A Home but not much else, what would u do

sebastianj

if a couple has a property worth around 400K and not much else in terms of cash and disposable income, what should they do? can any one think of any options the may have.
1-Selling and downsizing is an option, are there any problems associated with this?
2-Children 3 of them are grown up but the home is still their's as well, does this have a problem for the future?
rgd
seb

tanith

sebastianj a couple of questions

1. Does the house have a mortgage still being paid?
2. When you say 3 grown children but the home is still theirs do you mean that they own part of it or just that they consider it their home?
3. Are you in financial difficulties or just wanting to free up some money from your house?

You might get some good suggestions if you can answer these questions first and give any other info that would be good..

sebastianj

Tanith, many thanks for the response,
1- Negligible mortgage amount left.
2-Assumption has always been that they all own part of the property, nothing written down just word of mouth since the past 10years or so. Yes they do consider it their home as well,
3- Not in any immediate problem, just the thought of enjoying life a bit more and getting out and about and spend some of it. I am not a pensioner yet but have an occupational pension 8k pa.

rgd,
seb

tanith

Well I too own a house and have 3 children and to be honest although in all probability my children will inherit something from the house when I am gone they wouldn't presume my intention . I don't intend to spend my retirement scraping by so that my children can have my home when I am gone and nor would they expect it..

You asked if downsizing was an option I can't see any reason why not , if you don't need the space and your children are off your hands with their own homes then freeing up some of your capital for your own use is a reasonable idea no reason you can't invest some for your retirement but enjoy some also.. How does your partner/wife feel about things?

tattycath

Hi. Just read the thread. In my opinion, You have most likely worked hard for what you have and although your children will probably inherit what you leave i am in agreement with Tanith. You should enjoy your life, not just stay put because of the children's inheritance. I would imagine your children will want you to be happy first and foremost. I certainly put the happiness of my parents before anthing else. I don't expect them to leave me anything, they probably will but What's the point of working hard all your life if you can't subsequently enjoy your twilight years. I would think the biggest legacy a parent can leave a child is the fact that we (myself and siblings) were all brought up to stand on our own 2 feet. We are greatly loved by our parents, They were (and still are) there for us. My mother goes to church regularly-I do not, however, she says the greatest gift is love, and I think love counts for alot. I know when we go to meet our maker we can't take wealth with us but we can at least enjoy some of what we manage to accrue whilst we're here.
Sorry I'm waffling now. Hope this helps.

Mike_by_the_Sea

sebastianj wrote: »

Tanith, many thanks for the response,
1- Negligible mortgage amount left.
2-Assumption has always been that they all own part of the property, nothing written down just word of mouth since the past 10years or so. Yes they do consider it their home as well,
3- Not in any immediate problem, just the thought of enjoying life a bit more and getting out and about and spend some of it. I am not a pensioner yet but have an occupational pension 8k pa.

rgd,
seb

You could consider changing the ownership of the house to "tenants-in-common" with your spouse and the kids - then get the kids to pay you a monthly amount toward your enjoyment and their potential inheritance. They would then have a formal share of the house. Just make sure that you also have a document that identifies that you and your spouse can live in the house for as long as you live.

This is something that I did a few months ago.

Biggles

You ought to make it clear that you own your own home. Your kids will buy/have bought homes of their own and have their own lives to lead.

Keep it simple: think things like Rent (you would have to pay them a fair rent for the part of the home they own, or it would be a 'gift with reservation'), Capital Gains Tax (if they should inherit the house, they would probably get full value; if they owned part, they would prbably have to pay tax on it when it was sold) etc.

The only thing giving them a share of your house will do is limit your options when you want to downsize or, especially, if you should need to go into a care home a few years down the road - if only part of that money belonged to you, you may well not be able to afford a care home of your own choice, but have to rely on a council home on the council's terms.

sebastianj

Many thanks every one for some very useful advice. The 'tenant in common' not sure how to do this and how the council tax be effected?
Yes I have worked very hard all my life to provide for the family. The fact is that I am beginning to feel that I have not done much else, I guess this is life.
Children are not demanding in any way but as always, I want to make sure that I make all the right decisions etc. it is a habit rather than compulsion. My wife was a lecturer but after marriage she decided to be a housewife and look after the children and suddenly 30years have past and emotionally we find ourselves in the same mode as we started from. I know It is a SAD life to have but what else can you do. We have had some holidays, some good memories and some not so good.
May be I need to go somewhere and do some charity work but feel trapped and not being able to go any where.
rgd
seb

Mike_by_the_Sea

The "tenants-in-common" doesn't affect things like council tax etc.

The main difference between joint tenancy and tenants in common is that, in the event of the death of a partner, the share of the house can be "willed" to anybody - spouse, children etc. In the case of a joint tenancy, the house automatically goes to the spouse. This can be very useful in terms of inheritance tax planning etc. as it means it is possible to use the full tax-free allowance for each partner.

The most important addition to this is to have a formal Trust Deed which identifies such things as a lifetime interest in the house for the surviving partner etc. It is also important that you both have a will which identifies what you wish to do with your share of the property etc.

Also, it can help protect you from care home fees if either of you should require care later on in life.

sebastianj

Many thanks again, I did not know this. So a couple jointly owning their property (that is how we are), is not the same as Tenant-in-common? Where do I go to change this to tenant-in-common? It sounds as though it needs to be done sooner rather than later. It was mentioned to me a year or so ago but no pitfalls were spoken of.
Can any of the children be added to this without complications.
rgd
seb

Mike_by_the_Sea

Hi seb

I would suggest that the best way of doing it is to have a chat with a solicitor. They can advise on what you need to do and help with the forms.

The change in tenancy is done through the land registry and you can do it yourself. There is some further information here....

http://www.landregistry.gov.uk/assets/library/documents/public_guide_018.pdf

All the best

Mike