Renting out my MIL's property

Miss_Merlot

This is it LEJC - there are just so many variables. Trying to plan for the unplannable really.

She might drop dead tomorrow.

She might need care in six months and live another ten years in there with dementia.

She might (as we're anticipating - as far as you can at least) manage for another couple of years where she is, and then we need to face up to the fact that it's care home time (would absolutely kill OH to have to make that call - and not cause of the money!).

Life expectancy of dementia varies but seven years post diagnosis is the average (we're about two years in from diagnosis - though five years into caring!), and two years average spent in a care home before people go...

Poor MIL. It is coming across as if I'm nickle and diming up her life on here! I'm really not. Just trying to do what's best.

LEJC wrote: »

TBH...its all speculation until such time as the property needs to be sold.
There are far to many different scenarios which could happen and for the time being I think you have covered the essentials well.

The house may never need to be sold.

From what I read at the moment MIL is able to fund her living without the need to sell....
It becomes a whole new ball game should she need residential or nursing care but I guess you may have a plan for that which also may not involve selling the house.

Ive been through this whole process from end to end and its not always the case that a property needs selling....its always easier to deplete liquid assets such as money in savings before selling property.

The type of illness that MIL has doesnt even have a particular pattern to it either....so there are no set timescales of what care she will need when...so live each segment as it comes and deal with it accordingly.

Miss_Merlot

Thinking about it, it doesn't seem to make sense for the LA to want to force a sale sooner rather than later, where there is significant rental income already coming in and going towards her (future) care.

If they forced a sale and MIL got £150k (her half), that is a finite sum, and if she lived another ten years, that would run out and they'd have to then stump up themselves for the majority above her pension.

If they accepted her overall income as including "non-finite" rental income and topped up maybe £500 per month as deferred payments, themselves, they may well end up paying less overall as a result.

But I'm well aware that government organisations don't always operate by logic.

Guest101

Miss_Merlot wrote: »

50% left in trust to him on his father's death years ago.

I know I'm repeating it. But are you sure?

I ask because if they were joint tenants- father and mother. Then she now owns 100% of the property.

It might just be worth double checking

Miss_Merlot

I'm sorry Guest - I'm still not getting it!

FIL and MIL owned the property outright on FIL's death, and his will left his half share to OH. So that would make MIL the owner in the sense that she had the right to live there for life, but half of it on paper belongs to OH?

I can only guess that MIL and FIL were both on the mortgage, but in reality FIL would have paid the lion's share over his working life.

Guest101 wrote: »

I know I'm repeating it. But are you sure?

I ask because if they were joint tenants- father and mother. Then she now owns 100% of the property.

It might just be worth double checking

Daniel54

Miss_Merlot wrote: »

FIL and MIL owned the property outright on FIL's death, and his will left his half share to OH. So that would make MIL the owner in the sense that she had the right to live there for life, but half of it on paper belongs to OH?

If your OH owns half the house,he will need to pay income tax on his 50% of the rental income and also his half share of all renting and maintenance costs.Would he plan to give your MIL his share of the rent after costs ?

I have POA for my 88 year old mother.I have never been able to find a good argument not to sell the house once she goes into care.

Assuming the above,it seems to me to you are just about teetering on the correct side of your duties under POA,but only just

Miss_Merlot

All the rent will go to MIL.

Not sure legally if it has to given the trust, but we want it to go to her.

Daniel54 wrote: »

If your OH owns half the house,he will need to pay income tax on his 50% of the rental income and also his half share of all renting and maintenance costs.Would he plan to give your MIL his share of the rent after costs ?

I have POA for my 88 year old mother.I have never been able to find a good argument not to sell the house once she goes into care.

Seems to me to are just about teetering on the correct side of your duties under POA

Guest101

Miss_Merlot wrote: »

I'm sorry Guest - I'm still not getting it!

FIL and MIL owned the property outright on FIL's death, and his will left his half share to OH. So that would make MIL the owner in the sense that she had the right to live there for life, but half of it on paper belongs to OH?

I can only guess that MIL and FIL were both on the mortgage, but in reality FIL would have paid the lion's share over his working life.

https://www.gov.uk/joint-property-ownership/overview
Joint tenants

As joint tenants (sometimes called ‘beneficial joint tenants’):

• you have equal rights to the whole property
• the property automatically goes to the other owners if you die
• you can’t pass on your ownership of the property in your will

Tenants in common

As tenants in common:

• you can own different shares of the property
• the property doesn’t automatically go to the other owners if you die
• you can pass on your share of the property in your will

Change your type of ownership

You can change from being either:

• joint tenants to tenants in common, eg if you divorce or separate and want to leave your share of the property to someone else
• tenants in common to joint tenants, eg if you get married and want to have equal rights to the whole property

There’s no fee to do this.


It's likely they owned as Joint tenants. But it's just worth checking that the type of ownership changed when the will was made.

Mojisola

Guest101 wrote: »

Charge on the property. Property sold to settle the estate, charge gets paid. It's not a case of bothering.

As Guest says, the house will have to be sold in order for her estate to be settled.

Executors have legal duties and they won't be allowed to not finalise the estate while the council is waiting for its money. If things become extreme, the council could ask for the executors to be removed and new ones appointed.

Daniel54

Miss_Merlot wrote: »

All the rent will go to MIL.

Not sure legally if it has to given the trust, but we want it to go to her.

Tax liability is apportioned by ownership -so your MIL will need to pay tax on her share of the rent and your OH will need to pay tax on his.

Unfortumatley you cannot simply deem that all the rent and all the tax liability is hers -it doesn't work that way

Miss_Merlot

Oh God this is all too complicated.

I suppose he either owns 50% or he doesn't - I just don't know which one it is!

Going to go and hide under a rock to cry.

And try to persuade OH to speak to MIL's solicitor. But he probably won't.