Should mum pay for the granny annexe?

Obvs get advice but I would make sure that you're covered re deprivation of assets. Surely this is actually a good way of passing assets on to children,

She pays you the going rate in rent, for a cleaner, all her food etc and you also 'charge' for being her carer. Who are the council to say that you shouldn't be paid to for caring for her, it's no different to paying some awful care home.

Councils can't have it all ways - if they can't provide care at home then whoever is caring can get paid.

Don't underestimate how disorienting some older people can find moving and how not having the same daily tasks to do means they lose the confidence and ability to do so.

100%. Routine and keeping as mobile/active as possible is so important. How much will she be able to do day-to-day if you're all out at work/school?

I currently care for my mother in her own house but I’m hoping we can convert a corner of our house that we’re renovating so that she has a separate wing for herself. We’re doing the house up ourselves, but will use her money to put a suitable bathroom in for her - and we’ll probably pay to change it to something that we like in the future. At the moment she’s paying me 1/2 if what her carers used to cost and she pays for 1/4 of the shopping. We’ll probably add in 1/3 of bills when she moves in.

Just be careful as if she dies within 7 years you might have to sell your house for the inheritance tax bill. Suggest you pay and she pays rent.

Does your mum actually want to move in with you?

Don't underestimate how disorienting some older people can find moving and how not having the same daily tasks to do means they lose the confidence and ability to do so.

Presumably it’s not just two children but all her friends, familiarity and social life you are expecting her to walk away from. That’s a big ask and you need to make sure you are offering the equivalent in importance to her.

Sounds like a lot of variation between councils - my elderly parents live with us in an annexe, they have their own front door and kitchen, pay no council tax because they have a category W exemption. The annexe already existed however they have spent a fair amount of money (from their house sale) on improvements, they pay a monthly contribution to bills but nothing else.
I’m not overly concerned about depravation of assets if care is required as they have kept money back for this - although I accept it might not be enough! Sibling totally on board with the arrangement, parents gave them money many years ago to buy their ex out of a property and is grateful that we are taking the brunt of the “keeping an eye on them”.

She is still very independent

At this present moment in time.
Sheis getting older, you are getting older. Her needs WILL increase.

If you will be charging you Mum £500 pcm why would you only send £400 pcm to one of your siblings. Why won't they get £500 you get?

The rent a room scheme would let you charge up to £7,500 a year without tax implications.
https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

My Mum cooked for her and Dad til she was 90, and would have wanted her own kitchen as her domain

From all I’ve ever heard, which is quite a bit, councils are understandably very hot on any question of deprivation of assets, and in such cases can, and very often will, require the money to be repaid.

Whatever the intentions were, the fact remains that an elderly person’s assets have been used to make a valuable addition to someone else’s home. All very well if they’re going to be self funded, but not if they’re expecting the local authority to pick up the very hefty tab for residential - or any - care.

I'd say she should contribute to the reno costs and pay rent once she's moved in as well. This could be very informal that covers her percentage of the increased costs to your overall household. We did this when my MiL moved in with us.

As for those that mention deprivation of assets. Well yes this might be an issue but is only if mom runs completely out of money and the local authority need to fund her in a care home. What mitigates against it is that making a small contribution to making her a liveable space prevents her going into care so quickly. The longer she can live "at home" the less time she'll be in a care home. Furthermore - the worst that the LA could do is put a lien on your home for a set amount that could not be more than what mom puts into the reno costs. They can't make you sell "your" home that you have lived in for X years before mom moved to be with you.

Whatever you plan to do, put it in writing, get a lawyer to check it and get DM and your siblings to sign it.

Imagine the scene. Your children have left home / are at sleepovers with friends. You and your husband plan a nice meal together followed by an evening alone. MIL uses your kitchen so pops in to heat something up / make something, has a chat, decides to stay and eat with you,watches her favourite programme with you because thats more sociable. Would your husband think that was fine. Mine certainly wouldn't.

Because it allows her to keep her independence, and also means OP and her family still have their own home and space, which can be vital when you're providing care to an elderly relative.

As an added thing. When the mother moved in she didn't need carers and was able to manage when they went on a couple of long haul holidays a year ( a sort of pay back for friends husband for having MIL there). She got older and a good friend would come and stay when they went away to support friends mum. That worked well for several years. The lady who came and mum- sat for a week is now too old to manage it. She was a friend and they felt completely safe with her. They don't want strangers in the home when they aren't there for that length of time so now ( when they are only early 60s)they are having to curtail the fabulous holidays and have nights away very occasionally. They didn't have children so have disposable income and good health. They are part of a group of friends who go on cruises. The others are still going. They can't at the moment. You need to consider these things. Mum is far too old to go into a care home and start again. Realistically she needs to stay where she is but that has huge consequences . No one would ever have thought mum would live to 104. Mum and her son in law get on extremely well. He adores her. If he didn't it would cause enormous strain.

In our family she would give you the money for the extension and then live in it. And the siblings would be grateful, recognise the excellent solution this offers, and that it does not actually disadvantage them in the long run / the bigger picture because if not spent on the extension far more money would have been spent on more care, earlier.

I would not enter into any sort of co-ownership, nor spend your own money on work for an extension you might otherwise not want and might not increase the value of the house to the cost of building

Rent will be taxed over a certain amount but could be the way forward if your siblings are that way inclined. Just means your Mum spends rent rather than build costs.

She’s early 80s. How does her own seperate kitchenette benefit her as opposed to using your kitchen?

This would be my preferred option. Far far better plan

My friends mum moved in with her and her husband. Friends dad had just died. Mum wasn't expected to live hugely long. She's been with them for 25 years so far.She is currently 104. How is your marriage? What would happen to your mum if you and your husband divorce. What would the plan be if something dreadful happened to you. Very difficult for her and him if you die and MIL is in the annex . Some people will say these things don't matter. They absolutely do and other friends have been caught out by them. You need to have a written and legally witnessed plan for all eventualities.

this is an agreeable system.

@PropertyManager "
It may be better that she moves into assisted living or a nice home now and keep everything simple"

This is an excellent point. Socially it is very hard to move 200 miles away to a town where you know no one in your 80s. She'll likely be happier, have a better quality of life, and keep functioning more independently for longer if she makes connections in her new community. Retirement flats and assisted living complexes can make this a lot easier.

You need professional legal advice - the issues are that if your mother needed care and didn't have sufficient residual funds then the local authority, could, in theory take action to recoup the funds from you if they have been spent on your house.

There are also potential inheritance tax issues.

It may be that neither will be a problem, but I would not go into it blind or on the say so of forum answers.

Also, as someone who cared for my father, at home through dementia to the bitter end, be aware that caring for the elderly and infirm, especially when they are a loved one is very hard work.

It may be better that she moves into assisted living or a nice home now and keep everything simple.