Please can anyone help?

2pinkroses

I have offered to try and find out some clear advice and information, for a young couple, who are relatives of mine and working full time, regarding an opportunity that has been put to them by another very fortunate relative.

Having contacted the CAB, they advised the young couple need advice from an Independent Financial Advisor. I have consequently contacted Moneyhelper, Vouchedfor, Unbiased, 

The Personal Finance Society and
Martin Lewis's website. 

Below I have tried to give as clear a picture as I can of the situation the young couple need help advice and guidance with. 

The situation:

A very hardworking young relative and their partner are currently living in a tiny one bed mortgaged property and really need, ideally, a bigger home. Much of their stuff is being stored. They have been/are trying their best to save as much as they can, with a view to buying a bigger property to live in.

Totally out of the blue, another relative has unexpectedly, amazingly and very fortunately for them, come in to some money. This relative is comfortably off and doesnt need the money and wants to help the young couple and has very kindly and generously offered, to buy (as an investment for themselves/their own children long term), a 3 bed property, for the young couple squeezed in to the one bed property, to live in rent free. They know the young couple will look after the property and do not want or need tenants and an income from letting it out. They have suggested that as and when the young couple can, they can ‘buy in’ to this property and become co-owners, with a view to owning it outright eventually if they want. To clarify, this fortunate relative would not be buying the 3 bed property for the young couple or giving it to them. They would be just allowing them to live in the property rent free, indefinitely, with the option to buy/part buy it as and when the young couple could afford to, or if they wanted to.

Whilst my generous well off relative kindly offering this, is able to engage and employ the relative specialists needed, financial adviser, tax specialist and solicitor etc, the young couple need to establish their position and all of the possible implications for them, including advice re possibly letting out or selling their one bed mortgaged property they are currently squeezed in to and ‘living in/looking after/housesitting' indefinitely, their relative’s property and all that this would entail for them.

Please can you point me in the right direction of getting an appointment/s with a relevant Independent Financial Advisor/s for this young couple, in order for them to gain the clarity needed for this, what appears, a wonderful opportunity being offered to them, to establish the right thing to do for them financially right now and for their future and also, so that everyone involved in this is totally clear on what it all means for them from the off, if it all goes ahead. I have a list of Independent Financial Advisers, all of whom have specialisms but the young couple's situation does not align with any of them.

I think the problem is that the lists of IFAs specialisms do not directly correspond with the young couple's situation. Eg. they don't want guidance just about pensions right now - but no doubt, their decision about the situation that has been proposed to them, will most definitely affect their pensions in the long term, either positively or negatively, depending on the decision they need to make imminently. Same with, they don't currently need guidance just about mortgages  but again, their imminent decision will affect their ability to obtain a mortgage/remortgage/pay off their mortgage etc in the future without doubt. 

None of the lists of IFAs say 'covers 'all' or 'a range of areas' of finance'. I don't know which IFA on the lists to opt for and find it hard to believe, that for such an important life decision, it looks currently, like it will just be 'pot luck', picking from the lists, as to whether the young couple do get any advice and if that is actually the correct advice for them. 

I am not directly involved but care very much as they are my relatives and I offered to try and find out what's best for this young couple to do, as I don't know which type of Independent Financial Advisor they need.

Thank you for reading this very long email.

I do hope you can advise me.

Albermarle

As far as I can see, you/they have no need for an IFA, who mainly specialise in financial investments, pensions etc.
If you/they do need some professional advice then I am pretty sure a solicitor would be more useful. Possibly to draw up an agreement between the owner of the new property and this couple, in case of future disputes.

I am not a legal expert, but I would say that as the couple will basically be living rent free/housesitters, there are probably no major legal or tax implications at all, but wait for others to comment as well.

Regarding letting out their current property, being a landlord can be quite a big hassle, so probably a lot easier just to sell it and pay the mortgage off. They can use any extra proceeds from the sale as the start of saving up money for the future.

eskbanker

Happy to be corrected but I'm not sure there are advisory services that cover this sort of scenario - IFAs will typically be positioned to advise on what to do with significant investible assets, but it sounds like the couple concerned are really hoping for broader guidance?

If they currently have a property then I'd have thought that selling that (and potentially buying a share in the new house up front) would be a more realistic proposition than renting it out while tenants elsewhere.

I think that both the relative and the couple would need to engage solicitors anyway, so maybe that would be where to start?

Eyeful

1. How long have they known this "generous relative"?
2. How  well do the couple & this relative get on with each other?
3. Does the couple trust this relative to keep to their word?
4. Are the couple expected to sign any forms or agreements suppled by this relative?
5. What has been said about who is paying for Insurance, repairs & maintenance of the house?

I would think that the couple should see a solicitor who they will pay for to get independent advice and draw up a legal agreement which all party's need to sign.
The future is a unexplored country where anything can happen. 
People get ill. die, loose their jobs, get into debt, change their minds, fall out with each other etc
The house might be flooded, catch fire etc.