Moving into my mother's house to mind her

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PBSMummy

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Hi,

I have a few related questions:

My mother is elderly so my husband, child and I have agreed to move into the family home to take care of her.

My sister has agreed to sell us her share of the home so that we can remain there long term but she has suggested that we buy her out now, while our mother is still living, as she needs the money to renovate her own house. So is it possible for my mother to gift her a share of the house now that we then buy off her, or how could this work?

What would happen if we were ever in the position that we could no longer care for mum at home and we need to use the fair deal scheme, and we are living in the house?

The home needs renovation to make it suitable for us all, so I’d prefer to settle things with my sister before we invest in the house.

And if we cannot buy her our now, how can we make provisions that any money we spend on the house now is not up for grabs when the house is divided in two?

Many thanks for any advice.
 
If the property is part own by your mother at the time of fair deal, she would be liable of up to 22.5 per cent of the value of what she owns.
And if your mum needs the fair deal within 5 years, your sister will be affected by the claw back clause
 
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PBSMummy said:
My sister has agreed to sell us her share of the home
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But she does not have a share in the home? She is expecting to be left half(?) the home when your mother dies. But she does not have and should not have the right to sell that now.

Do you own your own home now? What will you be doing with it when you move in with your mother?

There would be a number of ways to deal with this. Each has its advantages and disadvantages.

I think that the best for you to protect your interests would be

1) You buy your mother's house from her for the market value - let's say €500k
2) You own the house and you owe your mother €500k
3) When your mother dies her estate is worth €500k and she can do with it what she likes.

But this allows you to spend what you want on the house and ensures that you own it when your mother dies.

These "minding the mother" arrangements often get into difficulty. There is no problem now that your mother is relatively mobile. But what happens when she needs much more care? It might be better for her to move into a nursing home, but she will resist it. And she might get a notion and cut you out of her will.

So I think you should buy your mother's house for half its value. In other words, she is giving you a gift of €250k if the house is worth €250k.

When she dies, her estate will be worth €250k and she can give that in its entirety to your sister if that is what she wants to do.

Do what is right for you and your mother as you are the main people involved. Don't not do something, just in case it is less efficient for the Fair Deal Scheme or because it might upset your sister.

Brendan
 
Just a question on this. If the mum is paid for the house, would the state/fair deal not be able to claim 7.5 per cent per year of the estate until her death? And thus potentially reducing substantially the estate (500k or 250k)? I might not have understood fully.
 
azerty said:
Just a question on this. If the mum is paid for the house, would the state/fair deal not be able to claim 7.5 per cent per year of the estate until her death? And thus potentially reducing substantially the estate (500k or 250k)? I might not have understood fully.
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In addition, would the 250k gift not be at risk of claw back?
 
Yes there is the risk that if your buy the house for say €500K and your Mum needs fair deal within the next 5 years there could be a claw back. It is a risk, and only you and your Mum will be able to assess that.

Brendan’s solution is the best, buy the house from your Mum, she gifts you half the value and thus you pay her half. She live with you in your house until she passes away. Then she leaves her money to your sister.

Or she can gift her the money when you pay her for the house. But that probably would not be a great idea for her as it would leave her penniless and she would have no security. You mum would need independent legal advice to ensure her interests were looked after.

Your sister cannot sell you a house she does not own. So you can’t make decisions on that basis.

You will provide your mother with a place to live and look after her in her old age so there is a benefit to your Mum in giving you the security of owning the house now.

There is a risk that the half value of the house you Mum would have in cash if the deal went through would erode in the years before she dies and you sister may perceive she got the poor end of the bargain. But she is not changing her life to look after your Mum.
 
If the mother sells the house now and has a wedge of money in the bank, would that preclude her from availing of the fair deal scheme in the future?
 
Salvadore said:
If the mother sells the house now and has a wedge of money in the bank, would that preclude her from availing of the fair deal scheme in the future?
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Not necessarily, but the funds generated by the house sale would be used and included in the calculation of how much she will have to contribute under fair deal. Hence, the more money you have in the bank, the smaller the amount the state contributes under Fair Deal and the more you have to pay
 
The house is capped at 3 years but I don't believe it is the case for any other assets she has before she enters the Fair deal. The main residence can now be sold after 3 years with a capped contribution of 22.5%.
 
People obsess over the Fair Deal Scheme.

And while having an eye on it is ok, the reality is that people should plan their affairs for their own immediate and definite future.

The OP should not do up her mother's home in the hope that she will inherit it. We already know that she has a sister who thinks that she should get her inheritance now rather than after her mother's death.

The mother might go into a nursing home or might not. If she does, it will probably be for 12 to 18 months.

Brendan
 
Peanuts20 said:
Not necessarily, but the funds generated by the house sale would be used and included in the calculation of how much she will have to contribute under fair deal. Hence, the more money you have in the bank, the smaller the amount the state contributes under Fair Deal and the more you have to pay
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So in the above scenario, the notional 250,000 the mother would receive for the sale of the house to sister#1 may well be used in the future to offset the cost of nursing home care.

This would substantially reduce the value of the eventual inheritance of sister#2. So why would sister#1 buy her out of an inheritance now that may not ultimately have much of a value?

Of course the mother could hand over the 250000 to sister#2 as soon as she received it herself but this would be taxed as a gift rather than as an inheritance.
 
Personally, I could see why the situation could create an awful lot of discord in the future. I understand that life is for living. However, we know very little about the situation. If one of the sisters buys the house at half price, she effectively inherits early while the other one could see "her potential" inheritance used for the care of the mum. I understand that one makes a life-changing decision at this point. I have no issue with the Fair Deal per se. I find that this situation could quickly become fairly difficult one way or the other.
 
azerty said:
she effectively inherits early while the other one could see "her potential" inheritance used for the care of the mum. I understand that one makes a life-changing decision at this point. I have no issue with the Fair Deal per se. I find that this situation could quickly become fairly difficult one way or the other.
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But the OP is going to care for her mother. So I presume that would leave more in the estate than if the mother recruited a carer from Home Instead.

Brendan
 
I said the situation could become fairly difficult. There would probably not be more money in the estate if the mother recruited a carer. But there could be no "notions" or "perceptions". If as strangers we think about these issues, they could also come up in real life.
 
azerty said:
I said the situation could become fairly difficult. There would probably not be more money in the estate if the mother recruited a carer. But there could be no "notions" or "perceptions". If as strangers we think about these issues, they could also come up in real life.
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Huh?
 
Salvadore said:
So in the above scenario, the notional 250,000 the mother would receive for the sale of the house to sister#1 may well be used in the future to offset the cost of nursing home care.

This would substantially reduce the value of the eventual inheritance of sister#2. So why would sister#1 buy her out of an inheritance now that may not ultimately have much of a value?

Of course the mother could hand over the 250000 to sister#2 as soon as she received it herself but this would be taxed as a gift rather than as an inheritance.
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If the house was sold and the mother retained the cash then yes, it would be used to offset the nursing home costs under Fair Deal. If the money was transferred to the sisters, then Fair Deal can look back at asset transfers over the last 5 years and include those in the calculations, so even aside from the Tax implications, it could still come in under Fair Deal.

Keep it simple, ensure your mother has a clear will made, take care of her now and divide it up when all is done and dusted
 
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