Complicated 'Inheritance' between two siblings

Ben1989

Hi all,

Wondering if somebody could offer some advice as it's a bit of a head scratcher.

Here's the background story:

This is between my mother and my aunt (her sister). Nothing has been agreed to yet but a situation has developed where some type of agreement and 'formula' needs agreeing to.

My Nan unfortunately had a mini-stroke a couple of weeks back. Timing of the events regarding this were very very fortunate that my mother had a 'feeling' she should call my Nan and that she was at home on the sofa when it happened. She's come out the back of it fine after a critical operation which has significantly reduced the chance of it happening again. She lives on her own and since the stroke has been permanently with my parents to self-isolate before the op and for her recovery after a very invasive operation.

My Nan who is very independent has now all but said she doesn't want to go back home. Her worry is if it were to happen again and she was on her steep terraced stairs, for example, it could be fatal. She is 78.

My parents have offered for her to stay permanently at their house. She can fully take care of herself and she will not be a burden in any way from that aspect. My parents have offered to convert their garage into an annex of the house so she can have her own space but close enough to ensure everything is okay. Semi-caring I suppose. To build it, however, they'll need to sell her house to fund it.

This is where the money comes in. I'll round the figures for simplistic reasons. Her house is worth £100k. The annex has been predicted to cost £50k. My Nan has said she doesn't want any money from selling the house and it can go to her daughters, immediately. However, who should get what?

If it's purely 50/50 my aunt gets £50k to do whatever she wants with and my mother gets no free money as it'll be spent on the annex to look after their Mum, the added bills continuously for however long, the added low burden to take care of her and turning the garden into a building site for months. That is not fair. However, an argument could be had that the annex could increase the value of the house so there's potential profit there. On the other hand, that money would likely go to me and my sister, not directly to my Mum at all. There is another argument to say it might not increase the value at all as I imagine there is a small market for people who want an annex especially at the expense of a garage. There is also no way to know in black and white how much value it added to the house (if it would at all).

What do people think is a fair way to split the money? My Mum and my aunt are best friends so they will just want want is fair. The topic hasn't been mentioned yet but my Mum is looking for a baseline to start with. We can't think of any thus far.

RAS

Of rather more importance is that if your grandmother gives away money at her age and having already had a stroke and needs care, it may well be counted as deprivation of capital. 

That would mean that if she needed care either aunt has to return the sum she was given or granny would find herself without care. 

Ben1989

RAS said:

Of rather more importance is that if your grandmother gives away money at her age and having already had a stroke and needs care, it may well be counted as deprivation of capital. 

That would mean that if she needed care either aunt has to return the sum she was given or granny would find herself without care. 

Ah I wasn't aware this was a thing. So if my Nan were to sell her house to fund the annex (essentially for half the amount of capital she had) how would that work? Would the full £100k funds be sought after? 

Sea_Shell

As I understand it, the local authority just won't pay for any care if they believe she has deprived herself of her assets.

How you fund care is then your (family's) problem.

Mojisola

Ben1989 said:

This is between my mother and my aunt (her sister). Nothing has been agreed to yet but a situation has developed where some type of agreement and 'formula' needs agreeing to.

My Nan who is very independent has now all but said she doesn't want to go back home. Her worry is if it were to happen again and she was on her steep terraced stairs, for example, it could be fatal. She is 78.

My parents have offered for her to stay permanently at their house. She can fully take care of herself and she will not be a burden in any way from that aspect. My parents have offered to convert their garage into an annex of the house so she can have her own space but close enough to ensure everything is okay. Semi-caring I suppose. To build it, however, they'll need to sell her house to fund it.

This is where the money comes in. I'll round the figures for simplistic reasons. Her house is worth £100k. The annex has been predicted to cost £50k. My Nan has said she doesn't want any money from selling the house and it can go to her daughters, immediately. However, who should get what?

If it's purely 50/50 my aunt gets £50k to do whatever she wants with and my mother gets no free money as it'll be spent on the annex to look after their Mum, the added bills continuously for however long, the added low burden to take care of her and turning the garden into a building site for months. That is not fair.

However, an argument could be had that the annex could increase the value of the house so there's potential profit there. On the other hand, that money would likely go to me and my sister, not directly to my Mum at all. There is another argument to say it might not increase the value at all as I imagine there is a small market for people who want an annex especially at the expense of a garage. T

I cared for my parents until their death but there's no way I would have agreed to the kind of arrangement being proposed - all the disruption, all the care and responsibility, the effect on family life and no cash!

When your Nan sells her property, could she pay for the changes to the house and become a part owner?  It would depend on whether your parents own the house outright - it wouldn't be possible if there is a mortgage.

She should retain the rest of the money to pay her way in the household and for any outside help she needs.  Presumably she has a pension and could be entitled to Attendance Allowance as well.

Her will could leave her estate equally between her daughters - if her share of your parents' house is worth less than half of her estate, the division is easy.  If it's more than half, your parents would have to be able to raise some money to buy out your aunt.

Loza2016

What about Nan selling her house and buying a retirement flat with a warden. 

My Nan lived in one until she passed at 93. 

gettingtheresometime

Personally I would look for a different solution - whilst I'm sure that there hasn't been an actual arguments, the potential for a family rift is immense - and this is with the grandmother being able to look after herself.

Soot2006

Loza2016 said:

What about Nan selling her house and buying a retirement flat with a warden. 

My Nan lived in one until she passed at 93. 

^ This!  My 101 yo neighbour was totally against this idea, but her family talked her into it and so she ended up selling her house and buying a retirement flat by the sea. Within weeks, she aid it was the best decision she ever made. She met loads of other independent women, yet knew she could call for help if needed and it made her feel very safe. I lost tough a few years ago, when she was 103 years old. I hope she's still going - who knows . /

RAS

Also check whether gran could be eligible for local older person's rented housing; using the house sale to pay for some adaptions like a walk-in shower and support like a cleaner?

By the way do check both the local planning portal and building control as any annex needs to meet both requirements. No point in having gran in a freezing/blistering energy guzzler.

sheramber

Leaving possible costs for care out of the equation 

Either the money is split 50/50 and your parents  use their share as they see fit. if that  is making the garage into an annexe , so be it.

 Gran pays for the annexe and what is left over is split 50/50 but then gran owns the annexe which would need to be documented somewhere.

Gran must have some source of income , pension?, which would cover her ongoing bills.

When gran dies then the value of the annexe is part of her estate and is split  according to gran's will..

If gran deteriorates or has another stoke and needs residential care then the council will consider her still to have that capital and will not pay for her care . 

 Time to sit down and consider all options.

T.T.D

I wouldn’t be doing this.