buying a % of parents' (mortgage free) house

crv1963

lisyloo wrote: »

Can a partner going through divorce evict the parents from their home (via a court order) in order to liquidate their divorce settlement?

Theoretically yes, if a couple divorce then all the assets they own go into a pot to be divided as the court sees fit. Just as if they owned a second property any tenants could be evicted in order for the asset to be liquidated to be split.


OP your idea seems on the face of it simple, but there are pitfalls as suggested in earlier posts. If you go ahead with it make sure you take proper legal advice, so both you and your parents are protected, have any agreement drawn up by a solicitor and get your parents to see a different one with it so if in the future care is needed the surviving parent can't be deemed to have deliberately deprived themselves of their home.


Could you not arrange for them (with you present if needed) to see an IFA who knows about equity release?

lisyloo

selling not an option

Sorry but why is downsizing not an option?
Our parents did this and released enough money to go on a few cruises.
They also bought into more sensible accomodation which was smaller/cheaper to maintain and physically easier to manage as they got older.


Formal equity release is expensive and can be onerous (we looked into it and were expected to decorate every few years which was very onerous for a disabled couple).

Tying your money up has pitfalls e.g. your parents could lose their home as your ex or beneficiaries have a stake and you might want your money back at some point (will that cause resentment issues if you can invest it in your own life?).

kidmugsy

18cc wrote: »

rather then buy a share of the property could you not just a lend the money and secure the loan as a charge against the property

That would also be much cheaper in fees as your parents would not effectively be selling part of a property and have someone else buy it

My thought exactly. Sticks out a mile as the sensible thing to do.

kidmugsy

markfff123 wrote: »

I think that would be less clear, as my potential 40k would be converted to 20% value of the property, which would (hopefully) rise through the years, making it a worthwhile investment for me

If you are going to inherit the house eventually your scheme means that you'll pay CGT on the capital gain of 20% of the house rather than there being no CGT to pay at all. So you'll be volunteering to pay extra tax and paying extra fees, while putting your parents' ownership at risk if you should become bankrupt, indebted, or divorced.

kidmugsy

p00hsticks wrote: »

Rather than you actually owning part of the property (having your name on the deeds) you'd simply have a charge on the property ...

As I understand it the charge would be registered at the Land Registry, which would have the beneficial side effect of making it harder for crooks ever to diddle your parents out of their house. It would also mean that your loan would have to be repaid before a local council could take the assets to pay for care.

In terms of protecting the interests of your parents, have you explained to them the advantage of their owning the house as "tenants in common" rather than "joint tenants"? If not, get the solicitor to explain when you meet to arrange the setting up of the charge.

xylophone

https://forums.moneysavingexpert.com/discussion/comment/74814476#Comment_74814476

See post 48.

atush

18cc wrote: »

rather then buy a share of the property could you not just a lend the money and secure the loan as a charge against the property

That would also be much cheaper in fees as your parents would not effectively be selling part of a property and have someone else buy it

This is what I was going to suggest

atush

And you could if you liked charge an amount of interest, which would be rolled up. Which would give you a gain (but will be taxed as income when you eventually get it).

Computer_Beginner

I would advise against getting involved.
Keep your affairs separate.
You don't know what you may need that money for in the future, regarding your own house, getting married, getting sick, unemployment etc.

Your parents retirement plans are not really your business.

steampowered

A loan, which is repayable on a sale of the property and is secured against the house, sounds sensible.

Of course this would not give you the benefit of any increase in value of the 20% share - though that won't matter if you are inheriting the house anyway.