Parents signing over house to child

[getupgonow]

My friend was telling me that her parent has signed their house over to her. This was done 7 years ago.

I don't know much about the legal side, are there any drawbacks to doing this?

@BrokenWing is quite right.

@WeakAsIAm: your reference to 'the current government' suggests that this is something new. It's not. My grandparents were born in the 1890s. 3 of them lived well into their 90s. Both their houses went to pay for care.

is there no way to sign a house over to a child with say a clause?

or sell it to said child for a£1 (but parent remains in it)

huge element of trust isnt it

@WeakAsIAm, don’t be so silly!!

The welfare state, that we all pay into, is there as a safety net for those who can’t afford to look after themselves. As you we’ll know there are many people who can’t build up enough to pay; but we shouldn’t hide our assets. If everyone did this we wouldn’t be able to afford it as a society.

*is there no way to sign a house over to a child with say a clause?^

or sell it to said child for a£1 (but parent remains in it)

huge element of trust isnt it

You can’t sign it over to a child so that it doesn’t belong to the parent for care fees, but also doesn’t belong to the child for divorce/debt/benefits.

Can’t have it both ways.

It’s another middle England tax isn’t it?

Poorest don’t pay anything.
Rich squirrel away assents in funds and off shore accounts.

That leaves the rest of us working home owners to fund everyone else.

I guess it depends if you want to use the equity from your property to pay for the best care home available if/when the time comes, as opposed to being put in a home paid for by the Council which is likely to smell of pee and cabbages. Personally I would prefer the former.

suddenly spending a lot of money in a way which is unusual for your normal spending

See - if I knew I was going to need care in the future, then I might well be tempted to sell the house just to have a fantastic holiday, see the world etc.

And come back with the £23,250 level to get my care paid for.

My understanding of calling Dep of Assets is dependent of how independent/well the person is when they hand over property. If they are healthy and mentally well the transfer is made in good faith with no deliberate intent to deceive.

Conversely if the person is already ailing and likely to require care at some point soon that's when the authorities become interested.

@WeakAsIAm

So a women works hard to purchase and maintain her own property and wishes her children to benefit from her hard work. Along side this she contributes to the system for others less able (read as majority less willing)
Unfortunately the current government believe they are entitled to take all she worked for as compensation for care if she needs it.
Next door Doris has never worked a day in her life never paid rent or tax, never contributed to the system but will get her care cost free and gratis.
Your morals are screwed along with the people who run this country

Oh the irony of your comments! So you believe that the children of this woman in your example should get something for nothing while the rest of the working population fund her care in later life? What have they done to deserve this? Be born? They've not earned it, paid tax on it, so why should they get it? Meanwhile poor old Doris next door who may have spent her life looking after her family (many women in their 70s did you know), husband on low income so no savings, living off a small state pension should be left to rot because she has no money for care?
I have my own house, decent savings and a decent pension. I know if a time comes when I will need residential care my house may well need to be sold to pay for it. I don't have a problem with that. Neither do my DDs, they don't expect any handouts just because I will eventually die.

Let's not forget too that many people who bought their own house and are now in their retirement years have made an absolute fortune on the back of the housing market. I've certainly benefitted with my house going up in value by 600%. I didn't need to work hard to do that!

A better way is to create a liferent trust, so the trust owns the property, and the parent has liferent of it. When the parent dies, the trust dissolves, and the property becomes part of the deceased’s estate.
This is in Scotland.
I’m not entering into a discussion about the whys and wherefores

My mums house is hers, it will be hers until she no longer needs it and if that need is for it to be sold to fund her care then that’s as it should be.
I expect no inheritance at all apart from a few personal items she told me she wants me to have - my grabby knobhead of a brother however was most put out by her Parkinson’s diagnosis as “there goes the money from her house”

This thread has got me thinking we might be putting ourselves at risk. We’re building a chalet/bungalow which we are going to rent out as a holiday home until my mum becomes infirm/ older and she will move into it rent free. We have a mortgage on the property. She owns an upper flat that’s only worth about £70k and has very small pension (about £6k per annum plus state pension) the plan was that she’d sell her flat and be able to use the money to live on. There not likely to come after the chalet are they? It’ll be a 20year mortgage, possibly more if the interests rates sky rocket.

My parents did that - the house doesn't even exceed the IHT basic level, so no saving there, no way will they ever give in to being in a care home - even if they did - there's no way for us to prove that we owned the house in any meaningful way - so it is deprivation of assets..in the event that they don't need care. We will have to pay massive amounts of capital gains tax as the house was "gifted" to us 20 years ago, so my parents actions will probably mean their kids get less inheritance not more as they had planned. Not that we care.

Whatever anyone does, don't go thinking that if you transfer your house over (at whatever point) the council will pay for you to go in a care home. The eligibility criteria where I live is high. Meaning you still have to jump through several hoops (assessment beds, panel boards) in order to get approved funding even if you are doubly incontinent, immobile and have dementia. It is a long and often inhumane process. Having funds gives you choice. Not having funds means you're at the mercy of others (often people you never meet who spend most of their time in an office). I always recommend people save well so they can be self funders and choose the life they want.

My parent has had to sell their home.

It's heartbreaking.

That said, they could no longer manage it & don't need it to live in & because of the sale they have managed to get into a fabulous care home.

I dread to think where they would have ended up if they couldn't have self funded.

What I do find unfair is that they have an illness which is why they need full time care, but are not considered ill enough to have NHS funding.

So, not ill enough for hospital, too ill for home, but have to fund their own treatment in effect.

Tbh, I have no words for someone who would find a way of holding onto their parents house if it meant poor care for the parent.

Of course the fact that anyone, self funding or not can end up being badly treated/"cared" for in a retirement/nursing home is another matter altogether.

Tbh, I have no words for someone who would find a way of holding onto their parents house if it meant poor care for the parent.

Absolutely not the case for my parent, we’re in Scotland where the care system seems a bit less fucked up than elsewhere. My parent is in a specialist care facility of our choosing, and his entire income £30k+ goes to fund it. That still pisses me off, he has mixed dementia, which is the reason he needs care. If he had cancer, it would be nhs funded

In this case it was all the parent's idea, it was announced to my friend as a done deal.

How can your friend take ownership of a house without agreement/signing something? At this point your friend should have consulted their own solicitor.

I know a couple who did this. Signed house over to their kids.

Then one of the sons did something very very silly (and very very out of character) (think prison) leading to a very very bad divorce. House share was included in the assets for the divorce and so son got a much smaller share than he should have.

People often want to do this most decent solicitors would advise caution. Iht thresholds now pretty generous most estates beneath them. Deprivation of assets legislation for care home fees is broad the 7 year rule does not apply that’s iht. You are extremely vulnerable if you fall out with the child or they get divorced. You lose your home - no recourse. In most cases it potentially causes more problems than it solves.