Dangers Of Giving Away Your Home

Timms Wills & Probate Solicitor Keith Baldock-Grimes discusses the potential consequences of giving away your home before you pass away…

In a recent news story, an 82 year old grandmother is facing eviction after giving away her home to her daughter under the incorrect belief that it would avoid her estate having to pay inheritance tax.

What Are The Dangers Of Giving Away Your Home?

If you give away an asset from which you continue to receive a benefit (such as giving away your home and continuing to live there rent free) then the whole value of the asset will be taken into account for inheritance tax purposes.
If the intention behind the transfer is to avoid care fees then it is a ‘deprivation of capital’. The Local Authority can use the insolvency laws to have the transfer set aside. They can also refuse to fund care. The Local Authority can go back as far as they like to see whether you have given away any assets.
You may still be responsible for the property insurance and general upkeep and maintenance.
Your children may ask you to pay rent.
If any of your children become divorced, then their share of the property will be taken into account when dividing up the matrimonial assets.
If any of your children become bankrupt, then their share of the property could be claimed.
Your children could take out a loan or mortgage secured on the property.
If any of your children die, their share of the property will pass under the terms of their Will or the laws of intestacy. It may also affect their inheritance tax liability.
Your children may have to pay capital gains tax when the property is sold.

How Timms Can Help?

Our friendly and knowledgeable Wills and Probate team have over 70 years combined experience guiding and advising clients on Wills, Probate, Estate Administration, Intestacy, Deeds of Variation, Care of the Elderly, Lasting Powers of Attorney, Court of Protection/Deputyship Orders and Trusts.

With four offices in Burton Upon Trent, Derby, Swadlincote and Ashby de la Zouch, we consistently provide an excellent service in every area of expertise and our client feedback reflects this. We can also organise home or hospital visits too if getting into the office is difficult.

If you would like further information, please contact the Wills and Probate Team on freephone 0800 011 6666 or via email at legal@timms-law.com.