Buying Parents Property under market value

Bells1977

My Dad wants to sell his house to downsize, as the property is too big for him, now that he is on his own.

My Husband and I are interested in buying the house from him, but wouldn’t be able to afford the full market value (circa £1m).

He has recently rewritten his Will and the property & all assets will be left equally between my and my brother.

Is there any way, we can make a legal agreement with them, so that we pay 3/4 of the house value now in exchange for a reduction in inheritance perhaps?

My brother is happy for us to buy the property, he has no interest in doing this himself. But will want everything to be fair in the long run.

The house needs a lot of work, which we will do over time and will fund ourselves, so I wouldn’t want the future value to be taken into account.

Any advise would be appreciated.

eddddy

So your Dad would be effectively giving you £250k now. There's no problem in your Dad rewriting his will to say something like:

"The first £250k of my estate is to go to Bells' brother, and the remainder is to be split equally between Bell and Bell's brother".

Would that solve the problem?

(Or do you want the £250k figure left to your brother to be adjusted for inflation? If so, a suitable formula could be included in the will.)

theoretica

To not bring in work on the house, perhaps the c.250k could be adjusted by the change in average property price (in whatever region it is measured in) from now to when the inheritance happens.

user1977

An agreement with another potential beneficiary seems an odd way of doing it - why not your dad simply amending his Will?

stuhse

You need to think this through and talk through with your brother and dad carefully.  So your dad effectively gives you 250k now to enjoy the benefit immediately.  You sure your brother is actually willing to wait till your dad dies to get his benefit ?  What if that's 20 years ?  What if after care home fees there's not enough money to pay out your brother?   What if your brother dies first ?  What if your dad remarries ?.......perhaps on the sale of the house your dad gives your brother 250k too,   but careful if he has to go in a care home this might be seen diverting assets.    

Your goal I'm sure can be achieved...but don't forget to consider the many possibilites the future may hold, and what seems fair now might not seem fair in ten or twenty years time.  Make sure everyone has considered all possible scenarios and outcomes.

Brie

It does cause some resentment between siblings even when a plan makes perfect sense.  I've 2 brothers who have received substantial amounts and myself and another sibling have received a fraction.  I keep wondering what happens if our mom needs some money for our care - are we going to "lose out"?  I wonder what would happen if I tell the 2 brothers that they need to fund mom's care and I won't be doing so.  

That said - this is exactly how my mom's will is set up that there's a 4 way split once the two of us have been brought up to a certain amount.  Nothing compensated for 1 brother having had the money 25 years earlier than anyone else. 

The only other thing I would add is what if your dad needs more money for his care?  Who will pay for that?  Will the local council consider if to be deprivation of assets?  A good solicitor would be able to assist I'm sure. 

Bells1977

Thanks all, the care element would actually be by him moving back into the adjoining 1 bed annex which is a part of the property we would be buying. This would fall to me whether we bought the house or not as my brother is a lot further away. 

Thanks for all of this, lots of points I hadn’t considered! 

stuhse

Saying you will care for someone in their old age is a huge commitment and one you may not be able to fulfil when the time arrives.  We have just had to put my wife's aunt into a care home because whilst she is perfectly physically fit and healthy she has developed dementia.  She needs 24hr supervision as she has left gas rings on unlit, has become aggressive , and has sadly reached the point where she is too much of a risk to have in our house/ our other commitments prevent us providing the level of support she now needs. (Its £1600 per week)

What if you are not well enough to look after your dad ?  How old will you be when he is 97 ?

At a time of your life when you perhaps might be retired and wanting to spend time having long holidays abroad, or taking your grandchildren to the beach for the day....will you be happy that you cannot because you are stuck at home in doors dressing and undressing your dad at each end of the day and feeding him at lunch time......meanwhile your brother is spending his 250k travelling the world ?        

born_again

Bells1977 said:

Thanks all, the care element would actually be by him moving back into the adjoining 1 bed annex which is a part of the property we would be buying. This would fall to me whether we bought the house or not as my brother is a lot further away. 

Thanks for all of this, lots of points I hadn’t considered! 

When people are saying going into care. they tend to mean a care home. 

lookstraightahead

What about care fees? Deprivation of asset issues. What if your dad remarries? What if you divorce? 

theoretica

It's a £1 million house - so even after this the dad will have at least £750k to his name.  Very unlikely to all be eaten by care fees.