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.

If I marry him, much more than a share of the house defaults to him. Whilst it's possible to write a will that avoids that, it wouldn't help in a divorce situation.

Do bear in mind that, if you don't leave them your home, you will lose that part of the IHT allowance.

One way around this problem is would be to leave your 50% share in the house to your children but leave your partner enough cash to buy them out (and perhaps talk to everyone ahead about why you’ve structured it that way). Same outcome in terms of him having the whole house but you’d also benefit from the additional £175k IHT allowance (or £350k if you also have your late husband's allowance).

I see what you’re saying, but you don’t have an income from a job, so you’d have to use your savings to pay the mortgage, which would mean your quality of life would suffer as you don’t have a job? In contrast to how it would work with him continually paying the mortgage which means you having (presumably) a comfortable amount of disposable money?

I don't have a job but I do have a significant income.

I wouldn’t give the kids 2/3rds of your current asset while you are still so young and in a new ish relationship. Maybe half or less if you sell, then keep some aside for a few years - you could always aim for this to help with grandchildren if your position lols stable in a decade or two.

Rather than leaving the new house to DP, you could buy together with a Deed of Trust that says that your half is paid for, so if you split up you get that back. You could either specify the money you put in, or 50% of the sale value. On your position I would not leave to DP but instead add into a will that if the partner survives you, the partner has 5 years (or longer at discretion of your children) to either vacate the property or buy your children out. You could either leave your half to your children or a percentage of it to them but I wouldn’t leave completely to partner.

Yes, and what if you need to buy care for yourself in later life? You need proper legal advice about the ramifications OP.

I think this is what Helena bonham carter has with Tim burton. Dealing so may aspect for sure. Practically hard to buy flats next door at the same time unless you’re lucky or new build / off plan I guess.

*ideal in so many aspects

They've split up, I'm sad to say.

Yes, and that's very sad, but the attempt at a do-over with someone who has less to contribute to the union than you is extremely risky.

Does he want to take on a mortgage?

I think this would leave you exposed if he was unable to continue paying for some reason (job loss , illness etc) and if you split up.

He’s younger than you so will be working for more than 12 years while you are not. That’s quite an imbalance - is that a better imbalance than him just living in an house that is yours?

And will he have any pension?

I understand that you are wanting to build something with your 'new' partner. That makes sense. And I think your plan could fo that and life insurance could cover the IHT issues. What I was wondering is how old is your son currently? Does he want to move out/buy somewhere new now? Would there be space in your new home if he wasn't quite ready?

I am puzzled by how keen you seem to be to give away your money and therefore your power.

With regards to your children, I get it. That makes sense to me, but you could find yourself breaking up with your partner and then priced out of the property market full stop.

Power and wealth seems like a burden until you no longer have it.

Watch King Lear!