Elderly aunt in straitened circumstances

[Molecule]

My lovely, eccentric aunt is struggling somewhat. She is in her late 80’s, fittish, and has a great zest for life, people and her very large garden. But she doesn’t have quite enough money. She has enough “investments” (left by her late husband who died 30 years ago) which preclude her from claiming any benefits, but only bring in a small and variable income.

She lives on a lane with fantastic neighbours, and a wonderful community so doesn’t want to move, and certainly doesn’t want to leave her garden.

I’m in the fortunate position that I have just received my divorce settlement so I could give her enough to survive, but I have 4dc, and also properties I need to invest in to get a return.

However, aunt’s neighbour has offered to buy her house and garden, as they (apparently) eventually want to extend their garden, and will let aunt live there until she wants to move/dies. Aunt’s house is pretty dire, but has a wonderful view, so is basically a building plot. It is being valued this week, and of course, oodles of money is very attractive to aunt.

If she goes ahead and sells it to the neighbour, how can her right to remain in the house be protected? TBH this is what worries me the most about the scheme, as tenants seem to have so little security.

I’m off to clean the house tomorrow prior to the valuations, as aunt is not at all bothered by by its filthy state, and would welcome any suggestions I can put to her. She can be quite impetuous so I want to make sure I’ve done as much as I can to advise her.

For a start, please don't give her any of your money as she has her own.
It sounds like she is living off the income from her investments. My father is in this situation too in that the income from his investments is not enough to cover his living expenses (which in his case includes lots of care). So I have taken the view that savings are for rainy days and the rainy days are well and truly here - I am therefore gradually cashing in his savings to pay for his outgoings. Yes, it's depleting the pot of money he has but when you're in your late eighties it seems the sensible thing to do.
I can't advise on selling the house and it sounds complicated which makes me think it's something to be avoided.
Do you know exactly how much her investments amount to?

Thanks @Haricot. I think her investments are about £100k, and I have suggested that she takes £10k pa which would cover her shortfall and give her a bit of pleasure. By the time they are depleted she’ll be in her late 90’s and then perhaps entitled to a bit of help.

She would probably benefit from financial advice if the investments were made years and years ago - they may not be working as hard as they could.

Plus if she is in her late 80s starting to spend them rather than keep them is probably the right way forward to make up the shortfall.

Selling off the house and garden now, seems to be a mistake that leaves her without security when she already has money in the bank.

She should definitely (in my lay opinion) cash in before selling her home. What if the neighbours suddenly need care and sell it from under her? Anyone can be in an accident and life can change profoundly.

Terrible idea to sell her home.

She needs advice - if she has that amount of money in investments she should cash it in, she'll have a lovely time.

Again a lay opinion, but it seems to me that she should only follow this course of action if she has a legal agreement which allows her to live in the house until she dies or leaves of her own volition. Anything else would leave her very vulnerable

Just no.

So many pit falls.

She needs to cash in some of the investments. Selling her house should at the very end of a very long list of things she could do.

It is possible to split legal and equitable ownership and give her a life interest in the property so she can live there until she dies. But this will probably only be acceptable to the neighbours at a heavily reduced price because it will be impossible to sell and impossible to extend until she leaves the property. A better solution may be selling off a chunk of her garden.

Thanks Gregory, it’s good to know that it can be done if necessary. I don’t think she will want to sell off a chunk of garden because of all her rare plants dotted about.

I’m going to suggest again that she cashes in her investments, and perhaps sells an option to her neighbours, so they will get the first chance to buy when the time comes.

I’ll see what she says tomorrow.