Is this a crazy idea?

[Wiresring]

I'm middleaged, early retired with two young adult DC. Financially I am well set up and have always said I'll never remarry in order to protect assets for DC.

I have a house that is too big for me to maintain easily, but which currently I share with DS2. He does "help", quite a lot actually, but it's the responsibility of it that gets to me.

I also have a DP. He's solvent, comfortable, and working, but after a couple of false starts in life not in the same place as me. He's renting and likely to work until state retirement age. We spend a lot of time together, but I like that he's busy during rhe day, and sometimes, I travel alone, which I also enjoy.

I could sell my house, split the proceeds three ways, a third each to my DC to help them on the property ladder, and a third as my half of a new shared property with DP. He'd have to take a mortgage for most of his half, but his income would support that.

My DC would have had their inheritance, albeit less than they might otherwise get, but they'd have the benefit of it early. I think I'd set things up so DP keeps the new house if I die first. Cash and other assets to DC.

But what happens re inheritance tax if I die within 7 years? DC and/or DP have to sell up to raise the cash?

How could the ownership/mortgage be set up to recognise that the debt is DP's half? I.e. if we split or one of us dies, his share is half the value less the outstanding debt, whilst at the same time having the whole pass to the other on death?

As DC would you think this was great news, or that your mother was giving too much of your family home to new boyfriend? As DS2, how would you feel about being "paid" to move out so your mum can live with the new boyfriend. If it makes a difference, their dad is deceased.

There's also the possibility of care fees, but I do have some significant cash savings too. I could help DC with deposits without selling the house, but if I am to move in with DP, I'd like it to be somewhere that we each have an equal financial and emotional stake in, plus I want somewhere much smaller.

I haven't mentioned any of this to DP, at this stage it's just idle musing.

I would buy a property as tenants in common, leave my half to the children but with a limited time for dp to stay in the house e.g. two years after my death to save and find other accomodation. You can always change it to a life interest in 10-15 years if your relationship lasts that long.

He can use the years before your death (assuming you go first) to save and also have an insurance policy on you to protect himself if you died in the next few years.

He should save a lot of money by only paying half of a mortgage on a small property.

Instead of gifting him the house I would leave him a set percentage of your assets (10-20%) with the rest to be split with the children.

"should I remarry, but no plans to do that, again mainly for financial reasons"

Am I be-labouring @Wiresring?

Are you actually, (taking your children, totally, out of this conundrum) trying to limit your financial exposure but wanting to give your partner "equal equity", (or at least the appearance of) in your new, joint, home?

Would this work for you; a Joint Borrower Sole Proprietor (JBSP) Mortgage?

My partner work in neurodegeneration and no one wants to think about it but dementia or neurodegenerative conditions can hit you at any age and is often more aggressive the younger you are. The youngest person he has worked with was 27!

There are also all sorts of things that could mean you need care, my dad had a stroke at 55. He was lucky it didn't leave him needing care but that's not a given.

Also, deprivation of assets doesn't have a time limit so a council could go back to decisions a person made when they were 55 to determine if they need to pay for their care home fees later on

He sounds thoughtful, you don't need to tot up the hours of who does what and who does this. You say he spends quite a lot of time at your place and he is currently renting, do you think a trial period of living together for 3-6 months whilst you sort through the legal logistics about what you are proposing?

You want to build a life together by the sounds of it and you want to give your children a helping hand too.

The cynic in me thinks this may well be what RR has intended with the changes in iht, encouraging people with large families homes to downsize to release the equity in their homes to help their children on the ladder so that the government doesn't have to think about fixing the housing market.

Yes, there are lots of reasons someone might need care young, DH did younger than I am now, but for a deprivation of assets case, the key is whether you knew you'd need care when you gave the assets away.

People often talk about arrangements like that as a perfect solution on here, but I've oly ever seen it once IRL, and it was a nightmare for all concerned. It caused tremendous friction between the DC who begrudged waiting for their inheritance and the DH who in the end became determined to stay in the house for as long as possible, just so they had to wait. Also issues regarding maintenance and whose standards it should be kept to.

If anyone's seen it work well in practice I'd like to hear from them.

This. What is Middle Aged? And why would you leave your share of new place to him and not your children? Sorry can’t bring myself to say DC.

Indeed, but the poster I was replying to seemed to be suggesting it was a risk now which does not appear to be the case (either by reference to age or situation). Apologies to her if I misread that.

On the tenants in common point, I agree it can be really messy unless one partner dies PDQ after the other. I would think about it in the round- your DC will be receiving 2/3 of the house now plus presumably other assets when you die. If that's all they receive, does that seem like a fair outcome? That's obviously an entirely personal question and will depend on all sorts of things. Do bear in mind that, if you don't leave them your home, you will lose that part of the IHT allowance.

So if he loses his job and can't get work for ages, or he gets ill, or he pisses off somewhere, would you not being on the mortgage (but on the deeds) mean you're not liable for the mortgage he should be paying, then? Perhaps not, in which case if you wanted to hang onto the house you'd have to get onto the mortgage and pay it yourself, or pay it off with your savings, thus indirectly leaving your kids with not as much money as you wanted. I know this is the worst case scenario, but it's something to be considered.

"Not everything is about money" you say. That's until you don't have any or don't have enough.
Your children have their working lives ahead of them to earn, save, buy a home.
Don't leave yourself vulnerable by distributing your assets at your age.

Yes, probably I'd have to pay it one way or the other, but it wouldn't affect what was left for DC, I'd have just moved savings into property. In fact, depending on timing, me taking over the mortgage and owning outright might benefit them.

Is it really 'half a life' to choose not to live with a man and cook and clean for him?

There are a lot of very patronising answers here, OP. You’re clearly somebody who is educated and well-informed on the relevant issues, and are not walking into anything blindly. He sounds like a good man, and you are allowed to prioritise your own happiness as well as whatever inheritance you choose to pass on to your children.

I would try to avoid a situation where your partner would be forced to leave the house were you to die first, as I don’t think this is a fair position to put anyone in. And I would talk everything over with your children in advance, so that things are out in the open and you can answer any questions they might have. Hope it all works out for you.

Yes that's why you put a time limit on it so the children aren't maintaining a house for someone else for decades.

It's either something like this or you potentially 'give' a large lump of cash to a partner.

As I said. This could just be a temporary solution. You could reconsider in 5,10,15 years when you have been in a long happy relationship where the expectation would be to look after each other after death.

You don't want to put yourself in a vulnerable situation where you can't even house yourself and you have given all your assets away.

With this plan, could you afford to house yourself if you split up in a year or two?

You plan sounds ideal. I’m sure your children will be very happy and is it really so bad if you leave the joint house to him on your death?

Also I’m sure you won’t die in 7 years, als unlikely to go into a care home so I think you should march ahead with your plan

What u can do easily do is pay your 50% outright at the time of purchase and get that legally documented and draw up the tenants in common agreement. Then see if he can take the 50pc mortgage in his own name somehow. You could just ask a mortgage advisor about that for free probably to see if they know what’s possible etc

The only issue is if you separate then it might be hard forcing him to sell up.

It’s your money and it’s your right to divide it up however you wish.
You could leave it all to a hedgehog charity or your local food bank if you wanted.

You will get as many opinions as there are people on how you should divide up your money but the reality is they are basing their idea of what you should do on what they would do which comes from having completely different relationships with completely different relatives and partners.

I think you know your children and your partner best. You are an intelligent and mature woman, you don’t need internet strangers to lecture you on their priorities or chide you for even wanting to leave something for your partner.

I think your idea is a good one and all you need to do is not be on the mortgage loan and for him to have life and incapacity insurance that would pay off his mortgage loan for his debt to never affect your assets or home in the event of him becoming incapable of work or dying before you. You’d be on the deeds as joint tenants. There is no need to ring fence anything or do a special will if your intent is for him to inherit your half of the house if you pass first and his intent is for you to inherit his half if he dies before you.

I think too it’s a great idea to gift your children inheritance money now from the equity of your current home. If you’re worried about IHT, the insurance option is there for the 7 year rule.

Then your will would simply give everything else to your children. If you died intestate, he’d only get your half of the house and your children the rest of your assets in equal shares.

There was a clause in the will that said all maintenance was the responsibility of the person remaining in the house, think that is the norm. It did work out for us as was only a few years before it became mine fully (guess depends on age of partner) at which point I sold and split the money between my three sons. I'm not rich by any means but I have a small house mortgage free and rather they had the benefit whilst I'm alive than wait to inherit.

Unless he's significantly younger than you, he doesn't have much chance of a mortgage from everything you've said

I understand that, on the original post I was just listing all the things that you might want to make sure you've considered. I don't know the ins and outs of your life and health but then someone quoted me saying you were 55 and the laughing face.
So I was just explaining why it was that I included that line

More and more I see that once you have children all your decisions have to be about making all decisions that will result in you leaving them everything possible.

My mum was a single mum in the 80s, she went on to marry my dad and had two more children and he raised all 3 of us as his. When they met she had her own home and he didn't. 40 years happy later they are still married and my parents have recently redone their wills to make sure that all of us are treated equally. I can imagine the calls now for her to be careful and not move her in or not get married as that would mean her asset of the house would be go to the new man and not her daughter.

You are a mum but you are also a person in your own right. The plan you have proposed recognises both roles. Iron out the logistics and don't feel guilty for focusing on yourself as you enjoy your retirement, whatever that life might look like.

My marriage was much more than that.

My mum owns her house and her husband is feckless and penniless. She has written a will that says if she dies first he can stay in the house but it stays in trust for her children. Now that is more watertight in England, in Scotland simply marrying someone can overturn that. But I knew another family who did that down south. Our friend’s stepmom lived in a house worth over a million in the end, well into her 90s whilst my mate had to struggle along. But she got the house eventually.

But if you don’t marry then you are on safer ground, but you can stipulate that he gets to stay put, or gets a share in the event of your death.

so I would either move him into your house, or sell, buy somewhere outright and he can stay with you and pay a share of bills and maintenance. You could probably still free up some capital for the kids and they still get the rest eventually.

I wouldn't personally risk it, but it is of course up to you. You have retired early, so your wealth creation has ceased and you will be living on an ever diminishing pot. The risks are that he can't or won't pay the mortgage. You have many years of the current balance before he retires, so don't expect him to step up and do half when he does. My mum certainly found that out! The imbalance of money and time also gives rise to a lot of potential resentment.

I would just keep on living separately and he can get his own place to buy.

Dp and I both have plans to leave everything we individually have to the kids to protect against the surviving one leaving everything to a new partner assumingthey will leave everythingto the kids, or falling for things like romance scams.

This. Sell your house. Earn interest / invest your capital 1/3 and rent with dp

If you like DP enough to move in with him and leave him your share of the house, marry him. That way your share defaults to him, no need for him to pay inheritance tax on it.

For your DC, just try not to die for 7 years. ( Being flippant, obviously, but there's no simple answer yo this.

For care fees, be warned. My dad died leaving about 1 million. Mist of this has now hone in care fees for my mum who has dementia. Fees for a reasonable place start at around 1.6k per week. That's not even a nursing home, just residential care. You could easily be spending 100k per year in the near future.