Retirement

[Swindon On Tour]

I had mine late in life & will be in 60's if decide to go to uni. My thinking is, if I'm retired I'll be then classed as a low earner & so kids will qualify for for assistance.

If it helps Mate I am in the same boat.
Taking tax free pensions sums definitely helps kids with university grants. When I was working they got very little. My eldest when home works to back up his income to support his University studying.
I do feel guilty however I never had the support when younger. Mrs (no) still working and my youngest is in the last year of 6th form. He doesn’t want to go to Uni however that can all change.

 

[WHD]

Can anyone point me in the right direction to sign house over to the kids as I don’t want it sold beneath us to pay for care? Haven’t any health issues at present but recently friend of ours has put her mother into 24 hour care £1400 a week using her savings but that’s due to run out and they are being told they must sell house to pay for any future care

Hold old are you and how old are your kids? I believe you will need to prove your kids paid you something for the house otherwise the council will argue it was signed over to avoid care home fees. Also, if your kids have left home and have their own houses, there could capital gains tax to consider in the future when they eventually sell it.

 

[buster]

I love this site, I get some cracking advice on many things but there's also lots of scary 'advice' on this thread and other financial threads. Full disclosure I'm a financial adviser and have been for over 30 years.

You pay for a service which happens to be financial advice. You're told what that service will entail and how much it will cost before any work is started. Much like getting a price from a builder or any other tradesmen.

Financial advisers haven't received 'commission' since the retail distribution review was introduced in 2012. They don't receive 'trail commission' as quoted on this thread. You wouldn't ask a builder to give you half his fee because you know what you want him to do. Yet posters on this thread expect a qualified financial adviser to share their 'commission'.

You're also paying for protection for the advice provided, as they're regulated by the FCA unlike the posters on here. 'Stick it in a global tracker with this company' isn't the one size fits all answer. Are you comfortable with the risk of that? Are you comfortable with 25% drop in a bad year? Your capacity for loss probably isn't even the same as your wife's, never mind a random on an internet forum. What if that 25% drop happened the year before you're planning on retiring? There are far too many variables and everyone's circumstances are different.

I could go on but I'll probably start getting pelters. There are some very knowledgeable posters on financial matters on this thread but not all.

You don't have to engage with a financial adviser but if you find a friend or family member who does, that is probably the best way to find one you can respect and deal with. You might even be happy to pay for their advice.

Good post.

But , you’re providing a service similar with the builder you quoted , I’d have no hesitation in asking for a discount on anything I buy , why wouldn’t anyone ask you for a better price ? , splitting the commission that was a common term back in the day , it’s no different from asking for a better deal.

 

[Will e]

Can anyone point me in the right direction to sign house over to the kids as I don’t want it sold beneath us to pay for care? Haven’t any health issues at present but recently friend of ours has put her mother into 24 hour care £1400 a week using her savings but that’s due to run out and they are being told they must sell house to pay for any future care

You would need to speak to a professional as to the legality/ins and outs of "tenants in common" (Google it)
It may not protect you totally, but would be a start, as opposed to doing nothing, but you would lose control over your house in doing so.

 

[Brother Lee]

Good post.

But , you’re providing a service similar with the builder you quoted , I’d have no hesitation in asking for a discount on anything I buy , why wouldn’t anyone ask you for a better price ? , splitting the commission that was a common term back in the day , it’s no different from asking for a better deal.

I get that and tbh I do alot of work for free and also discount to a level when people are recommended. I guess we're all different with regards to asking for a discount.

I quote at a price I feel is fair for both parties and wouldn't do for less if someone asked. I'd rather walk away with the amount of regulation these days you have to have a bottom line, a break even figure at least. A few years ago a past client/acquaintance was saying 'this adviser will do it for this' I let him go to the other adviser as it just wasn't worth it.

My mother in law on the other hand, she's a demon at the car boot sale. Got me all sorts discounted. Her best work is normally getting them down from £1 to 50p so each to their own.

 

[buster]

I get that and tbh I do alot of work for free and also discount to a level when people are recommended. I guess we're all different with regards to asking for a discount.

I quote at a price I feel is fair for both parties and wouldn't do for less if someone asked. I'd rather walk away with the amount of regulation these days you have to have a bottom line, a break even figure at least. A few years ago a past client/acquaintance was saying 'this adviser will do it for this' I let him go to the other adviser as it just wasn't worth it.

My mother in law on the other hand, she's a demon at the car boot sale. Got me all sorts discounted. Her best work is normally getting them down from £1 to 50p so each to their own.

Like a lot of things it’s about meeting at a place where both parties are happy , I think in your industry the problem is that the fees seem to be a lot of money for the work involved, rather than you are charging for the experience and skills you’ve gained as well.

 

[safcgun]

Hold old are you and how old are your kids? I believe you will need to prove your kids paid you something for the house otherwise the council will argue it was signed over to avoid care home fees. Also, if your kids have left home and have their own houses, there could capital gains tax to consider in the future when they eventually sell it.

I’m 58 wife is 59 no mortgage on house. Kids are 31 and 23 both have own properties

 

[WHD]

I’m 58 wife is 59 no mortgage on house. Kids are 31 and 23 both have own properties

Okay. So I think they might need to pay stamp duty on what you "sell" it to them for, and bear in mind, what you do "sell" it for, CGT will be due on the difference between that and what they sell if for in the future. I think there might be ways round this with trusts etc, but I'm no expert.

Any grandkids in the mix? Put it in their name when they turn 18, register them at your address (so its their principle primary residence) and they should be free to sell it on later without GCT.

As I said, I'm not an expert, I would speak to a solicitor, this is just what I've learned from my own research.

 

[safcgun]

Okay. So I think they might need to pay stamp duty on what you "sell" it to them for, and bear in mind, what you do "sell" it for, CGT will be due on the difference between that and what they sell if for in the future. I think there might be ways round this with trusts etc, but I'm no expert.

Any grandkids in the mix? Put it in their name when they turn 18, register them at your address (so its their principle primary residence) and they should be free to sell it on later without GCT.

As I said, I'm not an expert, I would speak to a solicitor, this is just what I've learned from my own research.

Cheers that’s helpful wife going to make appointment to sort it out

 

[soapster]

we done this about 2011, so things may have changed. we both had wills drawn up by a solicitor. it cost, but our thinking was, expensive now but will save the children a fortune in the future.

IIRC, it is a case of the house being jointly owned. when 1st partner dies, that half goes into a trust, with the trustees being the children and the survivor. when the living survivor dies, the whole house is put into trust ran by the 2 children.

I am not sure about the care home bit, I know we discussed this issue but cannot remember the outcome of the discussions but I seem to think it was all taken care off by the house being in a potential trust.

 

[DaveH]

Can anyone point me in the right direction to sign house over to the kids as I don’t want it sold beneath us to pay for care? Haven’t any health issues at present but recently friend of ours has put her mother into 24 hour care £1400 a week using her savings but that’s due to run out and they are being told they must sell house to pay for any future care

I thought there was a rule where you can do it and if the person transferring the house either dies or goes into care within 7 years, then it is liable for inheritance tax or care home funds.

I don't know the details. I know my mam looked at it after we lost my dad, but then didn't mention it again and it seemed insensitive to push it. A conveyancing solicitor might be the best person to advise.

 

[houghton cut head]

I thought there was a rule where you can do it and if the person transferring the house either dies or goes into care within 7 years, then it is liable for inheritance tax or care home funds.

I don't know the details. I know my mam looked at it after we lost my dad, but then didn't mention it again and it seemed insensitive to push it. A conveyancing solicitor might be the best person to advise.

The 7 years rule means nowt if the authorities decide it has been done to avoid care costs, although each authority is different in how aggressively they look into your finances. Sunderland Council were light touch when my Dad was in care, and didnt want anything from the distant past

 

[a1970man]

The 7 years rule means nowt if the authorities decide it has been done to avoid care costs, although each authority is different in how aggressively they look into your finances. Sunderland Council were light touch when my Dad was in care, and didnt want anything from the distant past

That's what I was concerned about.
My parents put their house in trust as one of their friends lost the whole lot to the council when they had to go in a home and they wanted the house to go to the kids.
When I read up on it, there were many reports of councils dismissing the trust as an attempt to avoid charges and proceeded to court.
Hopefully as time goes by it's less of an issue and fortunately, their both fighting fit and active.

 

[DaveH]

The 7 years rule means nowt if the authorities decide it has been done to avoid care costs, although each authority is different in how aggressively they look into your finances. Sunderland Council were light touch when my Dad was in care, and didnt want anything from the distant past

Cheers. I don't know how the rules have changed over the years or if what my mam suggested was even feasible.

That's what I was concerned about.
My parents put their house in trust as one of their friends lost the whole lot to the council when they had to go in a home and they wanted the house to go to the kids.
When I read up on it, there were many reports of councils dismissing the trust as an attempt to avoid charges and proceeded to court.
Hopefully as time goes by it's less of an issue and fortunately, their both fighting fit and active.

Rather than a trust, I wonder if a house could be sold for below market value then rented back for free or a nominal amount. I know there are tax implications of selling below market value. It feels like it is something those more wealthy can work around without too much trouble but it is difficult for those who do not have a lot of spare cash.

Relating this to retirement, it shows how it is worthwhile getting the balance just right.

If you don't invest into a pension or leave the scheme when you can't afford it, then you set yourself up for a long working life with a pretty bleak retirement. Go the other way, save too much at the sacrifice of enjoying life now, work longer to have a larger pot you don't need, and the government/council will take it as your health deteriorates.

Get out ASAP as soon as you know you have covered yourself with an amount you can realistically spend, seems to be the best way forward.

 

[SurreyMackem]

Get out ASAP as soon as you know you have covered yourself with an amount you can realistically spend, seems to be the best way forward.

The problem is you don't know how your health is going to be, how long you will live and how you will usefully use that time. It could be 40 years for some people thinking about retiring early. That is longer than their working life.

 

[Unbalanced Views]

I’ve 18 month or so to go, the summer of 2026, so not long to go. I’ve seen a few posts where people are wondering what they’re going to do once they retire, I’m the other way, I really don’t have time to go to work, I’ve got stuff to do stacked up.

 

[Flip]

we done this about 2011, so things may have changed. we both had wills drawn up by a solicitor. it cost, but our thinking was, expensive now but will save the children a fortune in the future.

IIRC, it is a case of the house being jointly owned. when 1st partner dies, that half goes into a trust, with the trustees being the children and the survivor. when the living survivor dies, the whole house is put into trust ran by the 2 children.

I am not sure about the care home bit, I know we discussed this issue but cannot remember the outcome of the discussions but I seem to think it was all taken care off by the house being in a potential trust.

Also to avoid inheritance tax (not an IFA but have some experience from about 10 years ago) you can put a life insurance policy on the final parent so if say it was 100K if life insurance was a 40K payout then that covers the tax liability.

 

[Aldhun]

Can anyone point me in the right direction to sign house over to the kids as I don’t want it sold beneath us to pay for care? Haven’t any health issues at present but recently friend of ours has put her mother into 24 hour care £1400 a week using her savings but that’s due to run out and they are being told they must sell house to pay for any future care

You can stay in the property once you have gifted it to your children but you must pay the the market rent for a similar property and all bills. If not, the property will not be exempt from inheritance tax. I thought of doing this but couldn't afford the rent as the value of my house is circa £1.5M 10x what it cost 38 years ago

 

[TommyB]

we done this about 2011, so things may have changed. we both had wills drawn up by a solicitor. it cost, but our thinking was, expensive now but will save the children a fortune in the future.

IIRC, it is a case of the house being jointly owned. when 1st partner dies, that half goes into a trust, with the trustees being the children and the survivor. when the living survivor dies, the whole house is put into trust ran by the 2 children.

I am not sure about the care home bit, I know we discussed this issue but cannot remember the outcome of the discussions but I seem to think it was all taken care off by the house being in a potential trust.

It's still in your estate and a personal asset until it's transferred to trust.
If the trust doesn't actually exist or own any of the property pre care home admission then it's included in the assessment.

You can stay in the property once you have gifted it to your children but you must pay the the market rent for a similar property and all bills. If not, the property will not be exempt from inheritance tax. I thought of doing this but couldn't afford the rent as the value of my house is circa £1.5M 10x what it cost 38 years ago

Also needs to consider the fact that if he signs it over to kids he loses complete control of the asset. They then have the right to boot him out and sell the property and there's not a thing you could.do about it. So make sure your kids are trustworthy before doing this.

 

[safcsafc]

It's still in your estate and a personal asset until it's transferred to trust.
If the trust doesn't actually exist or own any of the property pre care home admission then it's included in the assessment.

Also needs to consider the fact that if he signs it over to kids he loses complete control of the asset. They then have the right to boot him out and sell the property and there's not a thing you could.do about it. So make sure your kids are trustworthy before doing this.

Not just about them being trustworthy. If they are married then get divorced at any point in the future or if they ever come into financial difficulties themselves.

If the LA think you have made changes to avoid fees they will pursue it anyway

Trust funds - Google to see some of the stories where these have gone wrong.

None of the ideas to avoid care fees are without risk