I’ve approached a solicitor on this but hoping the good people of AAM might be able to let me know if they see any possible problems with the suggested solution.
I am one of three siblings, Sister1,2,3. My mother passed away and left a will covering two properties she held in her own name and the family home owned with my father. I (Sister 2) inherited one property, which I was living in and continue to live in, so was allowed the Dwelling House exemption on CAT. My younger sibling, Sister 3 inherited the other property which was just below her CAT threshold.
My father then passed away. An issue has now arisen around the family home. In his will my dad left it to Sister 2 and Sister 3 with a right of residence for Sister 1 who is intellectually disabled. She has always lived in the house and continues to do so, on her own. However she does not manage the bills or other ongoing responsibilities of the house, we do that for her.
If we follow the will as it stands Sister 3 is facing a substantial CAT bill that she is not in a position to meet. We are looking for a solution that will protect my older sister in her home.
The solicitor we met with has suggested the best course of action is to have Sister 1 challenge my fathers will on the basis that as my mother provided for Sister2 and Sister 3, then my father should have provided for Sister 1. However as she would not be able to deal with the long term responsibility of managing the house, the solicitor suggests we (Sister 2 and Sister3) place the house in a trust for Sister 1 with both of us as trustees. We have been advised that this allows the house to be inherited by Sister 1 (the value would be below her threshold), taking Sister 3 out of her CAT liability, while more importantly protecting Sister1 in the long term.
On the face of it seems like the ideal solution as it covers things like, what happens if either myself or Sister 3 died etc. But I’m worried that we are missing something on the tax side. I want to make sure that we aren’t missing anything that we would be liable for?
I know its long winded but it’s a fairly unique situation and we want to make sure we are doing the best for our sister. Sorry myself and Sister 3 are executors of the will.
I am one of three siblings, Sister1,2,3. My mother passed away and left a will covering two properties she held in her own name and the family home owned with my father. I (Sister 2) inherited one property, which I was living in and continue to live in, so was allowed the Dwelling House exemption on CAT. My younger sibling, Sister 3 inherited the other property which was just below her CAT threshold.
My father then passed away. An issue has now arisen around the family home. In his will my dad left it to Sister 2 and Sister 3 with a right of residence for Sister 1 who is intellectually disabled. She has always lived in the house and continues to do so, on her own. However she does not manage the bills or other ongoing responsibilities of the house, we do that for her.
If we follow the will as it stands Sister 3 is facing a substantial CAT bill that she is not in a position to meet. We are looking for a solution that will protect my older sister in her home.
The solicitor we met with has suggested the best course of action is to have Sister 1 challenge my fathers will on the basis that as my mother provided for Sister2 and Sister 3, then my father should have provided for Sister 1. However as she would not be able to deal with the long term responsibility of managing the house, the solicitor suggests we (Sister 2 and Sister3) place the house in a trust for Sister 1 with both of us as trustees. We have been advised that this allows the house to be inherited by Sister 1 (the value would be below her threshold), taking Sister 3 out of her CAT liability, while more importantly protecting Sister1 in the long term.
On the face of it seems like the ideal solution as it covers things like, what happens if either myself or Sister 3 died etc. But I’m worried that we are missing something on the tax side. I want to make sure that we aren’t missing anything that we would be liable for?
I know its long winded but it’s a fairly unique situation and we want to make sure we are doing the best for our sister. Sorry myself and Sister 3 are executors of the will.
