Protecting Mum in a family joint purchase

Marko286

This has been touched upon in other threads but I be interested in any more specific opinions on just this issue rather than IHT and deprivation of assets.
If there's a thread that deals with it comprehensively then don’t hesitate please let me know! I don’t want to clog up the forum with repetition.

In short my mum needs to move nearer to her family and its proposed she buys a property with my sister’s family.
She would use the proceeds from selling her house.
My sister and her partner would need to have a mortgage.

I feel its important that her investment (not a gift) is reflected by having her name on the deeds.
My sister and partner want to buy the house in their name as it opens up the choice for mortgages.
We haven’t found out yet for sure but think that any mortgage they might be offered in these circumstances may make the purchase impossible.
However I think leaving mum off the deeds leaves mum very vulnerable in terms of mortgage default, relationship breakdown, ability to realise her investment for care homes, and inheritance for my sister and I.
Do people agree and can anyone suggest a strategy for getting out of this mess?
Something has to happen as she's 6 hours drive away for everyone and in unreliable health.
Many thanks in advance hope someone can help

Jenniefour

Will your mother have sufficient funds from her sale to buy herself a small apartment more suited to her needs close to your sister? And what does your mother want to do?

Marko286

I'd considered a flat but there’s not much available. At the moment this seems like the best solution domestically but I am worried about her financial position if it goes ahead as is.

davidmcn

Marko286 wrote: »

leaving mum off the deeds leaves mum very vulnerable in terms of mortgage default, relationship breakdown, ability to realise her investment for care homes, and inheritance for my sister and I.

None of these things would be easy to deal with even if her name were on the deeds. As above, is the joint purchase actually necessary, or can she afford her own place?

xylophone

Is there a sheltered housing development near you or your sister where your mother could buy or rent something suitable?

Cakeguts

This is how I see it. Your mum may have got a lot of friends in the area where she lives and she would lose them all if she moved to be near you and your sister for your convenience.

If you and your sister both work you are not going to be able to look after her during the day even if she lives near you.

What is best for your mum is to downsize to some sort of retirement property where she already lives so that she doesn't lose her friends. I am sure that her friends can keep an eye on her better than you can.

ACG

There are Mortgage lenders who will allow more people on the deeds than are on the Mortgage, which means your mums age would be ignored.

Options are limited however, but it can be done and at normal rates. Speak to a broker.

Not an ideal conversation, but it might be also worth discussing what happens when she does pass away. Presumably you do not your mums equity in the property to be transferred in full to your sister?

Sarastro

I really think you need to identify what your mum's needs are and whether this option meets them.

If she's in need of support, then she might be better moving into a supported housing option, rather than you sister's house. IF moving in with your sister is the best way to meet her needs, then okay, but she must have her name on the deeds so that she can access the asset in the future.

I think you are right to raise the concern. I don't really understand the thinking behind making the purchase all in your sister's name because it opens up mortgage options...? What does that mean?

saajan_12

Options:
1) Retirement home / small flat near where she lives currently where she has friends

2) Sister buys larger house, mum lends her the money and places a second charge on the property. Then sister can still get mortgage but mum's interest is protected - no deprivation of assets as that value is still part of her estate, mum can still will her money to whoever even if its tied up in the house. Note even if mum had name on deeds, money would be tied up and the sister / private buyer would need to buy out mum's share to release her funds.

AdrianC

Can the mother's investment be recognised with a charge against the property, rather than necessarily being a shared owner?

Margot123

From my own experience of families doing this, please consider your Mum's needs first and foremost.

People can be made to feel more vulnerable than they actually are in order to satisfy the needs of others. An image of an ideal life where they are cared-for in their time of need can be easily conjured-up. Sorry to be blunt but this is what happens.

The scenario of 'so-and-so will care for me in my old age if I live with them' hardly ever works out as planned. Families become stressed and then see the older person as being a burden; I have witnessed this several times. Older people can develop more serious issues with health and mobility and need 24 hour care. Can the family cope with providing this? It's much harder than anyone imagines.

I'd suggest your Mum keeps her eggs in her own basket, buys/rents somewhere manageable where she already has a support network (be that friends, neighbours or professionals).