Selling 50% of a house to pay for care home fees?

brigez

Anyway, back to my original question.

Selling 50% of a property, has anyone done a home reversion transaction? as that is one of the options I have found out about, but I don't think it will work for my situation.

As far as I have found out they will buy a portion of a property and not want money back until the owner goes into full time care, but if you have read my original post you will know I am in a different situation.

Fire_Fox

brigez wrote: »

Anyway, back to my original question.

Selling 50% of a property, has anyone done a home reversion transaction? as that is one of the options I have found out about, but I don't think it will work for my situation.

As far as I have found out they will buy a portion of a property and not want money back until the owner goes into full time care, but if you have read my original post you will know I am in a different situation.

With PoA you and your brother have a legal obligation to act in the best interests of your mother, even if that is counter to your own best interests.

Any sort of equity release/ home reversion/ secured loan is effectively selling a percentage of the property for substantially under market value. That is neither acting in the best interests of your mother nor in the best interests of the potential beneficiaries of the Trust/ will.

The only way you can realise the true value of your mother's assets is to sell her property on the open market.

gary83

I think any other solution, other than selling the home and everyone taking their share isn't going to work, nobody will be interested in buying half a house with no way of realising the value of it due to somebody living there owning a quarter of it with no intention of moving out.

How old is your brother? Does he make any contribution or rent towards the house? if your mother owns 50% and you own 25% each then why does he think he's entitled to continue living in a house he "only" owes 25% of without paying for the rest of it?

xylophone

I've looked a bit more at the trust paperwork (just trying to sort out whats what has been a pain), and it says my Mum is the setlor, a potential beneficiary and a current beneficiary.

My self and my brother along with my Mum are potential beneficiary's
.
My Mum owns 50% of the property outright and my brother and myself hold 50% of the property in a family probate trust and are responsible for sharing out her estate as per her will to other named family members.

So It looks like if we sell the house she will be liable for 50% of the value to go to her care costs and the rest to be split as her will wishes.........I think

Then on your father's death, your mother became the sole owner of the house.

She kept total control of 50% of the house and gifted 50% into a FIPT as here?

http://www.willpowergroup.com/services/wills-life-interest-trusts/family-probate-trust/

The Trust created (of which she, you and your brother were Trustees) was settlor interested because she (as well as you and your brother) were potential beneficiaries of the Trust.

If this is a FIPT, is the mental incapacity covered as detailed in link above?



With regard to your mother's estate, it appears that this now consists of the 50% of the property she owns outright and any other personal assets (cash/stocks/shares etc) that she also owns. It may be that these will be used up in paying for her care.

You and your brother have no personal ownership of the property at all.

If the property is sold, 50% of the proceeds will need to be placed in an account (accounts) in your mother's sole name with you and your brother as Attorneys.

The balance can be held in a Trust account - you will need to check with the solicitor what powers you have to make disbursements from the Trust and on tax treatment of such disbursements, particularly as the Trust is "settlor interested".

AdrianC

Look at the bigger picture.

You and your brother want to keep the house.
That doesn't alter the fact your mother needs to pay her way, and as her attorneys your duty is to do that before your own preferences.

So can you AFFORD to keep the house? All the rest is lovely, but you're dodging that. If you can't, then just sell the damn thing and your brother can use his quarter of the value to sort his own accommodation. He's a grown-up.

Cakeguts

brigez wrote: »

Ok, Thanks for the help so far.

I've looked a bit more at the trust paperwork (just trying to sort out whats what has been a pain), and it says my Mum is the setlor, a potential beneficiary and a current beneficiary.

My self and my brother along with my Mum are potential beneficiary's
.
My Mum owns 50% of the property outright and my brother and myself hold 50% of the property in a family probate trust and are responsible for sharing out her estate as per her will to other named family members.

So It looks like if we sell the house she will be liable for 50% of the value to go to her care costs and the rest to be split as her will wishes.........I think

What it looks like to me is that your mother has a lifetime's interest in all of the money from the house. So your and your brothers 50% in a trust can't be used to own any part of the house or money from it while she is still alive.



I could be wrong I often am but it looks to me a if the whole of the sale of the house could be used for the benefit of housing for your mother and you inherit 50% of what is left that was left as your father's 50% after her death and the other 50% of what is left goes into her will.



Someone tried to do this with my father's will and they got it completely wrong. What they finished up with was that although the money from my father's half was supposed to be in trust what they had actually done was something that meant that my father's half of the property should have been inherited on his death and the house sold then. So they created a complete mess.



Since then I have learned that they get it wrong quite a lot becuase it is very complicated to set this up correctly. Even if you can still do it.

lisyloo

brigez wrote: »

Anyway, back to my original question.

Selling 50% of a property, has anyone done a home reversion transaction? as that is one of the options I have found out about, but I don't think it will work for my situation.

As far as I have found out they will buy a portion of a property and not want money back until the owner goes into full time care, but if you have read my original post you will know I am in a different situation.

Not an expert on this but looks like they expect to liquidate their share when the own no longer lives there I.e. goes into a home or dies.

So this would not work in your case.

The options are either one of you or both of you buy it (not sure if you’d need to buy 50% or 100%) or you put it on the open market.