Postby mosullivan » Tue Jan 15, 2019 12:04 pm
As a barrister doing this sort of thing all the time, I think the clear solution is a trust under which the wife has a flexible life interest with the trustees having power to apply capital for the wife. If there is a full life interest then the Trustees can sell the house and the wife would be entitled to the income.
The creation of a discretionary trust would make sense if care home fees asset protection is an issue - which it is not according the husband. The creation of a discretionary trust would mean inheritance tax on any value in excess of the nil-rate band sum. However, the trust could be wound up by a Section 144 IHTA appointment within two years of death in order to avoid the tax charge. This would involve appointing either absolutely to the wife or on an interest in possession trust.
An LPA appointing the husband and the sister as joint attorneys would not hurt either if the wife has her own property that needs managing.