Mum want me to have 1/3 of house in exchange for loan. Can she do this.

LULULU1

Hi,

My mum has asked me to loan her 20k. She says in exchange she will put me on the deeds of her property (father passed away).

I have 2 other brothers whom she would make aware of the arrangement. When she passes on I would sell the property take my 10k back and divide the remainder equally with my other brothers.

I don't have any objection but she is 80+ and I wondered if she could legally do this or indeed is this sensible. Also how would this effect me if she had to go into a care home and pay cost., i.e. sell her property.

Many thanks for any help.

LU

whitewing

What does she want the money for?

Senior_Paper_Monitor

Without entering into the argument as to whether this is the best solution for whatever the problem is ... easiest done by simply placing a charge on the property repayable on settlement of the estate (but please decide whether its 10 or 20 K first !!)


A few solicitor fees will be involved but perfectly do-able.

CLAPTON

LULULU1 wrote: »

Hi,

My mum has asked me to loan her 20k. She says in exchange she will put me on the deeds of her property (father passed away).

I have 2 other brothers whom she would make aware of the arrangement. When she passes on I would sell the property take my 10k back and divide the remainder equally with my other brothers.

I don't have any objection but she is 80+ and I wondered if she could legally do this or indeed is this sensible. Also how would this effect me if she had to go into a care home and pay cost., i.e. sell her property.

Many thanks for any help.

LU

do you have 20 k to lend to your mother?

if you lend her 20k why will you only get 10k back after it's sold?

if she is 80 she could live for 20 years... will you need the money during that period?

what's the money for?

Mojisola

LULULU1 wrote: »

My mum has asked me to loan her 20k. She says in exchange she will put me on the deeds of her property (father passed away).

I have 2 other brothers whom she would make aware of the arrangement. When she passes on I would sell the property take my 10k back and divide the remainder equally with my other brothers.

I don't have any objection but she is 80+ and I wondered if she could legally do this or indeed is this sensible. Also how would this effect me if she had to go into a care home and pay cost., i.e. sell her property.

Just loan her the £20k. Write a loan agreement that the money will be paid back when the house is sold or on her death. That will protect your money if she has to sell the house to pay for care.

The proposed plan could cause problems. Giving away a property for £20k would count as deprivation of capital if she does need care. If you are in receipt of any means tested benefits when you sell the property, you won't be able to pass lump sums onto your brothers. And that's just for starters.

bryanb

Senior paper monitor has got it right in post 3. That's the only way to be 100% sure of getting your money back.

xylophone

Assuming that you have £20000 to lend to your mother that you know you will not need in the next twenty years ( a family friend made it to her 99th year and there are/have been family members who have lived well into the nineties), have a solicitor draw up a legal agreement such that you will be repaid the capital (plus rolled up interest/CPI inflation etc) when the house is sold?

ACG

Im assuming she would lend £20k and then get £30k back in return.

bryanb

xylophone wrote: »

Assuming that you have £20000 to lend to your mother that you know you will not need in the next twenty years ( a family friend made it to her 99th year and there are/have been family members who have lived well into the nineties), have a solicitor draw up a legal agreement such that you will be repaid the capital (plus rolled up interest/CPI inflation etc) when the house is sold?

An agreement is useless if there is no money to pay it. House could be sold to provide care.
I repeat the only sure way is a charge on the property.

getmore4less

xylophone wrote: »

Assuming that you have £20000 to lend to your mother that you know you will not need in the next twenty years ( a family friend made it to her 99th year and there are/have been family members who have lived well into the nineties), have a solicitor draw up a legal agreement such that you will be repaid the capital (plus rolled up interest/CPI inflation etc) when the house is sold?

That creates a potentially taxable liability.

xylophone

That creates a potentially taxable liability.

Yes. And if interest were paid on the loan, it would be taxable.

But at least the lender would be protected to some degree from inflation.

House could be sold to provide care.

But if there were a legal agreement that the loan would be repaid on sale of the house, the loan would have to be repaid before the proceeds could be used for care.

The solicitor drawing up the loan agreement would cover eventualities.