Do you understand the risks of transferring your home to your children during your lifetime?
Have you made plans for what happens in your absence? Were you planning to leave your home to your children in your will?
Due to the current state of the housing market, many people have been looking into the option of making the move to passing property over to their offspring during their lifetime.
There are however risks involved in this making this commitment:
- If your children do not live in the house with you, the house will be subject to Capital Gains Tax on any increase in value from the date of transaction.
- If your offspring have financial difficulties or involved in a divorce settlement, your house may be considered as part of their shareable assets.
- If you needed long term care, the local authority could consider this transaction as a way of avoiding paying for care and are able to ignore the transaction, without time limit.
- The value of your property will subject to inheritance tax as part of your estate.
Have you considered, as an alternative, transferring your assets into a trust fund? If you put things into a trust, provided certain conditions are met, they can mitigate some of the risks involved in transferring your wealth. A trust can be a way of providing a gift to those who you intend whilst still enjoying the use of the property and protecting property or other assets to pass on to your loved ones in the right way and at the right time for them. We also provide trust planning services.