. . . to think parents are being naive about our "inheritance"?

[OhFFSNotAnotherVirus]

Just pondering . . . for some reason it's niggling at me, maybe because I find their lack of understanding frustrating!

I also want to point out that I in no way "expect" anything from my parents - I've been financially independent since I was 18 and I'm proud of what I've achieved by myself.

Parent are 65, I have one brother and one sister. Parents gave my brother their life savings (close to £100k) so he could buy a nicer house than he could afford by himself. Parents told me and my sister that they would change their wills to leave their house (a small townhouse worth about £200k) to the two of us, to make it fair.

I don't think it is fair, though. Chances are the house will be sold in the future to pay for their care. They seem blissfully unaware that this is a possibility - or a likelihood - and seem almost smug about having done the right thing by all three of their children. I've brought up the possibility that the house might need to be sold to pay for care, but they dismissed this, saying absolutely not, they wouldn't be going into a home, they'd rather go to Dignitas first . . .

I'm saying nothing further, there's no point and I know there's no entitlement here. But AIBU to be a bit . . . ?

Oh and this all happened a couple of years ago and they haven't changed their wills anyway

@Ginfilledcats

My in laws have put their house in my husband and his sisters name (they're early 60s) and pay a token rent if £1 a month. This bypasses the house being used to pay for their care as long as it's in their sons name for 7 years before any costs are needed.

My parents are going to do the same I think.

The seven years thing is a very common misconception. The criteria for a local authority to consider such action to be a deprivation of assets (ie to get around the need to pay for social care) is:

(a) whether avoiding the care and support charge was a significant motivation in the timing of the disposal of the asset; at the point the capital was disposed of could the person have a reasonable expectation of the need for care and support?
(b) did the person have a reasonable expectation of needing to contribute to the cost of their eligible care needs?

Transferring the title of a property is a common deprivation of assets that councils will be wise too. Expect a savvy council to scrutinise it some detail if your in laws ever require residential care, and be mindful of the risk that your DH would be liable as the third party beneficiary of the asset if the council decides deprivation has taken place.

Yanbu it's utterly shit. I don't know that I wouldn't raise it again or at least point out that by giving your bro a 'head-start' his inheritance is of more value. And really who's to say that after all the costs etc you'd manage to sell the townhouse for a neat 200k. Sorry but they're being entirely unreasonable. My issue isn't so much the entitlement factor but the unfairness. I'd rather my siblings and I all received fuck all than one of us be given a lump sum. I couldn't let this go.

Your parents need to sign their home to you and your sister. If they survive for seven years without needing care/dying it cannot be taken for care nor is it regarded as a deprivation of assets. The name evades me but it’s a legitimate inheritance scheme.

People don’t go to Dignitas with dementia - it just doesn’t happen for all sorts of reasons. People on here often say it’s their answer to the need for elder care and I always read it as “la la la I’m not listening”.

However only a minority of people will be in care homes for long enough to eat through the value of even a modest house. The odds are against the longer lived of your parents being in that position, although it’s still a real possibility.

More to the point they should make a sodding will (with a note included for the record saying “this doesn’t mean we have disinherited because we don’t love DB - it’s just that we gave him his money early”).

@millenialblush

Also you will lose a decent chunk of that to the taxman. House inheritance isn't that simple. And I also agree with the above poster that inheritance shouldn't be unequal

Not if their only asset is £200k house. There will be no tax to pay. Even if you include the £100k they have given to the poster brothers, becuase they die within the 7 year limit for tax exemption they are still massively below the combined IHT allowance of £1m ( as it includes property) Not sure why you think they would have to pay tax

I hear you OP. My sister is similar to your brother and my parents have bankrolled her for tens of thousands of pounds. My mother denied for years that we’d all been treated differently but as my other siblings and I hadn’t been given any money it was demonstrably not true! She then started saying out of nowhere about changing her will to account for the difference in money given. I got the feeling she thought I’d be thrilled to hear this but even if they never need care I should hope I’d be in my seventies by the time they pass - what would I need their money for at that age? I needed help and support when I was started out not when I’m retired myself as I should hope I have my own plans in place by then! As with your parents she hasn’t changed the will anyway!

My in laws have put their house in my husband and his sisters name (they're early 60s) and pay a token rent if £1 a month. This bypasses the house being used to pay for their care as long as it's in their sons name for 7 years before any costs are needed. if this were a legitimate action, don't you think everyone would be doing it? It's deprivation of assets.

OP you're not being unreasonable. Given average life expectancy they will likely live another 20 years, so your brother will have had the benefit of his 'share' for decades longer than you, and that's if there's anything left after care costs.

I think from what you have said they have tried to make your lives equal in the present, but I can understand it might grate a bit if you feel you worked hard while your brother had a good time. But thinking of it as them trying to make you equal now might be more comforting than thinking they favoured him!

@Ginfilledcats

My in laws have put their house in my husband and his sisters name (they're early 60s) and pay a token rent if £1 a month. This bypasses the house being used to pay for their care as long as it's in their sons name for 7 years before any costs are needed.

My parents are going to do the same I think.

This is not good to work to avoid either inheritance tax nor council assessment. They're not that stupid ...

The council can and will ask to see details of assets and how the parents afford to rent if not owning - this will then come up as a clear example of deprivation of assets. As mentioned 7 year rule doesn't apply for assessing care needs.

For inheritance tax, the 7 year rule only applies if it's a gift without reservation i.e. no strings attached. So parents would need to pay market rent on a normal tenancy contract for it to be a true gift, and not retain a beneficial interest. Continuing the live there for a nominal sum means it clearly wasn't a true gift.

Think your in laws and parents need to get some proper legal advice on this set up.

I would be very unhappy too op. Before anyone tells me that you can't expect an inheritance, I know that. We are in our late 50's and early 60's and will receive nothing when all our parents have died. It's the unfairness of giving such a substantial sum to one and relying on a healthy old age to even out the imbalance. That's very naive.

My husband's father died when my husband was in his teens. His mother spent the last few years in a secure care home. My mum has dementia and will end up in a care home. My dad is in his late 80's and disabled and highly unlikely to manage at home. That's any of their meagre savings gone. I'm not at all bothered as I think people should use their money to make their lives better rather than pass it on. I just wanted to demonstrate that assuming you will have something to pass on to your children is misguided.

I'm sorry op.

that is like a carrot they are dangling in front of you,
possibly elusive
can you have a conversation about it?

@millenialblush

Also you will lose a decent chunk of that to the taxman. House inheritance isn't that simple. And I also agree with the above poster that inheritance shouldn't be unequal

A £200,000 house won't lose a chunk to the taxman.

Alternatively the property increases in value and you and your sister end up with more than 100k.

I agree that it was not a very clever thing to do on their part but you’ll probably just have to crack on with your life and forget about it.

If they were really serious they would put the house into you and your sisters name now so it is safeguarded for you. The fact they haven't changed their will yet either shows they have no real intention of making things equitable.

Oh yes and certainly no tax on a family home of that value.

My parents were absolutely NOT going into a care home etc. They were extremely vocal about it from about age 70. The absolute shit show that was their final years bought me and my siblings to our knees, trying to look after them in their own home, the constant worry, the falls, the illnesses, the slow decent and hospitalisations. In the final months they were both in hospital and we were travelling up and down motorways almost daily trying to see them, coving with Covid bollocks, sorting house/paperwork/care etc.

Dad died in hospital and mum’s final 2 weeks were in a care home - that cost us £2k and could have been a lot more.

Coronavirus aside (which made things so much worse) if they had accepted care I think they would have had a much better last few years, and they wouldn’t have left behind their children that are all beaten down by the system, resenting the stress and pressure their parents caused and falling out with each other.

Your parents have been V unfair OP.

@Ginfilledcats

My in laws have put their house in my husband and his sisters name (they're early 60s) and pay a token rent if £1 a month. This bypasses the house being used to pay for their care as long as it's in their sons name for 7 years before any costs are needed.

My parents are going to do the same I think.

Great.

So if they need care we can all pay for it instead of them?

Thankfully it's not as simple as they/you think and they/you are unlikely to get away with it.

Isn’t there a way they can get round the selling of the house to pay for care? I’m sure you can do it by making sure each of them owns half the house rather than both of them owning the whole of the house. So you can’t sell it to pay for one persons care because the house doesn’t fully belong to them.

@Ginfilledcats

My in laws have put their house in my husband and his sisters name (they're early 60s) and pay a token rent if £1 a month. This bypasses the house being used to pay for their care as long as it's in their sons name for 7 years before any costs are needed.

My parents are going to do the same I think.

I know a family who did this. They were very pleased with it and advised everyone else to do it too.

A number of years later one of their sons had a very nasty divorce. Very very nasty. Family assets included one third of parents large home. Son got nothing else as one third of parents home was worth more than their own mortgaged house. He is back living with his parents now in his late 40s.

@OhFFSNotAnotherVirus. You’re the one being naive OP if you think your parents care whether you get the same as your db or not.
They’ve had 2 years to change the will and haven’t bothered.

@OhFFSNotAnotherVirus I'm afraid you just have to try and pack this away in your brain. It is highly likely that your DPs will mean to change their wills but then never get round to it.

I have a different potential inheritance problem but try not to think about it too often as it just annoys me.

@Ginfilledcats

As many other have told you this is not a foolproof method. 7 years applies to gifts for purpose of inheritance tax and is nothing to do with caring requirements.

The peppercorn rent and fact your pils still live in the property will be a huge red flag for the authorities.

It’s also a bit sad that having worked all their lives, your DH and his sister would happily allow their parents to receive anything than the best are they could afford just so their DC can retain an inheritance.

They have treated him favourably whatever they think. Its very different being given help at his life stage than further down the road when you are more secure and he chose his path

I think parents would ideally always give the same to each sibling. It creates bad feeling. If his situation was desperate though I.e ill etc I can see it being different. But, just to get a nicer house etc isn’t fair in my opinion

They won't necessarily need care in a care home, only a small percentage of people go into care homes. There is no tax to pay on the first £325K and then theres a nil rate band of £145k for the main residence.