I want to lend some money to Mum and Dad to have their bungalow updated.

[Marciau]

My mother and father are living well without help in their bungalow and are both 86.
Like most people their age their property is fully paid for but their savings have diminished over the years.
They now want to update their property and the costs are going to amount to about £30,000.
I do not see any point in them doing official equity release as I am the sole beneficiary of their will.
I have been to a solicitor and he has said I could take a charge over the property.
I then asked would my money be safe if my parents have to go into care.
He has said he is going to check this point with another solicitor as he has never come across this situation before.
In the meantime has anybody done a similar arrangement and was the charge OK against the council?.
The bungalow is worth about £350,000 so it is unlikely the full value would be used for my parents care but I did read a little while ago somebody's care cost over £400,000.

Marcia

[Mosaic]

I believe there is a minimum time period that is taken into account re. transfer of assets and going into care. A number of years but not sure how how many.

[cathfromsaron]

for simplicity i think you should 'buy' whatever percentage is worth £30,000!

cath x

[starone]

Or 'lend' it but make sure it is well documented and paybackable (I know, - no such word) should circumstances change in the future. My sister- in-law was in a care home for only 9 months before she died and it cost £25,000 so if they were both ill over a number of years - which is possible - it could well cost the amount of the bungalow. The Council has first dibs on any money before anyone else, so take care or you could lose it.

[bednobs]

perhaps these people can help? they have REMARKABLY similar stories with very similar elements
http://www.theanswerb.../Question1110645.html
http://www.theanswerb.../Question1123901.html
http://www.theanswerb.../Question1101862.html

[boxtops]

Gifts between living relatives need to last for seven years, I believe, otherwise there are tax implications (which I realise is a different issue, but needs to be taken into consideration).

[Marciau]

Hi Bednobs

I did a search and found 1 of these threads but the main difference between my situation and the people in these threads is there is only 1 parent alive where as both of my parents are alive so I do not own any of the bungalow as we speak.
In theory my parents could will the bungalow to somebody else but I think this is very unlikely.
I am 60 and have just retired so I am in a position to pay the £30,000 but I want it back at some point in the future.
It would be nice to find somebody who has made a similar arrangement and it has worked as I do not want the money to in effect go to the council.
For your information I will inherit half of the bungalow when 1 of my parents passes away but it is possible they could both have to go into care at the same time and all of the bungalow value could be used for care fees.

Marcia

[woofgang]

Then just buy a bit of the bungalow off them, no gift, no avoidance, very simple

[tonywiltshire]

I think it would be wise for your parents to try to avoid an equity release and may be more sensible for you to make a loan of £30K but remember if the ownership of the property is, as joint tenants on the death of one parent the other parent will inherit the entire property. As Tenants in common the three of you can own the property in unequal shares you holding a percentage equal to £30K as suggested by wg, each owner can leave their holding in their will to whoever they please, if one or both of your parents has to have care only their share of the property can be valued and no willing buyer will wish to purchase part of a property and the value is usually nil.
Talk to your solicitor, who has all the information, who may wish you to consider a trust deed.

[Marciau]

Hi Tony

I am begining to think it may be worth me going in as another tennant in common.
As I will have a right to the property probably with a right of occupation it looks as if nobody would be willing to buy Mum's or Dad's share in effect it will make the value of both their share's nil.
I will mention this as a proposition to the solicitor.
My long term plan is to move into the bungalow with my husband when my parents pass away.


Marcia