Lent DD money, now it's causing problrms

[Baabaablackshee]

Four years ago I lent DD (now 29) 100% of the cash to buy a 3 bed house.

The plan was that she would have lodgers to help pay the mortgage and after five years (when hopefully she would be earning enough to remortgage with a commercial lender) she would pay me back.

I am approaching retirement and the money will go towards my pension pot

DD struggled with social interaction and has recently been diagnosed with autism. She is also on medication for anxiety and depression. Lockdown exacerbated her poor mental health and she and hasn't held down any job for long.

With the hike in mortgage rates, it is unlikely that she will be able to remortgage and pay me back without selling the house at the end of the original five year term.

She seems to fall out with her housemates all the time. She wants to move to a smaller property where she doesn't have to share, but she can only do this if I continue her mortgage at the previous low rate of 2%. (I will lose out because current mortgage rates are around 5%.)

I'm reluctant to do this because I don't want to have to rely on her for part of my income in retirement.

If I pull the plug she will have to rent a room in a house share like many people her age. If I don't, I lose out. She has built up some equity but not enough to buy anywhere without a mortgage.

I now regret entangling our finances. I want to help her but not at the expense of my financial future.

WWYD

I would allow my daughter to downsize and keep the current agreement as this would release the majority of the money for my retirement and still keep a roof over her head. In fact I'd probably just give her the money to avoid all the awkwardness of interest rates and things. It really depends on what you have in mind for the money. Do you need all of it?

make sure you get the right legal advice as it might be difficult to legally make her leave the property.

The agreement was after 5 years she buys you out, stick to that, if she can't afford to then she needs to leave and you sell the property. She may not want to rent a room or live with other people but if she's not prepared to work then this is her only option.

She's an adult now, maybe you've supported her too much, so now she feels she doesn't have to work etc

If she sold it now and you got your cash back, would there be any profit that you could gift her?

You need the money for retirement so I wouldn't entertain that idea. I'd ask her to sell the house to release your money back to you. I'd gift her a deposit for her flat/bedsit. She needs something very small and easily affordable, if she's always changing jobs? She kinda needs to stand on her own two feet now. Perhaps working from home would be better for her, if she's struggling with her autism.

To be honest if it were me I would be trying everything to secure her and accept some sort of self sacrifice.

She has a disability. Late diagnosed so has obviously suffered for some time. Only 22% of autistics are able to hold down employment.

For our DC we are accepting that they may be living at home until circa the 30 mark and will be providing them with a house and other supports above what would be ‘normal’ due to their autism.

I think you need to see this from the point of view of a parent supporting a child who is disabled, rather than an idealistic scenario which is out of touch with reality. You need to be realistic about her capabilities and needs.

Accept some responsibility. If her medical needs weren’t addressed in childhood, why not - this would have given her in the region of 500k - 1M in support which no doubt would have drastically improved her life and she wouldn’t be in the position she is in now.

Get her to apply for PIP etc if she doesn’t have it already.

Could you rent the house out at market rates and use that income to save and then pay her rent or something tiny like a small flat while she gets on her feet?

*on sonething tiny

What are the actual sums of money involved in terms of the equity she has built up over the 5 years? Given property prices went mad over covid time, I imagine there's at least a bit of equity there? Might it be enough to pay outright for, say, the owned part of a shared ownership property? Or something self-contained but very small?

Because my observation here is that her disability is clearly making it very difficult for her to work, or to live with other people (you included). So there's a real question here about her practical and financial future, and it isn't the kind of situation where she can just 'pull herself up by her bootstraps' to resolve it. I am not someone who necessarily feels that people are obligated towards one another because faaaamiiiillllyyyy, but my observation here is that you seem quite... detached? from the question of where and how she will live in future. From the outside, it looks like the optimal solution is one that leaves her living somewhere alone, with security of tenure, and that doesn't require employment income for her to stay in that situation; while you also get back as much money as possible (preferably all) to fund your retirement. So it would be helpful to have a sense of the figures to try to ascertain whether anything like that is possible.

As a side note. Did you look into the legal implications of charging interest on a loan?

As in, treating the interest as income on a tax return?

As a side issue, you need to declare interest received on your tax return and pay tax on it as savings income

Some really good points here.

1. I knew she was a 'bit different' in childhood but didn't appreciate how much.

1. She suggested that I might have traits so I was assessed and it turns out that I have ADHD, that could be why I didn't spot her issues.

1. She has applied for PIP and been turned down, twice

1. I honestly don't know if she can't work or 'won't' work and if she won't work, whether I am enabling her. I am trying to see this as a parent supporting a child who is disabled and I already support her in other ways.

1. I am trying to be realistic about her capabilities and needs but I do find it very hard to be sure what they are as she does blow hot and cold a lot.

Between £20 - £40k profit depending on the sale price achieved. This is her money as the house is in her name. And I'd be happy for her to use it to put towards something else.

"but my observation here is that you seem quite... detached? from the question of where and how she will live in future."

Not at all, worrying about her consumes a lot of my waking hours, but I didn't want to muddy the waters off this post with too much emotion. I love DD and want her to be secure. I'm selling my house and planning to downsize to free up some money.

How much does she need to buy a flat vs how much will she get from the sake of the house? Would it be possible for you to lend her enough to buy the apartment or even half of its value so that she needs a smaller mortgage?

Can you go with her to see a mortgage broker? This can give you some idea of what type of loan she could get and what the repayments would be depending on how much you and her can use as a deposit. You might find that you could be in a position to loan her sone money but not all.

We tried that for a year. The tenants were difficult, so in the end she moved back to the house and I helped her find new lodgers.

I think people are being unfair to the op

The op May in future have additional needs themselves and the money would go a long way to ensuring they have some autonomy in this and are not just reliant on the state. It's their money and purely being a parent does not entitle the child to expect the parent to sacrifice their potential future security whatever disability the child may have.

Only the Op can make the decision as to whether they feel financially supporting their daughter is what is needed or whether it's enabling her to not go out and build her confidence in the working world.

I do feel it is unfair people saying that the Op should've got more help for their daughter earlier in their daughter's life it's only in the last half decade that knowledge about autism has been widely known, especially with regards to diagnosing girls

So grateful for this post.

I'm doing a lot of number crunching to work out how much I need in retirement. I know I won't be able to rely on DD for anything so I have to have enough put by for possible care home fees etc. I'm a single parent with no family to rely on so it's all on me.

I suppose where I'm coming from is, if you can engineer a solution where she has some security moving forwards, probably a lot of that worry dissipates. Whereas if you essentially wash your hands of the situation, she's likely to continue lurching from one insecure job/home to the next, and each time that's likely to create its own stresses for you. You're absolutely entitled to your money back, but pragmatically, if there's a way to swing things to avoid that insecurity for her, you also get to avoid the worry for you.

If 5 years of 'mortgage' repayments plus the 20% or so house price inflation boost we've probably seen over that time adds up to only £20-40k, I'm guessing property prices near you must be quite low? Which does give you perhaps some scope to work with?

Do you have a large garden? Would you use her money to put a garden house in it? She could have her own space and pop into yours for the kitchen/bathroom facilities. If she's not holding down jobs, she's never going to be able to mortgage her own place to live is she?

This. It was an odd arrangement in the first place - I don't know why you didn't just buy her a property to live in and keep it all in your name so you benefit from the investment but there must be a way to make the property work for both of you. If she transfers it back to you and you rent it out for profit you can keep the equity and also help her with rent on a cheap property.

So

Four years ago

One year of renting it out and did living with you
Three years of dd and lodgers

I would cut my losses with dd ever being able to work full time and pay you any sort of market rent /repayment and rent the house again via an agency while supporting dd with a longer term plan

Maybe look at shared ownership on eg a studio flat - with the profit from the house and perhaps a bit of extra help from you, it may be possible for Dd to do this and not share.

Ok so your daughter is in a really bad position now as for the best part of 30yrs she’s done without support due to you not addressing her issues, which you say is down to you being disabled yourself.

Regards the PIP she needs support to be able to apply for it properly, from you and from citizens advice. As a starting point you can google ‘PIP form guidance’ which should show up multiple guides from disability charities as to how points are awarded and the descriptors. If your daughter doesn’t write at length regarding how she is at her worst, using the appropriate descriptors then she won’t get it. I really think this could be worth revisiting as it could avoid the need to sell the house and help her to be more comfortable. If she gets PIP there will be an uplift in a lot of other benefits she may be due too.

If you go to national/local autism charities they will help support her with work and assess what type of work may be best for her. Be aware she may have to take work that she is overqualified for to be able to cope with it. It’s likely her living situation is contributing greatly to her inability to sustain work if she is stressed out by the lodgers and so forth. Perseverance is key and being supportive, even if it just isn’t possible for her. It’s easy to slip into treating her as ‘normal’ as that’s how she looks, but she is a vulnerable adult and one that hasn’t had the benefit of proper support throughout her life so that leaves a legacy of trauma unfortunately.

Relative to her needs, there should be some indication as to the level of her difficulties in her assessment report, surely? Again, speak to an autism charity, they can come out and do a review with her and help get supports in place, I would advise that you steer this and are present for any meetings as you appear to be her primary carer.

Regards your retirement, I really do not know why you are wanting to squirrel away massive amounts in savings, especially if you live in England and care in the community is charged (it isn’t in all other U.K. regions). Fair enough in your personal pension. But keeping a big house or thousands in savings (unless you are a high earner with bountiful amounts), is folly - it will only be taken by the LA for care.

Bear in mind you can still have up to 16k in the bank and still get benefits. Regards a care home, if ever the need arises you put yourself in as temporary resident and stretch that out as long as possible (usually a year, sometimes 18m if a social worker is tardy with paperwork). That way it doesn’t cost. All you need is enough to get in the door of your home of choice then when the money runs out the LA take over.

Regards saving the house either sign it over to your daughter (early) or have her live with you as carer before you go into a home, than and/or her status as a dependent/vulnerable adult will save it.

Much more to this than I’m giving info on, you need to do a lot of research and see a financial advisor and solicitor for advice as to your pension/finances/will etc. before you do anything drastic relative to your daughter’s home.

Your detachment from her would be symptomatic of ADHD and you need to be aware of this. She is a vulnerable adult and you do have responsibility to her, particularly since she is largely in this position now due to your issues getting her support as a child.

All the best of luck with her and I hope you’re able to get some solid advice from professionals outside of MN.