Inheriting a house

Old_Grey_Mare

I am about to update my will. I would like to leave my eldest daughter my house. As she is on benefits - and likely to be for the foreseeable - would this affect her benefits? She is currently in a housing association property but would obviously move out of this and into mine. Also, if she decided she didn’t like the area, would she be able to sell and buy another in the area of her choice? Thanks for any advice.

Spoonie_Turtle

Old_Grey_Mare said:

I am about to update my will. I would like to leave my eldest daughter my house. As she is on benefits - and likely to be for the foreseeable - would this affect her benefits? She is currently in a housing association property but would obviously move out of this and into mine. Also, if she decided she didn’t like the area, would she be able to sell and buy another in the area of her choice? Thanks for any advice.

If she is claiming a means-tested benefit (most likely UC) then assuming it's worth more than £16,000 she would have to move in basically immediately once the house became hers, or it would count as capital and end her UC. 
If she moves in straight away her means-tested benefit will continue just without the housing element as she'll no longer be renting.

If she decided not to move in but sell it and buy elsewhere, it would end her means-tested benefit eligibility from when the house became hers until she used the proceeds to buy another house.

(If she moved in and made it her home, then later sold in order to move elsewhere, the proceeds from the sale could be disregarded while she found another property.)

HillStreetBlues

Old_Grey_Mare said:

I am about to update my will. I would like to leave my eldest daughter my house. As she is on benefits - and likely to be for the foreseeable - would this affect her benefits? She is currently in a housing association property but would obviously move out of this and into mine. Also, if she decided she didn’t like the area, would she be able to sell and buy another in the area of her choice? Thanks for any advice.

That would be fine as the property would be disregarded as it would be her home. Moving is also ok.

Muttleythefrog

Old_Grey_Mare said:

I am about to update my will. I would like to leave my eldest daughter my house. As she is on benefits - and likely to be for the foreseeable - would this affect her benefits? She is currently in a housing association property but would obviously move out of this and into mine. Also, if she decided she didn’t like the area, would she be able to sell and buy another in the area of her choice? Thanks for any advice.If she moves into the house you leave to her and that is her only property then it is not counted as capital and she wouldn't have any other property related capital to consider... so that would not affect benefits except for the fact she wouldn't get any help with rent as there wouldn't be any.

Assuming she is on Universal Credit - do advise if otherwise.
Could she sell and buy elsewhere. Yes. UC allow you to sell your home with intent to buy another home... ideally these transactions happen together and often will on the same day.. but if there was a delay between selling the home she inherits and moves into and then buying (and so move into some temporary accommodation) she could ask for the proceeds to be discounted for 6 months as they're intended to be used to buy another home. In some circumstances that 6 months can be further extended with good reason such as you're waiting for the purchase to complete. Naturally if she were to sell the house for £200k and buys a new property for £150k then she may have capital left which means she does lose means tested benefits like UC. I suspect this is often the difficulty  for claimants in this situation - matching the sale proceeds with the cost of buying the new home to move into such that a) have enough money for the transactions and move and b) not left having too much money for means tested benefits. 

Keep_pedalling

The danger here is that she may inherit nothing as there is a risk that you may longer own the house at the time of your death or it could be the only asset remaining may at the time of your death. In the case of the former she will inherit nothing and in the case of the latter your other children could end up with nothing.

If she inherited cash then although it may stop her benefits for a short time but she would still be able to buy a house for herself with the bulk of her inheritance. 

Teapot55

I would advise consulting a solicitor on this matter. Spending maybe £500, maybe a bit more, is not much for having the certainty (and peace of mind) that your daughter will definitely be provided for after your death. No hitches. All eventualities covered. 

Old_Grey_Mare

Keep_pedalling said:

The danger here is that she may inherit nothing as there is a risk that you may longer own the house at the time of your death or it could be the only asset remaining may at the time of your death. In the case of the former she will inherit nothing and in the case of the latter your other children could end up with nothing.

If she inherited cash then although it may stop her benefits for a short time but she would still be able to buy a house for herself with the bulk of her inheritance. 

Thanks. I hadn’t really thought of this scenario. I have been diagnosed with heart failure at 65 so doubt I’ll make old bones if you meant I’d have to sell my property to go into a nursing home. That wouldn’t happen anyway. I also have stables/land that my youngest daughter has benefitted from immensely for the last 20 years and although it’s not worth as much as my house, I think it only fair she should inherit this.

fuzzzzy

Old_Grey_Mare said:

I am about to update my will. I would like to leave my eldest daughter my house. As she is on benefits - and likely to be for the foreseeable - would this affect her benefits? She is currently in a housing association property but would obviously move out of this and into mine. Also, if she decided she didn’t like the area, would she be able to sell and buy another in the area of her choice? Thanks for any advice.

Have you talked to your children about this?

Are you sure your eldest daughter would want to move out of their housing association property and into your house.

Maybe best to have some discussions with both daughters, if you haven't already, before updating the will.

NedS

Old_Grey_Mare said:

Keep_pedalling said:

The danger here is that she may inherit nothing as there is a risk that you may longer own the house at the time of your death or it could be the only asset remaining may at the time of your death. In the case of the former she will inherit nothing and in the case of the latter your other children could end up with nothing.

If she inherited cash then although it may stop her benefits for a short time but she would still be able to buy a house for herself with the bulk of her inheritance. 

Thanks. I hadn’t really thought of this scenario. I have been diagnosed with heart failure at 65 so doubt I’ll make old bones if you meant I’d have to sell my property to go into a nursing home. That wouldn’t happen anyway. I also have stables/land that my youngest daughter has benefitted from immensely for the last 20 years and although it’s not worth as much as my house, I think it only fair she should inherit this.

There will be many scenarios you haven't thought of, which is why you should seek expert advice. It may be easier to leave equal share of your estate to your children (if that is the intention) and leave them to work out how best to implement that after your death depending what assets you have at the time of your death. You may have a stroke tomorrow and need to go into immediate care and your assets are all sold to pay for that care, so there are only residuals (cash) to consider. A good will should reflect all possibilities. 

fuzzzzy

As you are currently thinking about these matters it might be a good time to think about sorting out Power of Attorney too.

TELLIT01

Something people overlook is the ongoing cost of running your own property.  That is a particular problem if your only income is State benefits.  The daughter might actually be better advised to sell the property and remain in the housing association property.  She would then have no concerns about the maintenance of the fabric of the property.

The thought of owning you own property is appealing, the reality if on low income often much less so.

Maybe discuss the options with the daughter, with emphasis on the cost of maintaining.  Then put in the will that the house is to be sold, with the proceeds going to the daughter.