Sort of inheritance one

[DrBlackbird]

Parent in care home. Sibling in 50’s wants to sell own home and move into parental home, which is currently sitting empty, to save on mortgage payments. Sibling is single and on NMW and financially stressed. Though quite a bit is due to their financial choices/mismanagement, love for luxury holidays etc.

Putting a lot of pressure on us to make this happen. Quite an emotionally driven person. Not v flexible or reasonable. Sibling has form being v v forthright in advancing a personal agenda and cutting off contact if displeased. Our DCs are v close so I suppose I’ve tried to ensure that this doesn’t happen.

Has this scenario happened to anyone else? What were the outcomes? On the one hand, the house is sitting empty and it could save the sibling a lot of stress. On the other hand, what happens when parent runs out of savings to fund care? Apparently it’s up to each council to decide/allow the adult child to remain living in the house. Anyone have any experience of this?

If the house doesn’t need to be sold, then that’s another story of what happens once the parent passes and the other recipients want their share.

Interested to hear of anyone else’s similar’ish experiences.

Unless you have POA its up to your parent to decide.
I agree that getting the sibling out if that was ever necessary would be difficult

In all honesty, as the person with power of attorney you need to act in their best interests which is to either sell or to rent it out if the money is not needed for at least 18 months or so

Do not, under any circumstances, agree to sibling living there. It will be a horrible, legal mess to sort out later.

Personally I would sell the house and remove the option completely.

God wouldn't it be great if we could all sell up and move into a house rent free?!!

I can imagine it's very emotional OP, does it best serve your mother?
If you agree, make sure to get a watertight agreement in place. And your sibling should definitely pay rent.

Isnt this a win/win? Your sibling moves in - with a proper rental contract and legal tenancy and maintains the house, keeps it heated and pays council tax. They pay rent to your parents which reflects the market value of a run doen home (get some letting agents round to quote on rental value as stands). You as poa could choose to reinvest some of the rental money from your parents' income on the rental on improvements, improving the value of the house (ie clear that the tenants are not investing in the property). And when necessary their rental comes to an end - if the house needs to be sold to pay for their care or as part of their estate. This is a pptential emotional sticking point so needs to be explored and agreed explicitly

You would need proper legal advice and contracts but I dont think its a terrible idea, esp if your parents would approve, as you think they would.

Right so you sell it now and put the proceeds into parents bank high interest account to pay for future care fees. Sad sibling is struggling. What would they do is this house wasn't an option. If they are desperate they need to speak to their mortgage and utility suppliers. If family want to help they could consider a short term interest free loan legally drawn up.

I would honestly be looking to just sell the house now if your POA allows it, assuming the move to the care home is permanent.

You can't do it. As POA for your parent who is already in care and has a totally forseeable need to use the house to pay for care, it would be deprivation of assets to allow your sibling to live there rent free.
And the exemption for children of the person in care living there is only for those dependent on the caree, so totally not applying in this case

It could take months to sell a house so I'd be getting it valued soon. Is it still furnished.

I don't know the value of the house, but keeping an empty house until the owner dies can be beneficial (for you and your sibling) in terms of inheritance tax due on the estate. This benefit wouldn't exist if you sell the house now. Do you think your parent will outlive their current savings? If not, and you expect to need the money from the house sale, sell it now.

But what happens if the LA kick her out and enforce a sale, she would lose her home and any refurbishment money.

I assume your mother was paying single person council tax prior to going into care so easy for the LA to prove this wasn't a pre existing arrangement.

@DrBlackbird and @Gasp0deTheW0nderD0g

"I would have thought there would be a risk that care recipient's child voluntarily giving up his/her own home and moving into the parental home could be seen as something like an avoidance tactic."

There are specific rules on this that allow the value of the home to be disregarded. But it only applies where the child (or other relevant family member) is over the age of 60 or disabled. But this only applies when the child or other person was already living in the home before the parent went in to care.

From what the OP has said, it appears that the child is not over the age of 60 and, in any event, was not living in the home prior to the parent going into care.

The child moving home will have no effect on the parent being liable for care home fees.

If you have financial POA for your parent you are legally obliged to act in your parent’s best interests regardless of how upset or desperate your sister is, or how much it might affect your children’s relationship with their cousins.

Assuming there is no way your parent will be moving back, and they will need some of the cash in 2 years anyway, would it not be better to sell the house now and invest the funds? The house, unoccupied, is likely to deteriorate and possibly lose value. It will cost money to continue to own in terms of bills. You’ve said renting it out is too much work. It doesn’t seem sensible to keep it as an asset unless you have good reason for thinking property in the area is going to shoot up in value to the extent it would outweigh losses due to deterioration and lost investment income. Also, could having more cash available help your parent live a better life now?

While there could be benefits of having someone move in and pay bills, any benefit would be quickly undercut if they were at all awkward about moving out when you need to access the equity in the house. TBH, I wouldn’t even want to rent it out if I were that close to needing to sell.

Thank you, that sounds perfectly reasonable. I hope the OP's sibling is amenable to reason!

That’s what I wondered. Some the language speaks to this but not definitively. I will of course have to go get legal advice. Will take some of the issues raised by others to talk through various scenarios.

This sounds like a crazy idea if your parent's savings will only fund their care home for about 2 more years. What will happen then? The property will have to be sold to fund their care and your sibling will probably be in a worse financial situation than they are now, as they will have sold their only asset and won't have enough to buy again.

I think the safest option is to say no to your sibling's suggestion. If they can't afford their mortgage, can then move into shared accommodation (renting a room in a shared house) and rent their house out? I know a couple of people who have done this. It's not ideal, but it's allowed them to keep their property while they get their finances in better shape.

Thanks @ICouldHaveCheckedFirst for that input as well. As horrible as it is to say, there’s a good change that DP won’t outlive their savings. Though you never know.

I appreciate what everyone is saying about it all becoming a tangled mess. Probably should’ve nipped the idea in the bud as soon as it was mentioned! But feeling badly for sib who has taken some steps to better manage finances. But no, they have not lived in the house prior to DP going into care. That’s pretty evident.

Alas, not so amenable.

Part of the issue is that sib just doesn’t seem to wholly get complex finances.

Sounds to me like your sibling has designs on the house and intends to live there forever. By 'spending tens of thousands' on it they are staking a claim in the event of your DP dying. Call me an old cynic but if they were in such dire straits why didn't they move in with your parent before they went into the care home?

I know that I am really splitting hairs here, but this is not correct:

"And the exemption for children of the person in care living there is only for those dependent on the caree..."

The exemption, or "mandatory disregard" is for any specified family members who are living at the same address as their main or only home. They do not have to be dependant, they just have to be over the age of sixty or disabled. But, equally importantly, they must have been living in the house prior to the person going into care.

"Family member" is quite a broad definition. It also includes parents, parents-in-law, step children, son/daughter -in-law, brothers/sisters (or the spouse or unmarried partner of any of the preceding), and also grandchildren, aunts/uncles and nephews/nieces.

This would be a firm no from me. You’ll never get them out once they’re in. Tbh whatever you do, they’re likely to cut contact with you, so you can’t win really.

You’re in the first stages of being disinherited. There’s always a common theme with this type of person. Shit with finances, make crap decisions but always manage to outmanoeuvre everyone. I speak from bitter experience.

The exemption, or "mandatory disregard" is for any specified family members who are living at the same address as their main or only home. They do not have to be dependant, they just have to be over the age of sixty or disabled. But, equally importantly, they must have been living in the house prior to the person going into care.

This will be a key issue to discuss with a lawyer. Sibling has looked up online advice that doesn’t mention anything about being over 60 and disabled. Also doesn’t say they had to be living in the house prior to care. Advice is a bit vague and mentions discretion.

Tbf there is a bit of that.

If your parents are not ever going to be able to live in their home again you'd be best off selling their house and getting their money invested into an ISA. That way you'd not have to pay council tax on the empty house and standing charges on gas and electricity. Your sister can't just expect to move into your parents house. Also if she puts some of her own money into your parents house she'll never move out. Your sister needs to get a second job if she's financially struggling. There is no guarantee she will ever inherit. The council will expect your parents to self fund if they have a house and both live in a care home. If your sister moved in she could become homeless because no doubt she'd depend the money from the sale of her own home quickly. She needs to cut back on outgoings and holidays. Don't agree OP or it'll come back to bite you down the line as you have POA you'll be the one the council go after.