Buying house with a parent - care home fees .

shap101

Any ideas on what happens when a child buys a property with his parent  and the parent needs full time care in the future ?

My 73 dad owns his own property ( 3 bed terrace )  but since a fall been unable to get upstairs and currently using the living room as bedroom , luckily the bathroom is downstairs , but has got both him and me thinking about the future  . 

I am currently renting and looking to buy , I can get a small 2 bedroom house which would be suitable for my needs but not big enough or suitable if my dad wants to stay or move in.

I have looked into converting his  property to allow him to stay but it needs a lot of work ( roof , stairs , kitchen , walk in ,  bathroom  , joists  - everything really ) and extending which will wipe out all of his savings ( I would have to contribute aswell )  . Not too sure where he could stay while the work is being done.


Another issue is that the  area is not too great for access to bus stops and shops so now spends most of his day just sitting in the garden by himself (if the weather is good ) , lonely and a bit depressed I think   . 


We have decided that we could afford a suitable house together by combining the sale of his house and my deposit  ( 40/60 split ) this would mean one set of bills with no mortgage which sounds great but as  selfish as it sounds my concern if he does need full time case in the future .

What will happen to the property  we have bought together  -  would it have to be sold to fund the care ? would they work it out as a percentage of tenancy or factor in that I would be paying the bills  , building work , council tax etc ?

I have 3 other siblings but everything has been left to me to sort out  , his Will states his estate will be divided between his kids which I insisted on . 

Just trying to do the best for both of us .

 

Silvertabby

So, if you buy a property together, and your dad doesn't need residential care (only just over 30% of elderly people do) then how will you pay your siblings on your father's death? 

Maskface

Aside from the house you are buying together could selling the old house then buying another not be seen as potentially depriving himself of assets anyway if he does need care? 

shap101

Thanks for the comments  , brothers are quite relaxed about it as they both have there own homes but down the line anything could happen  .

If anything was to happen I would want them to have their share  of the estate ,  as mentioned it sounds selfish but if they do see it as depravation of funds and I am forced to sell the house would they factor in the percentage held or any work I have done on the house . 

 It sounds band it can be a liability taking on my dad but no one else will ( or have )  and seeing him go down hill since the fall is really upsetting , I  pop in most days just to keep him company . 

I told my brother dad could sell the house any funds could be used to be build an annexe on my brothers home  and any extra he could keep for upkeep / etc but said no . 

Maskface

It sounds as though he is already in need of at least some level of care then in that case? I know it seems the ideal solution right now but there does seem to be a potential for pitfalls. With respect, I'd really look for some proper professional advice on this and not leave it to chance on the advice of strangers on a forum. 

Indigo_and_Violet

I agree with Maskface - worth sitting down with a solicitor to talk this out. A few hundred pounds on legal advice (and getting a consensus agreement with the whole family) now is likely to be well worth it later on.

If buying together you need to have a think about how you will structure your ownership (tenants in common or joint tenants) and the different impacts that has on recognising the different contributions you have made to buying the house, any potential care home fees or other financial needs of your father and what happens when he passes in terms of your brother's inheritances. As well as care home fees there is stamp duty, capital gains and inheritance taxes to think through. Definitely worth professional advice. 

badger09

Indigo_and_Violet said:

I agree with Maskface - worth sitting down with a solicitor to talk this out. A few hundred pounds on legal advice (and getting a consensus agreement with the whole family) now is likely to be well worth it later on.

If buying together you need to have a think about how you will structure your ownership (tenants in common or joint tenants) and the different impacts that has on recognising the different contributions you have made to buying the house, any potential care home fees or other financial needs of your father and what happens when he passes in terms of your brother's inheritances. As well as care home fees there is stamp duty, capital gains and inheritance taxes to think through. Definitely worth professional advice. 

If father sells his current property and buys a suitable replacement with OP, only ‘standard’ SDLT would be due. (Unless OP hasn’t mentioned owning an existing property)

I'm not sure why you mention CGT. Both father & OP would own only one property, their private residence, which, when sold, does not attract CGT. 

Ditto IHT. Unless father is very wealthy, in which case there is no dilemma, IHT is unlikely to be a factor. 

@shap101

FWIW, I think your plans are laudable but would urge caution. 

I did something similar many years ago when my dad died & mum was unable to live alone. It worked very well for a few years but then, for many reasons, it didn’t. She needed residential care for a short time, and funding wasn’t an issue. But when it became clear she wouldn’t be coming back to live with me, I felt morally obliged to sell. I was under no pressure, but could not have afforded to buy my siblings shares of the inheritance, and I no longer needed a house with a granny annexe. 

I echo others’ comments about proper professional advice. I would also suggest looking at alternatives, such as sheltered accommodation. 

Good luck 

elsien

Yes, I was going to suggest dad looks at what is available on the social housing front for older people. It may be more accessible generally and having his own property won’t automatically ruled him out - well it wouldn’t in my area anyway. 

Have a look on the age uk website - they have some very good fact sheets about funding care. Your age will also make a difference.
 I’d also echo what others have said about your siblings share after dad passes - not just financial but also if you’ve spent a lot of time/money getting the house right but the emotional impact of having to sell up when recently bereaved. The will would have to set out what happens  - work done on the property wouldn’t be counted, the valuation would be in the property at time of death unless dad wanted to leave you a larger share to account for this. 

diystarter7

Silvertabby said:

So, if you buy a property together, and your dad doesn't need residential care (only just over 30% of elderly people do) then how will you pay your siblings on your father's death? 

That was not the question.

OP, I don't know and would be informative if someone had an answer here.

diystarter7

OP

A couple of very helpful responses here but you don't have the answer.

Ring the council and ask to speak with the duty care manager for social care, care home fees assessment officer or similar about your questions. As they are the people that will chase/hunt people for funds/deprivation of assets etc etc, I'm sure that eventually, you should get a good, accurate answer. Get the response in writing so there is no ambiguity.


As others have stated, then also consider the other concerns etc etc.

Good luck. 

lisyloo

There are some good social housing places however he is not likely to be very high on the list and will likely have a long wait.

why is a 2 bed out of the question?
are there more than 2 of you?

do be aware that care responsibilities can increase.
for example 24/7 cannot be managed by one person even if they weren’t working.
if someone cannot make safe decisions (like wanders off or puts foil in the microwave) or is prone to falls then they might not be able to be left alone.

There is a lot to think about.

I am pretty sure you dad would have to use his equity to pay for his care (his % not yours). I’m not sure of the property would need to be sold.
when I was selling my MIL property the local authority offered a DPA (deferred property agreement) which was basically a loan. During that time she was charged the LA rate for care which was £100 less than when she became a private payer.

you need to check (age concern etc might have the info) but a possible scenario is that there is a loan on the property. 

Whether that’s a good idea long term is another question as there may be interest, but note the lower fees.

I would also urge caution on both the financial arrangements and the care situation which can escalate quickly.

but good on you for caring.

be sure to “consult” your siblings 
by that I mean make sure they are feeling consulted even if you’ve made the decisions and they are in fact being informed.