Buying flat from deceased estate

AnotherJoe

seven-day-weekend wrote: »

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.

Exactly, no benefits have been removed, she has it in cash instead of property , no deprivation.

AnotherJoe

bowlhead99 wrote: »

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

I’d say it’s a problem from a Money Saving POV.

seven-day-weekend

AnotherJoe wrote: »

I’d say it’s a problem from a Money Saving POV.

Well no..... it would be fraud to claim means-tested Benefits if you have the means!

However, I don't think it applies here.

AnotherJoe

seven-day-weekend wrote: »

Well no..... it would be fraud to claim means-tested Benefits if you have the means!

However, I don't think it applies here.

I wasn’t implying that at all.

The situation could easily be that someone who owns their house but has low income is due various benefits, but if they sell their house and now have no house but a chunk of cash in the bank, to equivalent value of the house, because they are over some arbitrary cash limit, get less or no benefits.

seven-day-weekend

AnotherJoe wrote: »

I wasn’t implying that at all.

The situation could easily be that someone who owns their house but has low income is due various benefits, but if they sell their house and now have no house but a chunk of cash in the bank, to equivalent value of the house, because they are over some arbitrary cash limit, get less or no benefits.

I don't see what the problem is, they will have enough money to not need benefits.......???

G_M

There are now various different options being discussed, all with implications.

1) current will.
Ask her to change it. Seriously - charities have a legal obligation not to 'squander' their funds and that ould include selling a part-share in a property at less than they could get.

As Executer, you could have a nightmare satisfying them.
As Beneficiary/buyer likewise.

Why not ask her to amend her will:
* make a bequest to each charity for a fixed amount
* no need to mention the property - just leave the 'residue' of the estate (ie whatever's left after paying the charities) to you (and /or anyone else she wants in whatever % she wants.

You as Executer can then sell the property to yourself as Beneficiary. The money you pay as B goes into the Estate (to pay the charities) and you inherit what's left. It then does not really matter about the precise amount the property is valued at since
a) the only Beneficiary who could complain about under-valuation is you!
b) the Estate is so far below the Inheritance Tax level that HMRC will not be concerned if the property is sold for £x instead of £y
c) the accounts, and Estate management will be much easier

2) you buy the property now
* if she pays you rent, you'd be her landlord,
i) with tax income implications on the rental income
ii) with legal landlord duties
iii) with Cpital Gains Tax implication when you sell as it's not yor main residence
iv) you could however draw up a life interest in the property - not sure the exact mechanism but a solicitor would sort this.

* she'd also be insecure. You might evict her
i) if you both fell out
ii) if you got divorced and your spouse took half (or more) your assets
iii) if you were declared bankrupt
etc (yes, all unlikely, but is it fair to put her at risk?)

* she might lose out on price rises eg
i) she sells to you now for £X
ii) so she has £X to support herself, and pay for future care
iii) Versus she keeps the house till she needs Care, then sells it for £X + y% (due to property price increase)
iv) so scenario iii) gives her more in the bank for her Care when she needs it

I don't think Deprivation of assets is relevant since she wll either own a house worth £X, or have cash worth £X.

However bear in mind that the property only has £30K equity. This is not much above the limit for care support(£17K ish I think?) so you'd be wise to have some evidence you paid market rate.

AnotherJoe

seven-day-weekend wrote: »

I don't see what the problem is, they will have enough money to not need benefits.......???

They will see what the problem is when their income drops merely because they changed the value they own from one form to another. In effect they will have transferred some large % of their accumulated house value to the government.

AnotherJoe

G-M i suspect your sell house now “price appreciation scenario” is unlikely to happen since it has a short lease thus as time passes the fall in value with a short lease cancels out the price rise.

G_M

AnotherJoe wrote: »

G-M i suspect your sell house now “price appreciation scenario” is unlikely to happen since it has a short lease thus as time passes the fall in value with a short lease cancels out the price rise.

Good point...

seven-day-weekend

Well thank you all, varying ideas there. Gives us plenty to think about and mull over.

I will keep you all posted.