Signing Over Our House

[mayennaise]

We are in our mid to late fifties and are thinking of signing over our house to our two daughters now, rather than leaving it to them when we pop our clogs. If we did this, where would we stand if either of us required residential care in the future. Our savings don't amount to much at the moment and would only significantly increase if we hit the jackpot on the Premium Bonds!!

[redcrx]

so youll sign your home over to your daughters even though you may be perfectly healthy enough and capable of living without care for a further 30-40 years?

what if your daughters hit any financial troubles, what if the house was removed from them? how about if (and i know its unlikely) you all fell out?

There is also the matter of you deliberatly disposing of assets to avoid future payments should you require care.

[bednobs]

i don't think there is a time limit if it seems like you have deliberately deprived yourself of assets to avoid nursing home fees. Also, you'd have to hope you always got on with your daughters as if not they could just chuck you out!

[ubasses]

If you sign over your house but still retain retain use of it, it will classed as a gift with reservation, meaning it will still be liable to inheritence tax and can be taken to pay for your care. To avoid this you will have to pay your daughters a market rent.

[bednobs]

good point by redcrx about them getting into financial trouble

[sandyRoe]

Do you intend to continue living there? If you needed to in the future you'd have to be able to show that a reasonable rent was paid. If you couldn't do that it would be thought that you'd disposed of an asset in order to become eligible for some benefit.
I don't think this a good idea.
There are wiser heads here on AB and I think they'd agree with me.

[Buenchico]

See 'Trying to avoid care home fee payments' here:
http://www.direct.gov...CareHomes/DG_10031523

Chris

[sandyRoe]

I was slow typing that.^^^ They already have

[puzzled54]

Also, if one of your daughters went through a nasty divorce, a vindictive ex may try to claim part of it.

[buildersmate]

Since a couple can have assets between them of £650k left after they both die without fear of HMRC requiring Inheritance Tax (IHT) to be paid, unless you have assets greater than that including the house, there is no particular reason on those grounds to transfer the house to your heirs now anyway.
Plenty of reasons why it won't work to avoid future IHT, as others have pointed out above, unless you stump up the market rent (and live for at least another 7 years).
Then there's the business about care home fees, which one person above has pointed out won't be burdened onto the State - you'd be regarded as having 'deprived yourselves of your assets'.
So, all-in-all, time to rethink the scheme perhaps.

[VHG]

>> To avoid this you will have to pay your daughters a market rent.

And if you do pay your daughter a market rent she will have to pax tax on the rent.

[rowanwitch]

Speak to a solicitor who is a specialist in property law and trusts about putting half the value of the property in a trust for your daughters... this effectively reduces the value of the remaining half to zero according to the financial chap on a recent retirement seminar... and means it won't be used for care fees not sure how it works but that seems to be the general idea...

It is quite a complicated thing apparently but worth looking into

[joko]

could you not 'technically' sell it to them...?

[Peter Pedant]

do not sign over the house
do go and see a lawyer


basically you a re fifty years behind the times - your idea would have worked prior to 1985 but I redret the govt has caught up with a lot of the ideas

[bundleone]

Stay in charge of your own life, you are still comparitively young.