Lifetime interest and dementia

[CeciliaMars]

This feels really complicated so please bear with me! My mum in law is 91 and will probably die shortly unfortunately. She is married but only got married 20 years ago, the house is solely in her name and is being left to my husband, her son, in her will. However her husband has a lifetime interest in the property. He is 90 and has Alzheimer’s, but is physically well and could live for quite a while. When MIL dies, he will probably need to go into a home as his Alzheimer’s is progressing and we can’t provide the care he needs. His pensions will cover care home fees. Now here’s the problem- the house is a big, rambling, beautiful money pit. We cannot afford to live there and maintain it. So ideally we’d need to sell it. But how does this work when FIL has a lifetime interest in it? Any advice appreciated.

I don't know but I'm in a similar position with the step mother. DF died and she had a lifetime interest. I kind of thought this would end when she had to move into a home once it was decided she'd not be able to come back to live in the house.

Sorry

You need to see a solicitor.

Sorry it posted several times.

You need to see a solicitor.

Is it a lifetime interest as set out in MILs will or a legal agreement?

If the lifetime interest is via a will there may be an option to sell the property and invest the money. FIL is entitled to the interest. If not, is MIL able to add a codicil to that effect?

If it’s a legal agreement then the exact wording will be important.

Well as I understand the lifetime interest is just that…it’s his until he dies. It’s not yours to sell yet or maintain yet afaik.

Thank you for your answer - I get that. But all his money will go on care home fees, he can’t afford to maintain the property too…would the house just sit there empty deteriorating for years while he’s in a home? That doesn’t seem to benefit anyone…

And what has happened if you don’t mind me asking, LunchtimeNaps?

There are two types of interest in possession - right of occupation ends when he can no longer live there and life interest trust is in the house or the money the house represents. Who are the executors of the MIL will?

Her son who is my husband and one of her cousins. I think it’s a life interest trust rather than a right of occupation.

Usually the trust within the will includes provision for the sale of the property if the spouse isn’t living there for at least 6 months, but they then have the right to income, ie the proceeds of sale must be invested and the spouse receives the income.
alternatively the house can be rented out and the spouse receives all of the net income.
Seek legal advice though, it’s hard to advise without seeing the will.

It depends on the specific wording of the will as others have said, it may be that if it was a life interest trust then as he can no longer live there you can sell it but he will be entitled to a % of the money because he does have that lifetime interest & is still alive.

As an aside though I wouldn’t be so sure his pensions will cover care home fees. The average weekly cost of residential care for Alzheimers is around £1500 per week, I don’t know many people who get £6000 a month pension.

The life tenant would be entitled to the income of the trust. The trustees have a duty to invest the property and see a return, balancing the interests of the income beneficiary and hold over beneficiary. There is usually no entitlement to capital.

Does he have capacity and any assets of his own / family to leave those assets to?

thanks for all your answers so far. He no longer has capacity, my husband has LPA. He has no property of his own. And yes his pensions will cover his care home fees.

If he lacks capacity to make the decision to refuse the life interest then it has to continue. But if the MIL does not have a deceased former spouse, then the life interest trust will benefit from his NRBs for IHT when he dies. This will bring their allowances to £1,000,000 before inheritance tax.

What is the property worth? She could change her Will and disinherit her spouse but she would lose his allowances and everything over £500k taxed at 40% unless she was a widow before remarrying.

Does your MIL have capacity or does someone hold a cash and assets POA for her?

MIL still has capacity but is very physically frail. She’s worried about what will happen if she goes first.

If she has capacity then the easiest thing to do would be for you to assist her to change her will or add a codicil explictly allowing the sale of the house, if her husband could no longer live there, and giving her her husband a lifetime interest in the resulting money. It may be that the will already allows for this and this would just need confirming. Solicitors will do home visits for people who are frail, obviously there would be a charge involved but it sounds like it would be worth it to reassure her and to give you all clarity.

She's still in the house at the moment.

Thank you, that’s really helpful.

Would he really be able to afford care home fees from his pension? Specialist care where I am is in the region of £7-£8k a month.

not really relevant to the question. All the OP wants to do is to ensure that the Mil's will reflects her wishes and won't cause problems in its execution.

Absolutely get a home visit from a solicitor asap so that she can clarify her wishes and get anything amended that needs amending.

You need to look at the details of the life interest. If it has been done properly then it should have full details eg he cannot sell it to use funds to buy elsewhere, what conditions were made around upkeep of the property eg what things does he need to maintain , costs etc.