10 March 2015
Sharing the family home with the older generation
Life expectancy is increasing all the time and while that may be applauded by many, for others it brings a real headache in deciding where to live.
For those who are capable of living independently, staying in your own home in your 80s, 90s and beyond is something to be celebrated.
For others however, there may be a need to make significant changes to ensure ongoing care and support is available.
While this can mean moving into an assisted living facility or a care home, another alternative is to pool your resources and that of your family to either extend or convert the main family home, or purchase an alternative property.
Mike Wragg, an associate in the residential property team at Buckinghamshire law firm B P Collins LLP, which partners with Age UK Bucks, says anyone considering such a move should seek both legal and independent financial advice in order to avoid future conflict.
“While moving in together or purchasing a house with room for the older generation may provide a good solution at a particular time, it’s always important to protect against future changing circumstances,” he said.
“Although arrangements can be made with the best of intentions and appear to have everyone’s agreement, people can change their minds for a variety of reasons, or their circumstances can alter.”
Mike highlights some typical scenarios where families could unwittingly find themselves with a major property headache.
A property purchased by a married son or daughter for their elderly parents to live in nearby:
- If the younger couple get divorced or one of them dies, the parents’ new home may have to be sold as part of their assets
- Alternatively, if whoever owns the property has a business and runs into financial trouble, it could be sold by creditors
If elderly parents sell their property and invest some of the proceeds in building an extension or “granny flat” on an adult child’s family home:
- There could be conflict over ownership of the extended area if the house has to be sold for any reason
- There could be inheritance tax implications over the subsequent value of the property
- If, in time, the elderly parent requires funds to pay for care home fees, it can be much more difficult to access the money they need if it has been invested in a “granny flat” or similar alternative. This may also attract the interest of the authorities who would be keen to recoup some of the fees and potentially could take a charge over the family house in order to recover money when it is ultimately sold
If a parent has several children but decides to live with one of them and invests £50,000 of their savings in building an extension:
- Potential to cause conflict among the remaining children, who could effectively each claim a share of the extension, but only recoup their inheritance such time as the house was sold
“These examples show just how important it is to consider the legal implications of such arrangements and to also seek independent financial advice,” concluded Mike.
“Life has a habit of getting in the way of the best laid plans and no-one likes to think of their elderly parents having to move against their will. We’re always happy to provide families with initial advice without charge, talking to us can make a real difference and help ensure the future is secure for all generations.”