Rented house and inheritance (Is GF BU?)

[OatAndRaisinCookie]

This is about my grandfather. And he’s been asking if we think this is fair. GF is 85 if it helps.

GF owns his own home, mortgage free. Worth around £180k (3 beds with garage, decent sized garden and options to extend). Currently it’s rented out to a family and the money after money to the management company is used to pay for my GFs sheltered accommodation. He’s compus mentis, but has mobility issues so likes the security of the SA.

Technically on his death the house will be sold with proceeds split between his daughters. His worry is the family living in his house. They’ve been living there around 5 years now and have 2 children both under 10. The couple are good tenants, pay the rent and keep the house in order. Their children attend the local primary school. They have often stated to the management company that this is their home and they want to stay in it long term.

GF wants to put a clause in his will so that the family can stay living there until the youngest child leaves home with the proceeds of the rent being put into a savings account to be given to his great grandchild when the house sells. He knows they will never be able to buy.

But he doesn’t know whether this is fair? And also whether the family might be a bit offended that he made provisions for him in his will when he’s never met them. He knows having seen all of his children struggling with rented places when their children were young that having a secure home for your children is very important.

Is HIBU? Or not?

I think that's incredibly generous and thoughtful of him!

What if the youngest child never left home?

What if the youngest child never left home?

Then I assume my mum and/or her sisters would come to an agreement with the parents about it, I think it's just so the children can stay in their school etc while they're young.

But what about his own descendants? He could add a clause giving them additional notice. Surely if you rent privately you know this can happen

It's incredibly generous of him, but he needs legal advice. Its a lovely thought but I can see this going wrong to be honest.
Like PP said, what if the youngest never left? It might be better worded to say when the youngest child is 18 for instance (and then what would happen if they had another child after that one?)

Will he definitely only have one great grandchild?

It is a kind thought but I don't think it's very practical to save all the money from the rent. It will require maintenance and repairs over the years and tax is payable on the rental income, on top of the professional fees already deducted.

I assume this money would be going solely to your child, OP, under the current plan? What about your mother and her sister - would the house go to them at any point, is there no chance of any other great-grandchildren?

Your grandad sounds like a wonderful person.

The only change I would make is youngest leaving school rather than youngest leaves home. At the point the youngest is 18, the need for stability should be considerably lessened.

But what about his own descendants?

What do you mean? They'd still get the proceeds from the sale but it'd just be once the youngest child left home.

I am not sure you can dictate what happens to your worldly goods from the grave. You can leave it to people who inherit when you die but beyond that I do not think you can dictate what they do with the benefits after your death unless put into a trust.

It sounds lovely but also a disaster waiting to happen.

Exactly what HeathRobinson said. I'm sorry, I think it's bonkers. Much as I want my tenants to stay forever, it's not their house. If your gf dies, the house needs to be sold. The tenants will have just to find somewhere to live.

"Then I assume my mum and/or her sisters would come to an agreement with the parents about it, I think it's just so the children can stay in their school etc "

No. Never assume anything when it comes to Wills! People can turn very quickly, sadly.

Personally, I think your grandfather is being a bit too accommodating to this family who is renting the house. Your own family's needs should come first, surely? This family may consider the house to be their long term home, but that's simply not the case. They are renters and if they have to find a new rental that's their concern, not your family's. What your grandfather is proposing involves many, many more years of being responsible for a property you can't sell or live in. What if major repairs are needed? Who would have to pony up for that? Obviously, your grandfather is a kind man, but I think this is a step too far.

Nice but subject to so many issues! What if the kid were to die, parents divorce, parents die....

I think he’d need a clause in there about paying market rent, otherwise 10 years down the line they’d be getting an absolute bargain, to the detriment of family. Also, are there likely to be any other great grandchildren arriving later and left out?

Will he definitely only have one great grandchild?

We don't know, currently he only has the one but he'd word it to say any living on his death.

Blimey I’d never ever have expected that as a tenant, he’s being far too accommodating imo

The tenants could also have another child, effectively restarting the clock on the 18 years.

Honestly, it’s a bonkers arrangement fraught with potential problems for the future

The youngest child may choose to stay there forever.

The parents may decide to have further children to extend the arrangements.

Whilst it's a lovely idea, it has significant potential problems and legal advice is needed.

He could put a no evicyion for 10 years (for example) instead.

No way, he's effectively saddling his own DCs with a rental property that they will have to maintain and not even get the rental benefit from, whether they like it or not, for the sake of a family of strangers. Weird.

The tenants, if they find out about this, could then take advantage with not paying or looking after the property correctly safe in the knowledge they cannot be evicted.

Your GF would do far better to say to his daughters what he would like to happen, allow them to inherit it and hope they are in a financial position where they are able to carry out his wishes but ultimately put their own (and, therefore, his own) family first.

I assume the money for repairs would come from the rent pot.

He pays tax on the rent already.

I think it's very thoughtful and he could always ask a solicitor whether there's a practical way of achieving it. If there isnt, no harm done.

Sort of thing that could be the subject of 30 mins free advice, or a conversation had during general will drafting?