Buying a house in our name but with mil's money. Issues?

macman

Point 2. Yes, you can gift the property to whoever you wish to, and title transfers.
See post 7. Your MIL will have no ownership and no right of occupation. Her security will be that of a guest, not even a lodger. In the event of your death, divorce or bankruptcy, she could be homeless.
If she lives rent=free in the property, them it would be seen as a gift with reservation, and the 7 year rule would not apply.
You need to take professional tax planning and legal advice.

hb2

Your MIL should be very careful about giving away her assets. If she needs any kind of care in future, be it residential or live-in, she could be treated as if she still had that money and have to pay for the care. Local authorities are able to look back some years, I don't know if that period is fixed in law.

Of course, having moved in with your family, the idea is probably that MIL won't need this kind of care, but no-one knows what the future will bring . . .

lisyloo

I don't know if that period is fixed in law.

No it isn't.
The criteria is whether it was done to avoid care fees.

Of course, having moved in with your family, the idea is probably that MIL won't need this kind of care, but no-one knows what the future will bring . . .

On the plus side people tend to get carers in these days before going into a residential home and local authorities recognise that this is both cheaper and better. Living with her doesn't exclude her from having carers visiting as LAs do recognise the need for respite but it might decrease the amount a cash strapped LA is willing to provide (postcode lottery here).


My experience is that someone can have £300 income per week before paying for carers to visit (also limited on savings/assets but homes not included).


Once someone exceeds 4x1 hour vists per day then they need residential/nursing care.
Once someone needs 24/7 care and possibly 2 people to assist e.g. immobile then it's highly unlikely to be practical to care for them at home.
People with dimensia can be very difficult to deal with on an emotional level for family as they can sometimes be vile, so they are better of being cared for by people who are not emotionally involved.

getmore4less

MY first though was just sell yours and fund a bigger place with both lots of money.

By the time you find a place for the cash amount you have then go through the upheaval of an extension you will be months if not a year or two from now while you are cramped in place that is too small.

xylophone

It is not impossible that despite your best efforts, your mother-in-law may need professional, full time care in the years to come.

Would you be able to cope with a ninety six year old woman with dementia , doubly incontinent, stone deaf, immobile, and prone to urinary/ gynae infections?

My relative has PoA for somebody in this situation and she is not currently eligible for CHC - her fees are in excess of £5000 a month...

I would be very careful of creating any situation where you could be accused of deprivation of assets.

It seems to me that your MIL should be registered as a TiC for a proportion of the home and have some proportion of her money left in cash.

Cakeguts

The problem is that people don't look ahead. Most people could in their 40s and 50s look after an older person. However an older person can't look after an even older person and that is what happens when the care is needed. When someone gets to their 90s the chances are that their children are in their 70s. A 70 year old can't look after a 90 year old who is very disabled. My mother had Parkinsons Disease. She became very disabled and she had dementia. I takes at least two people to do lifting safely so if you are not careful you are looking at two 70 year olds lifting a 90 something year old. That is not safe for anyone.



Care homes are not there for people who are well. They are there for people who need extra care. My mother had to go into a nursing home. Staff there had to watch out for her all the time and they checked on her several times in the night. Could you do that? If not don't put your mother in law's money into your next house. Keep it in case she needs a nursing home.



My mother died in the nursing home when she was 80. She was very disabled. You could not have left her at home on her own and gone out to work. 24 hour care was needed.

tlc678910

Jeepers_Creepers wrote: »

......the financial benefits for us will certainly be useful but not huge (hopefully clear off small mortgage, and slightly larger home - both of which we'd achieve in a few years in any case if we wished).

Hi,
You have made clear you are repaying MIL in full and she then funds the annex. How are you paying her back in full if you are repaying a mortgage and the new property is larger? Is the new house cheaper than the old one and will only be bigger when extended?

If you intend to get a mortgage you can’t normally get one on a property that has been owned for less than six months.

I think MIL should lend you the money to buy the new house and she should put a charge against the property for her money. A charge like a bank has on a mortgage, protecting her money if the two of you were hit by a bus the day after the purchase - she will be owed the first x amount from any sale. The solicitor can help with this. When MIL is repaid the charge can be removed.

You will have to pay additional stamp duty as you will own two homes but this can be reclaimed if you sell shortly after (I believe you have 18 months to sell? Don’t hang around to claim it after you sell as there is also a different time limit on that.)

I expect MIL once repaid could pay the bill for the extension without future issue - it must happen all the time up and down the country. You are not doing this to avoid care fees - you have made no suggestion that MIL is ill or imminently requires care so it should not be a deprivation of assets.

In this case I disagree with some posters that you should not go ahead in case MIL ever requires care.

If I was a healthy 80 year old I would rather grasp the decade of good health living in good accommodation within my family, and then come what may, than stay living alone in case “one day” I required care.

You make no suggestion that MIL lacks capacity so I’m sure you are all capable of deciding if you are able to live alongside each other. If you have a family that has explosive fall outs that drag on for years I would run a mile, but if you have all rubbed along well enough for a lifetime then I expect you will continue to do so. It’s a happy living arrangement for many and I wouldn’t rule it out too quickly because of “what if’s”.

Tlc

Jeepers_Creepers

getmore4less wrote: »

MY first though was just sell yours and fund a bigger place with both lots of money.

By the time you find a place for the cash amount you have then go through the upheaval of an extension you will be months if not a year or two from now while you are cramped in place that is too small.

We had been looking for over a year for a place that would be large enough to move straight in to for both my family and the in-laws, but absolutely nothing suitable has come on the market which is also close enough to my wife's work and children's school. So when we started to explore the option of buying a 'small' house with enough land for an extension, a few options started to appear - that's why we've chosen this route.



Yes, there will be upheaval to some degree, but actually not that much as we already share a slightly-too-small home with an astonishing amount of mutual tolerance, and an extension can be knocked up in 6 months. Probably....

Jeepers_Creepers

tlc678910 wrote: »

Hi,
You have made clear you are repaying MIL in full and she then funds the annex. How are you paying her back in full if you are repaying a mortgage and the new property is larger? Is the new house cheaper than the old one and will only be bigger when extended?

If you intend to get a mortgage you can’t normally get one on a property that has been owned for less than six months.

I think MIL should lend you the money to buy the new house and she should put a charge against the property for her money. A charge like a bank has on a mortgage, protecting her money if the two of you were hit by a bus the day after the purchase - she will be owed the first x amount from any sale. The solicitor can help with this. When MIL is repaid the charge can be removed.

You will have to pay additional stamp duty as you will own two homes but this can be reclaimed if you sell shortly after (I believe you have 18 months to sell? Don’t hang around to claim it after you sell as there is also a different time limit on that.)

I expect MIL once repaid could pay the bill for the extension without future issue - it must happen all the time up and down the country. You are not doing this to avoid care fees - you have made no suggestion that MIL is ill or imminently requires care so it should not be a deprivation of assets.

In this case I disagree with some posters that you should not go ahead in case MIL ever requires care.

If I was a healthy 80 year old I would rather grasp the decade of good health living in good accommodation within my family, and then come what may, than stay living alone in case “one day” I required care.

You make no suggestion that MIL lacks capacity so I’m sure you are all capable of deciding if you are able to live alongside each other. If you have a family that has explosive fall outs that drag on for years I would run a mile, but if you have all rubbed along well enough for a lifetime then I expect you will continue to do so. It’s a happy living arrangement for many and I wouldn’t rule it out too quickly because of “what if’s”.

Tlc

Thank you very much - you've pretty much nailed it.

Yes, the new home would definitely be cheaper and very likely smaller than our current one - we have looked at a camping pod for my wife and I to cope with the anticipated dearth of bedrooms whilst the extension is built :-)

From the possibilities we've seen on the market so far, we would hope to be able to buy the new place outright (ie fully repay mil), pay off our smallish remaining mortgage and perhaps even have a small sum left over.

Mil would then easily be able to cover the cost of the extension and still have the significant proportion of her own house's sale money left over. What she does with this is her business only, but of course should she suddenly require full time care that money would be used for that. We have made it clear that this is her money.

Yes, she is fully compus mentis and also physically quite able - she takes her dawgs for walks a few times a day. She is a mean Bridge player and even went off to a Bridge weekend in Stratford a week or so ago (and won some matches...). We fully expect her to continue to be 'able' for a good few years, but of course this will inevitably change as time goes on. At some point we will have to devote more time and care to her, and also bring in some outside help.

I am fully aware of how hard things can ultimately get - her husband suffered from dementia before he passed away - and at some point she will almost certainly require full-time care, but we are not going to scupper what should be a very good decade or more for the whole family on the fear of the worst outcome.

What's the alternative? She buys a place on her own and continues to live independently for as long as she possibly can, before then either sorting out her own care, or asking to move in with us then? This seems like a crazy choice as we like to all be together whilst we enjoy life to the full - provided there is enough personal space...

Many thanks for your comments.

Annisele

Jeepers_Creepers wrote: »

Yes, there will be upheaval to some degree, but actually not that much as we already share a slightly-too-small home with an astonishing amount of mutual tolerance, and an extension can be knocked up in 6 months. Probably....

That sounds optimistic to me - but your "probably..." suggests you know that!



Would you be trying to buy something that already has (or doesn't need) planning permission for what you want to do? If not, would failure to get planning permission change your mind about the whole affair?