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Loan to mother in law

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Tiggy777
Tiggy777 Posts: 94 Forumite
Part of the Furniture 10 Posts Combo Breaker


Hi all

My mother in law is in the process of purchasing a new retirement property but is short by about £20,000 on a property costing approx. £180,000

She has enquired if I could lend her the money to be repaid when she dies and the property is sold.

Whilst we are ok to do this I just wondered the best way of setting things up and the risks involved, mainly about her going into care and the property being used to pay for fees at some stage in the future and possible how to protect the money against inflation (for obvious reasons don't really want to charge interest so wondered if a possibility was to link to a percentage share in house.

Would welcome any comments or suggestions.

Many thanks for the help and your time

Regard

Tiggy


«1

Comments

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    She could amend her will to give you £20k before whatever distribution she then wants to make of her estate.

    It's not without its dangers, but nothing is.
  • iolanthe07
    iolanthe07 Posts: 5,493 Forumite
    Be very careful. My in laws lost their home to care fees, and if you're in England you don't get any local authority help with care home fees until you're down to around £20,000 (don't know the exact figure.)
    I used to think that good grammar is important, but now I know that good wine is importanter.
  • normanna
    normanna Posts: 172 Forumite
    Fourth Anniversary 100 Posts Combo Breaker
    I've heard there's such a mark up on a lot of new retirement properties that people are finding it really difficult to sell if circumstances change due to negative equity as the price premium on new is much higher than other new builds and the facilities promised don't always materialise. Search for some BBC Moneybox podcasts from earlier this year/last year - worth a listen.
  • ReadingTim
    ReadingTim Posts: 4,084 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    iolanthe07 wrote: »
    Be very careful. My in laws lost their home to care fees, and if you're in England you don't get any local authority help with care home fees until you're down to around £20,000 (don't know the exact figure.)

    No, they used their home for care fees - why should the taxpayer tick up the tab when they have the means to pay? Or do you really mean you "lost" your inheritance...?
  • A friend was talking about this the other day and it was suggested to her to do something called tenants-in-common.
    Unsure if you can do this on a retirement property though.
  • Gaz83
    Gaz83 Posts: 4,047 Forumite
    1,000 Posts Combo Breaker
    iolanthe07 wrote: »
    Be very careful. My in laws lost their home to care fees, and if you're in England you don't get any local authority help with care home fees until you're down to around £20,000 (don't know the exact figure.)
    Why would they need their home if they're in a care home?
    "Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."
  • glennstar
    glennstar Posts: 282 Forumite
    Fifth Anniversary 100 Posts
    Never lend money to friends and family.

    I suggest you gift it to her and see what happens... assuming you can afford 2K.
    The views expressed here are my own. I am not a Solicitor nor am I affiliated with any of the parties I mention. If you disagree with any of my comments please say in whatever way feels most natural to you. No one self improves in a bubble!
  • MEM62
    MEM62 Posts: 5,312 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    ReadingTim wrote: »
    No, they used their home for care fees - why should the taxpayer tick up the tab when they have the means to pay? Or do you really mean you "lost" your inheritance...?

    You hit the nail on the head RT.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
    10,000 Posts Fifth Anniversary Name Dropper Photogenic
    edited 18 October 2018 at 10:47AM
    To get back to OP's actual question, just document it as a loan which she acknowledges with a signed statement, witnessed by two others and also take a copy of your and her bank account statements showing the money being transferred between you.
    The loan agreement can specify that the amount due upon death is either matched to the change in value of the apartment as a %, eg apartment goes up by 25%, OP gets back £25k, (though that could lead to a decrease) or use a published government figure such as RPI or CPI.
  • iolanthe07
    iolanthe07 Posts: 5,493 Forumite
    ReadingTim wrote: »
    No, they used their home for care fees - why should the taxpayer tick up the tab when they have the means to pay? Or do you really mean you "lost" your inheritance...?


    Why the hostility? Of course it is right that people should use the wealth in their property to pay for their care. I was just trying to point out a potential pitfall.
    I used to think that good grammar is important, but now I know that good wine is importanter.
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