Moving in with Elderly parent

stevenrbradley

Hi
we are looking at moving in with the Wife’s 83yr old father as he no longer wants to live on his own. He is selling his house and buying a big house near us where we can all live in. Our intention is to sell our house and buy a smaller buy to let to protect the asset in our current house. What are the pitfalls? Would it be better if he gifted us the house. Thanks 

AdrianC

Gifting you the house is almost certainly a terrible move. If he needs to go into residential care, he'll be seen to have deprived himself of the asset, and won't get his care paid for - but he won't be able to pay for it himself.

If you're living with him, and he needs care (PLEASE don't say "But we'll look after him..." unless you really know what you could be letting yourselves in for), he will need to sell the house. Where would you go then? Or how will his care be funded?

As far as buying a BtL - do you WANT to run a residential lettings business? Do you know what you're letting yourselves in for there? There are a myriad of other investments available... far lower risk, far more easily liquid, far less work, and likely better return.

Mutton_Geoff

stevenrbradley said:

Hi
we are looking at moving in with the Wife’s 83yr old father as he no longer wants to live on his own. He is selling his house and buying a big house near us where we can all live in. Our intention is to sell our house and buy a smaller buy to let to protect the asset in our current house. What are the pitfalls? Would it be better if he gifted us the house. Thanks 

I'd carefully consider the effects that a year's worth of lockdowns etc has had on him. In 6 months time he/you could find this decision was a huge mistake.

frogglet

Having looked after elderly parents,   I would say think long and hard about moving in. 
Cant you move close by and go in everyday if not 3 or 4 times a day. Then arrange carers as well.
Doing it all yourself is challenging to say the least.

elsien

Aside from the deprivation of assets issue, if he gifts you the house then you have a falling out, he is left homeless.  That would clearly not be your intention, but with the best will in the world, families do sometimes fall apart under the strain of changing health and support needs. 
He needs an equal amount of protection for his assets as you do for yours, purely because none of us have a crystal ball. 
Hope for the best, plan for the worst. 
(As an aside, I could not live with my 83 year old mother. We have a very good relationship when we have our own space but we row within a few days of going away together. It would be world war 3 if we shared a house.)

lookstraightahead

There's a deprivation of assets issue.

getmore4less

You don't give any numbers but there may be other issues that need looking at like IHT if he can sell up and buy a bigger place that would be cash at his age.

Often the better starting point for a shares living experience is to also share the ownership.
Rather than him own it or gift it to you so you own it  you could own 50:50 (or in a proportion that reflects occupation.

That way there is no gift with reservation or deprivation issues as you buy in from your sale and he get to keep/spend the cash.
(if you may need a mortgage there are ways to structure it as a debt so no mortgage needed)

IT also protect your property interests without going down the BTL route and protect his interests over gifting to you.


This approach does not eliminate all the issues and has some of its own but often better than the single owner options..


With him being 83 there is alos the posiblity you are old enough that his shre get disregarded should care be needed in the future.. 
 

TBagpuss

I agree with Getmoreforless. The better option may be or you to invest your equity into the new house, and for you and your  FIL to share ownership in the proportions of your investment. That way, you avoid the pitfalls relating to his gifting you property, and as you are investing your capital in another property you preserve your equity. (you could, if you wish, then put money into savings instead of paying a mortgage, either with a view to buying a bigger share of the house from him, or investing in a BTL or other property or different types of investment.

You and he will both need to take separate legal advice to try to ensure that everyone's interests are safeguarded - this might include making provisions about the timescales for any sale of the property if either of you wants or needs out, options for the other to have first refusal if either wants or needs to sell, etc. 

Another advantage is that this would mean FIL has some capital available to him (as he would be putting less into buying the new property) so he would be able to invest that in way that it was fairly accessible should he need it  - which would mean he could pay for carers or care home fees without having to sell the house, for a time, if it became necessary. 

Although you plan to care for him, he may well need additional support  in time so having liquid capital to allow that extra help to be funded when it becomes necessary 9f it becomes necessary) gives him more options - if he buys the house outright you could end up with a scenario where he is asset rich but cash poor and can't easily fund what he needs.