That awful moment when the front door slams behind you and you realise that your house and car keys are still inside whilst you are firmly outside! A quick check at the back of the house confirms that I had remembered to bolt the six foot gates. I considered the option of climbing on the wheelie bin and ‘hopping’ over but I don’t think I could have done that in my twenties let alone in my fifties in a dress and heels!
Since lockdown I have seen at least one of my neighbours every time I’ve left the house. Today the street was empty, not a car in sight. Of course my partner, Martin, who usually works from home, was visiting his mum well over an hour away. My son, the emergency key holder (now sacked!) didn’t answer any calls. After several desperate messages my lovely assistant, Helen, came to the rescue and picked me up.
I’m a very independent person and it’s rare for me to find myself in a situation where I was completely reliant on getting help from others. For lots of elderly people this is the reality of life and sometimes, in a bid to solve some tricky problems, greater issues are created.
For example, a very common scenario that I am often asked about is how elderly parents can contribute to a property purchased with a child. This might be that they will all live together in one house or that a new property with an annexe is purchased. This arrangement helps to retain independence for the parents and gives peace of mind to the child that they are on hand if any assistance is needed. It does, however, create potential difficulties on the financial front.
So the first question to ask is: “Who will own the new property?” Very often large sums are contributed by the parents but the property is purchased in the names of the child and their spouse. This is because there is concern about the situation should the parents require care. However, when a property is jointly owned by occupiers that remain in the property the property is disregarded in assessing care fees.
From the alternative side, little thought is ever given to what the situation would be if the child and their spouse divorced or if there was a falling out between the parties. Both situations could require the sale of the property and without any legal right to any of the sale proceeds the parents could be left extremely vulnerable.
“So surely it is best to put the property in all of the occupiers’ names?” I hear you say. Well yes…maybe. This really depends on the overall financial situation of the parents and on their intentions on death. It may be that they intend to split all of their assets between all of their children. If the main asset is the house that they have purchased with one child the property may have to be sold on their death to divide the funds between the siblings.
Every situation is, of course, slightly different. It is always great when an elderly person can be assisted to retain their independence. We all need some help sometimes! From a legal perspective, there are Wills that can help protect the position of the occupying child and Declarations of Trust that can protect lump sums contributed by a parent to a property purchase.
If you are thinking of entering into an arrangement like this then please give me call for a free, no obligation chat on 01935 382680 or email at email@example.com