Should mum pay for the granny annexe?

[MooMa83]

Posting here for traffic. We're thinking of proposing that my mum move in with us. She's in her early 80's and starting to struggle but lives 200 miles away. I have 2 siblings that live locally to her but they can't/won't help out much. We already have a converted garage that is a bedroom and ensuite, but would want to do a small extension to give her her own living area with kitchenette. My mum currently owns her own house outright in an expensive city. The extension would improve our property so we would contribute, but is is fair that she also contributes? Do I suggest that this is deducted from my portion of inheritance? It would be great to hear if anyone has done similar and how they worked it out.

My df lives with us (me and dh) in an annexe.
There's often tension between dh and df.

There have been times when I've wanted to leave my marriage but I've had to stay because of df. I've felt trapped and unable to move on with my life as I'd like to and I'm sure dh has felt the same.

Hindsight and all that, but I wouldn't do it knowing what I know now.

If your mum pays for what is essentially an improvement to your home, and later might need 24/7 residential care, her share would be seen as ‘deprivation of assets’ - the council won’t care that it was done with the best of intentions

Intent is important here. DM would be using her money to fund somewhere for her to live that suits her needs now. It's not like she's paying for a conservatory to be added to her DD's house or a gaming room in the basement.

If your mum pays, and she needs care, you may need to repay that money under deprivation of assets. Can you afford to?

if she does need care, and the rest of the money is spent, how do you think your siblings will feel if you’ve effectively had a significant inheritance and they haven’t?

Lots of experience on here about taking good legal advice. A family meeting is called for...siblings, mum and DH.
So all cards are on the table then take the outcome of that discussion to a family solicitor.
Get everything in writing so in future the arrangements don't cause a family fracture. Get signatures.

If poss I'd make space for an overnight carer in the extension.
Or if you're not concerned about deprivation of assets and she has sufficient funds, she could pay for the extension and give your siblings a similar amount.

Lots of options but needs legally to be tied up tightly. I'd do it in a heartbeat but then I've nursing experience.

Always plan forward for possible eventualities.

We did this, it was very easy with a solicitor. They paid for the building work, the house in its entirety belongs to me, but if I asked them to leave the money spent would have to be paid back. There's a lot of finer detail, but the solicitors were very good, and not too expensive.

I asked them to reduce my share in their will, my brother was adamant that shouldn't happen as I'm taking the responsibility for them. Additionally they were able to buy two small rental apartments with the remainder of their house sale which will appreciate in value. So I don't actually know where that got left.

@CinnamonJellyBeans , my DM was in an excellent dementia-only care home for nearly 8 years. IMO it was largely down to the excellent care she received that she went on to 97, though to be honest a swifter and end would have been more merciful - her former self would have been appalled at the unavoidable indignities of late-stage dementia.

It was by no means the most expensive care home, either.

Is the question of paying mostly to do with the principle, or is there also a cash flow issue (that is, paying for the conversion/addition work will impact your daily finances)?

Also, is there an alternative where your Mum sells her house and buys a flat in the same town as you? That way you can help her out but she's not "around" all day. (Realistically, once she moves into the granny annexe she isn't going to be going back to her house, so you will need a plan for that anyway, and she might prefer to sell it rather than leave it empty or rent it out.)

If she is fully compos mentis then she should probably be at the heart of all of these discussions. I hope when my time comes that DCs will not be planning what they think is best for me without considering all the possible scenarios and discussing them with me, although of course it can be hard to convince people that they are in decline.

PS: If you do go for the separate flat option, be careful about buying one in a "retirement flats" building. We did that with DM and it was not great, because the management of such a building has little incentive to provide good value for money for the monthly charges as the residents are unlikely to get very militant. About all DM ended up with as a benefit of that building was emergency pull cords, but otherwise she was basically getting ripped off on the charges.

Notreat it may be OP's idea but the fact her DM would go through with it....not what I would do to my adult DC.

@lunar1 thanks for this. Did you use a specialist solicitor for this do you recall?

@MooMa83 we used the solicitor that dealt with our house purchase, but did have to wait for someone more senior to handle it. It cost around £650.

Please look into the Council Tax issues, you don't want to have to end up paying two lots, as some even charge double for empty properties.

Also think if it's worth the hassle (building work), a bedroom and ensuite is great, can she not just share your kitchen? Do you have a spare reception room that she could use as her own sitting room?

Just really think carefully about all of the options.

I arranged for dm to have carers three times a day, and I helped out when I did a full day weekly visit to help with any financials, gardening shopping et al.
I couldn't have had her live with me and my family, too much commitment and we weren't very close anyway.

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.

@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.

this is an agreeable system.

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 would be my preferred option. Far far better plan

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

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.

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.

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.

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.

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

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.

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.