Will my home be at risk if my father who lives with us, needs care

Discussion in 'Legal and financial issues' started by SMS, Feb 16, 2015.

  1. SMS

    SMS Registered User

    Feb 16, 2015
    1
    Hi everyone,

    I have tried to find the information I require through the fact sheets but wanted to ask the advice of you all on here.

    Myself and my husband plan to buy a house with an annexe so my parents can live with us. Since dementia runs in my family, there is a chance that my father will develop dementia and then may enquire care in the future. My father will sell his house and will give the proceeds of the sale as a gift to us so that we can buy a house big enough so that we can live together but the house will be in my name. There is no indication at this stage that he is likely to develop dementia as he is currently fit and well, and he is only in his 50s so it is likely that if he did develop it, then it may be a few years away yet.

    We have other reasons for wanting to live together and it is not about needing to care for my parents in their older age, as they are still fit and well. However my concern is that in the future a financial assessment for care may conclude that we need to sell part of the house to pay for his care if he requires it.

    Has anyone had any experience of this situation and any advice to us about what to do? Would it be best for us to rent a room to my parents to ensure we were in a protected position if he / they require care in the future? Or is it simply okay that we own the house and it will only be his / their assets that are counted? It is likely to be several years after the house purchase that a financial assessment would be conducted and we would be upset if it was deemed that we had tried to reduce their assets to avoid paying care.

    Sorry for the long post and thanks for reading. Looking forward to hearing your thoughts
     
  2. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,418
    Hi and welcome to Talking Point.

    I'm going to approach this from your father's POV and say that from that angle: this is a massively unwise thing to do. Not, I hasten to add, buying a house together but him giving you the money as a gift and not having the house owned at least in part by him. What if, god forbid, something happened to you? Or your marriage failed?

    Now I realise I haven't addressed the whole "will it be considered in a financial assessment" thing. Theoretically it could be. You've already stated that you think it's possible that care may be needed at some point in the future, and currently the regulations state that if avoidance of care fees are a contributory factor in a decision like this, even if it isn't the main one, that could be considered to be a deprivation of assets situation.
     
  3. Kevinl

    Kevinl Registered User

    Aug 24, 2013
    4,662
    Salford
    It's a bit difficult to answer really. If in the future your parents did need some state help then the decision to move in with you and give you the money would be looked at. If it happens in 5 years time they would take a different view to in say in 20 years time, if it happened in the near future they may claim deprivation of assets but the longer it goes the harder it would be for them to claim that.
    I agree with Jen, I'd give the whole ownership thing a bit more thought, if there were to be a relationship breakdown in either your or your parents relationship or even between you and your parents (it does happen) where would everyone stand.
    Say for example your husband left you or you wanted to leave him, where would happen then?
    Given the current situation with an aging population and all that the regulations may well change in the future, who knows what the rules will be in 5, 10 or 20 years time, it may be that goalposts get moved more than once before you get to the financial assessment stage.
    K
     
  4. AlsoConfused

    AlsoConfused Registered User

    Sep 17, 2010
    1,958
    Wouldn't this be an ideal situation for shared house ownership if all parties were convinced they wanted to stay together long term and wouldn't want to move from the new joint home?

    The Dad's share of the house wouldn't have a good market value so all parties would be somewhat protected against care fees. On the other hand, the daughter and husband will be stuck in this house until the Dad's death ... which is "taking a hostage to fortune" with a vengeance.
     
  5. Chemmy

    Chemmy Registered User

    Nov 7, 2011
    7,593
    Yorkshire
    My neighbours were talked into putting their house into a trust for the benefit of their children and grandchildren about 15 years ago. That decision has caused them so much heartache.

    They now live in a property owned (for tax reasons) by their daughter in law, whom they do not like. If their son dies before them, and he does have health issues, then they will be at her mercy. One of them currently needs to move into a care home but instead of having more than enough funds to go into the home of their choice, he will still be self-funding but they are now having to count the pennies.

    Their children and grandchildren have travelled the world numerous times on the back of this early windfall whilst the old couple are riven with anxiety and uncertainty over their future. They regret ever signing away their house.

    You may think "This will never happen to us". I'm sure they thought the same all those years ago.

    By all means buy a property together, but let everyone's names be on the deeds, because if living together doesn't work out for whatever reason down the line, (what happens if you need to move, for instance?) they at least retain some financial independence and security.
     
  6. marionq

    marionq Registered User

    Apr 24, 2013
    5,537
    Female
    Scotland
    An additional problem from the experience of a close relative. She put significant money into her daughter's home and sadly the girl died from breast cancer leaving a young husband and two young children. The husband married again several years later so the house would go to his new wife if he died. Her grandchildren would not necessarily inherit a share.

    Think long and hard before sinking the joint funds of two generations. You will be tied together in ways you may well regret.
     
  7. sue38

    sue38 Registered User

    Mar 6, 2007
    10,856
    Wigan, Lancs
    I have recently come across a similar scenario - mum put the proceeds of sale from her property into a property in the joint names of her daughter and son-in-law. Some years later the marriage broke down and daughter left the property - leaving her mother living with her ex-husband. Everybody thought they knew what had been agreed all those years ago, but everybody's version was different.

    If you do decide to go down this line make sure there is a properly drawn up agreement, with all parties receiving independent legal advice.
     
  8. Jess26

    Jess26 Registered User

    Jan 5, 2011
    970
    Kent
    I don't understand, if the house was put into trust for the children (something we have thought about) how did the children 'travel the world on this windfall' surely they wouldn't benefit untill the parents died ?
     
  9. Chemmy

    Chemmy Registered User

    Nov 7, 2011
    7,593
    Yorkshire
    It was signed over to the new family trust by my neighbours in 2002, the purpose being to avoid inheritance tax. They continued to live in it until three years ago, but a retrospective tax law was introduced by Gordon Brown which meant they had to pay the trust an annual rent (out of their income/ savings) whilst they continued to live there (POAT, pre-owned asset tax, I believe) which, as you can imagine, didn't go down at all well. And they still seemed to be expected by the family to be responsible for the upkeep as five of the trustees (the grandchildren) were teenagers/ students so had no income at the time to pay for maintenance etc.

    Once they moved out, one of the trustees (the daughter) moved in but she wasn't prepared to shell out for any maintenance on her own either so it got into a bit of a state, especially the garden, tbh. Then the other trustees, including her three kids, decided out of the blue that they wanted to sell it, so she was told to move out. The trust then sold the house and the money was distributed between the seven trustees (the son and daughter in their late fifties and 5 grandchildren in their late twenties)

    There may be other sorts of trusts, but this one turned into a nightmare. Besides my neighbours, the original owners being upset, the daughter and her brother are barely on speaking terms (because of the 'eviction') and the grandchildren are travelling the world.
     

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