Transferring property as a gift – are you sure????
- October 7, 2015
- Comments Off on Transferring property as a gift – are you sure????
Nicola White of Cohen Cramer Solicitors looks at the pitfalls of being generous without being clever.
As a legal practice with recognised expertise in such matters we are regularly contacted by people considering transferring property to their children. Their reasons for wishing to do so include a desire to avoid having to sell the property to pay care home fees, as a means of reducing an inheritance tax liability, a token of love and affection or a wish to see their family benefit from their generosity whilst still alive.
If you are considering transferring property, for whatever reason, great care is needed to ensure that you fully understand the implications of the transaction and to make sure that the transfer is the best way to achieve your goals. For example you may still face an Inheritance tax liability if you transfer your home but continue to live in it.
You also need to be aware that a transfer is just that – you are giving up your rights to your property. Once transferred the property belongs to the recipient and they can do with it as they wish.
This was the issue faced by Sheena Godden recently who failed in her bid to have a transfer to her son and daughter-in-law over turned. In 2012 she transferred her estate worth about £1.2 million, to them, after they agreed to move into the property and, at their own expense, renovate it back to its former glory.
Mrs Seddon later claimed that she did not understand the full implications of the transfer and believed she was simply giving the couple a right to live in the property. The judge did not believe her and accepted that she had known exactly what she was doing but had changed her mind about the gift following a family fall out. Mrs Godden is now facing legal bills reported to be in the region of £200,000 this is in addition to no longer owning her £1.2 million estate.
Even though ultimately successful her son and daughter-in-law had to endure defending court proceedings issued against them by Mrs Godden; not a pleasant experience for any family.
Whether you are planning to transfer your property, or whether you are the recipient of the property this salutary tale shows the importance of taking independent legal advice and the importance of both parties fully understanding the nature and implications of the transfer.
So if you are either the person transferring or the recipient in such an arrangement speak to us first. It is a lot easier to get sound legal advice before anything is signed than to try and argue against it at a later date.
To get the advice you need contact Nicola White at Cohen Cramer Solicitors on 01132247813 or email at firstname.lastname@example.org for a free initial consultation.