Deed of gift solicitors

Starcity83

Just looking for some advice about setting up a deed of gift. My dad recently inherited a home from his late father and as a result is going to give me his current house (which will soon be empty). I was going to inherit it upon his death but he’s going to pass it over now.

Do we just need one solicitor to draw up the papers and then he sign it with a witness?. The house is mortgage free and freehold. There will be no payment involved or need for a survey etc as I will be moving into it to live in.

silvercar

he may need independent legal advice, so he knows the risks of his actions eg deprivation of assets, that it is a gift with no comeback etc.

Starcity83

https://forums.moneysavingexpert.com/discussion/comment/81973965#Comment_81973965

Yes he’s definitely aware of all that, this hasn’t been a quick decision by any means.

silvercar

https://forums.moneysavingexpert.com/discussion/comment/81973978#Comment_81973978

That why he needs independent legal advice. So someone impartial can testify he understands what he’s doing.

You should also check the tax situation. If he unfortunately passed away in the next 7 years, would there be inheritance tax to pay? And if so, would you need to sell the house to pay it?

Starcity83

https://forums.moneysavingexpert.com/discussion/comment/81974184#Comment_81974184

ok thanks. The house in its current state is probably worth around £100k as it needs a lot of modernising etc. So I think it’s well under the limit.

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/81973965#Comment_81973965

I don’t think this is an issue, he will still have the inherited house so is not exactly shorts of assets.

Keep_pedalling

Have the two of you considered doing this the other way round? Gifting you his current house means it stays in his estate for IHT purposes for 7 years. If he gifted you the inherited house via a deed of variation then that property would never enter his estate.

If that is not an option and his inheritance does leave his estate with a potential IHT liability then he should consider taking out a 7 year time life insurance policy to cover any additional IHT should he meet an unfortunate early death.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81974189#Comment_81974189

The value of this particular house is not the issue- it is the value of his whole estate that will be assessed for IHT and if he dies within 7 years the £100K will be counted back into his estate and added to all his other assets.

It is not really an issue as if he did not give away the house, it would be counted in his estate anyway. Plus if he lives 7 years it will be out of his estate.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81974302#Comment_81974302

Yes, I think sometimes we get a bit carried away with thinking nearly every significant financial transaction made when you are older is potentially deprivation of assets !

In fact if you are likely to be paying your own care fees, it all becomes a non issue anyway, as the LA is only interested in your finances if you ask them to pay.

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/81974189#Comment_81974189

The house he is gifting you or the one he is inheriting? Including both houses what is his total net worth? What is his marital status?

Starcity83

https://forums.moneysavingexpert.com/discussion/comment/81974425#Comment_81974425

he’s single and separated from my mum, they never got divorced and they split over 25 years ago. I think the current value of the inherited house is around 200k. The one I would be taking care over and renovating is around 100k. Hard to value as it doesn’t even have central heating etc.