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If necessary, the house can be turned into an annuity through a reverse mortgage. "It's the statue, man, The Statue."
I know older people - not related to me, I hasten to add - who rely on their estate as a form of power over their children. Assurances from their children that they don't care about the money would be precisely what they don't want.
The more you have when you die the better you are...really...don't you believe me?? We are all in the gutter, but some of us are looking at the stars. Oscar Wilde
The above only showing how little I understand...wot I just rote. Don't fight forces, use them R. Buckminster Fuller.
http://fr.wikipedia.org/wiki/Soci%C3%A9t%C3%A9_civile_immobili%C3%A8re
It's used by non maried couples, for example the Royal-Hollande one.
If we bought our property through an SCI then we would own share sin teh company. The company would own the property. The shares can be left to anyone either of us wants to leave them to. So I could say that I wanted my shares to go to Colman or the-man-in-the-moon. The shares will nto go automatically to the bloodline relative. We are all in the gutter, but some of us are looking at the stars. Oscar Wilde
("I leave Buckingham palace to Billy Bragg" etc...) Don't fight forces, use them R. Buckminster Fuller.
you have restricted yourself by contract, e.g. by entering into an agreement to create and not revoke mutual wills; or it is something which does not pass to your personal representative on your death, e.g. jointly owned property held as joint tenants; or it is a contract in which your personality is an essential element, e.g. a contract to paint a portrait or to write a book; or it is property you do not own (e.g. assurance policies taken out by you on trust for another) and over which you have not been given a power of appointment; or the property has been 'nominated' and the nomination has not been revoked; or it is property the disposal of which is restricted by its nature, e.g. some rights in immoveable property such as a personal licence or permission to use or cross the land of another, or shares in some small companies; or it is your body; or statute law restricts your right to dispose of it in the way you wish.
(Completely OT, when did people start spelling the verb "lose" [past tense: I have lost my donkey; present tense: did you lose your donkey?] as "loose" [adj: "Yr trousers are so loose, they're hanging below your bum" "It's the fashion, man. Get hip grandad." "You'd find it easier to walk and run if that's where your troursers were. Around your hips, I mean." "Man, you're not getting much are ya?" etc...] Did someone change the rules? Is it an american spelling? Can I publicly state that the verb which means "to misplace an object or other item so that you can't find it again" is To lose (and not toulouse) (or even too loose)
Re: my question about signing deeds over to the children:
I can't find any laws stating that you can't bequeath your property to whomever you wish. The "Make A Will" sites all mention that if you don't write a will, the blood-line rules follow, but they don't say that they still (at least in part?) over-ride the contents of the will. Don't fight forces, use them R. Buckminster Fuller.
(Completely OT, when did people start spelling the verb "lose" [past tense: I have lost my donkey; present tense: did you lose your donkey?] as "loose"
I don't think I do this (but maybe?) but I do write 'looser'. Especially when it is to be pronounced 'loohuuser'.
I suppose it's possible, given that they can't tell a principle from a principal. "It's the statue, man, The Statue."
But then I thought, "Surely everyone has seen the word "lose" written down? "Lose" and "lost" surely appear in children's books, not to mention the adjectives "loose" and "looser".
And with that up he stood And the winner was the loser And this rhyme is rubbish, I know, But educational Stop laughing at the back!
(Though I doubt if there are all that many parents reading bedtime stories to their children from screens just yet.)
(Though I could be wrong. 'Tis fascinating watching the wheel of time turn and realise that yes, what you thought was one of the "facts of life" is, in fact, soon to be part of "What they used to do", where "they" means "me".) Don't fight forces, use them R. Buckminster Fuller.
In terms of pet peeves, loose for lose comes between it's for its (surely the most annoying of all) and lead for led (which I'm now seeing even on supposedly edited sites like HuffPo and Salon).
I think it must be to do with other uses of the word.
A dog lead
I lead him away.
A good read.
I read it at work.
Hmmm. Maybe "lead" has more "ee" uses, so the brain sees "lead" and hears "leed"? But then, what about "lead" weights? It was made of lead.
A conundrum wrapped in an enigma...until someone solves it. Don't fight forces, use them R. Buckminster Fuller.
It's a little hard on the eyes but it beats spending the extra time proofing.
You, sir, are a looser!
You, za, are a loo za! Don't fight forces, use them R. Buckminster Fuller.
It's not an area I'd depend on Internet information for at all ... lots of complicated, arcane, ancient laws in play.
Surviving spouses and civil partners are in a special position in that the court may well order that they should have a "fair share" of the family's assets which, in a wealthy family, may be a great deal more than only sufficient to live on. Ex-wives (and indeed ex-husbands) are also entitled to claim so long as they have not remarried. They are quite likely to receive something if there was a maintenance order at the time of death, but not if there had been a "clean break" at the time of the divorce.
Other members of the family who were dependant on the deceased, e.g. children, may claim a share of the estate if the Will does not give them one, but they are not likely to receive a higher sum than "maintenance". "Children", incidentally, can be any age at the time of their parent's death, not just minors.
The other main class of person who can claim under the Act are cohabitees -- defined as living as husband and wife for 2 years or more at the time of the death. In this case, the cohabitee does not need to have been strictly dependant on the deceased in order to receive provision.
The main purpose of making a Will is, of course, to ensure that your wishes are carried out after your death. If there is a possibility that the provisions of your Will may fall foul of the Inheritance Act, yet you have good reason for what you do, you can set out your reasons in a special document called an Inheritance Act Statement. For instance, if you have given their "inheritance" to one of your children during your lifetime and want to exclude that child from your Will, you can say so in the statement. While Inheritance Act Statements are not binding on the court in the event that your Will is disputed, the court is more likely to rule in favour of upholding the provisions of the Will if it can see that you have a reasonable motive for what you do.
http://www.cch-solicitors.com/wills/contest.htm
(Forgot a couple of links in the other posts...oops.) Don't fight forces, use them R. Buckminster Fuller.
A 1975 law? I wonder if did our normal cut-and-paste or whether that was a revamp of earlier rules.
I particularly love the idea that someone would imagine they could bequeath a contract for an uncompleted portrait.
If they have a will and leave everything to the donkeys then so be it...unless a blood relative pops up and successfully convinces a court that they are entitled to something! We are all in the gutter, but some of us are looking at the stars. Oscar Wilde
So...you when buying your property abroad you need not only a will in that country, but also proper tax and legal advice...otherwise that stack of treasure you were hoarding starts to be eroded by the wrong people... We are all in the gutter, but some of us are looking at the stars. Oscar Wilde
Actually it is more complicated in case of joint ownership : surviving spouse gets usufruit, right to use the property until s/he dies, whereas the children get the naked property. Un roi sans divertissement est un homme plein de misères
Surviving spouse has the right to "unmoved living" (orört bo), which puts a lower limit on how little she (or he, though it is more common that men die first) can be left with. The rest will then be inherited upon the surviving spouses death.
It gets really complicated when you have children who share only one parent. Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
In the LLP model, I assume the property becomes the LLP, then the parents and the children take on specific roles (maybe there needs to be a third person, a solicitor of some kind or just a friend of the family?, who "manages" the LLP. There would be (....fill in the blanks because this is what I'm missing...) and so, when the surviving parent, say, needed or decided to move into sheltered accomodation, a tenant for the property could be found and that tenant would (...fill in more blanks here...) meaning that money for the sheltered accomodation was freed up, no selling of the property was necessary and (....more blanks here related to inheritance tax and other such matters...)
Hence my request for a diary or maybe links to something that would fill in these specific blanks. An real example hopefully, with info. on
a) The necessary legal wherebywhats b) The various "agreements" between the parties (and associated legal wherebywhats
and I'm already confused!
Thing is, a lot of us will find ourselves in this position either as parents or children, and I'm all for ET developing beyond just 'aving a chat (which I enjoy mucho) and into...well, developing our ideas of "ways forward" into practical action beyond the type type read read. And the LLP-House scenario seems to me to be one of those possibilities.
Growing indoor herbs might be another...
Also, "How to sort out your business so you only have to work six months a year....and can then use your super-duper international rail ticket to travel lazily from place A to B imbibing....other places and other...er....imbibable...er...imbibes....ach...
So, I'm hoping that Chris can help out, even if just to paint a wide picture--just enough for me to see how it might help, eg, me when I am old and doddery (next Tues week, I think.) I would, of course, be happy to pay Chris or A.N. Other-Expert a decent rate for any hours they could put in to help me actually set up such an LLP, but for now I'm still at the "I like the idea but...I don't quite understand it" stage. Don't fight forces, use them R. Buckminster Fuller.
Simplifies things considerably.
You don't need a "Manager" per se.
But you still have family "Occupiers" and "Investors" plus a "Trustee", where you may bring in someone you trust (even a solicitor - if they would do it) in case people go under buses etc.
Individuals eg Mummy and Daddy, could be Members of all three stakeholder "groups" while other family members may only be Investors (especially when Junior leaves home, or when Mummy and Daddy get divorced).
So who needs a "pre-nup", or even a will?
You can extend this "family corporation" to acquire a property in which Junior lives etc etc
In the LLP ownership and control do not go together as in Companies.
I think it will be particularly interesting to family businesses who always have the problem of passing the family biz down through generations while retaining control.
Or of bringing in competent managers and keeping their interests aligned with those of the family.
Or of letting outsiders invest so that some family members can "cash out" yada yada
An LLP is limited only by one's imagination. "The future is already here -- it's just not very evenly distributed" William Gibson
There are plenty of corporations with 2 classes of shares -- some voting, some non voting. Ford Motor is the biggest example I can think of. The Fords only own about 10% of the company, but have a much greater piece of the voting stock.
Not dissing LLCs as much as failing to see the big advantage in re-labeling.
All Ford is doing is splitting ownership between two classes of financial investors. The company is otherwise structurally no different from any other as between the relationship between owners and everyone else aka "costs".
The difference is that the "Capital Partnership" variant of LLC's and LLP's brings the investors and users of investment on the same side.
The "Principal/Agency" problem of "the Corporation" - which requires the whole panoply of Company Law, Sarbox and all the rest - simply does not exist in this model.
If you need any evidence of the attractiveness of such a structure to investors you only need to look at the phenomenal growth in Canadian Income Trusts, which now extend to virtually the entire Canadian capital market.
This occurred despite the tax issues, management issues (an entrepreneurial trust is an oxymoron) and the complexity and costs of trusts (which is why accountants and lawyers love them).
Investors demonstrably like to share the Gross revenues with the management.
Would you rather drink the water before it goes into the bath, or after it comes out of the plug-hole? "The future is already here -- it's just not very evenly distributed" William Gibson
Well, here's the Sorcerer to help out his Apprentice ;-)
The reason the "Land Partnership" changes the game entirely is that it enables that bundle of rights and obligations we think of as "property" to be bundled and shared around in entirely new ways.
ie an entirely new form of tenure of indefinite duration - an "evergreen lease" - whereby for as long as you rent the Land and the Capital invested in it you pay an agreed "Capital Rental".
It also means that "Real Property" need never be bought and sold again, although "Occupiers" and "Managers" of it, and Investors in it, may change over time.
The key is that the "freehold" is put into "Trust" with a "Custodian" Member of the LLP or LLC - exactly in the same way that massive firms like State Street and Northern Trust act as "custodians" of shares while the "beneficial interest" is traded increasingly furiously on the casino's we call Stock Exchanges.
Having done this it is merely a question of who lives in the property, who invests in it, who manages it and what the relationships are between them.
French Law is interesting in respect of inheritance, and it would be interesting to see how this structure would intersect with it, with the property itself in trust.
This wrapper offers a neat IHT mechanism in that it is possible to transfer "Equity Shares" to one's kids and then to pay a "Capital Rental" to them (if you don't the Revenue will tax you on the benefit) and continue to live there.
But hey, that's no problem if you actually pay them not in cash but in more "Equity Shares".
The problem comes when you want to move. You have to convince the new "Occupier" to take on this radical new mechanism.
Well, when you tell him that all he needs to pay is an agreed "Capital Rental" - that if he pays more he starts buying "Equity Shares" in the property and that the outcome is much cheaper in cash terms - BECAUSE HE DOESN'T HAVE TO REPAY LOAN PRINCIPAL - then who knows, you might even get people interested.
If not, just rent it out conventionally and rent somewhere else. The model interfaces perfectly well with the existing mechanisms. "The future is already here -- it's just not very evenly distributed" William Gibson
The owner pays his "Capital Rental" not in cash but in more "equity shares".
If you run the spreadsheets the result is much less toxic than the other options: "reversions" (where the investor takes a punt on how long Granny is going to live) and "roll-up" mortgages at 2% over building society base rate, where the interest rolls up and (at today's rates) the mortgage doubles in 10 years.
So in the perfect world a pensioner could go to his pension fund and have it invest in his home.
For the pension fund it's a REIT clone (LLP's being tax transparent), but simpler and without the management conflicts of the REIT's the Treasury came up with.
Each pension fund could have stakes in a "pool" of its pensioners' properties.
For the pensioner it's the most equitable form of equity release there is.
It's a pity the Chancellor made it impracticable for UK pension funds (I won't bore you with the technicalities).
But that leaves the field wide open for overseas funds - particularly petrodollars looking for a GENUINELY Islamic home - unlike most of the hypocritical crap sold as "Islamic" investment at the moment.
There is over £1 trillion in UK property owned by the over-65's free of mortgage, much of it (unlike public housing rapidly being brought up to "Decent Homes" standards)falling into disrepair because the occupants can hardly afford to live, never mind maintain their homes in good repair.
In Newham, I understand maybe 40% of properties fall into this category. "The future is already here -- it's just not very evenly distributed" William Gibson
Suppose you can run a small Yoga studio on the following (average) annual budget:
Revenue: £100k (fees) Expenses: £85k (£45k teachers' wages, £20 admin costs, £18k space rental, £2k maintenance) Profit: £15k
Alternatively, you can buy the space for, say, £250k and pay the £18k/yr in mortgage payments.
Is there a non-toxic way to raise the £250?
One could value the business at £750k put it in trust, sell £250k worth of "equity shares" to buy the property, and pay 1/3 of the revenue (the total of "rent" and "profit" above) to the holders of the equity shares.
At the other extreme, one could value the business at £1.39M, put it in trust, keep £210k worth of equity shares for oneself, and sell £250k worth of equity shares to outside investors. This results in paying 18% of the revenue to the external holders of the equity shares, and 15% to oneself.
In the first case, the equity shares have an expected return of 13.3%, and in the second of 7.2%
Am I totally off?
The problem, in any case, is finding people who, collectively, have £250k to spare. The mortgage solution just requires (say) £25k, together with the "bank magic" of (say) 10% "reserve requirement". "It's the statue, man, The Statue."
In 1965, aged 90, she had sold her apartment in Arles to her sollicitor in return for a life annuity. In 1995, after having paid the annuity for 30 years, the sollicitor died before she did... "Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
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