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?

Why would it be "devastating" to have to move back into rental? The OP has said they she doesn't have realistic prospect of buying a property. If she goes ahead with this, she has the opportunity to save money currently being spent on rent. Which could potentially help her with a deposit in the future if the house she lives in with her dad needs to be sold to pay for his care needs later down the line.
If you all get on well and are going into it with eyes open on what care needs may be in the future, what you would be willing to do, what carers may provide, how care costs would initially be funded.
By all means, OP and her dad could (and probably should) take some financial advice to protect both of their positions as far as possible. But OP's intentions and wishes that her dad receives the best care that he needs at the time over her retaining his assets seem very clear.

Nothing illegal or dodgy. If your DD is still a child when/if your father enters care and passes then the house would be a mandatory disregard for care costs in any case (ie not counted), even if that's not the case, if you hold a share in the property and have facilitated your father living longer outside of the care system then the LA will likely apply a discretionary disregard - not to mention that they are highly unlikely to move him into care with a younger person co-habiting, more likely 4x carer visits per day - they set the bar pretty high due to the costs and do everything to keep people at home.

Personally I would advocate he makes you a 50% owner as joint tenants - this way when he dies his share of the house automatically passes to you, although as he lives in it, it would still get counted for inheritance tax being a gift with reservation of benefit.

Another tip I would give is to record in writing the decisions you make with your dad and get these witnessed.

Record what you are doing for your dad, record any sacrifices (in terns of work / finance / relationships) to meet these demands, and his promise to you and your DD of a place to live - as his care needs increase repeat the process and keep these documents safe.

What you are doing is evidencing a case for Proprietary Estoppel, which are hard cases to win, usually because of lack of evidencing, and in doing so a strong case for Discretional Disregard under the care act if it comes to it.

But really, what you need is to be on the deeds, there is nothing dodgy in him doing this, given the numbers he would be gifting you £250K of £750K so that would not be considered deprivation of assets as in theory he still has more than enough for the average care home stay. It puts you in a much stronger position, but will be counted for IHT as he will still be residing there.

In terms of IHT, assuming he was married at the time of his wife's death and was her sole beneficiary there is up to £1M tax free, if he was not married there is certainly £500K tax free in basic nil rate band £325K and residential nil rate band £175K available.

Re the last couple of posts, and more generally.

As the OP's DF will have significant savings, including from the sale of his more expensive home, the Local Authority will not be involved in any future care needs, until or unless that money runs out. His savings should fund roughly 2-3 years of care home costs, so it's not as if the OP is going to suddenly and without warning find the house sold from under her to fund care.

I don't see that deprivation of assets is relevant here as the OP's father isn't giving her any of the proceeds from the sale of the house.

My own DF is in a care home, but most people don't require such expensive levels of care in the years before their death. And even if the OP's DF does need expensive care, he can afford to pay for it for a few years without the house needing to be sold. And as I've already said, there are sufficient funds in the proposed shared house, and time, for the OP and her DF to plan for that eventuality.

My point is the OP shouldn't consider it unless she is on the deeds for 50%

Can I ask why you think this?

You need professionnel estate planning advice. A conveyancing solicitor will be unlikely to be able to advise on the structuring of the financial arrangements. You are right to be concerned OP. There are constraints around inheritance. It's not an area, I practice in any more so my advice would not be up to date but I suggest you make an appointment with STEP qualified practitioner to discuss options. You always need to consider the 4 Ds in joint property arrangements ( death, dementia, debt, divorce).

Simply because it confers a much greater level of security and stability for OP and her DD, they will both, over time be making a sacrifice in caring for her dad, the needs of which will inevitably increase over a period of time, that should not be under-estimated.

As a joint owner, if and when he does need care she will be in a much stronger position, even if the house does need to be sold. Given the figures involved its not an unreasonable concession.

I would actually advise an accountant who specialises in IHT and estates, in conjunction with a solicitor - solicitors are specialists in law of course, but a good accountant working hand in glove with a good solicitor is a very sound arrangement.

Yes, thanks. That seems sensible, along lines of hoping for best, while planning for the worst.