Annie Shaw: Your money problems solved

Annie Shaw / 31 December 2018

Should you give away your home to your daughter? Are there any PIN-only credit cards? Annie has the answers.



Question

My husband and I are becoming frail. My unmarried daughter wants to live with us in case we need help. She owns no property, so we’re thinking of giving her our house so she’ll have a home when we’re gone. Is this possible and is it legal?

Answer

It’s perfectly legal and could be a good idea. She can take over the maintenance and administration in her own name, rather than needing power of attorney, and were you to pass away she would already have ownership. However, you must be able to trust her absolutely as, in theory, she could evict you.

If either of you need long- term care, a family home isn’t included in a care-fees contribution assessment as long as a spouse or a relative over the age of 60 still lives in the property. If your daughter is 60-plus, owns no other property and lives with you specifically to care for you, it’s unlikely you’d be deemed to have deliberately deprived yourself of the property to avoid care fees.

Inheritance tax (IHT) could be a problem. No matter how long you live in the house after signing it over, it could be considered a ‘gift with reservation of benefit’ (you haven’t really given it away) and if the value of your remaining estate plus the value of the house exceeded the tax-free nil-rate band, IHT might become due. Do take legal advice, particularly if the house value is high, as the extra family home allowance doesn’t apply to lifetime gifts. It may be simpler for your daughter to inherit the house..



Question

I feel nervous using contactless credit cards. Do any credit-card providers still provide PIN-only cards?

Answer

Contactless payment is convenient and keeps costs down. There are safeguards against loss and fraud, so your money is refunded if you become a victim, and the risks of using contactless need to be weighed up against losses from other payment means, such as mislaying your wallet, disclosing your PIN or internet fraud..

Can criminals steal from contactless cards?

When you choose a credit card, look at the interest rate, credit limit and perks, such as no charges for overseas use. If having a non-contactless card is important to you, several banks, including Nationwide, HSBC and RBS, still offer them if you request them.

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Question

My mortgage term ends in 18 months and I can’t pay it off. The lender, a bank taken over in the crash, no longer offers mortgages so I can’t extend it. I’m retiring at Easter so have no earnings to switch mortgage providers. Are there any options other than selling up?

Answer

If your pension income is generous enough to make payments as you do now, you may be able to take out one of the interest-only loans for later-life borrowers that are coming onto the market in increasing numbers. Or you may be able to take out equity release. Talk to a mortgage broker in the first instance if you think you could continue to maintain monthly payments during retirement. If your income will be very much reduced, then see an independent financial adviser specialising in equity release.

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Question

My son insists that he doesn’t need to set up a lasting power of attorney (LPA) for him and his wife because they have a joint bank account, so, should anything happen to either of them, each would be able to gain access to their mutual cash. Is he right?

Answer

If the joint bank account is literally the total sum of the couple’s assets he might get away with it, especially if the funds involved are small – and, of course, he might never need the LPA at all.

An LPA is, however, about much more than a joint bank account. I suspect that your son and his wife probably have more in common: for instance, a joint mortgage or joint tenancy agreement, where both signatures are needed for transactions, or bills in separate names where the service provider will deal only with the named account holder.

Furthermore, there are two types of LPA – one for financial matters and one for health and welfare. You have to set them up while you still have all your faculties. Once you are incapable, it is too late.

Annie Shaw

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The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.