Gifting property to your children

I recently had the pleasure of visiting the RSC in Stratford-upon-Avon to watch King Lear. This is the first time I had seen this play and was struck by the in-depth plots and schemes and wonderful performance.

But with my lawyer’s head on I also saw unfold in front of me the results of a generous father giving his land to two of his daughters who he felt were best deserved of his generosity and would, in turn, ensure that he was well looked after in his old age.

As the story unfolds I saw the daughter he did not favour being the child to come to his aid, with the two daughters gifted half of his land each treating him with contempt. They refused to accept the small conditions that he made in return for the gift of the land and eventually ending in a tragedy where all four lost their lives through jealousy and greed.

I don’t, of course, advise many Kings (or indeed the Queen) on their estate planning, but I have advised hundreds of people in relation to their Wills.

It is also very common to have people come and speak to me or my colleagues about gifting property to their children now. This can be outright gifts or sometimes they want to set up complicated Trusts.

There are many reasons why people look to gift property and money to children in lifetime. Inheritance Tax is a significant factor, but people also want to consider potential care home fees and benefiting their loved ones whilst they are around to see them enjoy the gift.

My advice however is generally that, much as in King Lear, the potential benefits could be easily outweighed by the pitfalls. Family feuds, difficulties with agreements about use or access of items given away, care and support not being provided or potentially even the purpose for gifting the items not being achieved are many of the reasons why these types of arrangement are not always suitable.

I do however, spend a great deal of time ensuring that their wishes can be managed by properly formatted Wills, ensuring that they leave the property to loved ones, without risking their own lifetime enjoyment. Myself and my colleagues will also happily talk about ways to plan your estate in lifetime with the minimum amount of potential problems.

If you are thinking of gifting property or assets to your loved ones, please take legal advice first. Contact myself or one of the team here.

King Lear Act 1 scene 5
Fool: …but I can tell why a snail has a house.
Lear: Why?
Fool: Why, to put’s head in, not to give it away to his daughters and leave his horns without a case.