Mitigating risk of buying a property and allowing a family member to lodge

ratrace

k3lvc wrote: »

Thanks Ratrace - the issue is that she wants to give equality to the siblings, has stipulated equality in the will but the actions in allowing him to live in the property with her risks making future equality impossible if he decides to stay put in the property and assert any rights his living there might have given

Right move on her part me thinks

Now it all really comes down to the chaps morals really in the sense that he has to respect his mothers decision to split the property equally and rightly so, after all they are all her kids

What the son (whos going to move in) should be grateful for is that given his personal circumstances, that at least he has a free roof over his head

This should be an ideal opportunity for him to get a job (if he is not working that is) and save as much money as he possibly can that way when the time does come he will have some money plus the inheritance and that all should allow him to buy his own place even if its only a 1 bed, that way all the siblings are happy because they will get their equal share and all relations will be saved and every 1's a winner

but if he decides to be clever ans try to claim anything other than his fair share then i can see this peeing the other siblings right off, for the sake of a bit of cash its really not worth it, you can earn cash anytime but family once its gone it gone

hope this clarifies it a bit

k3lvc

Update - M in L has realised the potential issues/risks and the conflicts with her wishes

Her son is a student for next 18m with limited income, a dependent 2yo for whom he's aiming for custody in his forthcoming divorce and limited equity from the agreed sale of marital home.

She wants to help him and as she already provides an element of childcare then having him living in same place makes sense.

Given the above what legal/safe ways can anyone suggest on how this can be achieved ??

Mardle

Parents help their children when they need it and right now your BIL needs his mothers help but all you can see is that somehow by helping him now your OH might have problems getting his inheritance in the future.

AdrianC

Mardle wrote: »

Parents help their children when they need it and right now your BIL needs his mothers help but all you can see is that somehow by helping him now your OH might have problems getting his inheritance in the future.

Harshly put, but I think this is just about the nub of it all.

Let's remember that the property is the M-i-L's, to do with as she wishes, until such time as she drops off the perch. At that point, and that point only, does any legacy come into it.

IF the son is unable/unwilling to move out, come probate o'clock, then the siblings don't HAVE to sell, of course. They could negotiate some other agreement with him, of course, allowing their brother to continue to live in a property which is jointly owned between the three of them - maybe with some rent being payable.

Is the estate likely to fall within IHT? If so, are there sufficient other assets that the IHT can be paid without the house being sold and/or mortgaged?

Mojisola

k3lvc wrote: »

Update - M in L has realised the potential issues/risks and the conflicts with her wishes

Her son is a student for next 18m with limited income, a dependent 2yo for whom he's aiming for custody in his forthcoming divorce and limited equity from the agreed sale of marital home.

She wants to help him and as she already provides an element of childcare then having him living in same place makes sense.

Given the above what legal/safe ways can anyone suggest on how this can be achieved ??

The future's impossible to predict - there's a range of scenarios.

It might be that having her son living with her will mean that she ends up staying in her home instead of going into care and the value of the house being used to pay for care.

He might get a brilliant job after uni and quickly get on the property himself again.

He might meet a new partner and move in with her.

He might live there until his mother dies and then comply with his mother's wishes and move out so that the house can be sold or get a mortgage in order to pay his siblings their share of the house.

It always helps having something in writing. Your MIL could write a letter to all her children explaining that she intends to help to her son and grand-daughter for the next two years until uni is finished and the divorce is settled by having them live with her but that, after then, she will expect him to contribute to the household or find his own accommodation. That will show that she didn't intend to financially support him for ever and confirm her wishes in the will that the house should be divided between all her children.

It will certainly help his fight for custody if his child is going to be living in a secure family home with a grandmother who already helps with the childcare. If he does get custody, he should also receive a larger share of the marital assets and child maintenance from the mother.

k3lvc

Mardle wrote: »

but all you can see is that somehow by helping him now your OH might have problems getting his inheritance in the future.

Thanks for your insight into my motivations but how wrong could you be

A) I'm a he and other half is a she

MIL interests come first - she's made promises via her will and is only just realising that her actions may impact those wishes in future. Whilst there may be an impact on my OH my MIL is anxious that fairness remains throughout and if she helps her son/granddaughter financially now they should receive less in future whereas her current plans/wishes could backfire vs these wishes

xylophone

With regard to the situation if your MIL needed to enter a care home

http://www.thisismoney.co.uk/money/experts/article-2181497/How-navigate-care-fees-maze-long-term-care-questions-answered.html

"Can children still live in my home if I need care?
I am 75 and currently in good health. My son and daughter live with me (both single) and will continue to do so. If I suddenly needed to go into long term care would my house have to be sold to fund that care or would the fact that it is the home of my children make any difference? PMJ
Under the current rules, unless your children were over 60 years old, were considered incapacitated or a dependant relative under 18 also lived in the property, then the property would be included in the financial assessment.
However, though your children may not benefit from any of the automatic property exemptions, the local authority does have a discretion to disregard the value of a property in which others continue to live. Therefore, it would be down to your local authority to consider on an individual basis whether to include your property in the financial assessment.
The local authority can never force the sale of a property to cover care costs, though they can include the value of it in the financial assessment. If the property is your only asset and was not disregarded by the local authority you would have no choice but to use its value to cover your residential care costs.
However, if you did not want to sell the property the local authority may be able to offer a deferred payment scheme whereby they contribute towards your care in exchange for an interest-free charge against the property. Though, this simply defers the issue as the amount will need to be repaid in the future, which may ultimately still require the sale of the property."

And see http://www.saga.co.uk/money/news/2014/july/what-you-need-to-know-about-care-home-fees.aspx?pid=mn
re 2016 onwards.