Financial implications of house sharing

[DogsLoveLakes]

Hi, can anyone talk me through a brief guide to what I’d need to think about financially if an elderly/disabled parent was to live with us - various factors and possibilities up in the air and I need to know what I need to know about if that makes sense!
Ie - could they use funds from sale of their property to convert our garage to a granny annexe? Or to add an en-suite etc? If they lived with us how would they contribute to costs of bills/tax/house insurance etc etc? Who regulates this? What pitfalls do we need to be aware of? It all seems complicated from what I read on here and I’m wary of how liable we’d be financially once they moved on either when they’d passed away or if they needed to go into nursing care...seems to be so many issues that I don’t even understand! Any help appreciated!

You really need to seek legal advice, but before you do that you will need an idea of their financial position and of what you would need to do to your home to make it viable.

As far as I know nobody regulates how families share bills in shared accommodation. Your parents' income is their own to spend as they wish.

One thing you would need to consider is if one or both go into care.

If one carries on living with you but the other goes into residential care then the one in care will be expected to spend their savings (over £23k) on their care. But if their savings run out they will get council-funded care. If both go into care, or if only one is still alive and goes into care, then they will be expected to sell their home to fund this. So you need to get advice about who should own what to ensure your property is OK in that eventuality. There are other things you will need to think about if they give you money (deprivation of assets) that will be easiest talked over with a solicitor.

I'm going to assume that the elderly person in question has full mental capacity and is in full agreement with this course of action when answering

could they use funds from sale of their property to convert our garage to a granny annexe? Or to add an en-suite etc?

Yes it's their money they can do what they like with it. In return would they expected to be added to the deeds/mortgage/have a tenancy agreement

If they lived with us how would they contribute to costs of bills/tax/house insurance etc etc?

that would be for you and them to decide between you. Neither party should feel they are worse off from the arrangement would be the ideal.

Who regulates this?

No one

What pitfalls do we need to be aware of?

What are the expectations of each side? Are they realistic/ match up?
Will they expect to be included in all of family life or will they want their own space?
What happens if you go on holiday?
What happens if you can't/ don't want to care for them any more but they refuse to leave?
Is everyone on board with the decision?
Who is going to take on the caring responsibility? How much are they genuinely willing to do?

It all seems complicated from what I read on here and I’m wary of how liable we’d be financially once they moved on either when they’d passed away or if they needed to go into nursing care

If they went into care and didn't own the (your) house then the local authority wouldn't have any claiming your property.

seems to be so many issues that I don’t even understand

Caring for elderly relatives is much harder work than most people appreciate. It really tests relationships. I would always recommend a test run before anyone makes a commitment.