Gifting the Family Home

Gifting the Family HomeIf you are thinking of making an outright gift of your home during your lifetime, be cautious!

Why make an outright gift of your family home?

There are many reasons for considering making an outright gift of the family home such as:

  1. General affection – your recognition of the recipient’s love and affection
  2. Moral obligations - you feel that it is appropriate that a family member receives a gift of value from you
  3. Financial obligations – your recognition of the recipient’s financial contribution
  4. Family harmony – avoiding family issues or disputes
  5. Passing of the burden of owning property – to free you of the financial burden and responsibility that comes with owning a home

But you should consider such a decision with caution as your home may be your most valuable asset.

Some of the reasons for being cautious about making an outright gift of the family home

  1. Financial difficulties of the recipient  - if the recipient has financial problems or becomes bankrupt, your home may be lost to creditors
  2. Divorce of the recipient – if the recipient gets divorced, your home will become part of his/her assets in determining a divorce settlement
  3. False hopes about tax – Beware you may not save inheritance tax or other taxes
  4. Recipient in receipt of means-tested benefits – such benefits may be stopped or reduced
  5. Long-term care provision – it may not reduce the cost of long-term care fees
  6. Premature death of the recipient – if a child dies, the family home will pass by their Will or the ‘rules of intestacy’ which could be to a spouse who may then remarry.

Still wish to gift your family home? Please contact Amy Makaruk or Trudie Nicholas on 01432 352121 who will be able to assist