Buying a portion of Parents house

BitterAndTwisted

They may not welcome being managed. Is this something your wife has made clear to her parents?

Thrugelmir

When is the mortgage scheduled for repayment?

Cauli

BitterAndTwisted wrote: »

They may not welcome being managed. Is this something your wife has made clear to her parents?

Very. We moved here 'between houses', and then found out the extent of the situation.

Cauli

Thrugelmir wrote: »

When is the mortgage scheduled for repayment?

Middle of 2013

xylophone

And how had they proposed to repay in 2013?

Do you have £451000 in savings? You could then make them a loan of this so that they could pay off the mortgage? As soon as this was done, you would obtain a mortgage sufficient to pay for the extension and you and your wife would become tenants - in- common with the in-laws?
That should prevent the house being taken into consideration for care fees? The loan and interest would be repayable on the death of the second to die which should help lower any IHT payable? And presumably the house would be left to your wife/you in the wills?

Or some variation of the above depending on what savings you do have available?

As you say, all the parties are going to need expert advice!

Cauli

They would remortgage (tricky) or sell.

We could (just about) pay off their mortgage. I am not sure if Tenants in Common does prevent Care Home Fees, this was one of my original questions. The house would be left to my wife and I.

Errata

Cauli wrote: »

They would remortgage (tricky) or sell.

We could (just about) pay off their mortgage. I am not sure if Tenants in Common does prevent Care Home Fees, this was one of my original questions. The house would be left to my wife and I.

Read up and understand 'Deprivation of Assets'.

xylophone

With regard to deprivation of assets, as I understand it you would have to make any arrangements BEFORE there could be any question that care was needed - ie you would have to demonstrate that the arrangement was not primarily directed at avoiding care home fees.

In this particular case where your in-laws are heavily in debt you could make a strong case for having saved their home by taking the burden on yourself?

As everyone has said and you yourself acknowledge, you and your in-laws must take qualified, expert advice before you attempt any transactions - you probably need a solicitor with expertise in Wills and Trusts and benefits law- http://www.step.org/- this might help.http://www.ecadviser.com/xq/asp/txtSearch.Personal+Injury/exactphrase.1/sid.0/articleid.3A501061-8E12-4027-A3EF-8135F15CE977/qx/display.htm

Cauli

Thank you, I have looked now looked at it and I think(?) it will be ok. Both p-in-l are in reasonable health and the only time the the property would come into question is when the second needs to go into care. This hopefully would never happen but if it did it is currently not foreseeable (foreseen) - or does me writing this mean it is _pale_

CRAG, paragraph 6.070 states that:
"The timing of the disposal should be taken into account when considering the purpose of the disposal. It would be unreasonable to decide that a resident had disposed of an asset in order to reduce his charge for accommodation when the disposal took place at a time when he was fit and healthy and could not have foreseen the need for a move to residential accommodation."

xylophone

As the in-laws are currently in reasonable health I should think you'd be okay? I hope you'll let us know what happens in the end!