Signing house over the children

[kookahhh]

Hello

I'm looking for advice to see what my mum would need to do to sign her house over to her two children, myself and my sister.

This is at her request. All of my gran's money went to pay for a care home and mum wants to avoid that.

I know it's a tricky subject, but I also know loads of people do this because I work for social services.

Mum is 76 and has had a hip replacement but has no current care needs or significant health problems that would suggest she'll need care at the moment.

I live nearby and plan to make sure she never needs to go into a home by helping out myself if needed, (sister as well but she lives a bit further away) but I know that sometimes even with the best will in the world that might not work out in some cases.

Thanks all.

This is at her request. All of my gran's money went to pay for a care home and mum wants to avoid that

If she has the capital to pay for care then why shouldn't the money in her house pay for it?

If she passes away or goes into a home prior to (I think its) seven years, its deprivation of assets.

To process this request she needs to contact a solicitor who can complete the paperwork for land registry, you know I presume that up to 7 years the situation is that the council could seek payment from you and your sister? The other thing to consider is that it would potentially be an issue if you or your sister bought a house or divorced for different reasons.

So... You and your sister end up quids in and the rest of us pay for her care? And you'd like us to help you? Good luck with that, love.

I know it's a tricky subject, but I also know loads of people do this because I work for social services

Then you will know how chronically underfunded adult social care is and how anyone that can afford to pay should pay.

You will also know all about deprivation of assets.

Of course even if you think you can cheat the state that way there is still CGT and IHT.

I did say it was a tricky one.

The seven year rule is capital gains and doesn't apply here. It's not an expensive house.

You can sign your house over when you don't have care needs already apparent.

So many people do this. I'm not looking for opinions in the rights and wrongs - I can tell you that around 50% of my service users who go into care already have the family home belonging to a family member.

I would be very cautious about this. If you or your sister ever had problems with creditors (bankrupt? many small businesses fail) or if either of you got divorced, then your Mum's house would be at risk, because it is now your asset, not your Mum's. It's a double edged sword. Even if you are secure that your marriage is safe, is your sister's? You would be putting your Mum's future into your brother-in-law's hands, he could come after half of it if he wanted.
(Not wanting to demonise your BIL, here, just pointing out the practicalities and the fact that there are a lot of posts on here where people thought it would never happen to them )

It is deprivation of assets. You are doing it to avoid care fees which is the measure councils use to determine deprivation.

My understanding is that the 7 year rule doesn’t apply for things like carehome fees especially if your mum continues to live there. I’d do some extra research to make sure this doesn’t fall foul of the intentional deprivation of assets rules.

So many people do this. I'm not looking for opinions in the rights and wrongs - I can tell you that around 50% of my service users who go into care already have the family home belonging to a family member

This is not my experience at all. The vast majority of people who have a house and don't have to pay for care have spouses who still live in the property. Nearly everyone else pays and those that don't either have been very clever much earlier than 76 or have protracted legal situations with the local authority because they think they have been clever but haven't actually been.

I should say it's only deprivation of assets if the person already has care needs. My mum does not.

We have had cases whereby someone has done this and had a stroke the next day and needed long term care. Council couldn't claim deprivation because there were no care needs at the time.

I would absolutely do this. But you need to speak to a lawyer to understand the implications in terms of deprivation of assets, inheritance tax, and the risks to your mother of signing her house away.

Ok I meant 50% of the single people needing care not the ones with spouses in the home.

I place three last week, two no longer owned their own home, the kids did.

OP, so what will happen then is that you and your sister get a house while your mum gets no choice about where she's cared for and to what standard, because you've taken all her money. It's not as some as the State will pay instead. The State will pay for what it wants to pay for which might be miles away from how you'd like your mum cared for.

I can think of NOTHING better to spend her money on than giving her as comfortable an old age as possible. She deserves that far more than you deserve an inheritance.

Who will pay for a carehome or carers if she needs help in the future.

Yes, I don't think it is the right thing to do OP

@OverTheRubicon

So... You and your sister end up quids in and the rest of us pay for her care? And you'd like us to help you? Good luck with that, love.

This

To avoid IHT she would need to pay rent to you, unless you live in it with her. Not sure if the same is true to avoid Deprivation of Assets.

And as the owner, if you already own a property, one will be your second property, with potential implications for Council Tax.

If you do not currently own a house and want to buy, you will have to pay the higher rate SDLT.

If you / your sister go bankrupt the house could be at risk, as your house that you do not live in.

If you or your sister divorce the property will be considered as your assets to be divided up.

When eventually you / your sister sell the house you will be liable for CGT as it is not your man residence.

Quite a few risks and liabilities to incur when you don’t know if your Mum will go into a home / to see her put in a LA paid home with no choice of which or where or what standard.

I think the deprivation of assets thing is more about quickly moving your assets on when an assessment is imminent. But I think it's ok in the years before, otherwise it's no different to just normally spending money - the 7 year thing is about inheritance tax and something different. We've put our main residence into trust for our children, which might be worth thinking about instead, absolutely get professional advice though!
But something to factor in is if you give up your assets and then need care later, you will have no choice in where you go and the type of care you receive. I wouldn't want that choice taken away from me, personally.

If mum went into a care home she would get best value placement - as I work in the sector I know in our area there are no shit homes. I'd happily place myself in may of them should the need arrive. We don't place out of area unless at the request of the client.

Should that change and mum get offered a home I know isn't great, should one of them deteriorate, my sister and I would pay top up for a home of choice.

@kookahhh

I should say it's only deprivation of assets if the person already has care needs. My mum does not.

We have had cases whereby someone has done this and had a stroke the next day and needed long term care. Council couldn't claim deprivation because there were no care needs at the time.

My understanding was that this is not necessarily the case. Probably you'd be fine if it wasn't a very valuable house. But there's no limitation on when they can claim deprivation of assets.

www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/deprivation-of-assets/

The link above gives 2 reasons -

1. You must have known at the time you got rid of your property or money that you needed or may need care and support

2. Avoiding paying for care must have been a significant reason for giving away your home or reducing your savings

In your mum's case it would be 2).
I guess you'd be unlucky to fall foul of them pursuing it, and if you already know your council doesn't usually do so then it's probably a gamble you're willing to take.

But you probably shouldn't do it for various reasons.

Our LA doesn't pursue people for deprivation if the care needs arise after the transfer. At least as things stand.

It's difficult to prove. I guess they'd have to find this thread and know it was me!

My mother in law wanted to do this, had all the paperwork drawn up and then decided it was a bad idea. More info here www.saga.co.uk/magazine/money/personal-finance/giving/what-you-need-to-know-about-signing-property-over-to-your-children#:~:text=As%20a%20homeowner%2C%20you%20are,considerations%20before%20making%20any%20decision.

Why not ask at work? See what your employer thinks of this as a plan. Come back and tell us how you get on!

I can think of NOTHING better to spend her money on than giving her as comfortable an old age as possible. She deserves that far more than you deserve an inheritance.

I do not want my hard earned and slooooowly earned assets to be burned through at lightning speed by care fees. I do not believe the standard of care differs enough to justify it. I want my assets to go to my DC, just as the OP's DM does.

@TheYearOfSmallThings

I can think of NOTHING better to spend her money on than giving her as comfortable an old age as possible. She deserves that far more than you deserve an inheritance.

I do not want my hard earned and slooooowly earned assets to be burned through at lightning speed by care fees. I do not believe the standard of care differs enough to justify it. I want my assets to go to my DC, just as the OP's DM does.

Yeah, but the rest of us don't want to pay for your DC's inheritance.