Mortgage Paid & want to give house to our kids

[Phaeton]

Tomorrow is going to be a good day, we make our final payment on our mortgage, we've probably given the BS 5 times what the house cost & probably as much as it's now worth but that's mortgages for you. My question is I would like to sign the house over to the 2 children with the proviso we can live there until we shuffle the mortal coil. What is the best way to achieve this?

[seduraed]

Re: Mortgage Paid & want to give house to our kids

My advice is speak to a lawer who offers a fixed fee appointment. Wills and trusts can be very difficult and they need to be drawn up perfectly to be valid and to avoid the rules about depriving yourself of capital . An independant financial advisor may also be someone to speak to. There are Lawers who offer fixed fee appointments listed on this site. I can offer no recommendations.
There may be more knowledgeable people about soon.

[Peridot]

Re: Mortgage Paid & want to give house to our kids

Congratulations on the final payment!

As Seduraed said, this is an area that is fraught with issues I'm afraid. Particularly, as we are living longer and may need care in our latter years. Intentional deprivation of assets is becoming a real concern for Local Authorities and many are now pursuing funding where for example transfer of major assets, such as property is concerned. There is no time limit how far back they can look into the creation of trusts. If it can be proved that the main reason for the transfer was to reduce the burden of care fees then they will make a claim.

The other issue is that for most people their home is their major asset. If it is transferred to other family members you are left with no protection. Should the person whose name the property is in become bankrupt or get divorced, the property is legally theirs, so the value would be included in any proceedings and potentially could be taken from them.

There are ways to potentially lessen the blow of care fees, if that is your reason for the transfer, for example by severing your tenancy and leaving your individual share of the property to the children, with a right to reside for the survivor in that share. Then if any care fee calculation, were needed, only a half share of the property value would be included rather than the whole value (the whole value would be used if you left your estate to each other completely).

It is complicated and you really need to get some proper advice on this. Do not be persuaded that putting everything into a trust will work, it may not. The Local Authority are allowed to look behind the reasons for a trust, if a care calculation were needed in the future. In addition you leave yourselves open to being made homeless should something happen to the children as above.

Enjoy not having the mortgage and help family out when you can will be my motto, once I've cleared mine.

[ostell]

Re: Mortgage Paid & want to give house to our kids

And having the house will allow you to draw against the value of it later in life if you want to do some exciting things or even simple things like buy a new car. SAGA have a leaflet about this sort of thing. Google it.

I've just been dealing with the problems caused by the very act you are proposing. Friend gifted her house to daughter over 7 years ago. Friend became very disabled and very dependant on care. It would have been better if she could have moved to more suitable sheltered accommodation. She asked her daughter to transfer the property back to her so that she could sell and buy a more suitable home. No response from the daughter, either to her mother, solicitor or multiple emails. Daughter did not want to lose the capital even though she would recover it again when her mother died. That was 18 months ago. Mother died 2 weeks ago, mainly broken heart. Daughter is not coming to funeral but son in law arrived from New Zealand to clear out the flat and sell it. Mother died Tuesday, son in law arrived Thursday morning. He may be at the funeral, don't know, don't care, hope not.