Pensioner Divorce

[Contrarian78]

I'm posting here (rather than in Money) becasue I think it gets more traffic. I'm hoping that somebody has been through something similar and can provide some pointers.

My MIL (64) is planning on leaving my FIL (64) and coming to live near us. There's lots that's gone on, and although I have a view on it, the decision is hers to make. My MIL has retired and my FIL is due to retire shortly (this may have something to do with her now seeking to separate).

The problem is that they are not especially wealthy, certainly not wealthy enough to divide what they have and for each to be able to buy their own home. What happens in these situations? My MIL will have approx 60-70k (once evereything is sold) and no income other than her basic state pension. Would she be eligible for any State help? I'm guessing not. What are her options? ~I'm guessing she could use what money she does have to rent and live, but would she be eligible for State help thereafter or would I end up footing the bill?

Have you thought about buying a park home?

Just a few thoughts. She could rent, using her savings, and when they get below the required amount (16K?) she woud then be eligible for state help. I'm guessing she would not be able to buy a small flat outright, depends on where you live, but you would need to be in a v cheap area.

Good idea about the park home/chalet/posh caravan. Lots of people retire into them. Also, in our area there are shared ownership schemes with a housing association. You buy part, then rent part, which means you pay less rent, and have equity in the property.

We live in a really cheap area, but there just aren't really that many flats around. As cheap as this area is, small houses and Bunglaows start from about 130k.

Park homes start at approx 70k but have annual service charges, and officially you're not supposed to live there full time (11 months of the year). She could move in with us for 1 month a year, but I'm just not sure we'd be comfortable spending everything she has on a caravan when you hear so many horror stories

Perhaps part rent part buy would be an option (there are a few around and about - but these tend to be houses instead of Bunglaows) A small (part rent part buy) flat would be ideal.

She needs to go to CAB and ask for advice.

Contact AgeUk on 0800 1696565 to see what she may be entitled to. Honestly don't look at a park home thee are some real horror stories about people who have lost out wit these -age uk have a factsheet on these too www.ageuk.org.uk.

Good luck !

Thanks. I'll suggest she does that. To be honest, I'm a little bit concerned that she'll move in with us (DC3 due in June) and never leave!

She probably does need to do this though, and although the timing is far from ideal, we'll likely muddle through. The more information she can get, the more likely she is to make a success of it. My FIL can be a little bit controlling, so she'll need to have a clearly defined (and executabel) plan.

Bit of bigger job, but can you take her in and use her money to buy bigger house, or extend yours? Make a little granny annexe. you'd have to get a solicitor involved to draw up the legals. Might not suit you all but just an idea.

Don't forget that she should be entitled to half of FiL's pension.

Moomin would that still apply even if FIL is also on a basic state pension?

Suspect this only applies to private pensions. Halving a state pension would not leave anyone with enough to live on, surely.

My FIL doesn't have much of a pension (litereally less than 10k)

Papa We're not short of space (we already have a granny annexe which is self-contained). It's just we didn't really anticpate anyone living in it full-time.

My in-laws had previously talked about moving into the annexe whilst they looked for somewhere closer to us (they then decided to stay where they were) and to be honest, we wondered if they'd ever move out once they got there.

It could be an option I guess. If I'm being honest, I wonderthe extent that she'd be eligible for council help (even paying full rent) when she essentially had the use of a one bed flat at ours.

afaiK, the council can't take your circs into account when deciding what help they can offer. Make no mistake, she'd have to use up nearly all her equity cash first.

That's fine, I don't think we'd particualry have a problem with that (not ideal though). I think we'll look into the shared equity deals. Something might pop up I guess.

She could always go to Vegas and blow the lot, and then come back to the council when it's all gone

Could you buy a £130k property with her money as the deposit, and then take out the remaining mortgage yourselves? This would then be an investment for you for the future as long as you tied it up properly with solicitors so that the property is yours to inherit? A mortgage on £60k wouldnt be too bad.

That could be an option, and probably would be affordable I guess. The only problem then would be that we'd be liable to do the same for my father-in-law (my wife would insist on it) and at that point it becomes a bit more of an ask. The only way I can really see it working is if they split the money, which they then give to our children's trust. The trustees would then go and buy two suitable properties with input from the inlaws and then let them to my mother and father in law. The in-laws, once all of their capital had been depleted, would be eligible for housing benefit - which would be paid to the trust in order to cover the modest mortgages. This would also protect the equity in the event that either of them needed more specialist care.

To be honest though, it just seems like a little bit too much of a wheeze. Almost imorral. Please can somebody tell me why this wouldn't work as a taxpayer I'm sort of hoping that there is a reason

On the last point Housing benefit does ask if the property is owned by a relative and would investigate that situation. I believe they would not pay if the arrangement was as you describe. I hope not anyway.

I make you right, but the question would have to be worded more broadly before such an arrangement was frustrated (the property would be owned by the trustees). The existance of the trust deed would be a matter for the trustees, the settlor and the beneficiaries. To the outside world it would just look as if the in laws were renting from random/unrelated people.

As I say, I've no desire to defraud the taxpayer.