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!

Do you think there's a chance anxiety ciukd be affection her cognition? Is she on any medication for her anxiety?

You need to check carefully what sort of dementia care they'll provide. Many places have limits and then she'll have to move out again. If she doesn't want to rent can you tell her that she's not renting and pay for the rental with the PoA?
You will need to register a charge on the property as a secured loan if you do go ahead. Much like a bank.

Agree that you need to check how they handle residents with Dementia. My DM lives in an extra-care village and they contact the families pretty quickly to talk about moving out a resident if their dementia is affecting their behaviour and upsetting other residents. They are persuaded to move them on pretty quickly.

I would seriously reconsider lending £200K interest free. You’ll be losing £10K a year that you’d be getting in interest from having it in your own account. If she lives for another ten years that’s £100K potentially up the swanny, money which could be life changing for your own DC in the future. I’d never consider charging interest on a small loan, but these sums are enormous and you will be massively losing out.

I think it’s a crazy idea. No way should you apply your money to her living costs as in a few years time all her money will be up for grabs to pay for social care. An interest free loan is giving away money. Sometimes a decent cleaner can act more as a PA / companion as well. It seems like she is anxious and lonely and maybe getting someone reassuring in her life to clean, take her out and reassure her might help. Have you tried getting someone in before making dramatic moves? Some types of dementia can have sharp plunges down. Has she had medical tests done eg heart, brain scans etc. My mum had vascular dementia and was only diagnosed when it was advanced. Cognitive decline due to age is nonsense. Many 90 year olds are as sharp as anything.

My friend was in the exact same position as you OP - anxious MIL, who pulled out of two moves at the last minute. Their solution was to get PoA and then spend on daily 'cleaners' who were really carers/companions as being on her own made the anxiety worse.

Audley sell a lovely lifestyle, but I've heard that in many of them the community facilities are barely used, she won't necessarily get company or things to do there.

There is a possibility that she had poor sleep due to anxiety and that is causing the appearance of cognitive decline. In the main ‘cognitive decline’ is a precursor for dementia.But in 30% of cases it’s not and caused by basic stuff like lack of sleep.

She needs distracting and reassurance eg with companionship and support maybe. She might then have a completely different viewport. I would save all the legal fees and stamp duty to pay towards her care.

I hate to say it but the move may be too late for her, do you think she’d be able to manage new appliances and be able to go out without getting lost?

My DM simply couldn’t learn anything new at a similar sounding stage.

I think you should try your best to convince MIL to rent instead of buy. Would her anxiety be allayed by paying a year's rent upfront. Point out to her that if she buys, she will still be paying ground rent/service charge, so it is best not to sink all of her capital and assets into the flat.

She is probably thinking of buying the flat as having an asset, but if you can explain that capital will be essentially down the drain, she may be happier keeping some capital aside.

OP well done to you and your DH for putting you MIL needs first. Not everyone does that and it is clear you have her best interests at the heart of the discussion. You both sound lovely people.

I had a positive experience with my DM and M&S and yes, whilst not the best investment in property, it was a great investment in her later years although she did not have dementia. Also possibly the monthly service charge was not so big 10years ago. We extended our mortgage to buy her apartment and she paid us back in full when the family house was sold 12 months later. After initially being unsure if she would like it, she knew after 1 month, she wouldn’t go back to the house, but it still took her some months to clear it out! During this period she changed her temporarily changed her will to ensure DH and I were not out of pocket. When the house was sold and all monies repaid, the will was changed again to ensure a equal split with my siblings. After her death the apartment sold quickly (it was ground floor with a small external patio area) albeit for the same price it was bought for.

For all those saying put her in a private rented flat with 4 carer visits a day, please stop and think is that the right environment for an elderly person with early signs of dementia.

My mum really enjoyed the communal aspect of retirement living even in the depths of winter, she would see people whilst doing her laundry, she could collect her newspaper from the communal porch, have a cup of tea in the lounge - all with very little effort. There were definitely people in there with early signs of dementia, who may have later moved into a care home, but having M&S assisted living certainly delayed that stage. Carers also came in to many.

Good luck and just do what feels right for you and your family. I know DM living in M&S gave me piece of mind at a time when my children were very young.
For me, DM being happy and in a ‘safer’ environment for her, was worth the loss in inheritance.

Why is everyone saying rent? In my area rental property is in short supply, not sure an OAP would pass vetting and compete against a young professional?

The retirement rentals are £££££££, £4500k pcm for a one bed apartment (including utilities) in south east.

Also private landlords are unlikely to be keen for tenants to install handrails etc?

Lots of people who can loan to fund the sale as it’s less stressful and means the move actually happens. We didn’t but the stress on me of having to declutter, prep for sale, sort everything leave it clean and empty on moving day, hours away from where I live with kids was awful (ie stress of buying and selling on same day).

If you buy retirement village second hand you might get a better deal, it’s buying
new that’s the biggest problem. I know one where about 20% of flats have been empty all the time since built 7 years ago. Disgrace with the housing shortage. Renting does make more sense for future flexibility and McCarthy and stone now do this. You just have to persuade the property owning generation that buying leasehold with service charges would be kind of like renting anyway. My relatives have been very happy in these kind of places and you can up the care/get your own carers in as necessary.

Can I please say that her confusion and distress is also a sign of dementia and it is honestly not a good idea to let her make major financial decisions at this stage. Someone with dementia is in a totally different position to those without it, in terms of elder care needs and how long the awful disease lasts. It looks like she may well need a care home and you will need to do a financial assessment with the council to assess how much she can contribute. You can skip this by self funding but that is a really bad idea with dementia which could last years. And if you do the financial assessment it will be much easier by far if your finances are seperate to hers.

@dreamingchild MIL doesn't need a financial assessment, phase already said that she has well in excess of £23,250 outside of the property. She is a self funder.

OP may need social services involvement if MIL lack mental capacity at a later stage and does not have LPoA or Deputy. Currently though, private funding is likely to be tge easiest course of action.

Have you talked to Audley about what their policies are about residents with dementia as it progresses? Does your GP friend know people there with dementia? You need to be very clear about what your mother's rights would be if her memory and behaviour deteriorate after moving.

And are there really no similar communities near you which have flats to rent rather than buy? Buying a lease is really only a very long term rental anyway, and the very high monthly fees Audley charge plus the chunk of the proceeds they take when you sell up make it very different from buying a standard property in investment terms.

I think the suggestion of a previous poster of framing a rental as 'try before you buy' might be a good approach with your DM.

Thank you again all, I really appreciate it.

I didn't mean to drip feed. MIL financial position is pretty good in terms of assets but less in terms of cash. She has 2 small buy to lets worth about 200k each. She relies on them to a huge degree for her living costs. Selling those would panic her. She owns and lives in a cottage worth about 400k - there is nothing wrong with it so I can't see why it wouldn't sell fairly quickly. The plan would be that she buys a flat costing about £350-400k and borrowing £200k from me. When she is out of her cottage it is put up for sale immediately with DH running the sale. I am hopefully paid back within a year. I thought no interest would make it cleaner but perhaps not.

I don't really fear for my capital when DH has POA and she has so many assets. She moved from a big house to this cottage several years ago and so has already done much of the big 'declutter'.

You all make very good and sensible points about the purchase of this place not being incredibly sensible. Unfortunately we are not dealing with someone who can cope with being sensible and look at the reality of her future. Right now she is scared and stressed and just wants to be close to us. As I have mentioned she won't rent (and the place she wants to move to doesn't allow renting anyway).

If we are dealing with dementia/Alzheimer's I appreciate this is not a financially wise move but I honestly think it is more important to get her to our town and then deal with another move later when we have to.

She has been medically assessed twice and nothing found except 'mild cognitive impairment'. I myself feel certain we are on a very serious and tricky path but there is no one medical confirming this.

I am very interested in those who mention anxiety, stress, lack of sleep making the memory worse. If that is the case then moving near us will probably help. DH is very attentive and she will go from seeing almost no one to seeing him/us 3 or 4 times a week. We would be able to assist with things at the drop of a hat. Perhaps she might feel a bit better. Tiny ray of hope there?! But it sounds like most of you think she will actually suffer an initial decline. I still think that is better than the huge loneliness she experiences at the moment. We might also be in time for her to learn the ropes of a new TV/washing machine.

To those asking I am not worried about her being unable to look after herself on a day to day basis. It is forgetting conversations, feeling overwhelmed and a total inability to know where keys/phone are. There seems to be no problem with eating, washing etc. If an appointment is important, GP say, she gets herself there by writing it down.

If it was my own mum I feel like I would have a no nonsense conversation and she would move where I thought best. The personality of my MIL just isn't like that unfortunately.

I hope I am making sense. It has been very helpful to write this down and think it through and I am still very eager to hear thoughts.

@SoloSofa24 yes I think the 'try before you buy' idea is good. While DH has POA he does not control her finances at the moment so it would be quite a big jump for her to not grasp what is going on. She will be very, very reluctant to 'throw away money on rent' even though both DH and I wish she would consider it.

And at risk of outing myself - I will name our town - Tunbridge Wells. In case anyone has specific thoughts.

What about renting an extra care flat, look at Kent county council extra care housing schemes, there are 2 in your area, you have your own flat but there is 24hr support available.

@whattodo2626 The reason why 50% of your responses have urged caution and pointed MIL towards renting is because a purchasing an 'apartment' bring a HUGE layer of extra trauma into an already fraught situation.

Search previous threads on this board about ' McCarthy & Stone' and 'retirement villages' and read what others wished they had done instead.
Converting MIL to a new route might sound like a major task but the effort and emotional sacrifice is well worth the trouble further down the line.
Miss Money Fairy's suggestion is the one I'd explore first.

https://www.kent.gov.uk/social-care-and-health/adult-social-care/housing-and-care-homes/extra-care-housing

It may be impossible, but just an idea unrelated to where she
lives - a relation in similar state was able to learn to use an Alexa after extensive and repeated training from grandchildren / nephews. It was set to remind her of things - ‘. hello. You have a doctor’s appointment at x so leave the house by Y and take Z bus. It’s chilly out so you’ll want a warm coat. Etc ‘. She absolutely loved it and used it for shopping list reminders, to call relatives etc. In a funny way she used it for company 😔

I wish I could have done that for my DM. Sadly she is far too Deaf.

I am very interested in those who mention anxiety, stress, lack of sleep making the memory worse. If that is the case then moving near us will probably help. DH is very attentive and she will go from seeing almost no one to seeing him/us 3 or 4 times a week. We would be able to assist with things at the drop of a hat. Perhaps she might feel a bit better. Tiny ray of hope there?! But it sounds like most of you think she will actually suffer an initial decline. I still think that is better than the huge loneliness she experiences at the moment. We might also be in time for her to learn the ropes of a new TV/washing machine.

Has she had a medication review within the past year?

One thing I sometimes do with our Oldies is to email my co verbs to their GP

You have to make it super clear that you don't want any information from them, that you're worried about their mental state, lack of sleep, anxiety and cognitive decline and ask if they woukd be able to review their medication

I've done it with a few different GP surgeries and each time they've not contacted me back, which woukd be unnecessary, but have contacted the patient and made an appointment to see them.

If you think she still has capacity for learning new things like a washing machine, it might be worth trying to introduce something simple now to see how she copes.

My DM has mild cognitive decline and simply can't cope with anything new at all. She also has anxiety but refuses to take medication but that's a different story...