Loan to parents to be repaid when family home is sold after death

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marymary2

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I’m supporting my parents to stay at home by paying for a live in carer including payroll taxes. We’ve agreed I’ll be repaid from the proceeds of the house when it’s sold on their death. This will stretch me but I reckon I can cover for about a year. Only my parents live in the home.

I did pay and contract a solicitor who initially produced a Credit agreement regulated by the Consumer Credit Act 1995. Then when I queried why the loan amount and repayment dates were fixed, (contrary to my initial request) then stated I needed a mortgage on my parent’s house and for each of my siblings to get their own solicitor!

Anyhow, I’m sick of wasting good money on solicitors who don’t read their clients instructions before quoting for cases. So I’m going to free legal aid to get the agreement reviewed. But as I will only be repaid when my parents are dead or the house is sold I thought it would be worthwhile getting my siblings to sign and witness a statement to reduce any potential problems.

I’ve already told them this is what we’re doing and they don’t have any problem with it. My Parents will leaves each of them money from their will. The main asset is the family home.

What do people think of this?

“I accept that Mary is paying for a live in carer for my parents and that all expenses related to this will be a first charge on the house, before any inheritance due to me. These monies will be repaid when the house is sold.

Thanks for your help.
 
Ideally yes. Unfortunately My Mother has Alzhiemers and my Dad has executed power of attorney so her will cannot be changed. Their solicitor charged €350 last time around and dragged my Dad into town 3 times and took 8 weeks to make a change to his will last time. So as this solicitor is the executor and My Dad does not want to change solicitors I plan once everyone has signed the agreement to ask Dad to send directly to the solicitor for filing with the will.
 
You should not be paying anyone.

Just give your father a loan and let him do the payment.

You should have a short written agreement that the money is a loan and not a gift.

You will have the agreement.
You will have the record of payments - maybe pay by cheque for an additional record.

Then no one should dispute it.

You do not need a mortgage on the property.

Brendan
 
Thanks Brendan and Gordon, My Dad manages his own tax affairs with difficulty but refuses help. So getting him to register for PAYE as an employer would cause him far too much anxiety. Easier for me to do it. We'll have the written agreement and a clear employee contract signed by the live in carer that they are providing care for my folks at my folks home with payments made monthly. I'll also be issuing my Dad a written statement and getting him to agree the charges. I've confirmed with the revenue that once it's overnight the tax relief is at 40% as for nursing homes. Unfortunately due to illness I work partime so can only claim at 20%. Yet another way the state conspires to make it harder for people on low incomes to keep parents at home. It would be much easier and far less responsibility if they went into a nursing home and availed of the fair deal scheme. But that's not what they want. And we want to support them.
 
Surely there is a better way to structure this.

- The family should ensure that whoever’s paying tax at the 40% rate is in a position to claim what’s a valuable relief (I understand that the OP is currently a 20% taxpayer).

- A simple loan agreement between you and your father should suffice; for good practice, I believe that all future beneficiaries should be made aware of this to avoid strife.

- The solicitor who produced documentation referencing the Consumer Credit Act should be pushed off a bridge or tall building.
 
Hi Gordon

Surely if I pay my mother's nursing home bills,she can't give me the money back either now or by way of repayment of a loan?

Brendan
 
Thanks Gordon, I do agree with you there must be a better way. Unfortunately like many families the siblings paying the higher tax don't want to get involved. Plus Brendan is right, a loan does not attract tax relief.

Yes, we've already made the siblings aware I just want to evidence it.

Interesting what you say about that solicitor, I emailed in the details, then reiterated the details in a follow up phone call, paid the fee , then after the document was produced, told a mortgage was needed and they refused to amend the agreement to reflect a variable sum and repayment date. My own experience of solicitors is because they charge on time, many of them are just not efficient and charge for their inefficiency in not understanding their client’s instructions as they clock up hours.

I've had past experience as an executor with a will which went badly wrong so I do want to tie up all loose ends.
 
If your Mother lacks legal capacity yes, you're right. My Dad though does have capacity and ability to enter into an agreement.
 
Brendan Burgess said:
Hi Gordon

Surely if I pay my mother's nursing home bills,she can't give me the money back either now or by way of repayment of a loan?

Brendan
Click to expand...

Hi Brendan,

Not if they’ve overtly linked.

Families often work together, find out who has 40% rate capacity, get him/her to pay the fees, and then the parents square them off indirectly in a different way.

Where the problems arises is with greedy beneficaries and siblings with different levels of means, education, and intelligence!

I’ve seen cases where one sibling had paid medical or nursing home expenses only for beneficiaries to argue “but sure you’re loaded anyway” or “sure you don’t need it, we do”.

There should be no surprises for immediate family in a will in my view.
 
My family had the same situation a while back but luckily we had a few on the 40% bracket and we agreed everything among ourselves. As it transpired we ended up putting my mother into a home due to an unexpected illness and we availed of the Fair Deal scheme. Without complicating things further, you are only helping out for a year. What happens then ?
 
I'll be honest, this set up sounds like a recipe for disaster.

If your siblings "don't want to get involved" now when your parents are alive - what will it be like when one or both of your parents passes away?

When it comes to families, I believe lending money is guaranteed to end in tears. Give what you can afford, if you ever get it back that's a bonus. If you can't afford to give the money then you can't afford to lend it either.

As a sibling, and with the best will in the world, I wouldn't be prepared to sign a document such as you've described; it's way too open ended, you've no idea what amounts might be involved, what costs for the carer are actually included - annual leave? sick pay? overtime? travel expenses?

As elcato has pointed out, you can only do this for one year, then what? Heaven forbid, but your father could die first and then in truth it would be very difficult for anyone to keep your mum at home.

I'd urge a re-think.
 
I’ve committed to a year because I have the cash for that, after that we’ll see. While Dad’s physically frail, mentally he’s sound and he’s only happy when spending his remaining time left with my Mother in their own much loved familiar home.

We have wonderful, amazing carers who they love and don’t rush them around because they have to be with the next patient. To-day, a lovely sunny day, a carer drove them to the park and then they sat outside eating ice creams, watching kids playing and enjoying the sun.

Two of my siblings have now signed the document as they believe my Dad’s quality of life and his desire to stay at home with his beloved wife of 50 years is much more important than any money they might inherit from my folks. They don’t care how much it costs.

We’ll see what the other 2 do. My Dad’s asking them. So we’ll review depending on their reaction. Perhaps they might even offer to help out!!!!! NOT

Sure either of my folks could become so ill and have to go into a nursing home but we’ll deal with that when it happens. Medically neither of them need to be in a nursing home.

IF Dad dies, then with the arrangements we have in place (which don’t involve my siblings) we can still keep Mam at home.

At least, by doing this,whether for 3 months or a year, I’ll know that I did everything in my power to repay some of the love and care they’ve given me and my kids.

What really bugs me is a state policy which is more expensive for tax payers. It actually encourages people to put their parents into nursing homes by making it as difficult as possible to keep people at home. Solicitors who drives unnecessary fees and a society that thinks future inheritances are more important than love and kindness.
 
Well hold on now...

"..future inheritances are more important than love and kindness"

You're the one looking to be repaid.

So whilst you may truely believe that what you are doing is entirely noble, you're still looking for your money back.

There's nothing wrong with being sensible about money.

There's nothing wrong with wanting to do your best by your parents.

But don't confuse the two.

Another option to consider is to take Carer's Leave from work & claim the SW Carer's benefit & look after your parents yourself.
 
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