House swap with parent

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sashabowman

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Hi not sure which area I should be posting this so please let me know if its in the wrong area.

Back ground - father is in a nursing home with advanced Dementia, through the Fair Deal scheme. He has been in there several years now so the house is not in the equation for fees only his wife's savings.

Mother is living in the family home which she can no longer manage on her own, she has approached all her children to see if any would be interested in buying or a house swap. 2 of the 3 children are not interested in taking on the house as there is extensive work to be be done on it.
Only the son is interested in moving into the house and taking on the work. His mother would then move into his apartment which is low maintenance and secure ( her suggestion ). Also in the same area where her own house is.

The son that wants to move into the house is not in a position to buy the house as he is tied into a clawback for the next 4 years, and would be paying back approx €100k if they were to sell now, on top of his mortgage @ €100k.

Mother wants her son to hold onto the house until the claw back is finished and then for the son to sell his apartment when there is no clawback to be paid. She would then move back into the house until she passes or needs residential care or she can at any point move back into her own house with the son if she felt she wasn't able to look after herself anymore, and the son would rent out the apartment.

After 4 years her son would then be in a position to buy 2/3 of the family home and the mother would then pay the other 2 siblings their 1/3 each. This would be well under the gift allowance.

Question is, if the mother passes in the next four years or before the husband in the nursing home, how would the son living in the house be able to protect his interest in the house regarding the fair deal scheme and make sure that his siblings are included in any agreement so its all done fairly, and also to make sure that his mother is protected financially if she needed residential care in the future.

The mother's main concern is not leaving any of her children with a tax bill when she passes and ensuring she can provide for herself and her husbands residential care in the future.

My friend has asked my opinion and I can see the merits of doing it and I know they are going to seek legal advice on this but I'd like to know what people think and what questions to ask the solicitor, or if there is anyway of doing it legally or is it a non-runner.

Thanks in advance.
 
I don't think I've ever read anything so convoluted in my life.

First question, does Mom want to stay in the home place?

If yes, can offspring chip in to bring the place up to a liveable standard?

Can additional home help be hired to help mom?

If no, could Mom move to live with any of the off spring?
 
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It's hard to follow this story, but let's set out a few guidelines:

The mother should do what is best for her. She should not be worrying about how much she leaves her children.

The mother should not transfer ownership of her home to her son.

If she does, she should not expect that she can move back in there when she needs him to care for her. The son might agree to that now but when the time comes, he or his wife might decide that it is too much work.

Why does the mother want to move out of the family home?
Is it too big?
Does it need too much work?
Is it a lack of security?

If the only reason is that it needs work, then they should get the work done. They can borrow the money from Seniors Money if the children don't have it themselves.

If it is that the mother is lonely and needs company, moving into an apartment will resolve that for her. She might be better off selling the house and moving into some sort of assisted living place. She would have her own house with plenty of people her own age around her.
 
If they go ahead with the plan and unofficially swap houses now with a few to formalising it in 4 years, the son needs to protect himself.

The agreement needs to be in writing.
The mother should pay for the work which the son gets done to fix up the house.
So even if the son pays for the work, it is regarded as a loan to the mother.

If, after 4 years, the deal goes ahead, then it would be something like this:

Value of house : €700k less €100k "mortgage".
Each child gets €200k + the son gets his €100k loan repaid.

If plans change and the son does not get the house, he won't find himself in a position, where he paid for a lot of work to bring the house up to standard, and he has nothing to show for it.
 
sashabowman said:
She would then move back into the house until she passes or needs residential care or she can at any point move back into her own house with the son if she felt she wasnt able to look after herself anymore,
Click to expand...

I have seen many of these arrangements fall apart with great family fighting ensuing.

"You got the house cheaply on condition that you would look after Mammy when she needed it"
"Yes, but I didn't realise that she would be bedridden full-time and I am out at work and my wife doesn't see why should be a full-time carer for her mother in law"

Brendan
 
Didn't fully follow but:

  1. When assessing the assets for fair deal, they look back 5 years (I think) to ensure there is no offload of assets just before the person goes into a home.
  2. If the son gets the house, he gets the house. If within 5 years of mother going into a home, the State get a claim on it.
  3. Who is going to give the other kids their inheritance if the son has it?
  4. Son may be liable to CAT on the transfer of property.
  5. Others get nothing
  6. She shouldn't concern herself with tax
This reads like a case where people's wishes are at odds with the law. You can't have your cake and eat it if you want to stay compliant with the law.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
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