To think that that this will not end well

[subtlesue]

A is a 60 year old widow with 2 adult children. She owns approx £300 equity in her house. All children moved out, all renting and struggling for deposits. She works part time at minimum wage. If relevant, £150k of that equity came from life insurance pay out when her late husband (father of the children) died 15 years ago.

B is a 60 year old divorced man with 4 adult children all moved out and renting. He has about £200 equity in his house and earns about £50-60k/year.

A and B have been dating for 10 years and now all the children have moved out they want to move in together, no intention to marry. All children support the relationship and are happy for them that they can now live together properly.

Here is where it gets a bit complex.

A and B are planning to put equity together and buy for approx £400k keeping some as savings in the bank.

A and B both, in the event of their untimely death, want the equity that they have put into the house to be available to their children relatively quickly, and not for them to have to wait for their 'step parent' to die which could be another 20 years.

Is there any way legally that this can be done, or must we rely on the good will of the living partner that they would organise for the release of equity (most likely downsize I suppose)?

No one is suggesting that a bereaved partner should be evicted suddenly. Honestly- no one in the two families is horrible. But surely something formal
needs deciding and something 'put in place' in advance so that everything is clear and all are prepared should something happen to one of the partners. It seems immoral to me that if A were to die, then B could be living in a house with £150k worth of A's children's fathers life insurance money. But also seems immoral that he would be expected to move out of his home to release the equity when he's just lost his partner. And there would be other difficult situations if B were to die and A to live.

So, to my AIBU- A and B keep saying they will 'make sure' that things are set up so that their equity would be released, AIBU to say that this won't be possible and there would be an awful complex situation?

Pretty straightforward case, though I would certainly have the wills drawn up by a CV professional.

New house owned jointly rather than as tenants in common. The percentage owned by each to reflect the capital contribution.

The share of the house owned to be left to DC, with new DH to be given some 'x' months where x is agreed when will is made to find somewhere new to live and to be given quiet enjoyment of the whole house until that time.

All straightforward but how will the inheriting DH feel about turfing the remaining partner out, especially if they are old and frail. Will they try and put pressure on the remaining spouse to move out more quickly?

I wouldn't do the joining together. It really only makes sense to get married if they want to share estates. Sorry.

Whatever they decide, don't leave it to those left behind to sort out.

While everyone is for the idea at the moment , it can rapidly change when there’s money up for grabs . I don’t know what the answer is though.

This makes sense. Surely you just put a clause in that the surviving partner has x years (3?) following the partners death to release the equity either by buying the children out, or selling op.

*up

Perhaps IABU and there is an easy situation I'll be chuffed if that is the case! Thanks for reply's so far.

arethereany

That won't work, 3 years is too long.

"want the equity that they have put into the house to be available to their children relatively quickly"

The problem is though, how do you actually force someone to sell? You probably can't. Because they could say I'll only sell if I get '£something unrealistic'

Another possibility they are discussing is that they move into B's house and A pays off the rest of the mortgage with the sale of her house. Could a similar clause/contract be added in that case? Would seem horrendous for B to have to move out of his home of 30 odd years to release the equity if A were to pass though!
It's so hard

@arethereanyleftatall

The problem is though, how do you actually force someone to sell? You probably can't. Because they could say I'll only sell if I get '£something unrealistic'

This is the worry. I have no reason to believe either of them would go back on their word or would want to 'deprive' their 'step children' of their inheritance. They're both lovely people not driven by money or greed. But if it's literally having to move out of their home they might be less willing than they expected when they went into it.

Could they live in one house and rent the other? Then if the one with the rental property is the surviving partner they serve notice on the renter and then move back there withing say 6 months. Okay not simple, tricky as they get older and frailer. Not sure what they do about splitting the costs for the upkeep of the property they live in though...

Is it likely to be complicated by one of the properties or a new property increasing in value more than the other so that the share is essential less/static.

Is there enough equity to buy a house and say a cheaper flat in an area they like to visit so that the second property is familiar and the survivor won't mind moving to the cheaper property as it will be familiar.

I don't think there is a way round it really apart from either the survivor raising the required equity or the house being sold within say 6 months.

What ever it all needs to be set out in a cast iron way

We have a friend in similar circumstances. He has decided to let his house and will move back in there if new wife dies before him. If he dies first his house will go to his children and not to his wife. They felt the inheritance issue with children was too complex.
Another friend's dad lost almost all of his inheritance from his dad's estate as stepmother (childless) lived in the house for thirty years after dad's death and most of the money from the sale of the house went on her care fees. £100s of thousands.

I know of a situation like this and it took two years for the step children to get him to sell up. When my DD was looking to buy one of the vendors was in this position and you could tell that he was doing everything to prevent the sale, she dropped out.
The best thing to do would be for one to move in with the other. Work out a reasonable amount to give them for accommodation costs and pay it six months/yearly. Each of you then get to keep your children's inheritance. Moving isn't easy when very old, nor is getting into legal conflicts. You haven't featured in care homes/dementia care etc. So the one who doesn't move in either rents out their property, or sells, gives the children something when alive/keeps enough for accommodation to suit.

@Philandbill and @Forestdweller11 that's a good suggestion. I will take it to them and see what they say

Something similar happened in my family. My relative died first and then my step relative died 25 years later. Money was shared equally between all the dc when my step relative died.

You can release the equity on a house without moving out. It's very common.

It's like a mortgage but with interest added to the end value which is paid back when the second partner moves out of the house.

I'm in the US, so take it for what it's worth. Not sure if UK does home titles the same as we do. But a friend dealt with this years ago. They ended up as 'tenants in common' because her husband wanted to guarantee that his share of their house went to his children.

If one owns a house as 'joint tenants' then in the event of death, the survivor becomes 'sole owner' and can dispose of the house how they wish. This means that they could sell the house and NOT share the profits with the deceased person's heirs. Or they could will the house to whomever they choose.

If one owns a house as 'tenants in common' each share of the house is owned as separate property and the owner can dispose of their share as they wish. In the event of their death their share goes to the person(s) they have designated (ie their children/siblings/cat's home).
However, it would take a court order to force the surviving 'occupier' to sell the house so the deceased's heirs can get their share.

Personally, as a financially secure senior with grown children, if I were to become single I would never jointly purchase a home with a partner. I would NEVER sell my home as part of moving in with someone. I would never co-mingle finances in any way. Actually, I'd never cohabit. I like my space and not having to 'consult' with anyone on my decisions.

When my auntie remarried she and her new hubby got a legally drawn up 'right and tight' ironclad pre-nup (enforceable here) leaving each one's property and assets to their own children. They kept both houses and just moved back and forth as the whim took them.

Bottom line is this couple needs to consult separate solicitors as to what is best for them as individuals. Then go from there to see if there is a workable agreement.

@madroid

You can release the equity on a house without moving out. It's very common.

It's like a mortgage but with interest added to the end value which is paid back when the second partner moves out of the house.

Don’t do this it’s an absolute rip off.

Not clear why it would be ‘unfair’ for children to wait for the step parent to die even if it is 20 years.

More normal surely that’s they leave their assets to their children legally, but give their partner the right to live there for life. After all, this is the person each of them loves. They may not be marrying and sharing their worldly goods forever, but not unreasonable to share them for both their lifetimes.

The stepchildren involved sound entitled and grabby. They should perhaps suggest this solution to their parents and stop being so selfish. The parents are not marrying, probably to protect their children’s inheritance and perhaps the children should be as generous in return. Both would most likely hate to see the other forced to move after they die and neither should have to live in a lower value properly for their time together just to convenience their children later!

Presumably if one of them ends up in a care home that equity would also be needed to pay for their care, so the children wouldn't get it anyway? Has that been considered?

They can do whole of life insurance in trust so that the survivor can buy the children out as well. Given their age it may be costly though.

They're relatively young and could live for decades.It may be sensible to make inheritance plans but perhaps wishing them well and worrying less about their estate would be more positive.

What would happen if the remaining partner needed care that had to be financed? They then would not be allowed to pass on the equity from the property but instead be used for the care home fees (and it is remarkable how quickly any capital can be gone through). And if the equity from the property had already been given to the children, and the remaining partner THEN needed care, there could be difficult legal problems to overcome.

Both A and B need legal advice. But the idea that the money will be easily available if everything is tidy up in the house doesn’t sound logical.

The reality is that it will either be waiting for the other partner to die/move to a smaller (?) property. Or expecting the grieving partner to move out to the marital home.
But most importantly they both need wills. Extremely clear wills where they will be able to leave their share to their own dcs.
Because my experience of inheritance is that they will all want different things. The children from the grieving parent will want them to stay in the house whilst the ones receiving the inheritance will be in a hurry to get said inheritance. So setting everything up is essential, whatever they decide to do.

FWIW another possibility is for let’s say A to keep her house and rent it whilst she lives in B house.
If A dies, inheritance goes to her dcs.
If B dies, A can move back into her own home and inheritance goes to B’s dcs….

They can't both have the surviving partner living in the house long term and release the money quickly. Not without some sort of equity release and that will be costly for the surviving partner as they're generally a bit a rip off.

They also need to take proper legal advice about care fees. Councils are getting much harder on chasing fees so it'll be massively expensive not to take proper advice and make sure the ownership is set up very properly.

Ultimately though there's nothing anyone else can do - A & B will set it up how they like and others will just have to deal with it. Even if it is done in a way they think is immoral.

It is a minefield.