Issues with potentially inheriting a house with someone else’s elderly parents in it

[Cathpot]

Need a list of ‘things we haven’t thought of’ with a slightly non standard situation.

Long time very lovely family friend who has no next of kin, has just asked if we would agree to be in their will to inherit the house their parents currently live in.

Parents are living independently day to day but not coping with wider aspects of life and friend has power of attorney and owns the house they live in, having bought it for them.

Friend wants some one they can trust to own the house so that parents can continue to live there if they died before their parents.

Friend lives abroad in partner’s country of origin and the rest of their estate would go to their partner.

Although our friend -who is healthy and mid 40s- is very unlikely to predecease the parents, ( and may well be married and/ or have children in the next few years which would change the situation) , I can’t help thinking we need to consider any unforeseen consequences before saying yes.

Things to think about so far

• What happens if the house needs repairing , who pays for that?
• What happens if their parents need to move into care, who decides that and what if they resist?
• if parents moved into care or died, what does friend then want done with the money from selling the property.

We feel that friend just needs peace of mind to know someone who has known their family all their life and would do the right thing for their parents, has been named in the will should something unexpected happen. We would like to help but don’t want to say yes without making sure everyone has considered all the consequences , however unlikely the chances of this happening.

Do people ask others to be mentioned in their will, now?
I've never known anyone ask permission, it's either yours or not. You either own or not.
You could agree to anything but once the house is yours you can do what you want. You are no more trustworthy than anyone else they'd sell to.
I'd decline and let her sort her own parents care.

I think you're right to be cautious. Couple of things I've thought of:

• What happens if you pre-decease your friend's parents?
• Who gains power of attorney over your friend's parents? Presumably this and the house ownership is in place because they don't have full capacity to be in charge of financial decisions
• Who pays the bills? (again relating to the power of attorney)

I really don't know if I'd be happy to take the potential responsibility for someone else's elderly parents with potential capacity issues unless they were already incredibly close to me and I had a vested interest in their care anyway.

Best of luck trying to sort this out, it may be worth checking with your friend if they've received legal advice on how this could be managed.

Our friend is writing their will and wants the parents to be able to continue living in the house for as long as they are able and their first solution is to leave the house to family friends who they know would facilitate this. They checked in with us to see if we could think of any reason this might cause us problems ( mortgage is paid off) and if we would agree to essentially take over the job of allowing the parents to live there for as long as possible. It has the feel to me of a simple solution on the face of it but might in practise be more complicated. We are trying to think it through ourselves but I’ve posted here as a quick check with the hive mind.

Justcallmegriffin those are all good questions. I hadn’t thought of day today day bills either.

I’m starting to think friend would be better off thinking about care / sheltered accommodation ( can you write that into a will?!) but parents are very resistant to any help at all.

Who do they want to benefit in the long run? Surely you leave the house to x, but with a and b having the right to live there as long as they wish.

Or simply leave it to a&b.

This is odd.

This feels very complicated! Initial questions which occur to me are...

Why is the partner not inheriting? What processes is your friend planning to put in place to prevent you just chucking the parents out? In reality, is this you taking on the responsibility of the parents - what about the power of attorney? Who benefits in terms of tax limits etc? What are the financial impacts on you (do you already own a home, would this impact stamp duty etc)? Would it not be better for the house to go to the person who will finally inherit, but with a trust set up which ensures the parents rights to live in it?

No solicitor yet but we have suggested that would be best , rather than a DIY will, given the odd situation.

That's very complicated and she really needs to take legal advice from someone in the country that her parents live in. It could potentially cost you a lot of money, inheritance tax, property maintenance, all sorts of things. Plus, I don't know what sort of legal position that would put both you and her parents in. Are you a landlord if you don't charge rent? Will you have to fulfil all the legal landlord requirements like gas boiler checks etc?

Would she consider leaving the house to them instead and you having power of attorney for them? That way if they need to go into care the house will be sold and the money used for that purpose.

I don't understand. ,You woukd own the house but who would be looking after the parents?

Your friend needs to put the house into an Interest In Possession Trust to allow their parents to live their during their lifetime, and then appoint you as Trustee.

The parents would then be responsible for any outgoings in relation to the property, and your friend would be able to decide who ultimately inherits the property xx

*to live there

This does sound incredibly complicated and unusual. I can’t believe they’re considering doing it without legal advice! Having said that you can’t criticise somebody for wanting to do the best thing to look after their family. You’re very kind to be considering taking it on and sensible to look at all the implications as well.

onceuponapotato
Friend has not suggested anything to stop us selling the house from under their parents - and even though we absolutely wouldn’t do this I agree it seems an unnecessary risk for them to take legally. I don’t know whether you can write into a will the right of a person to live in the house until they die? What then happens if they aren’t safe in the house and need to move to care? Friend is in a stable long term relationship but isn’t married and they have only just moved in together. I also think that really the house needs to go to the partner but maybe friend feels we have more connection with their parents. The more I think about it the more I feel it’s a bit fraught!

Friend absolutely must get legal advice from a good solicitor.It sounds like she needs a trust in her will with consideration given as to how property costs can or will be funded if the parents have insufficient to meet them themselves. Also, thought needs to be given as to whether there will be inheritance tax and how it will be paid if all other assets are outside the UK and husband is entitled to them under the law applicable there. If you are asked to be a trustee for the parents you also need to be very clear about what that entails.

Sorry- cross post I can see my questions answered. Thank you very much - this has really helped- we do need a different plan.

There's 2 separate issues, isn't there?

1. Ownership of the house. Easy, leave it to you with the stipulation that her parents can live there for the rest of their lives. You would be responsible for maintenance and upkeep etc. and would effectively have sitting tenants who pay no rent.

2. Who has responsibility/power of attorney for her parents if she dies before them.

Whether 2) should be a condition of 1) is what you need to decide.

You'd be disadvantaged for stamp duty (I think it's 3% on top of the normal rate, but not certain) if you had a second home (which this would be classed as) and you would be responsible for capital gains tax on the sale of the property.

It looks like you'd also be landlords, so would be required to comply with those laws (gas safety checks, maintenance). I assume you wouldn't charge the parents rent to cover this, so you would potentially be out of pocket

Is there reason her parents can't inherit the house?

I think it would be better to put the property in a trust giving her parents a lifelong interest in the house until their death. The upkeep of the house would be paid by them (assuming they do that now) or your friend leaves money in the trust to be used for this. The trust is administered by an lawyer or whomever your friend appoints, quite likely whomever takes over power of attorney. Then when they die it passes to you. Or you could inherit the house and rent it to them.
If you were owners of the house you would be responsible for insurance, upkeep etc. It is complicated and they must use a lawyer to draw it up, and you should appoint a lawyer to read the will before you agree.

Does she think you'll care for the parents or something?

I wouldn't like this, there must be some strings attached?

What are your friends expectations?

Why aren't they simply leaving it to their parents? Am I missing something? And how can your friend have no next of kin if her parents are currently living in her house?

What happens if the parents require care or placement in a nursing home? Isn’t there something about property sold within 7 years of such happening is seen as a form of avoidance of paying?
I think there’s far more to this than what you’re being told OP.

I think your friend has this backwards. She should be leaving the house to her parents, so that if she predeceases them, their home would be secure. She could then ask you to be a reserve on a Power of Attorney, so that, in the case of her death, you could facilitate a move to a care home (which she should select in advance) and sell the house to enable it. (Some homes require evidence of ability to self fund for a while.)

This is what I did for my parents, as an only child. It meant that if something happened to me and dh - we travel together by car, so it's not unimaginable that we might both go at the same time - the friend agreed to ensure that my parents, who had various health issues, would not have to do anything other than move to somewhere they would be looked after. It gave me huge peace of mind.

It probably is to avoid it being sold for care fees

Friend really has no hidden motives! Their parents don’t have capacity to deal with the house themselves and all of these answers have highlighted that although the sentiment is good the realities make it a bad plan. I’m glad I asked as this has made us think it through properly rather than just saying yes in the spirit of helping out. I’m sure a better plan can be sorted out that covers her worries for her parents.