Buying parents house for them to continue living in

Computer_Beginner

Mojisola wrote: »

Minus the value of the loan.

IF the council agree that the loan was "genuine" and not "contrived to deprive".

The burden of proof will be on the claimant.

It's not black and white. All decisions will be individual.
But with the parents in their 70s, I'd expect the council to take a close look at it.

AnotherJoe

Computer_Beginner wrote: »

So what's to stop everyone taking "equity release" loans to avoid care home fees?

Nothing if done well enough in advance, so they have actually spent the money rather than it being squirreled away under sons bed, the money will indeed be gone, and parents will be able to stay in the crappiest and cheapest care home with zero choice about where they are sent.

After all, this is effectively the position that those who dont own a home or have substantial assets are in to start with, they either didn't earn enough to accumulate assets, or like the annoying couple on TV tonight they [STRIKE]squandered[/STRIKE] spent it on "designer" clothes, £12 gel per month for 12 year olds hair fashion, a bedroom for each child, and 4 foreign holidays a year so they will be unable to buy a house and will continued living in a rental indefinitely.

Computer_Beginner

bazzabear wrote: »

I certainly see your point, but it seems a bit heartless.

In an ideal world I wouldn't get mixed up in their finances. But I don't want them to lose their house while I sit comfortably telling them it's not a good financial decision for me to help.

Well it makes a nice change from the tales of spoilt youngsters scrounging from the "bank of mum and dad".
Whatever you decide, keep the care home "deprivation of assets" guidelines in mind.

POPPYOSCAR

Computer_Beginner wrote: »

IF the council agree that the loan was "genuine" and not "contrived to deprive".

The burden of proof will be on the claimant.

It's not black and white. All decisions will be individual.
But with the parents in their 70s, I'd expect the council to take a close look at it.

How on earth could they possibly come to that conclusion when the mortgage term is coming to an end and they need the loan to redeem the mortgage as they have no other way of paying it!

That is not deprivation of assets that is maintaining an asset.

Computer_Beginner

AnotherJoe wrote: »

Nothing like the annoying couple on TV tonight they [STRIKE]squandered[/STRIKE] spent it on "designer" clothes, £12 gel per month for 12 year olds hair fashion, a bedroom for each child, and 4 foreign holidays a year so they will be unable to buy a house and will continued living in a rental indefinitely.

Stories like that really annoy me. These people expect something for nothing.

I'm going to write letters of complaint to David Cameron, the Duke of Westminster, Prince Charles, Prince Edward, Boris Johnson and Jacob Rees-Mogg.

Computer_Beginner

POPPYOSCAR wrote: »

How on earth could they possibly come to that conclusion when the mortgage term is coming to an end and they need the loan to redeem the mortgage as they have no other way of paying it!

That is not deprivation of assets that is maintaining an asset.

Have you dealt with the council / DWP often?
Common sense, logic and fairness aren't exactly top of their list of objectives.

macman

They presumably took out a 25 year interest only mortgage in their 50's when still working? If so, I find it hard to believe that they have saved nothing at all to pay off the capital in all that time. Were you not able to assist them, what was their plan, other than selling the property and downsizing?
IHT is not an issue (at current values) if the house is their sole asset, but were you to buy the house and allow them to live in it, you would need to charge them a commercial rent, as otherwise it would be classed as a gift with reservation.

POPPYOSCAR

Computer_Beginner wrote: »

Have you dealt with the council / DWP often?
Common sense, logic and fairness aren't exactly top of their list of objectives.

Makes no difference.

It would be easily challenged.

Computer_Beginner

POPPYOSCAR wrote: »

Makes no difference.

It would be easily challenged.

Well I've never tried to challenge either, so I'll take your word for it.

I do however, know lots of people who have found both the council and DWP a complete nightmare. So I'm cautious. Especially when you consider that anyone appointed to "judge" their decisions, is probably friends or related, went to the same school, golf club etc. Basically all "batting for the same team".

Mobeer

Could they just take out another interest only mortgage? Some lenders have recently started to offer these to the retired.

Then perhaps consider whether the government's Support for Mortgage Interest (SMI) scheme is worthwhile (assuming they are eligible)?

I'd recommend a good read and then a financial advisor.