Own half the house with a parent? Any advice

Idpullthecurtain

Hopefully someone has some experience of this type of situation. We are going to get legal advice, but it would be great to know what to expect.

Long story short. Partner owns her house, but jointly with her Dad.

He has his own house too that he lives in with the Mum. Hes getting on, and hes got health issues, etc etc.

Just wondering if theres anything we can do now to protect ourselves. He may need residential care in the future. So there may be financial assessments and asset considerations etc. He doesn't want his ownership of her house to impact anything. He also has a dementia diagnosis.

I guess partners house is vulnerable? But is there anything we can do, before its too late.

I guess he cant gift his share of Partners house to her?

Any ideas anyone? TIA

sammyjammy

What was the long term plan when they bought the house? Do they own it jointly or as tenants in common?

Keep_pedalling

He could gift his share to his daughter (providing he still has the mental capacity to do so) but that may leave him with a capital gains tax liability to pay and may be treated as deliberate deprivation of assets as far as care costs are concerned.

The ideal solution would be to buy out his share, is that a possibility? Does anyone have power of attorney for him?

Idpullthecurtain

https://forums.moneysavingexpert.com/discussion/comment/81898686#Comment_81898686

It was 16 years ago. I think he just wanted to help to be able to purchase it.

We need to find out, we think its owned jointly.

Idpullthecurtain

https://forums.moneysavingexpert.com/discussion/comment/81898689#Comment_81898689

Despite his illness, we believe he can and wants to cooperate so her home isnt vulnerable.

my Partner does have POA for him yes.

I guess it would be good to buy his share, but she cant afford to I believe.

BikingBud

Interesting take and switch between plural and singular:

Just wondering if theres anything we can do now to protect ourselves

But is there anything we can do, before its too late.

and

I guess it would be good to buy his share, but she cant afford to I believe

Seems to be a few elements that you are unsure of have you discussed this fully?

Perhaps a greater commitment to the shared benefits might help in determining the best outcome.

What is your role, partner covers many shades of a relationship? Long-term fully committed?

If so then can you (plural) buy out his share? And the increased funds then enable best possible support for your partner's father, should it be required.

Or if only a transitory relationship - why do you care?

If it is long term and you do care then invest in your joint future.

freesha

Can you buy out the father?

Idpullthecurtain

https://forums.moneysavingexpert.com/discussion/comment/81898761#Comment_81898761

Its complicated.

And as ever, finances are complicated. And there are many considerations.

Ultimately its my partners house (or stake).

Some discussions are difficult. Some people dont like to tackle difficult subjects readily - death, illness etc.

Idpullthecurtain

https://forums.moneysavingexpert.com/discussion/comment/81898774#Comment_81898774

Its a possibility.

At this stage we want to be aware of all considerations.

Brie

If he give her his portion of the house then there's the CGT and deprivation of assets as already mentioned.

If he doesn't give/sell his portion of the house then should he need council assistance for care then they will look at his share of the house as a means to pay for his fees. They won't do this with his wife as she needs somewhere to live and they won't consider her home even if it's 100% owned by her husband. But his share in a daughter's home is considered an asset. They are unlikely to tell her to sell to release the value there but may put a lien on the property so when it is sold they get any money they are owed. She could live there the rest of her life and not be affected. That's as I understand it, some may think that if she is under 60 she may be forced to sell but few councils would go that far in my opinion.

The other thing to consider is any potential beneficiaries should he die. Are there siblings who may be expecting a portion of his estate including some of her home? What about his wife? Would she inherit anything? That will of course depend how the home is owned - joint or tenants in common.

poseidon1

Gifting to daughter is very likely out, for the CGT reasons mentioned by others.

However, there is a stop gap gift that could be considered, ie to his own wife.

Assuming she and he are compos mentis, gifting to his spouse could keep the wolves from the door whilst further options such as eventual purchase by daughter could be explored.

Worth noting that although the transfer to spouse is CGT exempt, wife acquires the half share at husband's original cost so the CGT overhang remains.

One last point if wife continues to own the half share until death, the CGT gain is automatically wiped out, but potentially replaced by Inheritance tax depending on size of remaining estate.