Is this legal? Elderly dad buying house

[BarbaraVineFan]

My elderly dad is widowed and currently lives about an hour and a half away from me and DD in his house, which he owns outright. Due to personal circumstances, I have never bought a house and currently rent. Recently Dad and I have been discussing the possibility of his selling his house and buying one in the town where DD and I currently live, and for us all to live there together. Is this possible , or is there anything dodgy about it financially or legally- for example, if my dad passes away soon after we all move in together?

Does he have any other assets?

Are you in a position to put anything towards the purchase?

(Even if your dad later covered a lot of day to day living costs for the household for a while so you could rebuild savings).

Then it would be a joint purchase. Or possibly a private mortgage (between you and him, with suitable legal paperwork, that’s voided on his death).

Probably not if the primary purpose of putting a property into joint names is to provide a home for his daughter.

I would put the house in joint names, assuming your father would agree. When you are ready to buy, your conveyancing solicitor will be able to advise you on the best way to do it.

Not many, probably about £75,000 max in savings, a very old car. Total assets not including the house are definitely not more than £100,000

But why would I need or want to do this? If dad needs care in the future I would want him to have the best, not to sit in a lovely house while he has the bare minimum of care. I would rather he keeps the house in his name and then if it needs to be sold in the future, I can always rent again, or buy a much smaller place.

He needs to put it in your name or 50/50 the two of you and you need to be tenants in common to protect your half should he need to go into a home or anything. It’s complicated to explain on here, you need to see a solicitor who will explain it all to you, but yes it can be done

Because it provides some security to you and your child.

If your dads care needs exceed his available funds, then you can always choose to sell the house and put money towards his care - but if you own a share then you get to choose how and when that happens. If you don’t own any part then you have far fewer rights. Being at least a tiny part owner puts you on a more solid footing. Otherwise you’ll have less security than you would renting. Needing to find a new home in the immediate weeks after your father eventually dies would not be a great situation for you or your child.

It wouldn’t affect the quality of his care (unless you went private) but he would be expected to pay towards it. If the house is in both names the government can’t insist it’s sold to cover his costs, it won’t effect his care, but it does protect his property.

also if he’s living with you, he hopefully won’t need to go into care l know noone can see the future, but living with you and your daughter he will be better off then living alone

The word you want is Laws. Rules are for Monopoly.

Check with a family lawyer to be safe.

You need to have a robust discussion with a professional about how best to move forward.

Your father can put half the property into your name. This will probably protect from iht to a degree. It would be a potentially exempt transaction (pet) - should he survive for 7 years the gifted potion will be exempt from iht. If he doesn't survive 7 years iht is charged on a sliding scale.

Regarding the possible deprivation of assets - if the primary purpose is to provide you with a home it is probably not deprivation of assets.

Speak to a professional with your father present - either a qualified tax planning accountant or a solicitor who is competent in tax planning.

Well, exactly- my hope and plan is to be able to keep him at home with us , forever if necessary. I was thinking that if we had a spare £200k or so from the sale of his current house, we would be able to pay for carers to come in (which would be cheaper and also nicer for him) rather than packing him off to a care home.

Given this, I don’t really see the advantage of having the house in joint names.

Legally you could live with your Dad of course. Your dad can have anyone he wants living with him.

I'd be wary of your theory of leaving funds for care though.
750,000 house for sale and then buying a 500,000 house to live in together, would leave 250,000. Nursing home fees could be up to £2000 a WEEK. 250,000 divided by 2000 = 125. That would mean that left over from the original house sale, you would have the 125 weeks worth of care which is 2.4 years. Your dad could easily need care for longer than that if he gets some horrible illness. You need good advice on how to do this legally while safe guarding a home for yourself.

Please don't assume that carers at home are cheaper or that you'll manage if he needs care.... Dementia is not easy for family to cope with - your father could ask to go home (meaning the other house or his childhood home or just meaning somewhere he felt safe), not remember who you or your daughter are, retreat further into the past, be disorientated in time (is it 3am or 3pm), insist he can manage when he clearly can't. What if he becomes incontinent, falls, or is too frail to manage anything? It's hard work even if you do have limited help from carers. Not all carers or care homes are equal. My uncle is in a pretty poor one (temporary) and is in the process of being moved to a really nice one. He has round the clock care and the new home has an amazing garden, a bar, a gym, the residents go on trips and there are activities for anyone who wants to join in. The current home is a place where you wait to die.... Both cost the same per week and I know which one the family want my uncle in and because the care is good he will probably be there for 5 years..... As PPs have advised you need good legal advice on how to manage your particular situation. Good luck!

Because you get to choose. If the house is in his sole name, you will be liable for iht at 40% at death . . .

There is an additional allowance of £175k if the main residence is left to direct descendants, and this, like the basic nil rate band , can be passed from a deceased spouse to the survivor. So £1M in total.

I agree. You're not wanting to claim any part of his home or assets for yourself at this stage. The money he makes from selling his house and buying a cheaper one will provide 3 years worth of fees for the average nursing home. And if necessary, the house can be sold to release additional funds. And anyway, not everyone needs to go into residential care.

If you all get on, it sounds like a good plan, OP.

Speak to a solicitor before you do anything- there’s a very real risk that you and your child could end up homeless if a house in your father’s name only is forcibly sold to pay for care.

You would probably have better protection if you buy the house as tenants in common, so you have some ownership of the house.

Some people have care needs so high that they can’t stay at home with carers coming in and so ‘packing them off to a care home’ (v offensive term btw) is the only option. Residential nursing care can be upwards of £2k per week. So your ‘not small amount’ could be gone in 2 years and they’d want the house you and your DD live in to pay.

But as you don’t own one now and seemingly without a prospect of buying one it’s not a risk.

I don’t know if OP and her dad being tenants in common would protect OP if her dad needs care and the LA could prove deliberate deprivation of assets, because during the financial assessment they would note her dad sold his asset to pay for the new house. Happy to be corrected if I’m wrong,

I do know they go through bank statements, land registry information, medical records, you name it.

Yes there are rules around IHT and care fees that you need to research and make sure you stick to them IF they apply but none of it is "illegal"

Presumably he has a state pension, maybe a private pension, if his care needs are high he can claim attendance allowance. His money should last longer than three years.

Very very few people need more than amount of care though. Plus if they save/invest the money it will grow.

The OP and her dad could probably benefit from talking to a financial planner about how best to execute what is likely a sensible and mutually beneficial plan.

OP also said he has other assets up to £100,000.

Father in law (who was still ballroom dancing at 90) when into care at the end of his life and was in the home for over 3 years until he died. My own father and mother both ended up in care for quite a few years. Don't assume around £250,000 with cover care home fees!