Lending cash to MIL for flat purchase

[whattodo2626]

I will simplify the figures.

MIL has been losing her memory for ages but has no diagnosis despite some medical tests. For example she cannot remember plans at all - if you say we are leaving for lunch in half an hour she will almost never remember. Her long term memory is fine.

We live 2 hours away from her and in the last few weeks she has decided she can no longer drive to us. Public transport not an option. She is utterly miserable and scared. We have 2 very young children and can't visit that often.

She finds even very small tasks incredibly stressful. For example sending an email can get her so stressed that she is brought to tears.

We all think it is time she moved to a retirement village near us. In fact we have all been in agreement of this for some time BUT the stress of her selling her current home is too much for her. She simply cannot engage in the process without falling apart (not emotionally but she gets so stressed).

The apartment costs £400k. She has £200k in cash, I have £200k in cash. I am considering loaning her the money (formalised in a document, no interest). DH has total POA (medical and financial) and will then deal with the sale of her house to pay me back. We know she needs to sell within a certain amount of time to avoid CGT.

For the sake of completeness: Mine and DH's finances are joint but this money comes from the recent sale of my flat which was purely in my name as I bought it before meeting him and so we see it as 'mine'. I also earn less than him and like having this nest egg.

Please evaluate this plan as harshly as you like. The £200k we would both use up leaves neither of us destitute!

If MIL is out of their county, which it sounds like she is, she will not be eligible.

Don't buy. Retirement properties are notoriously difficult to sell and there are many restrictions and charges. A sheltered unit which she can rent in an assisted living unit would be more suitable. Look for one which has a dementia unit attached as it will make things easier down the line if she gets a formal diagnosis.

Have a look here https://www.ageuk.org.uk/information-advice/care/housing-options/ for more info.

Could she rent something near you? That way she can move slowly and not mess a buyer about?

Agree with others rent don’t buy. Her health may continue to deteriorate and renting will give you more more flexibility . Sounds like she shouldn’t be driving at all!

In similar circs I found a retirement flat to rent, moved Mum into it and then sold her house. She has carried on renting happily. I didn't want to get caught up in the difficulties of selling a retirement flat later ( live near south coast where supply far outstrips demand). But they are not always a money pit. My grandparents had one in a town centre in Bedfordshire and it increased substantially in value in the 7 years they were there

From what you say she has probably has stage dementia. Moving someone with dementia nearly always leads to a significant deterioration. I would get a thorough medical check up before even considering buying a flat.

www.leaseholdknowledge.com/grannys-audley-retirement-home-money-pit/

If her short-term memory is so poor then soon she won't be able to live on her own I'm afraid. Can you imagine her cooking with no short-term memory?

It's a bad idea and she's on her way to needing a care home soon enough.

Not a good investment for your 200k for all the reasons stated above. Renting not buying would be your best option here, if she gets a dementia diagnosis further down the line which sounds possible then you'll have to have a rethink about her living arrangements anyway. I live in a town on the south coast where they are still building these places despite the fact that countless are already on the market and virtually unsellable due to the high service charges etc etc. the town community in general would happily accept general use open market flats being built, but of course they are not the licence to print money for the developers that retirement flats are. MCCarthy &Stone are now putting justifications on the hoardings round the latest ones going up citing job creation and contributions to community infrastructure to try and con us into the flats being a good thing.

Short term as she is feeling so anxious and overwhelmed would she benefit from a few weeks respite in a residential home, she'd be looked after, dh could start the flat sale process, she could be assessed by a doctor for her memory, it would give you all a bit of breathing space.

Do not buy a retirement village flat !Money down a rabbit hole! I would go for a ground floor flat near to you and pay for a carer to call in regularly.

Some retirement flats will evict the owner if they are causing problems
like wandering around - being aggressive causing problems that could be a danger to others

and of course you still have to pay the service charges / mortgage

Loan

• your MIL with her PoA must have independent legal advice.
• You need your own legal advice. This may seem OTT but it is to protect both parties.
• Effectively you are providing a personal mortgage and need a proper loan agreement. It needs to cover a range of circumstances including MILs house not selling quickly.

Dementia

• Your MIL needs a proper diagnosis via the Memory Clinic.
• Once she has a diagnosis they can advise on both the potential progression but also Occupational Therapist advice regarding living on her own in her home.
• understanding her likely long term needs are crucial for deciding what accommodation she needs.
• Be aware that she will have coping strategies that can mean you don’t realise just how much help she really needs.

Accommodation

• Do your research, some over 55 schemes do have a guaranteed buy back option.
• There is a difference between independent living and sheltered accommodation.
• Research residential homes with dementia units. The move within the same property can be less stressful.
• Older properties which are 3rd or 4th hand won’t look shiny and new but often offer better value.
• There are some options that include a restaurant so when MIL can no longer cook she can get a hot meal on site.
• I know she is desperate to move but using carers to stretch out how long she can stay in her own home then transferring to a care home may be a better option.
• Make sure you claim any benefits, like Attendance Allowance, as she deteriorates.

I would be inclined to start with the medical issue, aiming to get a diagnosis, appropriate medication (if helpful) and the consider her capacity. As @Harassedevictee mentions, both sides will need independent legal advice if you are to loan her money. We wanted to loan an elderly relative money for day to day living expenses with no interest to be repaid after her death and that was the advice we received.

Is she competent to drive? If not, please take steps to ensure she is not a danger to herself and others.

How often is your DH visiting? This may be a time you need to look after the children so he can increase his visits.

This is true for us. We get it is not a good investment but she is of the mind that renting is not good security for her. At this stage we just need to do what we can to get her closer ASAP.

By the way I am an ex lawyer so legal side will be taken seriously!

I have to go out for the day now but wanted to say THANK YOU for all advice so far. Will check in later.

If she has that much in savings I too would look at renting a flat in a retirement village.

Do bear in mind too that there is a chance that the change in environment may cause a bit of a decline in her cognition. Fairly normal for people with dementia but I didn't want it to come as a shock to you

What would you do if the stress of moving into an unfamiliar environment caused a sudden decline in her already-poor level of cognitive functioning, and she was unable to live alone any longer? Not an unlikely scenario, I am afraid.

You need to think about what options there are for her in residential care, which it sounds like she will need sooner or later, and how that will work if funds are tied up in a retirement property which may be difficult to sell and has ongoing service charges to pay.

If there are any sheltered/retirement housing communities with flats to rent near you, I would definitely go for that. My late DM lasted three weeks in her new sheltered flat before going into hospital then nursing home. I am so glad we rented rather than buying, but it still ended up costing nearly £10k.

Personally I wouldn’t “lend” £200,000 amount of money to anyone myself, including an in-law. (I might give money to an adult child but that’s all. ). Could create all kinds of difficult or confusing financial and legal and personal/family dynamics. She has a £200,000 property and pension and presumably AA and a supportive son; I am sure something else can be arranged. Renting is one way to go that doesn’t put the onus and responsibility on you. However you of course may be happy with the risk, the admin and legalities, and see it differently in terms of in laws and family.

I'm so sorry @SoloSofa24. All of that sounds so distressing

What kind of support is actually available on site in this retirement village, and would it genuinely help your MIL? And what would she be paying for it, is her actual income high enough to pay for the service charge with increases and still live the life she wants?

My mum moved into a retirement village at this sort of price level but all that was available was someone on site in the mornings, plus a handyman a couple of times a week. The big benefit was that it was a short flat walk from a shop, bus route and village centre. If she'd needed actual care of any sort she'd have had to pay for it.

Have you looked on your council website for 'extra care housing? Imo this is much more useful as there should be someone on site 24/7.

Thank you for input.

I had a long chat with DH, we agree that renting would be better but we just can't see her agreeing to that and then we are back to square one.

It is hard to explain how stressed and panicky she gets about these things. She seems to have come round to the Audley place (where you cannot rent) and we feel like we have to just go for it before things deteriorate even if it is a money pit and difficult to sell on later. She also seems to have an issue with renting and it not bringing her peace of mind/security - it is just not an option for her sadly.

The care options on site do look ok - you can pay extra for being washed etc.

So I accept the situation is not ideal and wish there could be more common sense involved in the next step. BUT the situation we have now of her 2 hours away and DH completely stressed out trying to help her is totally unworkable.

If anyone has anything extra to add on the loan please do let me know. One of you mentioned that I consider she buys the Audley place and then deteriorates/hates it and insists on going back to her home before we sell it. That is a 'worst case' we hadn't considered so thank you. We think DH would have to insist on her selling - tricky and awkward as that would be.

Lots of you mention her getting her memory assessed again. Are there private doctors she could see that might have more time with her? She has been to the memory clinic in the last year and had brain scans etc. I think all she was diagnosed with was cognitive impairment in line with her age. Anyone who spends time with her feels like there is a lot more going on.

Got to get the kids up now so apologies for typos.

going to add DH is an only child and there is no other family.