Buying flat from deceased estate

seven-day-weekend

getmore4less wrote: »

It will be just getting the charities to agree a distribution.

What's the plan for the place,

Would the relative be interested in a deal now?

She might be. However I was worried about the Deprivation of Assets rule if she ever has to go into care. She is 82 and has no major health problems at the moment.

getmore4less

I was thinking you buy it at full market value now.

Simplifies the estate/charity interaction, becomes all cash.
No deprivation of assets you have paid for it.
You decide on the longer term issue with the lease(wither as part of the sale or later).

Depending on the relative you may want to help them out with no/low rent and potentially a life interest to protect them from being kicked out.

AnotherJoe

I see one main downsides with that;
Benefits, the person will likely lose a chunk of those as they now have a large sum sitting in the bank (or wherever).

seven-day-weekend

getmore4less wrote: »

I was thinking you buy it at full market value now.

Simplifies the estate/charity interaction, becomes all cash.
No deprivation of assets you have paid for it.
You decide on the longer term issue with the lease(wither as part of the sale or later).

Depending on the relative you may want to help them out with no/low rent and potentially a life interest to protect them from being kicked out.

However, if it was decided to sell me her home whilst remaining living in it, then in six month's time she has a stroke and goes into care, isn't there a chance they may look at it as a deprivation of her assets to avoid care home fees?

Although I suppose if we had paid the market value she would just have the money instead of the flat.

seven-day-weekend

AnotherJoe wrote: »

I see one main downsides with that;
Benefits, the person will likely lose a chunk of those as they now have a large sum sitting in the bank (or wherever).

She doesn't get much in the way of Benefits and anyway she could afford to pay her way if she has a large sum in her bank account.

bowlhead99

seven-day-weekend wrote: »

She might be. However I was worried about the Deprivation of Assets rule if she ever has to go into care. She is 82 and has no major health problems at the moment.

If she sells her house for market value she has not "deprived herself" of any assets. She still had assets, just different type of assets worth the same value.

If she gives it away - or sells at undervalue - when in decent health with enough savings and income to not need benefits in the foreseeable future nor the expectation of needing public funded care then the "deprivation" doesn't put anyone else out, so again no issue.

AnotherJoe wrote: »

I see one main downsides with that;
Benefits, the person will likely lose a chunk of those as they now have a large sum sitting in the bank (or wherever).

But if they have a large sum sitting in the bank they don't need benefits to get by, so as a taxpayer I'm all for that course of action.

, if it was decided to sell me her home whilst remaining living in it, then in six month's time she has a stroke and goes into care, isn't there a chance they may look at it as a deprivation of her assets to avoid care home

For them to decline to fund her care they have to prove the intention to deprive herself of assets with the expectation of gaining a state funded advantage such as welfare benefits or state funded care.

For something like having a stroke when she had not previously had strokes, or getting paralysed in a car crash when she didn't usually have debilitating car crashes, it is pretty difficult for them to say she deliberately deprived herself knowing our expecting she was going to have a stroke. Effectively they have to prove it rather than her being in the dock trying to disprove it.

And of course the action of selling a mortgaged property at its full market value to release cash and be able to afford other non-frivolous things in life (eg rent and bills) is not in itself a "deprivation", as mentioned above.

Of course there is the question of if you buy her out now, what does she live in? The same house (while paying you rent at market rate which you pay income tax on)? Or somewhere else cheaper/more suitable using the capital she has freed up to pay for it?

seven-day-weekend

, if it was decided to sell me her home whilst remaining living in it, then in six month's time she has a stroke and goes into care, isn't there a chance they may look at it as a deprivation of her assets to avoid care home

For them to decline to fund her care they have to prove the intention to deprive herself of assets with the expectation of gaining a state funded advantage such as welfare benefits or state funded care.

For something like having a stroke when she had not previously had strokes, or getting paralysed in a car crash when she didn't usually have debilitating car crashes, it is pretty difficult for them to say she deliberately deprived herself knowing our expecting she was going to have a stroke. Effectively they have to prove it rather than her being in the dock trying to disprove it.

And of course the action of selling a mortgaged property at its full market value to release cash and be able to afford other non-frivolous things in life (eg rent and bills) is not in itself a "deprivation", as mentioned above.

Of course there is the question of if you buy her out now, what does she live in? The same house (while paying you rent at market rate which you pay income tax on)? Or somewhere else cheaper/more suitable using the capital she has freed up to pay for it?

She would continue to live in the same place for as long as she wanted to, we would have this drawn up legally. As she would be our tenant, we would draw up a tenancy agreement. However, we would not want any rent from her, but don't at the moment know whether this is legal. She would pay all the usual expenses on the flat as she has always done.

We do have another flat which we rent out, so are not entirely unaware of landlords' responsibilities (and yes, we do pay tax on the proceeds).

bowlhead99

seven-day-weekend wrote: »

We do have another flat which we rent out, so are not entirely unaware of landlords' responsibilities (and yes, we do pay tax on the proceeds).

Yes, no worries I'm not trying to suggest you don't know how to be a landlord and whatever legals go with it.

Just pointing out to you what deprivation of assets was and pointing out to Joe that not getting benefits because you have adequate cash is not a "problem" per se

seven-day-weekend

Does anyone know what the situation would be with renting, if we charged her no or very little rent? Would we be in trouble with HMRC?

(BTW, in case it is relevant, she is not a relative).

seven-day-weekend

bowlhead99 wrote: »

Yes, no worries I'm not trying to suggest you don't know how to be a landlord and whatever legals go with it.

Just pointing out to you what deprivation of assets was and pointing out to Joe that not getting benefits because you have adequate cash is not a "problem" per se

:rotfl:I have said the same thing!