Buying a share of my Grandparents house

Questions4Forumz

My Grandfather died last year, leaving his 50% share of the house in trust to my Mother.

My Grandmother went into care in March, and will at some point be required to pay for her care. She has investment assets and bank cash, which will cover care costs for at least five years.

The only other asset to her estate is the house, which presumably would be sold.

The house however, is very sentimental and has been in the family for fifty plus years. Do we have any options to prevent the sale of the house? It wouldn’t be able to mortgage the entire value of the house, but could I potentially take out a mortgage on some of its value, and have this money go to her estate? 

Could we potentially look at getting tenants, whose rent funds will go to the estate?

Side note: I heard that the Conservative government had plans to stop people having to sell their houses to fund social care, how would this impact the above situation - and when are these changes likely to be implemented.

[Deleted User]

Questions4Forumz said:

My Grandfather died last year, leaving his 50% share of the house in trust to my Mother.

My Grandmother went into care in March, and will at some point be required to pay for her care. She has investment assets and bank cash, which will cover care costs for at least five years.

The only other asset to her estate is the house, which presumably would be sold.

The house however, is very sentimental and has been in the family for fifty plus years. Do we have any options to prevent the sale of the house? It wouldn’t be able to mortgage the entire value of the house, but could I potentially take out a mortgage on some of its value, and have this money go to her estate? 

Could we potentially look at getting tenants, whose rent funds will go to the estate?

Side note: I heard that the Conservative government had plans to stop people having to sell their houses to fund social care, how would this impact the above situation - and when are these changes likely to be implemented.

What does your grandmother want to do with the property?  Does she still have capacity to make these kinds of decisions?  If the value of your grandmother's share of the house is required to fund her care then she can't deliberately deprive herself of that capital by selling it to you for under market rate.

Where do you think the money to fund social care is going to come from?  The economy has taken a battering this year so I don't see where the money to fund social care for people like your grandmother would come from.

macman

Sorry to be blunt, but very few people who go into care will be there for five years: I think the average is about two years.
Obviously it's not advisable to have the property unoccupied for a long period, so renting it out is the only option to selling it or living in it. However, becoming a landlord means taking on major legal responsibilities, and doing so for purely sentimental reasons is a really bad idea. Is your gran really able to take this on, even via an LA? Or is there a POA in place which allows her family to do this without her involvement. Your mum can't do it alone if she only owns 50%.

Mojisola

Questions4Forumz said:

My Grandfather died last year, leaving his 50% share of the house in trust to my Mother.

My Grandmother went into care in March, and will at some point be required to pay for her care. She has investment assets and bank cash, which will cover care costs for at least five years.

It wouldn’t be able to mortgage the entire value of the house, but could I potentially take out a mortgage on some of its value, and have this money go to her estate?

As your Grandmother now only owns 50% of the house, could you raise enough to buy that?

greatcrested

Questions4Forumz said:

Side note: I heard that the Conservative government had plans to stop people having to sell their houses to fund social care, how would this impact the above situation - and when are these changes likely to be implemented.

Not sure where you sourced this. The Gov is currently desperately trying to work out how to raise the money to pay for the pandemic. Inheritance Tax is an option for them. Protecting properties from funding social care is unlikely, though some kind of threshold and/or deferrred payment is possible.

Implementation is likely at the Autumn budget.

Does grandma have mental capacity? If yes, the decisions are hers. If no, who has POA?

Is this a permenant move to care,or might her health improve?

Letting the property is an option (for her or the attorney) to raise income for her care, but she/you/the attorney need to consider carefully the real financial costs/benefits of this, as well as the practicalities.

Post 7: New landlords (1):advice & information :see links in next post

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AdrianC

Questions4Forumz said:

My Grandmother went into care in March, and will at some point be required to pay for her care. She has investment assets and bank cash, which will cover care costs for at least five years.

The only other asset to her estate is the house, which presumably would be sold.

The house however, is very sentimental and has been in the family for fifty plus years.

...then what do you do with it? You're going to live there?

Is it going to sit empty for the next five years? You know she'll be paying double council tax after two? And it's uninsurable, and it's at risk of damage through neglect...

 Sentiment is all very lovely, but your grandmother has a lot of money, and she can afford to pay for the care she needs in her last days. There's no reason why her neighbours should have to subsidise an inheritance, is there?

Do we have any options to prevent the sale of the house? It wouldn’t be able to mortgage the entire value of the house, but could I potentially take out a mortgage on some of its value, and have this money go to her estate?

Of course you can. You raise the 50% value of the house, and then you pay her for it. She then spends that money on her care.

...then what do you do with it? You're going to live there?

Could we potentially look at getting tenants, whose rent funds will go to the estate?

How much is 50% of the profit from renting the house, after all expenses and tax, going to be?
How much is her care going to cost?

Now think about the emotional toll of seeing "Grandma's house" as just a rental property. "The tenants aren't looking after her garden properly, she used to love those roses..."
Nope, it's their home, their garden now.

Sentimental value and running a lettings business are a terrible mix.

Side note: I heard that the Conservative government had plans to stop people having to sell their houses to fund social care, how would this impact the above situation - and when are these changes likely to be implemented.

https://www.bbc.co.uk/news/uk-politics-52748652 is the most recent. A lifetime cap of somewhere around £100k has been waved around for years, with nothing actually happening. It definitely isn't going to be happening in your gran's lifetime.

AdrianC

Oh, yes...

And does your grandmother still have capacity to make these kind of decisions, or does somebody already have power of attorney?

getmore4less

That trust is almost certain to be a IPDI trust and any rent would be 100% for the grandmothers benefit.
To remove the property from the estate would require the grandmother to sell or gift her share and dissolve the trust to give up her beneficial interest in the other 50% held by the trust.