leaving money

[Penelope]

How old are most children going to be when their parents die? 40 plus? (closer to 60 I reckon) That's a long while to bum around waiting for an unknown legacy.

 

assuming the average value for a house is £250 k, I wonder if the knowledge of receiving this amount when your aged mother dies would result in a lack of incentive for the child, perhaps he might feel that he doesnt have to try that hard in work to buy their own house for example, or even that as the parent although we think we are doing the right thing this lack of incentive could result in making your child lazy or dependant on others, As one of the greatest things in life is to be proud of your achievements could our money actually be harmful how often have you heard the phrase I started with nothing !

 

Or as I once saw the phrase (might have been on here) I was born with nothing and Ive still got most of it

[steve_b_wales]

 

I agree. I would presume a fair percentage of old folks die in nursing homes, so the greedy government gets all the value of the house anyhow....

My wife and I are going to seek some financial help at some point to see how long we have to get the house signed over to our children, before we get too old. And also, the implications on the children when doing this...

I think that you have to have ownership of your parents house for a minimum of seven years befor they die, OR go into a nursing home. In the case of a nursing home, you cannot be forced to sell it to pay for your parent/s upkeep in the home, nor will you be made to contribute anything towards it.

[islandgun]

How old are most children going to be when their parents die? 40 plus? (closer to 60 I reckon) That's a long while to bum around waiting for an unknown legacy.

 

agreed, but I speak as an old #### with kids still at school however I have known at least three people who have idled away inheritance not only from parents but also grandparents, one young man I knew (the only child, of two only children) seemed not to have any direction or abilities, another constantly nurtured his inheritance and lived frugally on it without employment, another is still hoping to be a rock star !

Edited August 27, 2015 by islandgun

[Chris Bb]

How old are most children going to be when their parents die? 40 plus? (closer to 60 I reckon) That's a long while to bum around waiting for an unknown legacy.

 

 

I'm the wrong side of 60 & SWMBO is approaching the next "big one".

 

And we each still have one parent fit & healthy!

 

We paid our daughter's deposit on a house some years ago in lieu of a silly priced wedding which she appreciated.

 

Yes, she'll inherit a house or two but the bank account will be empty.

[nobbyathome]

just out of interest if I sign the house over to the kids how long do I have to live so they do not pay inheritance tax?

Edited August 27, 2015 by nobbyathome

[OJW]

just out of interest if I sign the house over to the kids how long do I have to live so they do not pay inheritance tax?

 

Pretty sure it's 7 years. When you die it automatically goes to your Spouse tax free, then get's taxed when it goes to kids I think. Unless you've offloaded. This is only what I've gleaned from the odd conversation here and there, probably best to google it.

[lord_seagrave]

just out of interest if I sign the house over to the kids how long do I have to live so they do not pay inheritance tax?

Get proper tax advice or estate/wealth planning advice on anything like this. The rules are not so simple. If it is your home and you live in it, then you are not simply 'giving' it away. If you have other property, then there may be other (eg Capital Gains) tax implications.

 

As many members can testify, inheritance issues can bring out the very worst in people, it is worth investing in the correct advice whilst you can.

 

LS

[brett1985]

 

Pretty sure it's 7 years. When you die it automatically goes to your Spouse tax free, then get's taxed when it goes to kids I think. Unless you've offloaded. This is only what I've gleaned from the odd conversation here and there, probably best to google it.

 

i'm pretty sure that's accurate.

 

Get proper tax advice or estate/wealth planning advice on anything like this. The rules are not so simple. If it is your home and you live in it, then you are not simply 'giving' it away. If you have other property, then there may be other (eg Capital Gains) tax implications.

 

As many members can testify, inheritance issues can bring out the very worst in people, it is worth investing in the correct advice whilst you can.

 

LS

 

I think from memory that the house is best 'sold' for a reduced rate to the child/children and then rent is paid back by the parent while they are still living there. if you are part of the rent a room scheme that the government is running you can 'earn' up to £4250 each year from 'rent' without paying tax, this is due to go up to £7500 in April 2016.

depending on the amount paid for the house, if a parent wanted to return the money you could earn it back quite quickly and pay no tax.

this 7 year rule, however, would still apply as the house was sold at a reduced rate.

 

but yes, proper advice from a professional is a must.

Edited August 27, 2015 by brett1985

[mossy835]

I like the idea of the 'Living Mortgage' but my son in law is not keen at all! Your only here once so spend it.

 

 

 

+1

[jam1e]

I think that you have to have ownership of your parents house for a minimum of seven years befor they die, OR go into a nursing home. In the case of a nursing home, you cannot be forced to sell it to pay for your parent/s upkeep in the home, nor will you be made to contribute anything towards it.

Has that changed then Steve? I watched a TV documentary not to long ago, that stated you would have to sell your home for your care if you were the last surviving spouse? Or, when the last surviving spouse dies a claim can be made against your house. Although in fairness, my memory is a little sketchy with regard to that second part.

[steve_b_wales]

Has that changed then Steve? I watched a TV documentary not to long ago, that stated you would have to sell your home for your care if you were the last surviving spouse? Or, when the last surviving spouse dies a claim can be made against your house. Although in fairness, my memory is a little sketchy with regard to that second part.

You could be right. Laws are changing all the time. My parents signed their home over to my sister and myself many years ago. If either of them go into a nursing home (both 81 now and in good health) then the house, which they worked hard for, cannot be sold to pay for their care.

[Lloyd90]

You could be right. Laws are changing all the time. My parents signed their home over to my sister and myself many years ago. If either of them go into a nursing home (both 81 now and in good health) then the house, which they worked hard for, cannot be sold to pay for their care.

It's either changing soon or changed mate. They can not force you to sell up BUT anything you own / have over around £26,000 will have to be paid towards the care, either a contribution or full payment.

 

Once the estate value drops below this threshold then the social has to pay it and can not take any more.

 

BE WARNED. Anyone who is just above the threshold putting parents into a very expensive place thinking the social will pick up the tab after the first few payments are wrong. They will most likely move them somewhere cheaper as long as they claim it can provide the care required.

When I say your , I mean the estate holder (normally your parents) in your case steve you should be alright if signed over for many years before hand. You may want to check up though

[jam1e]

Looks like I need to get some professional advice .....

[team tractor]

I think if your worried about your kids wasting your money and sitting on their back sides you have failed as a parent. My kids already know the value of money at 6 and 9 years old.

 

I work with my parents and will never waste anything they leave me . Half the business is mine and it will all be mine when my parents pass but I hope my son will carry on our joinery company after me.

 

I've told my parents to spend all their money but they won't so I promise to invest it wisely.

[Carman06]

I luckily am still very young at 33 and there is no chance of any family leaving something to me or the wife as they haven't got anything despite coming from a large family. My Gran has a little but this will be left to my Aunty who still lives with her including the house. My dad has just used one of those equity release type things and downsized his house to have some spending money after struggling for last 10 years work wise. My mum has nothing and no assets. My wife's dad is one of 16 children but none of them have anything to their name.

Fortunately for us we have been more sensible and own our house mortgage free and have built up a little nest egg for the kids by saving the child benifit since day one. It does worry me sometimes that should something happen to us how would the kids be looked after (11 years & 9 years). We came to the decision a long time ago that there will prob not be a state pension etc when we reach that age so need to do something now.

[CharlieT]

Get proper tax advice or estate/wealth planning advice on anything like this. The rules are not so simple. If it is your home and you live in it, then you are not simply 'giving' it away. If you have other property, then there may be other (eg Capital Gains) tax implications.

 

As many members can testify, inheritance issues can bring out the very worst in people, it is worth investing in the correct advice whilst you can.

 

LS

This is indeed correct.

If you give your house away, but continue to live in it rent free the 7 year rule does not apply and you will pay inheritance tax on it.

If you decided to go down the paying rent route, the rent paid would have to be the market rent and don't forget the rental income would be subject to tax.

And don't forget capital gains tax when the "gifted" property is subsequently sold.

 

As you say, It is imperative to seek proper advice.

Edited August 28, 2015 by CharlieT

[djrwood]

I like to read how most are keen on trying to avoid paying for a nursing home out of their estate, instead wanting the care for free. Yet I bet many of you get quite excited when one of those benefit programmes come on showing people wanting to live for free.

 

I get the entitlement many feel after spending a life time working to amass a small fortune and then have it all taken away in order to pay for their care in their older days. I just don't quite agree with searching for a way not to pay for it. Personally when the time comes, if I can afford to pay for a better quality of care, rather than end up in some old cattle market full of people, I think that will be savings well spent. I'm having the same thoughts now at this stage in life with wondering whether I can afford to put my son through private education or not (doesn't look to hopeful but going through state school never did me any harm so I'm sure he will be fine also)

 

We are part of an ageing generation. I'm 28 and they predict the average life expectancy for my generation will be in to their 80's! The care sector is already stretched and it will only get worse without significant investment. I think the next generation will be moaning about having to support the elderly rather than the invasion of foreigners!

 

In all seriousness and back on topic, I think leaving of money is a very personal matter and will definitely be a case of each to their own. If my children are struggling, I would like to help them throughout their years rather than them waiting for me to die. The time people need money is in their 20's when starting a family and trying to get a home. Hopefully i'll be comfortable enough by the time my parents are looking like heading off.

 

I have been incredibly fortunate, in that after my granddad died suddenly at 71, my nan decided that she didn't want to wait for her day to come and would rather see us all enjoy what she had to give. She has looked after each of the 7 grandchildren very well and helped us of the right age do up our first houses. Must say she has never given us cash lumps, instead opting to pay for things like kitchens, bathrooms etc. Cash seems to complicate things in my opinion as will upset her if she believes it is being wasted. Also been fortunate in that my parents are of the same build and have helped both my sister and I get on the property ladder.

I am positive much of their decision is based on the government robbing you with inheritance tax, rather than worrying whether they will end up in a home.

 

Sod it. Best answer is to sell up when im 60, give a little to my child/ren and then sod off to Thailand and spend every penny I own on drink, golf and ping pong shows. When I'm down to my last grand a little trip to Switzerland to put me out of my misery before I lose all my faculties will be required.

[malkiserow]

This is indeed correct.

If you give your house away but continue to live in it rent free the 7 year rule does not apply and you will pay inheretence tax on it.

And don't forget capital gains tax when the "gifted" property is subsiquently sold.

 

As you say, It is imperritive to seek proper advice.

 

I imagine on the whole value not just the uplift since the kids ownership

[leeds chimp]

myself and old man have been talking about this recently since he moved down here...said to him bluntly ..spend and enjoy it and dont worry about me...or my younger dole dosser brother...he earned it...spend it

[Lloyd90]

My kids already know the value of money at 6 and 9 years.

As much as you'd like to think that I've got to say your being a bit "kennel blind".

 

Your brain doesn't stop even developing until your around 20ish so to associate complex matters to young children is a bit optimistic.

 

Most adults I know are absolutely useless with money, everyone wants a nice car, nice house, designer gear, latest iPhone etc.

 

Just keep raising them right, atleast your off to a good start

[islandgun]

I like to read how most are keen on trying to avoid paying for a nursing home out of their estate, instead wanting the care for free. Yet I bet many of you get quite excited when one of those benefit programmes come on showing people wanting to live for free.

 

I get the entitlement many feel after spending a life time working to amass a small fortune and then have it all taken away in order to pay for their care in their older days. I just don't quite agree with searching for a way not to pay for it. Personally when the time comes, if I can afford to pay for a better quality of care, rather than end up in some old cattle market full of people, I think that will be savings well spent. I'm having the same thoughts now at this stage in life with wondering whether I can afford to put my son through private education or not (doesn't look to hopeful but going through state school never did me any harm so I'm sure he will be fine also)

 

We are part of an ageing generation. I'm 28 and they predict the average life expectancy for my generation will be in to their 80's! The care sector is already stretched and it will only get worse without significant investment. I think the next generation will be moaning about having to support the elderly rather than the invasion of foreigners!

 

In all seriousness and back on topic, I think leaving of money is a very personal matter and will definitely be a case of each to their own. If my children are struggling, I would like to help them throughout their years rather than them waiting for me to die. The time people need money is in their 20's when starting a family and trying to get a home. Hopefully i'll be comfortable enough by the time my parents are looking like heading off.

 

I have been incredibly fortunate, in that after my granddad died suddenly at 71, my nan decided that she didn't want to wait for her day to come and would rather see us all enjoy what she had to give. She has looked after each of the 7 grandchildren very well and helped us of the right age do up our first houses. Must say she has never given us cash lumps, instead opting to pay for things like kitchens, bathrooms etc. Cash seems to complicate things in my opinion as will upset her if she believes it is being wasted. Also been fortunate in that my parents are of the same build and have helped both my sister and I get on the property ladder.

I am positive much of their decision is based on the government robbing you with inheritance tax, rather than worrying whether they will end up in a home.

 

Sod it. Best answer is to sell up when im 60, give a little to my child/ren and then sod off to Thailand and spend every penny I own on drink, golf and ping pong shows. When I'm down to my last grand a little trip to Switzerland to put me out of my misery before I lose all my faculties will be required.

Like your reasoning, one point though by the time your old enough you wont need a one way ticket to Switzerland it will be done on the NHS, lets hope its not compulsory

[norfolk dumpling]

This is a topic wife and I have been discussing quite a lot recently as we have a fairly messy family situation at present:

 

1) in laws not well. Aged 86 & 93. One won't see the year out. My wifeis due to inherit half of a very nice house.

 

2) our disabled son has cancer and won't out live us.

 

3) our daughters (both mature and in good jobs) are in hiding and not even a phone call in several months. Whilst we are not seeking physical help from them a bit of moral support might be nice.

 

When we re-write our will, as we will have to some time inthe next few years, if things stay as they are it is likely only our two grandkids will be beneficiaries. How much they get will depend upon behaviour/contact in the meantime. We will not publicise this ie no blackmail (Father-in-law using this tactic at present and were he not very old and infirm I could have slapped him!) but it just seems wrong. When my wife is a major carer for 2/3 presently that my daughters, who cannot even pick up the phone and ask how are things should get a share of our £3-400k (unless we have spent it!!) when we turn our toes up. What think you guys and gals??

[islandgun]

norfolk dumpling for what its worth, realise as much cash as you can and do whatever your son and you wants !

[fortune]

Why should the government have their hands on anyone's money or property at all? I should be able to give or receive without the thieving so and so's getting their hands on any of what I have. We have already helped our girls to get started because it is impossible for them to get onto the housing ladder without a leg up. Even when they are on the ladder they need help to hold on to the property. The wife helps out with childcare at odd times like school holidays because even with the wages of both parties it is a bit of a struggle for the couples when childcare is in the region of £50 a day. It has always been a struggle to get along but it is really difficult now with the financial hoops/criteria that you have to get through. It's harder than the salmon swimming upstream.

[Bobba]

No two cases are the same. As has been said, professional advice is essential. We did, and searched for legal eagles who specialise in wills and not a generalist solicitor. One of the issues we addressed was changing property ownership to "tenants in common". In this way we each own our respective half and whoever goes first their half goes into a trust for our kids. One reason is an inheritance tax issue, the other is that should the remaining partner need to go into care then the half of the property in trust cannot be touched and we have, between us, left something to our kids. Also, we have decided that should either of our children die before their remaining parent then their share of the trust does not go to their widow but to the grandchildren. Lots of things to consider. Make a list,then throw down your thoughts then consult a specialist who may have greater experience in legally ironing out the wrinkles.

 

And for those thinking of disinheriting their kids, a recent court case could frustrate that. It used to be that if a disinherited offspring could prove financial dependency it could ask the courts to award it part of the estate from which it had been disinhereted. The dependency ruled was turned on its head recently. A daughter who had not communicated with her mother for many many years managed to persuade the courts that her poor financial circumstances were such that she should have some of the estate. Bizarrely the courts agreed. The three animal charities who were beneficiaries now have to find a way of paying over part of the share they inherited!! So, again, this points to the need for specialist advice.