living in house inherited by several memebers of family
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Perhaps you should show them what the replies on here say. In any case when you all go to see a solicitor hopefully they will spell it out. The solicitor might well refuse to to accept the work if he has any sense..I agree with you as well but unfortunately the person living there does not see the problems that may be ahead and the rest of the family want this plan. I agree because I am not willing to disagree with the plan of the others.0 -
I agree with you as well but unfortunately the person living there does not see the problems that may be ahead and the rest of the family want this plan. I agree because I am not willing to disagree with the plan of the others.
The issue that would worry me most is that were I to need state-funded care, I have a substantial capital asset from which I am deriving no income, but into which I am putting capital funds (because it's almost certain that it will need maintaining including things likes roof, wiring, windows). That's a thirty-year bet on the deprivation of assets rules, and from the outside looks exactly like DoA; I would be moving capital out of my direct control into an investment vehicle which will come back to my estate at some later point. Similar problems apply for pension credit and any other means-tested benefit.
At the other end of the financial scale, if my estate were to be liable for IHT and I pre-deceased my sister, my estate would need to pay IHT on my share of the property without (it would appear) being able to sell it, which would mean that my children would be continuing to fund my sister.
And if I predecease my sister by a substantial period, are my children expected to continue to provide roofing, wiring, windows and other capital maintenance? This is the stuff of massive family disputes.
And that's before we start pondering what would happen were I or one of my siblings to go bankrupt, were I or one of my siblings to divorce and all the rest of the "don't hold assets on behalf of other people it will end in tears" problems.
As I say: if I wanted to keep a roof over my sister's head, I would simply give her my share (after all, the parents' house being left to the resident sibling is hardly uncommon) or, failing that, set up a discretionary trust to hold the house with the intent that she has a life interest. I would not, under any circumstances I can envisage, want to be the owner of a share.
ETA: I realise that living in a house held by a discretionary trust isn't a life interest. You know what I mean.0 -
A typical scenario would have been a life interest given in the will.
(this is what the op was proposing in the opening post)
If a DOV can set that up and make the tax status satisfactory(eg life tenant holds the interest for IHT and CGT purposes).
With the right terms the trustees can recover the property if the tenant fails their obligations or the other option is just let them get on with it and hope their is something to salvage when they pass.
you will also need to consider things like, they want to move people in, get married/civil partner, just want to move somewhere else, get moved somewhere else.
For the siblings seems this could be a non event anyway they could get outlived, the biggest potential losers are the next generation some are party to the agreement.
That assumes everyone currently a beneficiary is in a position to make the gift(DOV is just gift) in the first place.
As a group you are going to need to get proper advice to get his clear in your heads what you are doing and the long term implications.
if doing a DOV it may make sense to skip a generation and all current sibling change the remaindermen to their issue so eventually the property/value left all goes to the grandchildren when the life tenant gives up their rights or dies.
Also probably worth considering at least one of the current Grandchildren as a trustee.0 -
Whatever the others do there is nothing to stop you washing your hands of the whole deal and gifting your interest to the others. You acknowledge what the others are proposing is absurd so save yourself lots of future grief. To involve yourself in such a deal as the others want you to is pure folly. Sorry to be blunt but that is the Yorkshire way.I agree with you as well but unfortunately the person living there does not see the problems that may be ahead and the rest of the family want this plan. I agree because I am not willing to disagree with the plan of the others.0 -
"if doing a DOV it may make sense to skip a generation and all current sibling change the remaindermen to their issue "
You could do this, if you enjoy the thought of a massive family dispute happening for your entertainment.
Giving your children, at buying houses / having children age, the choice between spending money on their aunt's house or evicting their aged relative is a pretty nasty thing to do. It would also make a royal mess of their entitlement to benefits, and the question "what would happen if they marry and divorce" becomes even more current, because assets you bring into the marriage are, unless protected by a pre-nup, assumed to be marital assets.
"For the siblings seems this could be a non event anyway they could get outlived, the biggest potential losers are the next generation some are party to the agreement."
A small share of a house with a sitting tenant who does not have the means to either maintain or purchase the property is worthless.
"Also probably worth considering at least one of the current Grandchildren as a trustee."
So someone who won't see a penny of the asset, if there are any pennies left, until their parents die in, what, sixty years' time, should take on the responsibility of housing their great-aunt at (in the limit) their own expense? Did I die and wake up in a novel by Mrs Gaskell?0 -
I agree with you as well but unfortunately the person living there does not see the problems that may be ahead and the rest of the family want this plan.
To quote Sir Humphrey, "Neville Chamberlain wanted peace", and to quote my infant school teacher, "I want doesn't get".
You giving your share away does not interfere with this stupid plan in any shape or form, your sister (or aunt?) still gets to live in the house at other people's expense, just not yours.0 -
None of what you suggest makes sense as it would burden later generations with an ill conceived scheme. TheOP should walk away from the whole thing.getmore4less wrote: »A typical scenario would have been a life interest given in the will.
(this is what the op was proposing in the opening post)
If a DOV can set that up and make the tax status satisfactory(eg life tenant holds the interest for IHT and CGT purposes).
With the right terms the trustees can recover the property if the tenant fails their obligations or the other option is just let them get on with it and hope their is something to salvage when they pass.
you will also need to consider things like, they want to move people in, get married/civil partner, just want to move somewhere else, get moved somewhere else.
For the siblings seems this could be a non event anyway they could get outlived, the biggest potential losers are the next generation some are party to the agreement.
That assumes everyone currently a beneficiary is in a position to make the gift(DOV is just gift) in the first place.
As a group you are going to need to get proper advice to get his clear in your heads what you are doing and the long term implications.
if doing a DOV it may make sense to skip a generation and all current sibling change the remaindermen to their issue so eventually the property/value left all goes to the grandchildren when the life tenant gives up their rights or dies.
Also probably worth considering at least one of the current Grandchildren as a trustee.0 -
There was a crazy thread last year sometime about leaving shares in a holiday home to all the grandchildren, so that each would have a tenth (or whatever) share, the place would stay "in the family" (why does everyone suddenly want to be an 18th century land owner?) and everyone would have happy holidays as a family forever.
But in reality, who wants a tenth share in a holiday home? It has no financial value, most people don't want to go to the same place every year, it costs money to maintain and there will be a huge fight over August, And it's an unsaleable asset: it's like the forced gift of a crap timeshare.
Fractions of houses are a millstone.0 -
I can really get where people are coming from with the "walk away", as it does seem a bit of a PITA.
However, assuming the Dad was a widow, you could still be talking (within IHT threshold) of inheriting a 1/4 share of a property worth in the region of £600-650k.
I would think most people wouldn't be in a position in life to just "walk away" from £160,000. (not saying that's what at stake here, as I don't think value has been mentioned)How's it going, AKA, Nutwatch? - 12 month spends to date = 2.38% of current retirement "pot" (as at end April 2024)0 -
Found this old thread on a similar subject..
http://forums.moneysavingexpert.com/showthread.php?t=3992745#topofpage
"One point to bear in mind is that as executors, you and your brother have the power to sell the house without needing to go to court, it needn't be transferred into your names at this point, as executors you can legally sell"
In our OP's case the house has been inherited under Intestacy rules.
So would the onus be on the person who has applied to be administrator (rather than executor under a will) in the same way, to sell the property to distribute the assets according to those rules.How's it going, AKA, Nutwatch? - 12 month spends to date = 2.38% of current retirement "pot" (as at end April 2024)0
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