Buying House with Elderly Parent

MaddyBC

I need advice!

My father-in-law is 74 but his health is poor for his age. He lives alone in a property he owns worth about £250k.

My husband and I worry about him living on his own. (He has problems with his joints and struggles going upstairs) After discussing our options for a few years we have agreed (with my FIL) that he would sell his house and we would buy a property that would be big enough for the three of us (and the family we plan to have).

He has said he wants to put £200k toward the purchase of the new house. My husband and I will then take out a mortgage of £120k. We are looking at houses around £300k and intend to use the additional funds to make modifications to make the property more suitable for my FIL. (Like converting the garage to be a downstairs bedroom for him and adding a ramp to the entrance etc)

My FIL will live with us permanently. My FIL does not want his name to be on our mortgage due to his age and doesn't have any concerns about us tossing him out. (He knows we never would) He is happy to have the house in our names and him give us the down payment because he says "it is going to go to us one day anyway".

My husband and I earn a decent combined salary and have good credit ratings and no debts. We have been living in rented house for 3 years while deciding what to do. We didn't want to buy a house that couldn't accommodate him if he needed us. We are entering into this arrangement because we feel it is best for my FIL and not for our financial gain.

I want to make sure we do this 'right'. God forbid something happens to my FIL in the next 7 years. I do not want us to encounter difficulties that could have been avoided. I am happy to seek professional advice but I don't even know what kind of professional we should speak to, Solicitor, Accountant, IFA?

Sorry this is so long. I thought with all the facts it would make it easier to give advice.

I would be grateful for any guidance!

Many thanks

Maddy

ginger_nuts

I would speak to a solicitor & accountant .
What would happen if your FIL had to go into a nursing home ?

lynzpower

At the end of the day, this is something that you need to talk through with a solicitor. My feeling is that assets should be liquidated for nursing homes ONLY f your FILs names are on the deeds, or HE has a home he can sell. However if he has no assets as his name isnt on the mortgage, then I certainly cant see you being liable for his care costs. HOwever, your solicitor should be able to talk through any inheritance tax issues which could arise ( not something I know muhc about)

clutton_2

This sounds like a wondefully caring thing to be doing - but you are right, that you do need advice - both from an accountant and from a lawyer.

If a person has disposed of assets within a particular time frame (and it may vary from council to council) of the person applying for a local authority care home place, the council may decide they sold the asset to avoid paying the care charges. You seriously need to talk to solicitor - preferably an independent one for your FIL and one for yourselves also.

very best wishes

elona

I am worried that if your name is on the house then FIL may be treated as a "dependant" of yours and you would both be liable for nursing home fees?

missk_ensington

Why would he have to go into a care home, is that not the point of him living with you?? I'd be keeping some of his money aside to pay a nurse to come in and help should his health deteriorate.

If he dies within a certain amount of years, I'm not sure if you'd cop for inheritance tax as your money and his is combined together as your home where your family live, besdies I think inheritance tax is dependant on your honesty as they don't have the manpower to start delving into transactions from years ago. Could be wrong though

lynzpower

I tend to think that there is a hell of a lot of panic around about these nursing home fees.

1) if the person needs NURSING ( ie MEDICAL) care the NHS pays for it out of thier continuing care package.
2) if the person needs CARE then they have to pay for it. Miss K is correct here the CARE component would be pretty much negated by living with you and the adapted garage ( which I think is a FANTASTIC idea BTW) and the shopping, cooking, cleaning and self-care issues should be covered within the family when he is unable to manage himself. Yes, you might want to employ a carer for the personal care bit, but its not a lot, usually around the tenner an hour mark ( although you can get MUCH less if you are savvy about it ) , and if its just for the personal care you could be looking at about 50 a week for bathing etc. Not a huge amount of money in the grand scheme of things IMHO.

I dont intend to turn this into an argument about how the care is dished out and whos had what outcomes ( usually disappointing, sadly) but just to let the OP know this fundamental difference in care issues which seldom gets discussed in the press.

MaddyBC

Thank you all for the advice.

One of the reasons for this move is to ensure that my FIL does not need to go into a care home. If his health deteriorated to a point where we could not care for his needs (even with a nurse) then we would have to face options such as a care home. However that is certainly not our plan.

I have booked an appointment with a solicitor to discuss our options in detail. Once I have a proper understanding of our options from a legal point of view, I will look to meet with an accountant to see how our options stack up financially.

Maddy

lynzpower

Maddy

Bear in mind the difference between NURSING care and CARE/ RESIDENTIAL care. This is the fundamental difference that you need to get your head around.

Additionally, I also know for a FACT that some nursing care/ continuing care can and is provided at home, by nurses along with district nurses. Sometimes of course, for those who remain in "thier own home" cna be packages of both NURSING and GENERAL care, as I outlined above.

Have a look at this http://www.nhfa.co.uk/modules/standard/viewpage.asp?id=174 it might give you a bit more idea of the difference.

Feel free to PM me with any questions, Im not an expert, but I know some stuff

missk_ensington

Lynzpower- do you work in this area? You might be able to clear something that was baffling me- (Sorry OP I'm digressing from your thread)

Anyway, I viewed a house some time ago before deciding on the one I have, and it was being sold by a son of the woman who owned it- his Mum had gone into Residential care. Now, what would be the point of him trying to get the best possible price for his Mum's hosue if it all has to go to Government? Can you keep some?

Otherwise why not say, here have it for £50,000 below the estimate just to get rid cos the only person you're saving money is the government???