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to ask how you plan to protect your children's inheritance

(243 Posts)
OrangeMabel Thu 25-Apr-13 14:19:56

DD only aged 10 but my main goal is to make sure she has a home for life; with us whilst she's young then a house for herself when she's an adult. So I eventually want to make provision to buy her a house that can't be touched to pay our care home fees, should we need them.

Anyone else got similar goals for their kids and, if so, how to you plan to achieve them?

imour Thu 25-Apr-13 15:09:41

i know loads of pensioners who have died in their own homes not needing to go into a care home , not every one ends up frail and needing help .

Portofino Thu 25-Apr-13 15:12:51

So you want your dd to have a free house, and everyone else's kids to pay for your care in your old age? Nice. hmm

mrsmalcolmreynolds Thu 25-Apr-13 15:13:18

Agree with what all have said in relation to inheritances etc.

However, a v. quick google search turned up this which explains what needs to be present in order for an authority to consider there to have been deliberate deprivation of assets (which is what there has to be before they come after assets which have been put outside their reach). Seems pretty clear that if you give assets away when you are fit and healthy, there shouldn't be any question of the authorities attacking that.

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS40_deprivation_of_assets_in_the_means_test_for_care_home_provision_fcs.pdf?dtrk=true

If on the other hand your need for care is foreseeable when you give stuff away, I think it's probably right that there should be some ability for the state to unwind that. My DM (64, in decent health) has just started to pass on some of her savings to us in order to manage inheritance tax etc but is deliberately keeping back enough (when combined with her house) to fund a fair stretch of care just in case (think she's basing this on at least 10 years). That's not because she's worried that anything she gives us might be clawed back, but because she thinks it's the responsible thing to do...

Oh, kids will be taught value of money, financial responsibility, to work hard at school, college, university and their chosen career and be able to support themselves too. We just think that doesn't automatically mean that we shouldn't give them a hand if we have the means to do so. Working hard and having help do not have to be mutually exclusive of each other.

AThingInYourLife Thu 25-Apr-13 15:20:00

Deliberately making yourself poor in old age so that you can attempt to use public money to fund your elder care seems kind of a scrounger thing to do, no?

AThingInYourLife Thu 25-Apr-13 15:21:30

There is no moral difference between doing that and deciding to have a life on benefits.

Shanghaidiva Thu 25-Apr-13 15:24:56

My goal is to ensure my children have the necessary skills to support themselves - decent education, understanding of finances, etc.
They are welcome to live in my home rent free when they are studying, but whether they choose to purchase a house later is up to them and I am certainly not buying them one!

I'm assuming that the OP means she will have a family home, that will be sold for care homes fees. She will also separately give her DD a home so DD can live in it. Or, have I got that wrong?

I know a couple of people whose parents did this. One remortgaged and lost the home eventually, making his friends who were renting rooms from him homeless. Nice. The other is a twunt.

badguider Thu 25-Apr-13 15:31:01

I don't plan to leave an inheritance unless I die unexpectedly early. I would prefer to live to such a ripe old age that I need all my money and assets to live on smile

My parents also intend to pay their own way until death (and burial) as a first priority and only leave anything to my brother and I if any left.

Poledra Thu 25-Apr-13 15:37:17

My parents always say they gave us our inheritance in university fees - they spent a shitload of money giving us all a bloody good education then turned us loose to sort ourselves out. That there is my plan too.

<Addendum: they also helped out their children when we needed it urgently but my siblings and I have always paid them back>

Timetoask Thu 25-Apr-13 15:39:07

OP, how big is your property?
Could you downsize and buy a second small property that you could put in your dd's name (and rent it our while she is little)?

If it is in her name for 7 years before you die she does not need to pay inheritance tax. (best double check that with a tax expert though).

TSO Thu 25-Apr-13 15:42:14

I plan to see my children work hard, earn their own money and spend it wisely, just as my own mother planned for me.

Chiggers Thu 25-Apr-13 16:02:31

Is it true that if you sell your house to your DC, for less than the market price (say house is worth £250,000 and is sold to DC for £10,000), then your house can't be touched to pay for care costs because the house sold and wasn't given away?

Not up to date on inheritance and so on.

higgle Thu 25-Apr-13 16:11:34

You won't be having a very happy old age, OP, in the type of care home the state pays for. They will probably be kind and caring but understaffed, the food will be very basic and you can forget good interior design.

Chiggers Thu 25-Apr-13 16:33:29

Good grief!!!! That was meant to be "house was sold". I'm going to bed. I shouldn't have got up at all this morning as I'm suffering secondary brain malfunction with the evidence being my inability to compose a sentence grin <<waves and trudges upstairs>>

Jengnr Thu 25-Apr-13 16:45:06

Why do people get so angry that houses have to be sold to pay care home fees? It's only the same as having to sell your house to buy another.

Inheritance isn't inheritance until you are dead. Until en it is your money. Treat it as such.

Jengnr Thu 25-Apr-13 16:45:20

*then

DIYapprentice Thu 25-Apr-13 16:45:51

You would start up a trust which they could gain control over at a certain age, and you would put into that trust money, sufficient to purchase the investment of a property. You oversee the trust fund while you are alive and before they reach whatever age you set out in the trust, and you appoint someone else to take over the trust fund should you die.

If, however, you do this to the detriment of your own financial stability then you'd be very foolish.

Once they gain control of the property/trust then it is theirs to do with as they wish. They could sell it and squander the money. They could marry, divorce and lose half of it.

Or you could try to set up a complicated trust which maintains the property as family property, but that is expensive, and I don't think it's looked upon as favourably anymore and some of these can be overturned.

LooseyMy Thu 25-Apr-13 16:47:51

By never getting married :-D I'm a single parent and own my own home and it's all going to ds when I pop me clogs!

Fast Thu 25-Apr-13 16:52:46

You can have the house put 50% into your name and 50% your DH's so that if one of you did have to go into care but the other one didn't it would only be half the value of the house taken into account for care fees. It's called 'Tenants in common'.

EssexGurl Thu 25-Apr-13 16:55:53

We are buying a buy to let property and the idea is that either the kids can share it together, or we will sell that to give them a foot on the ladder. If the first one works out we will probably get a second.

We won't be able to afford private education - and also there is no guarantee that a private school would be right for them or they would come out with lots of qualifications. I also think university is not a great idea now with too many graduates and qualifications not being what they were. The current funding means they only pay back any loans at a certain salary point, which I agree with as a principle, so they can get loans if they want to go to uni.

Our approach is to hopefully give them a foot on the property ladder at some point. Our own house would be used for any care bills. Theoretically you don't need lots of money to get a BTL property as the rent should cover the mortgage. Fingers crossed. But it is a way of trying to spread the risk for us and giving them something.

Fast Thu 25-Apr-13 17:23:33

Another reason to go tenants in common is that if you died first and your DH remarried and went onto have more children or step-children your own children would inherit your full 50%.
I know more than one family where the children have ended up with nothing because the mother died first, father automatically got the house, father then remarried to someone who already had children from their first marriage. The father has then died and his new spouse inherited the house from him, original child has nothing from either parent.

Iggi101 Thu 25-Apr-13 17:38:18

Tbh a decent wage won't get you a (lovely) house anymore <looks round tiny flat>. It would be lovely to have a big inheritance to at least use as a deposit. Really surprised you would say it's your "main goal in life" though, sounds pretty shallow.

LynetteScavo England Thu 25-Apr-13 17:38:54

I plan not to have any care home fees to pay, by having several children and being nice to them, in the hope at least one of them will look after me in my old age. wink

I plan to ensure my DC have a home for life by encouraging them to get a job which will enable them to support themselves sufficiently.

If I had a DC with SN, and potentially unable to support themselves, I would feel very differently.

specialsubject Thu 25-Apr-13 17:45:17

the inheritance you give your children is the values, security and education that you give them. Spend money and effort on that now.

to answer the basic question: you should have guardians and care sorted in your will in the (hopefully non-) event that she is orphaned before she is an adult. After that, the family home cannot be sold to pay care fees if someone still lives in it. If no-one lives in it, then what does it matter? If she lives elsewhere in a house she owns, it also won't be used for care fees.

no-one should ever make their life plan based on inheritance. It is 2013.

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