Annexe or cottage built for parents

[Linbrusco]

Im not from the UK, but would like perspective if you are or have been in the same situation.

13 yrs ago when Mum & Dad were fit and healthy, but also asset rich and cash poor still paying a mortgage my husband and I borrowed money to build a granny flat on our property for them.
Mum & Dad sold, paid off their mortgage, paid us for the building of the flat, and freed up some cash for them.
We had a legal agreement protecting their money, they had the right to occupy.
I might add, that at that time my husband was diagnosed with cancer and given 3-5 yrs to live.
As we know life hardly goes to plan. Within just 5 yrs Mum diagnosed with Alzheimers, Dad last year with Mixed Dementia. Both of them were in care, both of them passing away this year. Mum in March, Dad in June.
My husband is still well.

Now comes the question of Dads Estate.
We are in a position to pay back the Estate, the sum of money Mum & Dad paid, but then split between myself & 2 siblings.
However, siblings want a valuation on our property as the granny flat has increased the value, then 3 way split.

Despite making wills & EPOA, and our property agreement, the only downfall is not getting Mum & Dad to update their wills reflecting all of this.

Opinions please

 

[MartinWL]

Much as I am sure we would all want to help you are not in the UK, we do not know New Zealand law. Also, we don't know much about the legal agreement you signed. The only suggestion I can make is to get legal advice from a local lawyer with the right expertise, who will need to study all the detail of your unusual circumstances.

 

[silkiest]

Hi @Linbrusco, I can understand why you family want the flat valued as it is better for them financially. The value of the flat will have increased much more than money in the bank. Your parents must have been happy with this at the time and with the financial freedom this arrangement gave them. I would assume legally it would depend on whether the legal agreement was for the sum of money your parents paid or for a share in the house. If your parents only claim on your house was to be able to live there (rather than part ownership) then I would assume your family cannot demand that the flat is valued. But as MartinWL says, it will depend on the law in your country.

 

[Linbrusco]

Sorry should have said we are waiting to hear back from our lawyer. Everything is on hold due to our current Covid lockdown past 5 weeks.
Thankfully have stepped down a level.
The agreement was a right to occupy and their capital was protected.
It was more a post of, if any one had been in a similar situation.

 

[Jessbow]

presumably your siblings areof the opinon that the money invested by your parents has accrued some interest of /worth more than they invested- on the face of it- not unreasonable- but difficut as it forms part of your home.

Your parents did , after all, pay for it but you retained ownership?

In theory, could it be sold seperately?

 

[marionq]

My reading of it is that they had no ownership but the benefit of you as safety net while they were tenants who paid no rent but had some spare cash. I can’t see what rights your siblings have at all other than to a cash asset if any.

 

[Melles Belles]

@Linbrusco, am I right in thinking that you did most of the caring for your parents and that your siblings did less?
If @marionq is correct and that your parents just had a cash asset and not a share in your home then the siblings get a share of the cash asset.

 

[Linbrusco]

Yes I did the majority of caring. I was also both their EPOA for Health & Welfare.
The granny flat cannot be sold alone or moved off the land.
On the face of it legally, we just need to pay the amount my parents paid to build back to their estate - it’s my siblings who want valuations.
The value of our property & the difference including the granny flat.
Hope our Lawyer replies soon.
Anything to keep the peace!

 

[DesperateofDevon]

Im not from the UK, but would like perspective if you are or have been in the same situation.

13 yrs ago when Mum & Dad were fit and healthy, but also asset rich and cash poor still paying a mortgage my husband and I borrowed money to build a granny flat on our property for them.
Mum & Dad sold, paid off their mortgage, paid us for the building of the flat, and freed up some cash for them.
We had a legal agreement protecting their money, they had the right to occupy.
I might add, that at that time my husband was diagnosed with cancer and given 3-5 yrs to live.
As we know life hardly goes to plan. Within just 5 yrs Mum diagnosed with Alzheimers, Dad last year with Mixed Dementia. Both of them were in care, both of them passing away this year. Mum in March, Dad in June.
My husband is still well.

Now comes the question of Dads Estate.
We are in a position to pay back the Estate, the sum of money Mum & Dad paid, but then split between myself & 2 siblings.
However, siblings want a valuation on our property as the granny flat has increased the value, then 3 way split.

Despite making wills & EPOA, and our property agreement, the only downfall is not getting Mum & Dad to update their wills reflecting all of this.

Opinions please

Legal advice from your solicitor & get it in writing. Your siblings need to grow a conscience & pipe down!
They could have offered to do the same & didnt!
Any valuation increase on ‘your‘ property is a by product of the initial agreement.
Seriously it makes me glad I’m an only child when I read stuff like this!

Dont be bullied by family over money - your parents have died & your OH is not in the best of health.

If you say ok I will give you some money - every time your property value increases you’d be obliged to give a hand out !
shocking expectation from family !

sorry but it’s horrid of them
(((hugs)))

 

[DesperateofDevon]

Sorry should have said we are waiting to hear back from our lawyer. Everything is on hold due to our current Covid lockdown past 5 weeks.
Thankfully have stepped down a level.
The agreement was a right to occupy and their capital was protected.
It was more a post of, if any one had been in a similar situation.

I’m sure that a Letter from the solicitor will firmly put your siblings in their place. Obviously they don’t have a conscience!! sorry just my opinion

yes my biological Mum went through the same issues with her mother & two brothers. Legally they were entitled to cash assets & going back through my Grandmothers cheque book & bank accounts they had had a lot of handout previously.

As an unpaid carer you certainly earned the granny annex , so total up 24/7 care x days / weeks/ months
+ holiday pay
+ building work disruption
+ costs of food
+ added council tax value now parents no longer alive
+ water / electric/ gas etc
+ upkeep ongoing on the granny annex

After all if siblings want to share evenly then they are liable for a portion of these costs as well.

Please don’t allow yourself to be bullied for a quiet life.

 

[spandit]

We built a lovely annexe on our house for my father - cost about £125,000 (from his money). My sister acknowledged it would be a nice addition to our house after he's gone but I am not intending on compensating her for our gain (not that I think she'd ask). Unfortunately, in your case, it sounds as if your siblings want a cut but I'd say (not legal advice) they can whistle for it.

Good luck!

 

[Cazcaz]

We built a lovely annexe on our house for my father - cost about £125,000 (from his money). My sister acknowledged it would be a nice addition to our house after he's gone but I am not intending on compensating her for our gain (not that I think she'd ask). Unfortunately, in your case, it sounds as if your siblings want a cut but I'd say (not legal advice) they can whistle for it.

Good luck!

Be careful, If your father is PWD, the annexe could be sold to pay for care.

 

[spandit]

Be careful, If your father is PWD, the annexe could be sold to pay for care.

It can't be sold, it's integral to the property. He's not named on the deeds but I take your point, thank you

 

[Cazcaz]

It can't be sold, it's integral to the property. He's not named on the deeds but I take your point, thank you

It can be sold as it was your fathers money that pays for it and he has use of it. Who is on the deeds is not relevant.

 

[MartinWL]

It can be sold as it was your fathers money that pays for it and he has use of it. Who is on the deeds is not relevant.

Whose name is on the deeds is relevant, and we are talking about the whole building not just the annexe. If this was deliberate deprivation of assets the council might try to get the money back but as the PWD lives in the annexe I suspect this would be unlikely.

 

[Cazcaz]

Whose name is on the deeds is relevant, and we are talking about the whole building not just the annexe. If this was deliberate deprivation of assets the council might try to get the money back but as the PWD lives in the annexe I suspect this would be unlikely.

I have read so so many cases, including at least two on here of people being told they have to sell their PWD’s share of a home (not an annexe which has a separate front door, I mean A house).
eg Daughter and mother buy a house 50/50, daughter keeps house in her name for IHT purposes, mother becomes PWD and needs care home. Daughter told mum’s share of home must be sold.
Plus if PWD has use of a home, it counts for assessment , even if property not in their name. If Their money was used to pay for it, it counts.

So where you’re talking about an annexe, which is basically a self contained property in its own right not PART of A property, and it was bought with PWD’s money and used solely by PWD, you can bet the LA will count it in a financial assessment irrespective of who is on the deeds.

 

[MartinWL]

I have read so so many cases, including at least two on here of people being told they have to sell their PWD’s share of a home (not an annexe which has a separate front door, I mean A house).
eg Daughter and mother buy a house 50/50, daughter keeps house in her name for IHT purposes, mother becomes PWD and needs care home. Daughter told mum’s share of home must be sold.
Plus if PWD has use of a home, it counts for assessment , even if property not in their name. If Their money was used to pay for it, it counts.

So where you’re talking about an annexe, which is basically a self contained property in its own right not PART of A property, and it was bought with PWD’s money and used solely by PWD, you can bet the LA will count it in a financial assessment irrespective of who is on the deeds.

You may be right but we do not have details of the design of the premises so we don't know. In my mind the annexe is an extension of a house with its own front door but also an internal door to the main house. But I suppose it could be a separate building in its own grounds. Basically we just don't know if the annexe is saleable on its own.

 

[spandit]

You may be right but we do not have details of the design of the premises so we don't know. In my mind the annexe is an extension of a house with its own front door but also an internal door to the main house. But I suppose it could be a separate building in its own grounds. Basically we just don't know if the annexe is saleable on its own.

The annexe is a side extension with an internal door to the main house. It would not be possible to sell it off separately. In my father's case, I don't think he'll reach the point where it needs to be considered as an asset.