I agree with everything that has been said about reservation of benefit but if the disposition is into trust it must not be a life interest for him or it will be IPDI and hence aggregable with his estate on death. Using a straightforward discretionary trust might seem the obvious answer but you must take account of SP 10/79 assuming he continues to live at the property without paying rent (this is after all the reason behind all those rather contrived ‘debt or charge’ arrangements that we used to have before the introduction of the transferable nil-rate band). It seems to me that you could avoid that problem if he takes a lease of the premises from the trustees and pays rent for the period of his occupation until at least two years have elapsed from the date of Mrs B’s death to avoid the suggestion that an IIP has arisen in that period. This does not necessarily have to be a full market rent (see SP 10/79). After two years from the date of death the trustees can give him an IIP. An IIP created after two years will not be an IPDI and is helpful for CGT principal private residence relief purposes on a later sale of the property.
A gift to the children (without a trust) avoids the IHT issues referred to above but the children will not get CGT relief on a property they do not live in and (if they do not already own a property they live in themselves) this course of action will almost certainly adversely affect the rate of SDLT they have to pay when they acquire their first property. Furthermore Mr A does not have the same security of tenure that he would have as a beneficiary of a trust he controls.
There are a lot of other possible considerations e.g. nothing I have said above takes account of the possible availability of the residence nil rate band, and a discretionary trust is obviously going to be subject to periodic and exit charges if the value of the property exceeds the nil-rate band from time to time.