Could possibly be mortgage free, but some reservations

Tammy2

Quite out of the blue my Father In Law has suggested we both sell our properties and buy somewhere with an annex.

He would be putting in all the money from the sale of his place (around £400K) and we would only be putting in the equity from the sale of ours (around £150). We would then be mortgage free.

He assures us that the property would be in our name so as no one could come after it (e.g. should he need to go into a care home at some stage or OH's sister wanting more inheritance).

Not sure I want to go down this route, tempting though it is. But, if we do, what legal steps do we need to take to ensure it all goes to plan?

elantan

cant help you with that info i am afraid ... i would suggest you really do look at it though, we lived next door to the inlaws for two years a few years ago, we used to be really close, note the word used

Tammy2

I can imagine, lol.

If we do it, it will have to be completely separate, different entrances etc. I'd also have to completely love the house as we'd probably be there decades. It is an opportunity, but is a very big commitment.

pathtofreedom

Does he have any other kids? Just as this might cause problems with inheritance tax and trying to dispose of assets, if he did need to go into a care home. Might be worth on the tax boards or benefits as well for advice about that part.

Tammy2

Yes, my husband has a sister. I guess cash / other assets could be left to her to balance things out? We did raise it with FIL he didn't seem to think it would be an issue

My MIL died last November and apparently my FIL now gets her inheritance tax allowance (not sure if that is the right term)? But according to FIL he is just below the combined £700k threshold. Does that sound right? / is that how it works?

pathtofreedom

http://www.moneysavingexpert.com/family/inheritance-tax-planning-iht

http://www.nidirect.gov.uk/your-home-your-assets-and-your-care-home-fees - this is for NI but I think it is the same in england, someone else should be able to confirm.

What would happen if you and hubby got hit by a bus as you don't want to end up him being homeless.

I think you need some proper estate planning for all of this, and maybe a trust to protect both his kids interests.

Not many people on this board will take kindly to your plan though, as if he has the money to pay for fee's, and you're trying to hide the money from the local authority, if everyone does this it just puts the costs up and up for everyone else.

KarenStew88

If you go to a solicitor and explain everything to them, before there are any probs they will write something for you in your wills or something. We looked into doing the same and found out that if it was in the MIL's name and she died, you had to be careful with the will otherwise other family can say that your house where you live is part of her estate and therefore not yours. Solicitor is the way to go.

Tammy2

Yes, we will def go to a solicitor. Thanks