Who pays the Building insurance

fuzzy3

My father-in-law recently signed his property over to my husband he's in his 70s (and is hoping that the government won't get their hands on his home if he should need to go into a nursing/residential home in the future),my husband will have no claims on the house whilst his dad is alive or is taken into a home.His father now seems to think that we should pay for the buildings insurance something we can't really afford just because the house is in my husbands name hasn't changed our income.
Also the solicitor handling the signing over has said about some loophole in our area that if he had to go into care ,as long as the house has been signed over for 6 months the house would safely be my husbands and he wouldn't have to sell it to pay for care.

bryanb

If you lived in this area, when applying for CC payment for care fees you would have to answer "have you ever had an interest in any property?" You would then have to produce the rental agreement and prove payment of rent for the property you live in. Not sure if this applies in all areas, but easy enough to get the forms and check. Hope this helps.

fuzzy3

I don't really understand, as my husband and myself have our own home.So should it be made to look as though my Father in law is paying us rent? legal things like this are so complicated.

merlinthehappypig

It's not as straightforward as you might think. Certainly there is no hard and fast rule about any 6 month deadline after which the council will have no claim.

If your father in law has to go into care at any stage in the future the council will consider his assets. Whilst the house will no longer be his, they will want to know why the house was given to your husband. As the only reason is to avoid it being sold to pay for care, the council will almost certainly consider that he has 'deliberately deprived himself of assets' and he will be as liable for the costs of care as he would have been had he still owned the house.

Help the Aged have a decent free helpline and will be able to give you advice. We used this, then took professional advice when we considered buying jointly with my wife's parents.

I think that you need to think long and hard about this before agreeing.

There are other implications as well.

As you already own your own home, you will almost certainly be liable for Capital Gains Tax when you eventually sell your father in law's house which wouldn't be the case if your husband inherited on the death of his father.

You haven't mentioned the value of the house, but the 'gift' may also be liable for Inheritance Tax if your father in law dies within 7 years of the transfer of ownership.

As the value of your assets will have increased you may find then you are not entitled to any benefits in the future should your circumstances change.

If you charge your father in law rent, you will be liable for tax on any profits, which may have implications for tax banding.

You will be legally liable for anything to do with the house, be that buildings insurance, council tax, maintenance and services.

Sorry to be a harbinger of doom, but you really need to consider all these options before going ahead. On the information that you have given I can't see any benefit to anyone of what is proposed.

If you were selling your own house and moving in with your father in law for care purposes it would be a different matter.

silvercar

Without a mortgage, there is no obligation on anyone to take out buildings insurance. However, not to do so on an asset of considerable value is risky.

Whoever owns the property is the one with an insurable risk, therefore the building insurance has to go in the name of the owner.

clutton_2

if you were to do this, a try to get a Buy to let mortgage on the house, you would find that Mortgage companies do not allow you to rent to close relatives.

when you say your FIL "signed it over" = what exactly happened ? did you go to a solicitor ?

No solicitor would advise your FIL to sign it all over to anyone else - if there were to be a disagreementg in the future your FIL could be made homeless - and yes - it has happened - there is nowt so strange as folks !

Aged Concern will help you find out the real facts - we are mere interested parties, trying to help - do not make major decisions just based on what you read here - you could end up in serious trouble - and it sounds as if finance is a bit of a worry already.

bw

merlinthehappypig

Thinking about it I wonder if the father in law has made his son a joint owner or tenant in common rather than simply signed the house over to him?

As clutton says, that would be very poor advice from a solicitor.

I had assumed, perhaps incorrectly, that there wasn't a mortgage on the house, given the age of the father in law. If there is then that is another consideration.

The OP really needs to get proper, professional advice, from someone who specialises in this field. There are so many possible issues. Age Concern will give a good general pointer, but can't be specific.

eldowardo

it goes to show that its not always cut and dry signing anything over to another family member

really you should have considered all potential costs before doing this.

fuzzy3

No mortgage , but we have one oustanding on our own home. He went to a solicitor and then my husband had to go as well the next time to sign. I went along just to listen he made it sound as though it's done all the time without problems.

tanith

Fuzzy3 as previous posters have said the whole thing is fraut (sp) with pitfalls and it doesn't sound as though all the drawbacks of agreeing to something like this have been explained to you.. it simply is not as straight forward as you have been led to believe... I would definately ask more questions if I were you...