Strengthening a parents right of residence

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Angeleyes

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I purchased my mother’s home some years back and she has a right of residence for the rest of her life ( she is in her early 70s and in good health. She is divorced for many years). I am married but I purchased my mothers home in my name only and I fully funded the purchase. There is no mortgage on the property.

My husband is in some financial difficulty which has affected our marriage and I am looking for advice on ensuring my mothers home is protected from any impacts from my marriage. My husband had no financial involvement in the purchase of my mothers home.

Is there is any action I can take to protect my mother home, which is my property but she has right of residence. I also need to consider the best scenario should my mother require nursing home support in the future, as I would be using the property to help facilitate this.

Any advice would be much appreciated. I’m not sure if this is the right forum as there are a number of areas to consider - tax, legal protection in the event of a separation or divorce and nursing-home support In the futures
 
Thirsty said:
Do you and your husband live in this house?
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No it’s not our family home. We do not live in the house, only my mother lives in it. It was done to assist my mum financially at the time, it was purely an exercise between my mother and my self. My husband signed paperwork that he would not make any claim on the house. We have never lived in it, only my mother lives in it. But my husbands financial circumstances have changed and he is not coping with his current situation very well. Both my mother and I are now concerned over my husband’s situation deteriorating and he may make a choice to separate from our marriage (note that he is not being asked to do this but he is not coping with his current situation despite all efforts to support him) Is there anything I can do to ensure the house which is her home is protected ?
 
Hi Angeleyes

I think you might be worrying unnecessarily.

For the most part your husband's assets are separate from yours.

Let's assume the worst and your husband goes bankrupt.

They will take his assets (if he has any) and use them to pay his creditors.

If you own your family home between you, they will use his half to pay his creditors. So let's say that the house is worth €400k, it would be sold. You would get €200k and his share would be used to pay his creditors.

If your house is worth €400k and has a mortgage of €300k, you would be able to buy the house for half the net value of €100k, or €50k

Where it could get messy is if you have guaranteed any of your husband's debts. So if your husband borrowed €100k and you jointly signed the loan, then you would be fully liable for it if he can't pay it.

Likewise, if you are a partner in your husband's business and it can't pay its creditors, then you would be fully liable for the debts.

Questions
What is the value of your family home and how much of a mortgage do you have on it, if any?

Have you any joint borrowings?

Have you used your home as security for any of his debts?

Are you a director of a limited company which he is running?

Are you a partner in his business, outside a limited company.
 
If your husband chooses to separate, then it could be an issue.

He would probably seek to get half your joint assets.

If you own a home worth €400k on your own and you jointly own a home worth €400k, he might try to say that he wants 50% of the total assets of €400k. So he would get the family home and you would move in with your mother.

You, of course, would resist this and a court would probably not order it. But there are no guidelines so it's very unpredictable.

However, if your husband is in deep difficulty and the proceeds of any separation would go only to pay his creditors, then he would probably not try to deprive you of your home.

If you are cooperating on the separation and divorce, it probably makes sense for him to avail of bankruptcy now.

You would need to talk to a Personal Insolvency Practitioner to tease all this out.

Brendan
 
Do you currently live in a house jointly used by you and your husband and do you have children who are dependant on you both.

Not knowing all the details but you may consider a scenario where you and your children move into your other house (where your mother lives) and your husband and your children remain in your current home. This is a solution that would allow you both to have a house suitable for you to live in with your children in a co-parenting scenario. Especially if he is out of work due to his financial difficulties he could become the main cater and you could pay the mortgage and support him financially.

You are of course better off coming to a joint agreement if you plan to separate and divorce. But looking at it independently one spouse has another house that they can live in so it makes sense to let the spouse without that option remain in the family home.
 
Questions
What is the value of your family home and how much of a mortgage do you have on it, if any?
Value of our family home is €800k and we have a joint mortgage of €300K

Have you any joint borrowings?
No

Have you used your home as security for any of his debts?
No

Are you a director of a limited company which he is running?
No

Are you a partner in his business, outside a limited company.
No
 
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Hi Angel

How much is your mother's house worth?

Could you gift it to her?

Unfortunately, she would be subject to Gift Tax at 33% of the value in excess of €32,500.

If this is worth exploring, get tax advice as there may be some way to structure it to avoid CAT.

If it has increased in value since you acquired it , then you would be subject to Capital Gains Tax on it.

Brendan
 
Based on your answers, I don't think you need to worry about your mother losing her home.

However, he could get the family home in the event of a separation or divorce.

You need to consult a solicitor yourself.

And if he is cooperative, he needs to consult a Personal Insolvency Practitioner.

Brendan
 
Hi Angel ,
Unfortunately I have some bad news for you.
I purchased a property in 1982 ( 6 years before I met my wife )
In 1986 I gave my parents right of residence for the rest of their lives in this property and I moved out ( my solicitor drafted the documentation ) .
I married in 1990.
We separated in 2002 .
When it came to dividing our assets it was made very clear to me that the property where my parents lived must be included.
I thought it was dreadfully unfair - but thats the law .
I hope everything works out for you
Robert
 
To add to Brendan's questions, do you have children & what age are they?



My mothers house is probably worth about 500k

We have 1 child age 16
 
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robert 200 said:
Hi Angel ,
Unfortunately I have some bad news for you.
I purchased a property in 1982 ( 6 years before I met my wife )
In 1986 I gave my parents right of residence for the rest of their lives in this property and I moved out ( my solicitor drafted the documentation ) .
I married in 1990.
We separated in 2002 .
When it came to dividing our assets it was made very clear to me that the property where my parents lived must be included.
I thought it was dreadfully unfair - but thats the law .
I hope everything works out for you
Robert
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Thank you very much for this insight
 
Brendan Burgess said:
Based on your answers, I don't think you need to worry about your mother losing her home.

However, he could get the family home in the event of a separation or divorce.

You need to consult a solicitor yourself.

And if he is cooperative, he needs to consult a Personal Insolvency Practitioner.

Brendan
Click to expand...
Thank you very much for this information I really appreciate it.
 
However, he could get the family home in the event of a separation or divorce.
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IANAL

Unlikely the family home would be 100% allocated to one parent; given the age of the child, they are likely to be at secondary school currently and potentially attend 3rd level at a later time.

That being the case, my best guess is that the order would be for minor child & primary carer to remain resident until child is 18 or 23 if in full-time education and the family home sold at that time & proceeds divided.

Other assets would be included in the settlement proceedings; but I'm not certain court would order an elderly person to leave their home. Again, best guess would be that OPs mother would continue to live in that property, but on her death it would be sold and proceeds divided.

Possible bankruptcy changes the picture though; and I'm wondering if it might be better to get that out of the way first?

You need specialist advice; but my initial thoughts are that the family home and your assets would be outwith any insolvency arrangement?

Isn't there a time limit on insolvency? At some point it runs out and you are 'free and clear' I believe?

So it might be better to do the insolvency bit, stay married until that's timed out and then separate / divide assets as you wish. At that point your child is likely to be an adult / finished education etc., which makes it a bit easier.
 
Thirsty

That is very confusing.

The OP is not insolvent. Her husband might be.

If he goes bankrupt, he would be free and clear after 1 year. With a PIA it's more complicated.

But we don't know if his financial difficulties make him insolvent or not.

Either way, he would aim for half the assets. If he gets them before he becomes insolvent, they would go to his creditors.

Brendan
 
Which is why I'm wondering would he be best go for insolvency before separation?
(If that's the way things are headed).

I don't know the answer, but its worth the OPs while to game out all the options; and both of them have a proper sit down conversation, with an advisor.
 
Brendan Burgess said:
But we don't know if his financial difficulties make him insolvent or not.
Click to expand...

It's very hard to advise. This could be:
  1. A failing business
  2. Redundancy
  3. Gambling problem
  4. Something else entirely.
Gifting the house to the parents would put it out of reach but the CAT bill would be hefty, and then the OP would pay it again on inheritance presumably.
 
Could you gift the house to your child and have your child give your mother a right of residence. This will result in a CAT liability for the child but should be substantially less than if you were to gift the property to your mother
 
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