Inheritance

[Le Chat]

My mother in law, who is only 59yrs lives with her eldest son (35 yrs) in a house worth approx. �130,000. Her question is this :- Is there anything she can do to ensure that in the event of her having to go into a "home" , her house wouldn't be sold to pay the home charges? She wondered if she could sign it over to her 2 sons. I vaguely remember that you could do something like this if you then lived on a furthur 7 yrs or so? Does anyone know? She is not working and lives on a very meagre widows pension. Non-judgemental answers please ... I already know that side of it!

[Ethel]

If she transfers the property to her son(s) she will have to be able to show she is paying market value rent.

This can affect their income tax liability, even if the reality is they give the money straight back to her.

If the sons are claiming any benefits whatsoever the very fact that they own a share of a property they do not live in could affect their claims.

It is a potential minefield and proper advice should be sought.

[dzug]

There are two issues here - Inheritance Tax and care fees.

The IHT is where the surviving 7 years comes in - however given the value of the house and presumably having few other assets she is well below the threshold, so there is no worry here.

Care home fees are a bigger and separate problem - signing it over to her sons could be regarded as deliberate disposal of assets and therefore its value would still included in calculations for the assessment of fees. AFAIK there is no set period during which this could happen - in theory they could still count it in 30 years time.....

So take advice as the previous poster suggested

[themas]

If she signs it over and wants to go on living there then, as well as the problems already mentioned, there could be difficulties if either of the sons subsequently became bankrupt or was divorced. In both these cases, the house could be lost as the equity of the son concerned could be taken - either by the Insolvency people, or as part of a divorce settlement.