Financial contribution-mum living in annexe

[soontobecarer]

My mum is soon to move into the garage conversion we have had done and largely paid for, which will be a small but well equipped one bed flat. We are happy for her to come, after my dad died earlier in the year. She will need some things doing and required more care from my dad than she really admits to-she thinks she was pretty independent but she has very poor eyesight, mobility issues (blue badge holder) and lots of appointments to attend.

This might be a really awful question but, given that she will have a really large inheritance, has a flat that she can either sell for close to half a million and a healthy pension (occupational and state close to 30k), is it reasonable to broach the subject of financial contribution? We have taken out extra mortgage and a couple of loans to do the conversion. We were going to do it anyway, but expected it to pay its way as air B and B or student rental and so are going to be out of pocket. That said, we will probably inherit just enough to cover it.

Does it sound wrong even to broach the subject? We are not struggling to put food on the table, but neither are we living luxuriously and the flat has also been fitted out to be a proper home with kitchen etc rather than an extra room with living space and bathroom as we had planned.

Just don't know where to begin with it all and know that it's going to take a toll on me emotionally to live so close to my mum, just because it's such a huge change for us all, and I don't want financial issues to come into it too.

I’m surprised she hasn’t offered.

Maybe the horse has already bolted if she’s already moving in/the works has already happened?

Has she not already contributed to anything so far? If she’s not already sold her flat could she keep it as a rental and split the profit of rent? 30k pension isn’t a lot and if she needs carers anytime in the next 7 years she’ll have to pay for it herself (£20+ an hour in her own property).

She has paid for a few things, I can't fault her for that. I suppose I'm thinking of the on costs really. It feels a tiny bit like grown up children moving back into the house and how to ask them to contribute. If she stayed where she was she'd need carers and a cleaner. And I will most likely need to spend a day a week taking her to appointments etc.
I don't know how people do things usually. Nor do I want to appear to want to be profiting from her being here.

Honestly I'd insist she still gets carers and a cleaner. With the best will in the world constantly looking after someone is exhausting best to outsource the worst of it to others so that when you are with her its quality time rather than you constantly bustling around getting xyz done. Ask her for the equivalent student rate for rent Bill's. I'd be mortified to mooch off my children if I had cash in the bank.

Do you have siblings? Or are you set to inherit everything?

But definitely get her to contribute to bills.

I agree with Still getting Carers and a cleaner for her flat.

I dont think you should ask. But dont turn her down if she offers.

I'd say to her -right let's talk about running costs. - council tax, heating, bills etc and work out what we both think is fair.

I know you will want your own independence with that in mind -I have a cleaner who is prepared to do 4 hours a week in the main house and 2 hours in a week in yours -would you be happy with a 1/3 2/3 split of the cost? What independance do you want from carers coming in -what you think you want? Someone to do x or y? How are we going to sort this.

Write a list
Council tax
Water
Heating
Food
Petrol
Cleaner
Gardener

But I'm suprised you didn't do this BEFORE. You need you need to say the conversion cost this and we have a larger morg etc now so I just wanted to discuss with you costs and make sure everyone is happy with how they are going to be covered.

I think this needs to be talked about before she moves in. Given she's loads of money you can't be out of pocket for her moving in. If you don't raise it now it will cause issues in your relationship and marriage.

What's her plan with regards to money she makes from her home? In cases similar I've heard that parents have gifted their children early inheritance.

Thanks all. I think we'll need to sit down and have a big chat soon. It's been tricky with lockdown and my dad being ill for the time just before.
We had planned this for a long time, got planning permission etc, and mum and dad knew it would be there as a long term option, but got jerked into action to get the builders started when dad got ill. He only had 3 months between being a totally independent, ridiculously so, mid eighties to dying. In truth, we never expected it to happen this way round.

This has given me confidence to feel it's not unreasonable to ask for a contribution towards mum being here. In the end, although we will still have the annexe afterwards, and the value of it, it will be saving her a lot just by us being there to do the little things dad used to do, because I genuinely think she'd need significant carers otherwise. Plus the company and proximity to the children.
I don't want to profit, but this is pretty huge and I don't want to resent her being here either.

Eek, yes you definitely need to get it sorted, it would worry me enormously to have someone (effectively) living in my home who I couldn't have that kind of conversation with.

She should pay the market rent for a similar flat IMO but unless she was completely reliant on your dad for finances, so it wouldn't occur to her, I'd expect her to have raised this before agreeing to move in. One of you needs to.

She could give you her heating allowance to cover her heating bills. Will she qualify for attendance and carers allowance. Does ahe know what she will do with her house, will she sell it and put the money in the bank. Is she good at managing her finances and easily living off her pension.

You've hit the nail on the head regarding finances-my dad handled everything. I think it'll be fine when we have the conversation-my husband is as close as I am to her and she will definitely want to contribute. I just want to make sure we aren't being greedy. I had thought market rent.
It does feel a little transactional, and genuinely, if she hadn't a penny I'd still do this, but she properly has. She's good with being pretty frugal but has not a clue about big sums of money, be very why she thinks she's badly off! She gets full attendance allowsmce.

Soontobecarer.sorry I’ve replied on your other thread oops.

Gosh, market rent. I think that sounds like a lot for family. And it needs a discussion so she can get herself sorted financially to meet that.

I’m a bit confused about what you want to be paid for. Is it to cover the costs of having her there? (Seems reasonable time me). Or is it to make up for the hassle of looking after her, which some of your posts seem to imply. That seems less reasonable as she’s family and we don’t usually monetise that sort of caring.

I think market rent would be a bit steep, unless it includes all bills. Will you be catering for her too?

I think your sticking point here is that she hasn’t offered. Many women of her generation left the money side of things to their husbands.She might not have actually thought about it.
Your doing a wonderful thing. I couldn’t do it but that’s just me. I think she needs to realise that you’ll need help and this will need to be paid for out of her own pocket. Attendance allowance is available and it’s not means tested but she has her own funds too.
Have the conversation soon. Let us know how you get on. Good luck 😊

The other option is that she pays off the loans you took out to do it in a lump sum. No running costs afterwards. Could be an option? Frees up a monthly amount from your budget and takes the whole 'rent is due mum' conversation out of the equation?

Sorry just seen you get attendance allowance. There’s also direct payments , that she can receive to nominate a person to give care in an hourly paid roll . But these might be means tested I’m not sure. But please get some help , it’s both physically and mentally draining .

You said tired built the accommodation to rent out so you are in a difficult situation.

You will need to pay a separate council tax for the annexe anyway won't you? That's how you could broach the subject?

Agree with @DonLewis. It’s also worth bearing in mind, if she’s likely to get need to pay inheritance tax anything she gives you over the next 7 years will be subject to the tax from her estate. It may therefore be more financially prudent to find a way round this such as her paying a larger than market value rent or if possibly paying the loans. If you’re not the only one who would benefit from the estate it could also mean resentment - if you’ve got siblings or family who will lose some inheritance to the tax man due to paying tax on money she gives you they may be very disappointed (It’s her money and her choice but I think it’s good to plan now) . Could be worth consulting a solicitor? Hope you have many happy years living close to your mum x

These replies are so helpful for me in getting my thoughts together. I kind of wish there was an organisation giving advice on what's reasonable here.
If we hadn't got the annexe planned, mum would need to buy or rent somewhere around here. And we would have either a place for friends/our in laws to stay when they visit, or a place to rent out. I do think that it's reasonable for her to pay something approaching rent, rather than just added expenses. A bit like we would expect adult children to pay something if they were earning.

I might approach AgeUK and see if it's something they will advise on.
In the end, I am sure we will inherit generously from her and I know that she's not at all mean with money. It's just that she doesn't necessarily get the bigger finances like bills.

I think I'm so much clearer than I was twenty four hours ago on our situation.

Scenario one of mum living near us would be she bought or rented a property near us. She would be entirely financially separate to us then, and the use of our home unaffected. In that scenario, why would I expect/want any contribution? That would be wrong.

In the scenario we have, where she lives in the annexe on our property, we have, willingly, taken a financial/social hit. We will neither have the space to rent nor for friends relatives to visit. Whether or not we do ask for rent or equivalent is a different thing, but I don't think it would be unfair.

How that works out in practice is different, but I think I know where I am on the rights and wrongs.

I agree with the other posters who have said you are right to talk to her about finances and rent. I'd be inclined not to think too hard about inheritance; my experience is those kinds of thoughts can get a bit toxic. I'd just make sure that you're content that the financial arrangements are fair from now, going forward, given that she has the financial means for it.

I think charging rent is massively transactional and unless you're on the bones of your arse financially it wouldn't cross my mind to charge a parent rent to live in an extension. A contribution towards bills would of course be fair. Either she cleans for herself or gets a cleaner, but you don't need to clean for her. Appointments and stuff - she can surely use her own cash to pay for taxis to get to hospital etc? Our local authority has a subsidised taxi firm for that sort of thing.

What I'm trying to say is, you have offered her a home, that doesn't mean you have to slot yourself into the 'carer' role. Let her use her money to preserve her independence. No matter how much she gives you, if you don't really want to do the care (fair enough) it doesn't matter how much money she gives you, you'll resent it.

I’d suggest you also facilitate her to take tax and financial planning advice so she can see and use the fiscal advantages of the situation she has, with independent advisers, and feel comfortable about it all.