Buying Parents Home and subsequently providing care

Hullaballoo_2

Hi, I wonder if anyone is able to advise me on what I need to think about in the following situation. I'm sorry if I have posted in the wrong place. So my parents (mid 70's) want to downsize, as they are finding living in their 4 bed bungalow too big for them. They currently own the property mortgage free. The property is around £300k market value I'd say. I would like to buy their property from them, extend the bungalow to include an annexe and then provide full time care to them both. Although they don't need it at the moment, when the time comes I will be their main care giver. They think that if they sold the property to me for £150k (well below market value) they could use this £150k to leave as inheritance to my sister and her family thus making the sale to us below market value fair in the long run. This sounds too simple and I'm sure there are a whole host of considerations to think about. If anyone can assist I'd be grateful.
Many Thanks.  

RAS

The starting point is that statistically your parents have another 15years (ish) to live but it could be 5-30 years.

Have you any realistic understanding of what it is like to care for someone with dementia and physical infirmities? Or even dementia and physical health which can be harder. 24/7/52? Year in year out?

Or plans as to how to cope if you yourself are ill for any period? In which case your sister's "inheritance" would be used to fund care. Or you have to move for work or lose your job?

Or any idea how much that bungalow might be worth in 5-30 years, compared with £150K stuck in low interest accounts? And how "fair" that might be?

Let them sell, make proper wills and use any surplus money they might have to fund adjustments and support if they need it and enjoy if they don't.

alelly

This would almost certainly be considered deprivation of assets and affect any care entitlements for your parents. Additionally there are a Humber of tax implications for yourself and your parents. Also if you need a mortgage to pay the £150k you will be extremely limited and it’s unlikely any lender would allow your parents to continue living in the property. 

Your parents need to speak to a solicitor about the best way to effect their wishes.

Hullaballoo_2

RAS said:

The starting point is that statistically your parents have another 15years (ish) to live but it could be 5-30 years.

Have you any realistic understanding of what it is like to care for someone with dementia and physical infirmities? Or even dementia and physical health which can be harder. 24/7/52? Year in year out?

Or plans as to how to cope if you yourself are ill for any period? In which case your sister's "inheritance" would be used to fund care. Or you have to move for work or lose your job?

Or any idea how much that bungalow might be worth in 5-30 years, compared with £150K stuck in low interest accounts? And how "fair" that might be?

Let them sell, make proper wills and use any surplus money they might have to fund adjustments and support if they need it and enjoy if they don't.

Thank you RAS for the reply. Yes completely good point. This is what I fear in terms of their proposal. The last thing I want long after they are gone is a family feud over inheritance. We have discussed the caring situation at length, and this is something that I have experienced with other family members, but for as long as I am able and alive I will care for them. However we shall look for alternative solutions in terms of house purchase. What a minefield it is. 
Thanks Again, very grateful and gives us plenty to mull over. 

Hullaballoo_2

alelly said:

This would almost certainly be considered deprivation of assets and affect any care entitlements for your parents. Additionally there are a Humber of tax implications for yourself and your parents. Also if you need a mortgage to pay the £150k you will be extremely limited and it’s unlikely any lender would allow your parents to continue living in the property. 

Your parents need to speak to a solicitor about the best way to effect their wishes.

Thank you alelly. Yes I think a solicitor is their first port of call looks like there could be a whole host of tax implications here. 

GDB2222

Can you afford to buy the property for £300k?

Hullaballoo_2

Yes I could afford to buy it at market value.

GDB2222

Hullaballoo_2 said:

Yes I could afford to buy it at market value.

Well, that’s a good starting point. How much would a granexe cost to build, who would pay for that, and who would own it? 

I think a decent granexe needs to have two bedrooms. One for the elderly folks and one for a full time paid carer. Unlikely to be cheap.

lincroft1710

They must be in a cheapish area if a 4 bed bungalow is only worth £300K.


If you were an only child your idea (or a variation) may have been workable, but where there is a sibling there is always potential for family disagreement/disgruntlement.


My mother died at home aged 85, my father died at 88, neither needed care, except my father in the last 6 weeks of his life (hospital). Your parents may or may not need care in later years, depending on your age/future health, you may/may not be able to give them care. 


Suggest to them that they downsize to a smaller bungalow and they invest any surplus money for their future needs