Would you buy an 'estate' with mother and granny

[CPHB2021]

DH and I are heavily considering selling our home ( new build ) and going in with my Mum and Granny, who are already buying ( cash buyers ) a large property to live in together.
The idea would be that they would be buying the majority but we would mortgage the rest of a ( haven't found anything yet but seen some properties that have sparked ideas ) a farm type with multiple properties on.
They would live in the main house whilst we would have our own separate accommodation.
We all get on very well, see each other most days and DH and I would love a more rural upbringing for our children but we couldn't afford to buy something like this by ourselves.
Thoughts?

As long as we had separate properties and felt that ground rules could be established, I think this could work.

@TinaYouFatLard

As long as we had separate properties and felt that ground rules could be established, I think this could work.

Yes absolutely separate properties and my mum has said we would always be welcome without asking there ( as we are to her house now) but she would always ask before coming into our home, to respect my DH etc. I think it could be a fab opportunity...

Absolutely. We came close to doing it but didn't, and wish we had.

Sounds good but what happens when granny dies, will your mum want to stay in the main house and be able to afford the upkeep., what would you do with all the land and property in the future, would you eventually have to sell the whole lot or could you sell the accommodations separately. What sort of accommodation would you be living in, would you actually own it. How rural do you want to be qnd the children when they get older, would you feel a bit cut off from friends, social life, schools, activities.

You will be the carer for both. As long as you are happy with that go ahead.

My aunt is in this situation now, enjoyed years and years of free childcare but is now resentful that elderly mum needs support and help and that she sees her all the time. They live in separate properties but on the same land.

What happens when mum and granny get older, suffer dementia or a stroke or just get physically frailer? Will you be expected to look after them, and are you prepared to do that?

Will your DM and grandmother want to pass part of their estates to anyone else? Do you have siblings?

Consideration of the legal aspects: what happens if care is needed in the future for gran or mum, could their partner of the estate be sold independently to fund this, would you want it to be and have to live alongside new neighbours, would the whole estate and therefore your home have to be sold together in reality? Likewise, is your mum the only child of your team and are you the only child of your mum, how would it work with wills and equal distribution of assets in the future etc.

We'd also consider this, it's such a good idea and really is of benefit for everyone - they have company and get to know the grandchildren properly.
You have peace of mind that they're nearby and safe and can see them regularly.
Also everyone has the larger land and space that the pooled funds can buy.

But I'm not sure what happens when one of the parties pass away? Do you have to sell up if there are other children or beneficiaries of a will?
Would inheritance tax be payable?

I think you'd need look at care and what happens as they get older financially.
And also look at it practically. You'll be in the cute cottage with D... which is cute until you have 3 kids... then is small.
Will you, DH and your 3 kids still be crammed in a small cottage while your mother potters around her 5 bed house in 10 years?

All points to consider.
We wouldn't be buying somewhere huge, no more than an 2/3 acres so wouldn't be too much up keep.
Yes happy to care for both eventually although my mother is only early 50's, Granny is in her 90's but has a large sum saved for her own care. She doesn't want to put my Mum in the position in which she HAS to care for her. She is very capable (ATM) and lives alone but she feels she would benefit from living with someone now.
I have three sisters. Idea would be that once Granny passes, mum would still stay there, once mum passes ( hopefully we still have years and years ) we would probably sell and we would get our % and then the rest split equally between the 4 of us.
As for rural with teens, yes happy to be. I was and enjoyed it. My parents drove us everywhere - they always knew where we were etc! And DH and I have said we would like to do the same. Currently live on a new build estate and whilst our DC are 5 & 2, we don't really want our son becoming one of the boys on a BMX we see regularly.
Of course, any number of things could happen and cause issue but that would be the general idea.

@Totalwasteofpaper

I think you'd need look at care and what happens as they get older financially. And also look at it practically. You'll be in the cute cottage with D... which is cute until you have 3 kids... then is small. Will you, DH and your 3 kids still be crammed in a small cottage while your mother potters around her 5 bed house in 10 years?

We have 2 DC now. No plans for any more. I think once my Granny passes, my mum may want to swap properties. Currently one sister lives at home and mum always has a spare room for another sister who splits her time between UK and UAE so she's not entirely alone in the house. I should add, we are all relatively young so there may be a sibling living at home for a number of years yet. The one who is at home now is 19.

Yes!! Sounds fab.

My extended family did this (cousins) 3 generations went in together.

The curveball thrown at them was that the youngest adult died (seems like in your case that would mean you and/or dh, not to be morbid) and the late teen DC were left with the elderly adults and a REALLY complicated intergenerational probate/inheritance/trust legal wrangle.

Just remember it doesn’t always happen in the ‘right’ order

@PiesNotGuys

My extended family did this (cousins) 3 generations went in together.

The curveball thrown at them was that the youngest adult died (seems like in your case that would mean you and/or dh, not to be morbid) and the late teen DC were left with the elderly adults and a REALLY complicated intergenerational probate/inheritance/trust legal wrangle.

Just remember it doesn’t always happen in the ‘right’ order

This sounds awful. The poor children.

Had friends who did this, was all great till the couple in your position divorced. It got difficult and messy.

But in theory sounds brilliant.

@JustJam4Tea

Had friends who did this, was all great till the couple in your position divorced. It got difficult and messy.

But in theory sounds brilliant.

All of these scenarios do sound very problematic and I am absolutely not saying they might happen to us but thinking they would all equally be awful if we were still living in our home now. I suppose we would need to have the provision that the property we live in, could be sold by itself, so would need to be separate from the existing house in the eventuality that we needed to sell without disturbing mums living situation, we could.

It sounds great to have granny and mum close, but you should sit and work out lots of legal issues. And there could be a lot. All the contributing adults should have to have (transparent) and compatible wills so the inheritance issues for the property and assets are sorted from the start and everyone is clear. Make non resident siblings aware of these decisions so there are no surprises. You’ll also need to be comfortable with any IHT tax implications and understand taper reliefs. Consider guardianship for your children should anything happen to you and your DH.

From a land law perspective, I’d want to understand whether there would be separate titles and who owned what piece of land or whether you would all own a share of the whole title. You will need a trust deed drawn up if you are contributing separately and unequal sums to buy a single piece of land/title regardless of the number of dwelling houses or the size of them. This feeds into the inheritance stuff above.

Possibly with my family but no way in hell with my in-laws. What does your other half think?

@MadeInChorley

It sounds great to have granny and mum close, but you should sit and work out lots of legal issues. And there could be a lot. All the contributing adults should have to have (transparent) and compatible wills so the inheritance issues for the property and assets are sorted from the start and everyone is clear. Make non resident siblings aware of these decisions so there are no surprises. You’ll also need to be comfortable with any IHT tax implications and understand taper reliefs. Consider guardianship for your children should anything happen to you and your DH.

From a land law perspective, I’d want to understand whether there would be separate titles and who owned what piece of land or whether you would all own a share of the whole title. You will need a trust deed drawn up if you are contributing separately and unequal sums to buy a single piece of land/title regardless of the number of dwelling houses or the size of them. This feeds into the inheritance stuff above.

Forgive my absolutely ignorance to this whole tax situation but as far as I am aware, mum and granny have had joint accounts, POI, etc for over 10 years. Isn't there a rule for IT to do with 7 years has to pass and then it's not taxed? It's all an idea at the moment and lots of boring bits to consider before we even start putting houses on the market etc! It is an exciting thought though!

@Asdf12345

Possibly with my family but no way in hell with my in-laws. What does your other half think?

He is very keen. He gets on very well with my family. We have lived with my mum twice, once as teens in our early relationship and once for 6 months with both DC in tow whilst we waited for our new home to be finished. He loves the idea of more outdoor space / a workshop

You might find it difficult to get a mortgage as a) lots of lenders don’t like lending when they haven’t got the freedom to repossess the whole property and b) a property like you describe with more than one house on a piece of land can also be tricky to mortgage.

I have only skimmed the thread but has anyone raised that if Granny needed you would have to sell?

@saltandpepper234

You might find it difficult to get a mortgage as a) lots of lenders don’t like lending when they haven’t got the freedom to repossess the whole property and b) a property like you describe with more than one house on a piece of land can also be tricky to mortgage.

I have only skimmed the thread but has anyone raised that if Granny needed you would have to sell?

Yes we have thought about that and basically accepted that should mum/granny need to sell, we would have to, too.

Didn't know that about lenders and a very valid point! It's probably looking very tricky legally! But a lovely idea in theory

Make sure your mindful of what should be your sisters inheritance, essentially, make sure they get theirs and your home isn’t at risk of that or care home fees.

I’m envious of people who manage this. What a wonderful way to bring up children and be there for family.

@CPHB2021 I was talking more about the mechanisms of inheritance of the property (or share of an interest in the property) than tax on bank accounts. What happens to a property on the death of one of the co-owners is complex legally and depends whether you will own as tenants in common (broadly, a % share and will require a trust deed) or join tenants (everyone owns the whole as equals) and consider the rights of dependent children etc. I agree with a previous poster that you will have trouble getting a mortgage for part of a property without clear agreements in writing.

The 7 years you mention is IHT taper relief for the gifting of assets out an estate in the previous 7 years. I’m not up to speed on current rules.

I think you need a lot of open conversations with family, clear legal advice and then trust deed documentation and transparent wills drawn up to avoid issues and complications in the future.