Page 3 | Help - uncle with lots of debt & teacher pension

tiredmum2468 · 2021-04-10T12:05:20+00:00

Dear All I'll cut to the chase Partners uncle is very unwell - he's a Batchelor only family is my DP and he's asked if we'll help him get his affairs in order Basically - DP has worked out at 71 He has a car on PCP paging approx £450 a month for (within budget but now an issue potentially he's 2 years into the 5 year agreement) it's a very expensive x5 bmw He has about £10,000 over 2-3 credit cards Fortunately mortgage free He lives on state and teachers pension No savings but he likes to "live" so always had nice food and holidays and a nice car etc... He owns his house but his wish is that (this has already been willed to my 2 DC ) with the idea it's rented out and the rent is split equally into accounts for them both as savings for university - we'd have to modernise the house to make it rentable realistically He can't find his teachers pensions paperwork and he said he can't remember (he retired at 65, 6 years ago) whether a lump was payable on death and what happend as he'd only drawn on it for 6 years Can anyone offer any help or advice?

quizqueen · 10/04/2021 14:24

Get rid of the car and get a cheap run around. If he's ill, he won't be using it much anyway. Downsize the property and pay off all debts. His problems to sort unless he's willing to give you power of attorney. He has a reasonable income.

SpiderinaWingMirror · 10/04/2021 14:25

Sensible thing is to sell house now and then buy something smaller and more suitable. Pay off debts.
New property and anything else gets divided up after he dies. You might struggle now if he wants to avoid paying care costs if that's what he wants but could be worth seeking legal advice.

SpiderinaWingMirror · 10/04/2021 14:28

And don't get rid of the car if the payments are manageable. Read the contract terms really closely. If he still wants the car once he has sorted house out that's reasonable.

Ilikewinter · 10/04/2021 14:29

I can see why you are concerned about the house, it sounds like selling it and purchasing something more managable is the right way to go.

Moondust001 · 10/04/2021 14:33

@MathsFiend

Your advice sounds terrible. Sell the house to keep money aside for the children and then have to pay rent? Sounds like you are trying to ensure the children have an inheritance rather than ensuring he is financially sound. If he has state and teacher’s pension, he can use this to pay his debts over time.

I kind of agree. If you do this then you will probably face deprivation od assets anyway, if he's as ill as you suggest and will need help. They will very likely come after you for the money you receive. Sell the house. Either downsize or rent but the money from the sale goes to him and he pays off his debts; and if any is left when he passes then that is the inheritance. If not, then there isn't any.

You know that saying about death and taxes? Well in the UK adult social care is added. They will come after any money he has, but it could easily make a difference between decent standards in his later years and next to nothing.

StCharlotte · 10/04/2021 14:35

I'm really confused about all this pensions advice. Why is this an issue?

Because there was the hope that the lump sum was "somewhere" which would pay his current debts off.

Notaroadrunner · 10/04/2021 14:45

I would not want him leaving the house to my dc on the condition it be rented out. That is just causing hassle and unnecessary stress for you and Dh for years to come. If he wishes to leave the house to your dc then he should state that it's to be sold and the money held in trust until they are old enough to have access to it.

Or better still, suggest he sells it now if he's open to that, and he can downsize, pay off all his debts and have cash in the bank to use to make his life easier, now that he is deteriorating. He should spend his money on carers if needed and other comforts to allow him to continue living at home. Then when he does die his new house can be sold and the money, along with any left over savings, can be kept for your dc's education.

Stratfordplace · 10/04/2021 14:53

It sounds like your uncle has a very substantial asset in his property, the house is very large with land and outbuildings. Compared to this asset his debts are not high and your uncle has 2 pensions to live on.
Maybe you could sell something other than the property, ie furniture, to help with the credit card debt. It would be unusual id this large property was his only asset.

Babyroobs · 10/04/2021 14:58

@Notaroadrunner

I would not want him leaving the house to my dc on the condition it be rented out. That is just causing hassle and unnecessary stress for you and Dh for years to come. If he wishes to leave the house to your dc then he should state that it's to be sold and the money held in trust until they are old enough to have access to it.

Or better still, suggest he sells it now if he's open to that, and he can downsize, pay off all his debts and have cash in the bank to use to make his life easier, now that he is deteriorating. He should spend his money on carers if needed and other comforts to allow him to continue living at home. Then when he does die his new house can be sold and the money, along with any left over savings, can be kept for your dc's education.

Exactly. It sounds like the house would need a lot of money invested in it to be suitable to rent out anyway and op does not have this money to invest.

Unsure33 · 10/04/2021 15:02

Firstly if he has Parkinson’s he will be able to get attendance allowance as it’s not means tested . It could be that the house will not be manageable for him and he could be liable to falls etc.

You should really get financial and medical power of attorney ASAP and then speak to his Parkinson’s nurse about what stage he is at .

He may unfortunately get to the stage where he needs care at home ( my mum manages with 4 visits a day)

You could consider either renting the house out and then he uses the rent to go into an extra care facility? That is where he could have a flat with 24 hour care in site if needed ?

Think carefully and get advice . If he starts having bad falls you might get choices taken away from you .

Mintjulia · 10/04/2021 15:07

Op, the other thing to bear in mind is if he gives money away, and then dies within 7 years then death duties become payable on that gift.

It makes more sense for him to sell the house and buy a smaller one. Then invest the difference which will provide for his lifestyle and care should he need it.

Undertheoldlindentree · 10/04/2021 15:37

He could opt to sell the house, pay off debt and buy a smaller house or bungalow. He could gift you and your children a certain sum per year or on big occasions like a wedding or birth. But if you thinking he can sell the large property and gift your sons the whole proceeds. Then go nto rented accommodation paid by his pension and the tax-payer will pay any future care costs....this is wrong and will quite right be identified when he needs care. If he's as ill as you say, this probably won't be long.

Shedbuilder · 10/04/2021 15:38

Parkinsons can affect mental capacity and it's probably a good idea to get him to talk to a solicitor about setting up an Enduring Power of Attorney. He'll also need to make a will while he has capacity. Just because he leaves the house to your children and expresses the wish that it's rented doesn't mean you have to follow his wishes after his death. A sensible solicitor would probably talk him out of the idea by pointing out the maintenance and renovation costs. Find a solicitor, talk to them, then get him to talk to them. Solicitors for the Elderly is a group of solicitors who have been specially trained to deal with these kind of issues. One of my elderly relatives used them:

sfe.legal

In my opinion it's better for these things to be handled professionally. It can become a huge emotional and guilt burden otherwise. It's clearly already stressing you out and it's only just begun.

Undertheoldlindentree · 10/04/2021 15:39

Sorry, should read.....if you're thinking....into....and quite rightly....phone has a mind if its own!

Ariela · 10/04/2021 15:55

I would definitely talk to EA and developers with a view to developing the plot as a whole if it's large and the house run down.
Selling that could well be enough to pay off all debts and buy a smaller bungalow flat or home, perhaps unit in serviced apartments, where there are much lower running and repair costs.

Ideasplease322 · 10/04/2021 16:00

Please don’t take some of this man’s money.

Talk to him, see what he wants, don’t suggest selling his house to give your children money.

Suggest selling his house, and us using the money to pay off his debts buy a smaller, but fabulous home and let him use the rest to live a nice lifestyle.

He could live another twenty years. Your children will be fine, I am sore you and your husband will provide for them. Let this man spend his money on himself,

Ideasplease322 · 10/04/2021 16:02

@quizqueen

Get rid of the car and get a cheap run around. If he's ill, he won't be using it much anyway. Downsize the property and pay off all debts. His problems to sort unless he's willing to give you power of attorney. He has a reasonable income.

Poor man.

StaffRepFeistyClub · 10/04/2021 16:12

www.teacherspensions.co.uk/members/once-retired/death-

I am afraid the pension will go with him when he dies so to speak. It does not get added to any inheritance pot.

Soontobe60 · 10/04/2021 16:13

@Shedbuilder

Parkinsons can affect mental capacity and it's probably a good idea to get him to talk to a solicitor about setting up an Enduring Power of Attorney. He'll also need to make a will while he has capacity. Just because he leaves the house to your children and expresses the wish that it's rented doesn't mean you have to follow his wishes after his death. A sensible solicitor would probably talk him out of the idea by pointing out the maintenance and renovation costs. Find a solicitor, talk to them, then get him to talk to them. Solicitors for the Elderly is a group of solicitors who have been specially trained to deal with these kind of issues. One of my elderly relatives used them:

sfe.legal

In my opinion it's better for these things to be handled professionally. It can become a huge emotional and guilt burden otherwise. It's clearly already stressing you out and it's only just begun.

You cant get an LPA with a diagnosis of Parkinson’s. We looked into this for my FIL.

tara66 · 10/04/2021 16:17

As Shedbuilder said - uncle's health and state of mind are the main factor in this situation. Studies have shown Parkinson and mental deterioration (actual Alzheimer) are thought related. His health may get even worse soon. You say ''he has asked DH to get his affairs in order''. Your DH need to get a Living Power of Attorney to manage his affairs - if he wants him to do that. You can have repercussions if he then changes his mind if no POA. It's a lot of responsibility and work for your DH . Uncle must be very muddled if he doesn't know basic details of Teacher's Pension if it and state pension is all he needs to be dealing with..

Original poster

tiredmum2468 · 10/04/2021 16:31

Thanks everyone for the helpful advice

DP's uncle only rang us yesterday so it's all very new
He isn't well and is very scared and confused and the assumption we're trying to profit from his ill health is simply not true - we just need to try to help him.

He isn't going to get better and he's struggling in a a big house in need of lots of repairs and we need the best outcome
For him; to reiterate we don't care about the money and if every penny is needed for care then so be it. That's no issue to us.

We've never had to deal with anything like this and so it's all a bit of a mindfield to be honest.

OP posts:

crimsonlake · 10/04/2021 16:55

Hopefully he will have named beneficiaries on his TP, as in I have out my children's names down and they will receive a small annual amount upon my death. However with no spouse his pension will not be continued to pay out.
Upon retirement he would have received an automatic lump sum, however he may have increased this by also taking an additional lump sum which would decrease his annual amount.
He could certainly downsize to pay off his debts, but gifting you the house would certainly be seen as deprevation of assets.

AnotherEmma · 10/04/2021 17:09

Ok so the main issues that his house is too big and unmanageable for him, and he probably needs care - maybe a small amount now but his care needs are likely to increase.

Focus on finding the best solution for him, that will ensure he is comfortably housed with adequate care from now until his death. I doubt anyone on here will be able to tell you what that solution is. I would advise looking at the Age UK website and contacting their helpline to get information and advice about his options.

On the face of it, it wouldn't make financial sense for him to sell his home and move into rented housing, but it sounds as if he could do with living in some kind of supported housing for older/disabled people; ideally he would buy somewhere like that if possible - but if not he might need to rent, I don't know. If he has a local branch of Age UK they'd probably have decent knowledge of the options.

As for his care needs, he (or you on his behalf) should contact adult services at the council to request a care assessment.

And he may well be eligible for attendance allowance, as others have said.

As for the debts, they are kind of secondary to all of the above, as it will be difficult to work out the best course of action for dealing with them before the above points are resolved. But I would recommend contacting a debt advice service such as Citizens Advice, National Debtline or StepChange.

IndecentFeminist · 10/04/2021 17:36

Why even consider filtering money off for your kids at this stage? And why are you wondering what'll happen to his pension when he dies?

Logically, a house like that may have development potential so selling it and him going into sheltered housing makes most sense. Whatever he says he wants, his money needs to be used for him and not stashed somewhere for his niece/nephew

CavernousScream · 10/04/2021 18:14

Realistically he is going to need care quite shortly. The house will need to be sold, then the debts can be paid off and the rest used to pay for his care. Your DH’s sole job here is to make his uncle understand that and make him as comfortable as possible with the idea. Unless the house is an expensive area, the care costs will burn through the house profits.