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!

I have one relative in a mccarthy and stone, it suits her and for her it’s worth the price. She has other assets so she can afford it long term. I know that the flat will be very difficult to sell but if she’s happy at this stage of her life that’s her choice. It seems easily possible to increase care as needed and is an easy comfortable social life. I think the problem is when people think by ‘owning’ a lease in this kind of place they are preserving capital to pass on, that is unlikely especially if they bought new.

there are signs on the wall at the McCarthy and Stone building saying that they now offer the facility to rent there.

I had another relative in a housing association extra care scheme. Again she bought the lease as shared ownership, actually a nicer flat and about a third of the price. We sold it for slightly more than she bought it for over 5 years ago. But she was happy, it was a good place for her changing needs, and if there had been no money left that would be ok, her money was for her care. Anything passed on is a bonus but not expected.

if your mil can afford it and she wants to spend her money at the Audley village maybe it’s the best place even if other people would go for a cheaper option. The caveat I would have is, as others have said, is it reasonably flexible for her changing needs. IME the people asked to leave are not the ones with the most needs but those who disrupt/threaten others

@MissMoneyFairy forgive my ignorance but surely as she doesn't qualify for council housing she can't apply. She also has no 'social care need' - well not one that has been formally recognised anyway!

@TinyMouseTheatre yes, we have done this before. That is how she got referred to the memory clinic initially. A good idea to do it again though - it has probably been about a year.

@Mum5net I agree, I wish I believed it was possible to change her mind. I will try.

It has taken us YEARS to persuade her not to buy a totally unsuitable chocolate box cottage in the village near us. A village that has no amenities whatsoever and not even well located for us as we will probably move within the area in the next few years. Getting her to agree to the Audley place is honestly the best we could do. Anything seen as a serious 'old peoples home' will be a non starter for her.

The truth is that she probably wants to live with us but this a not going to happen for many reasons I am sure many of you have been through yourselves.

Again, thank you all.

Don't do it.
Seriously.
You have great intentions but my husband did the same.
You want to know what will happen next.
All you mil family members will be after the property and schmoozing her to get deeds transferred into their own name.
You are better off buying the apartment via mortgage in your own name and charging her rent.

You won't believe how fast people change for money. All sorts of creatures will come out the woodwork.

Stick your money in a stocks and shares ISA.

I repeat,
Do not do this.

Much better idea

It's very likely her entrenched position might intensify, OP, so formulate a Plan A and a Plan B before you open up further discussion. Does she still go online? I I'd be deliberately economical with the truth but not tell fibs. Maybe see if there is a 'friends of Audley' FB group where you can rent someone else's space, even though they say online it is purchase only? Where I am there are several private retirement development spaces we can rent for £800 +/ month with a 9-5 warden and call cords... Could you see if there are places that are similar in your area and then spend £5k reflooring, painting, updating bathroom, bringing in Sky TV etc so that it is to her standard? My Dfriend did this for her DF. She recreated his lounge and bedroom and got a host of carers.

She should rent the retirement flat and move in (maybe using your funds to rent in meantime) then sell her property .
Then she has cash in bank to fund rent and care or care home down the line.

If it's been a year and she is so very anxious and not sleeping then yes, I think that emailing her GP and making them aware and maybe asking if her medication can be reviewed might be beneficial.

Has DH joined the Carer's Group close to your DMIL? They usually have some good information on how to help DMIL in the short term.

I would be tempted to see if you could get her to this M&S rental - which looks fresh nice and modern at £2100 a month ( no service charges obviously ) - basically to see how she gets on in this kind of setting - because to be honest if she sold up her interest would pay the rent without her having to touch the other properties- I would sell it as saying it's better to see how you get on without buying first as retirement village homes lose a lot of money the minute they aren't new- for instance there are resells on thatAudkey development for 1 bedders at £299 and £315 -

www.rightmove.co.uk/properties/150599216#/?channel=RES_LET

To be honest there are some really nice developments in TW with sales too from £85k to £170k and with sensible service charges and pretty nice fresh and modern interiors too and all the add ons of the Audrey villages may well be somewhat wasted if she can't take full advantage of all their offerings. It looks very nice but I'm not sure it's worth more than double what many of the other flats are depending on her abilities - but you are in a better position to know that .