ChatterBank1 min ago
motives for changing names on deeds etc
8 Answers
What reasons would a mother have for transferring all of the family properties and businesses from her elderly husbands name to her sons name? (forging signatures etc or would he have to be present in front of a solicitor or can she do this as his spouse?)
is there some future benefit to be had from this? for who, mother or son?
the mother and father do have some debts.
and does this mean that fathers will is meaningless as the properties are no longer in his name?
will the son have sole power over the other siblings?
many thanks
Answers
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(2 part post):
The usual reason for parents transferring properties and businesses to the names of their offspring is an extremely sensible one: To avoid inheritance tax.
Let's assume that the elderly husband dies before his wife. When that happens, anything which was jointly owned by the husband and wife would pass to the sole ownership of the wife. When the wife dies there will be inheritance tax to be paid on the estate which (given that your question suggests that it might be quite a large estate) might be an extremely large amount. The husband and wife can avoid this inheritance tax burden being placed upon their son by handing over the estate now, as a gift, rather than leaving it until after their deaths. However, the tax man is wise to this tactic and, consequently, there is legislation in place to prevent 'death bed transfers'. Because of this, the tax man will still charge inheritance tax on the estate if the mother dies within seven years of the gift being made. So, in many ways, a policy of 'the sooner the better', with regard to such gifts, is a wise one.
There are lots of legal arguments here which could keep teams of solicitors busy for years but, in general, it's not possible for a married person to claim sole ownership of anything. (i.e. everything that the couple have is jointly owned - although a large number of divorce lawyers get paid a great deal of money for finding exceptions to this rule!). Therefore, despite the properties and businesses being in the husband's name, the wife has joint ownership of them. This gives the wife the right to sell, give away, or otherwise dispose of those assets.
The usual reason for parents transferring properties and businesses to the names of their offspring is an extremely sensible one: To avoid inheritance tax.
Let's assume that the elderly husband dies before his wife. When that happens, anything which was jointly owned by the husband and wife would pass to the sole ownership of the wife. When the wife dies there will be inheritance tax to be paid on the estate which (given that your question suggests that it might be quite a large estate) might be an extremely large amount. The husband and wife can avoid this inheritance tax burden being placed upon their son by handing over the estate now, as a gift, rather than leaving it until after their deaths. However, the tax man is wise to this tactic and, consequently, there is legislation in place to prevent 'death bed transfers'. Because of this, the tax man will still charge inheritance tax on the estate if the mother dies within seven years of the gift being made. So, in many ways, a policy of 'the sooner the better', with regard to such gifts, is a wise one.
There are lots of legal arguments here which could keep teams of solicitors busy for years but, in general, it's not possible for a married person to claim sole ownership of anything. (i.e. everything that the couple have is jointly owned - although a large number of divorce lawyers get paid a great deal of money for finding exceptions to this rule!). Therefore, despite the properties and businesses being in the husband's name, the wife has joint ownership of them. This gives the wife the right to sell, give away, or otherwise dispose of those assets.
(2nd part):
If the properties and businesses have been given away as a gift, then control of them passes exclusively to the beneficiary of that gift, i.e. the son, so other siblings will have no legal interest in those assets.
In regard to the father's will, the rule is that 'you can't bequeath what isn't yours in the first place'. i.e. if the properties and businesses have already been given away, then any reference to them in the father's will becomes redundant. In any case, the father's will is likely to be of little relevance as it's effectively only valid if he dies after his wife. This is because, irrespective of the contents of the will, all his assets automatically pass to his wife upon his death, so it's the wife's will which is of more importance to her children.
As I've tried to indicate, there are all sorts of legal 'ifs and buts' which could come into play here but I hope that I've outlined the basic legal starting points.
Chris
(Former MD of a will-writing agency).
If the properties and businesses have been given away as a gift, then control of them passes exclusively to the beneficiary of that gift, i.e. the son, so other siblings will have no legal interest in those assets.
In regard to the father's will, the rule is that 'you can't bequeath what isn't yours in the first place'. i.e. if the properties and businesses have already been given away, then any reference to them in the father's will becomes redundant. In any case, the father's will is likely to be of little relevance as it's effectively only valid if he dies after his wife. This is because, irrespective of the contents of the will, all his assets automatically pass to his wife upon his death, so it's the wife's will which is of more importance to her children.
As I've tried to indicate, there are all sorts of legal 'ifs and buts' which could come into play here but I hope that I've outlined the basic legal starting points.
Chris
(Former MD of a will-writing agency).
This is because, irrespective of the contents of the will, all his assets automatically pass to his wife upon his death, so it's the wife's will which is of more importance to her children.
I really don't believe this. It doesn't even happen when there is no will. The widow gets the first �125K and goods and chattels, but the remainder is split in two - half to the children immediately and half when the widow dies.
With joint assets yes - but not all assets
Is this a misguided attempt to benefit from the seven year gift rule to negate inheritance tax liability? I fail to see the benefit for the brother and sisters of the new asset holder, I would be very wary if this was happening in my family.
joko ,you can get an ides of how inheritance laws work by sourcing a paper copy, or downloading rules from the Tax office website ( I would print it out so you can shuffle from section to section tho" )
The signatures would almost certainly have to be witnessed, but not necessarily by a solicitor. The mother could only sign for her husband if she had Power of Attorney. If the signatures have been forged and this can be demonstrated then the transactions are probably void. Is the husband mentally competent? If he is not and there is no Power of Attorney then the transactions cannot be validly carried out (without a complex procedure involving the Court of Protection).
If this is an attempt to avoid inheritance tax it will almost certainly fail as far as the family home is concerned if the husband continues to live there, as it will be seen as a "gift with reservation".
It could be an attempt to put assets beyond the reach of creditors, but if the husband was made bankrupt the transactions would almost certainly come to light and be undone by the Official Receiver.
If the transactions are regarded as valid the assets are no longer in the husband's ownership so would not be part of his estate when he dies. The son to whom the assets have been transferred would appear to be the sole owner, and can do with them what he wishes - the other siblings would seem to have no say in the matter unless they can dispute the validity of the transactions.
I too was puzzled by dzug's post - Buenchico's has only just appeared! I agree with Dzug - the husband can leave any solely owned assets to whoever he pleases in his will.
I also query Buenchico's statement that the wife has the right to dispose of the husband's assets. This is effectively saying that if I own (for example) a car, my wife can go and sell it without me having any say in the matter. I don't believe she has any more right to do this without the husband's agreement (or a Court order in certain circumstances) than anyone else has.
Buenchico, as I have only just read your post this evening, I have supplementary questions that you may be able to help me with : if these assets have passed to one child to the detriment of other surviving children can they lodge a notice of interest with the probate division?
Also if there is no will in place ie the husband dies intestate the rule about wife & surviving children falls into place, I signed a release form to my mother at the time of my fathers death and at that point she would have been able to release tax free funds to myself and my siblings then made her own new will for remaider as she wished ie a new will in place for her reduced estate!
Also I suggest that the inheritance tax liability is reduced per year that the person survives after the gift is made.
What are the capital gains problems that would be raised by such a transfer of assets - do you know?
Ta muchly ,Sense x
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