House sale proceeds

[Primrose19]

Our mother age 91 with dementia is in a very nice care home, self-funded. We have lasting POA and are selling her bungalow. I suspect my sister is thinking of asking for some of the money to buy a flat for herself, due to marriage problems. Can we say that she would be using her share of the inheritance from when my mum dies but if mum needs the money, that she has to sell her flat and give it back? Or should the flat be bought in mum’s name and sold if needed? Thanks

 

[marionq]

If it is bought in your sisters name and there is a subsequent divorce the husband may be entitled to half. If it is bought in your mother's name your sister could pay rent which would then go towards your mothers fees.

 

[2jays]

I’m going to be blunt. Apologies in advance

You only receive an inheritance once some one is dead. You may be named in a will, but you should have no expectation of receiving anything until a person is dead and there are funds/items left to fulfil the persons wishes in their will.

Until a person is dead, any money is theirs for their benefit and not for anyone else

I completely understand your wish to help your sister. I think if you did give your sister “her inheritance early” you could be seen as depriving your mother of her assets

 

[try again]

Agree with above. Though can't see a problem buying the flat in your mum's name, though if money runs out this will then have to be sold to help fund ongoing costs as it will still be part of her estate.

 

[love.dad.but..]

I agree with 2jays. Anything purchased must be in your mum's name and could be rented to your sister so your mum receives income and benefit as her poa that is the one of the responsibilities but I would carefully work out how long her current funds will last. The expense of selling her bungalow and then buying the house...professional fees and stamp duty etc and then the cost of selling afain plus you would have to factor in timescale in the process of selling and the need to access funds in say 4 or 5 months unless your mum's current funds are such that she will have no need of the house sale funds for a few years. However any rental income will be subject to income tax if she is over her personal allowance.

Handling my dad's affairs including sale of house I was very much of the opinion his money for his care so I would not have been wanting to muddy the waters with your sister's request and for her to wait until whenever the will is executed. I have 2 sisters and if I had been askwd I would have said no.

 

[Primrose19]

Thanks for your replies - sister is in a very troubled state at the moment, up till now was completely on board with it being mum’s money and not to expect anything. I don’t know yet which she was proposing or the cost of the flat.
May consider buying in mum’s name and charging rent as interest rates are so low at the moment. I guess sister is hoping for money from the divorce so could eventually buy the flat from mum. Assuming the flat is half the cost of the bungalow, mum should be ok for a few years - has a good pension set up by my dad who sadly died 14 years ago.

 

[nitram]

We have lasting POA and are selling her bungalow. I suspect my sister...

If the 'we' includes your sister and she ends up renting a flat from your mother it would be advisable to take legal advice.

 

[Distressed55]

Thanks for your replies - sister is in a very troubled state at the moment, up till now was completely on board with it being mum’s money and not to expect anything. I don’t know yet which she was proposing or the cost of the flat.
May consider buying in mum’s name and charging rent as interest rates are so low at the moment. I guess sister is hoping for money from the divorce so could eventually buy the flat from mum. Assuming the flat is half the cost of the bungalow, mum should be ok for a few years - has a good pension set up by my dad who sadly died 14 years ago.

If you are considering this then I'd just add that the rent charged to your sister has to be the market rate, or you will end up in difficulties with HMRC. The latter will be expecting their tax take on the rents received, and if you aren't charging the market rate, then they will simply tax what your mum should have received on the open market. And you should also consider protecting your mums position for the future - if you should need to sell the flat in the future to fund her care and your sister is still in residence. So please take legal advice before you make any decisions.

 

[love.dad.but..]

I agree...this could be fraught with difficulties if something is not clearly set out or covered by taking professional advice from the outset.

 

[Primrose19]

Yes you are all right. Hopefully she will sort something else out.