Gifting Home to children
I had a couple in the office who advised that their mother was ‘getting on’ and wished to gift them her home.
PC currently pay Mortgage interest and service charges. I advised that Mortgage interest would end ( they will take up the shortfall ) but could children then bill the mother for service charges as although she is living rent free in home she is still liable for charges.?
I asked about if their mother went into a home and was told ‘the lawyer said she would be fine after 5 years’.
They seem to be under the impression that after this period the mother ceases to have an asset as such…
I don’t obviously come across this as its mostly tenanted properties I deal with..
What sort of services would they be providing? Would making payments be a genuine condition of mother’s occupation?
I’d be a bit concerned about whether mother has received adequate legal advice in her own right ...
This appears to be a tax dodge/evading responsibility for care home fees if they arise. You are not a tax adviser.
She wasn’t with them. Can you properly advise them about dealing with someone else’s property?
And as Jon says—is the mother of sound mind—does she have the mental capacity to do this—has she been properly advised as to her vulnerability if she gives away her home.
I’ve just been through something like this with a member of my own family and trying to explain to them that although my mother is old they cannot take over her bank account if she doesn’t agree has been a hard slog.
and in any event the LA would challenge it if mother was ever put into care and the LA was asked to pay for it….
and picking up the capacity point - the lawyer should have been advising the mother alone, or telling her to get her own advice.
if the lawyer was indeed advising mother on her own with her children no where in sight, and the mother had then come in to discuss with you, that would be one thing and possibly fine. but if not…..
thanks for the replies, I did tell them I was unable to give information and they seemed to have already consulted a lawyer so I explained that the lawyer should be their point of call..
Seems to me there’s a confusion around Inheritance Tax (IHT) rules, which state that, in general, a gift like a house will be ignored from IHT once 7 years have passed since the gift is made, and the rules around social care provision in a care home, which are completely separate and which work similarly to the deprivation rules for benefits.
I’[d tread very cautiously and also be wary that the soliticor seems to be taking a rather gung ho approach.
Also just noticed that you’re in Scotland and I’m not sure whether or not the same rules apply around IHT or not.
I explained that the lawyer should be their point of call..
...and get it in writing!
if they are specifically referencing the house being ignored for care home financial assessments then I think that the five year statement is accurate.
gratuitous alienation or something similar I think its called.
don’t see any issue with directly answering the service charge/pc question as a stand alone one as long as your notes are clear on what you said..and didn’t say.
I saw exactly this situation a couple of years ago. Dad had gifted property to son a few years ago but, whilst in care, for the most part had been funded under Continuing Health Care. When the CHC was revoked the family were horrified to discover that there were deprivation of capital rules and they’d need to stump up for -by now very institutionalised- Dad’s nursing care fees. Bankruptcy looms and, of course, it’s all Social Services’ fault.