Parent moving to care home, wants me to live in her house with my family, what about my sister?

[Deleted User]

This is quite a likely scenario, my mother has been diagnosed with early stage alzheimers, she's expressed a preference for moving to a care home (when the time comes she needs full-time care, and I'm hoping a care annuity from her savings can cover this), and for me to move into her house with my wife and child. I would like to do this because it's the house I grew up in and it would suit my family perfectly.

Question is, how do I sort this out with my sister? I could sell my house pay off my mortgage and give her what is left, but this would be nowhere near her full share of the house value, I think I'd need to take out a new mortgage to fully cover her share and even then the most I could borrow might not be enough.

Other people must have been in this situation before, I'm wondering what arrangements people come to.

To give some numbers, I think I've got about 300k in equity in my house that I'd give to my sister. According to zoopla my mother's house is worth about 1.3M (hard to believe, because it's just an average sized three bed detached, but it's got a big garden - similar houses sold in this street end up demolished and replaced with flats).

Is there any hope I could do this without requiring a lot of generosity from my sister?

elsien

Your sister  doesn’t have a share until your mother passes away, and nor do you. And if your mum goes into a care home and the annuity doesn’t cover the fees her house will be an asset that needs to be realised. 

So very simply it comes down to can you afford to buy the house from your mother at full market value if you need to?

Hoenir

Has your mother written a will ? 

Has your mother actually suggested you buy the house not just live in it, for the foreseeable future?

p00hsticks

Sell your house, pay of the mortgage, move into mothers home and pay her rent. 

As an aside - assuming that your mother still has capacity, then if she doesn't t already have PoAs in place get her to make them (there are two types - Finance & Property and Heath & Welfare). 

OldMusicGuy

Your mother is not thinking through the implications of this. It sounds simple, but isn't. 

The bottom line IMO is she needs to think backwards from what happens when she dies. She needs to write a will and decide how she will divide up her estate. If she is going to leave it equally to you and your sister and the house is the major asset, then if you can't afford to buy your sister out you will be in a difficult situation. Does your mother want you to inherit more than your sister? If not, she is going to potentially cause you all pain that will become apparent when she dies. Unless your sister is prepared to be very generous to you. And if she does write the will to leave more to you than your sister, the pain may become apparent now......

What does her current will say? 

sheramber

Will your mother still own the house and you will live there rent free?

Have you considered if IHT will be due when your mother dies?

Jemma01

I think you'll be taking a risk moving into someone else's home that you can't actually afford. What if it needs to be sold to cover her care fees? I suggest you stay in your house, and rent your mum's house to help her pay her fees.

[Deleted User]

She has a will and it does divide everything equally between me and my sister. She wants me to live in the house so that her only grand daughter (my daughter) grows up there.

My mother has enough savings to cover a care annuity without selling the house, but should it not be enough then yes, I will have to pay the extra needed, probably having to sell this house and downsize to do so, and I accept this is a possibility.

My sister lives over 100 miles away, but would like to see the house stay in the family too. The question is, is there are way to pay off her share? Or at least pay as much as possible of it now, and leave her as shared owner of the house until I can find a way to pay off the rest (which might be never).

elsien

So you and your sister would be looking to buy the house from your mother at the point she goes into care?
I am still unclear about how the shares come in while your mother is still alive? Is she talking about gifting it to you and your sister because then deprivation of assets is going to kick in? And possibly various tax implications for your sister if she is not living there. 

Malthusian

It sounds like you can afford to rent it in your mother's lifetime, but you can't afford to stay there permanently because once your mother dies, you will not be able to buy your sister's half outright. Renting her half from her is probably a bad idea (mixing family with business rarely ends well, and there is no reason she would want to go into business as a landlord with her inheritance) and there is certainly no reason to expect her to give it up. 

I struggle to believe it is such a nice house that it is worth uprooting your family twice; once to move in and then again at some unknown future point to move out so both you and your sister can access your inheritance. The second move could come at any time; hopefully your mother lives for many years but deterioration can occur rapidly and without warning. You are the only one who feels nostalgia about this house out of three people who would have to live in it. I've no doubt it would suit your family perfectly but I imagine most £1.3 million houses in your area would. (Particularly ones in which two children grew up whereas you have only one.) The trouble is you don't have £1.3 million and still won't after your inheritance.

This isn't sounding like a goer to me. When your mother dies, hopefully many years hence, you will be able to upgrade to a much nicer house with a free hand using your current equity + creditworthiness + inheritance, or stay where you are, pay off some or all of your mortgage and live much more comfortably. That seems like enough to be going on with.

You know what the best thing about living in childhood homes is? Being a child.

[Deleted User]

Thanks all, I guess that unless I win the premium bonds jackpot, that this idea is a non-starter. I'll just have to come to terms with the likelihood that my beloved childhood home will be demolished by the developer who'll likely buy it, I don't think many people appreciate how upsetting this is.