Beneficial interest in the valuation of a home in LA care financial assessment
My widowed mother owns her own leasehold home outright. She is in poor health and on a low income with no savings so we expect that she may eventually go into a care home. After about two years of living in a care / nursing home there will be no equity in the home to pass onto her children as per her will. I understand that the Local Authority will either put a charge on the property straight away or accept a deferred arrangement. Prior to all of this she has got into arrears of service charge and ground rent and in order to undo a court order for possession all/some of her children are prepared/able to loan the money to pay the debt and costs. The court application can, if necessary, reveal the source of the repayment. The loan is about 10% of the value of the property. A written loan agreement will be set up. Based on her current income, not much of the loan will be repaid before she is likely to go into care.
Our question is whether the loan from her children can be offset – less any repayments - when in the future the local authority works out what it can take from the value of the home? If I understand matters, the "creditors" seem to have a beneficial interest in the property as they paid for its retention (and its existence to be used by the LA for funding) even if they are not the legal owners. Thus, when the estate is worked out the loan is repaid to the “creditors”? Another option might be to put a legal charge on the property but this seems a big step.
I should stress that the answer in no way affects whether
the children make the loan, but it would be good to know if can be repaid
eventually from her estate / sale. I also
appreciate that for a definitive answer we would need legal advice and even
then it may be hard work when we eventually deal with the LA, but some general
views would be appreciated.
- All Categories
- 338.9K Banking & Borrowing
- 248.7K Reduce Debt & Boost Income
- 447.6K Spending & Discounts
- 230.8K Work, Benefits & Business
- 600.9K Mortgages, Homes & Bills
- 171.1K Life & Family
- 244K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards