It is a widely known fact that when you pass away you can leave your estate to your family, as long as you have outlined the beneficiaries of your estate in a validly drafted Will. It is highly advised to draft your Will with a specialist solicitor. A less widely known fact is that it is possible to make gifts of your assets when you are alive. For example you may wish to give your house to your daughter for her to raise her family in. If you wish to make gifts of significant assets, or extremely large sums of money, you will need to involve a solicitor.There are intricate legalities surrounding gifting, and there are also a lot of risks.
You may wish to gift an asset to a family member for a number of reasons including:
1. To prevent family being subject to large inheritance tax bills
2. To help fund ongoing care should they be in a state of deteriorating health.
With regards to point one, this is unavoidable if the donor has gifted the home to the recipient yet is still living in the residence and with reference to point two, there are measures in place to prevent inaccurate means testing when ascertaining how much of their care fees an individual must pay. In fact a donor may find that they did not expect to need care and due to the gifting of their property it has transpired that only the most basic level of care can be provided for them by the government. Also, there is a different kind of danger in that if the recipient is involved in a bankruptcy or a divorce, the home may have to be sold as part of the settlement. As is blindingly apparent, gifting an asset must not be done lightly and solicitors are bound to inform all their clients of the all risks involved with gifting an asset in such a way.
Any gift that is made to a beneficiary must be done with no coercion or undue influence, full mental capacity, awareness of the legalities of the gifting process. Solicitors have guidelines in place to help them spot the warning signs of money laundering or fraud, be aware of this if you are thinking of gifting your assets for the wrong reasons. The legalities of the process will be explained by your solicitor, you should also be aware that your solicitor cannot act on behalf of both you and your donee, as this would result in a conflict of legal interest. If you are thinking of gifting an asset, make sure you contact a solicitor today as there may be a risk to you that you were not aware of and if you hear all the advice and still wish to make the donation you will need a seasoned professional to guide you through.