My children have both given me £80,000 to buy a bungalow for retirement but they cannot be listed as co-owners – could their money be used towards childcare fees?
My children have both put £80,000 into buying my bungalow for retirement. I didn’t have enough money so they invested that money in a place for me to live.
We couldn’t name it together because I had to be retired to live there. How can I make sure they don’t lose their investment if I have to go into foster care for some reason.
I’m really worried that they’re losing so much money.
Property Dilemma: My children both gave me £80,000 to buy a bungalow for retirement but they cannot be listed as co-owners (stock image)
This is Money’s Tanya Jefferies responds: Your children have generously helped you to buy a suitable home for your age.
Understandably, you do not want your municipality to include its contribution in a financial assessment of your own wealth should you require care in the future.
But as things stand, your bungalow only bears your name because the retirement community you moved to only allows people over a certain age to live there.
However, there may be no age limit for ownership, just residency – you should check.
We asked an attorney experienced in welfare cases to explain your options for protecting your children’s share of your property.
Ben Tyer, Private Clients Attorney at GLP Solicitors, responds: As the bungalow is in your sole name it will be treated as your property so it will be included in any assessment of your financial means to pay for the care which will put you above the £23,250 threshold which will mean you are able to pay the full amount costs of care.
However, they say the reality is that the legal title does not reflect the true position because your children are the real owners of the bungalow (assuming they provided all the purchase monies).
When legal ownership is in the name of one person (you) but someone else (your children) enjoys the benefits of ownership, such as B. the proceeds of sale, this is referred to as “useful” property.
In these circumstances the full value of the bungalow should not be taken into account in any financial appraisal.
Ben Tyer: As you are the sole legal owner of the bungalow he will be included in any assessment of your financial means to pay for the care
But unfortunately you have said that there is no formal legal agreement that proves your children’s interest.
Providing bank statements showing the origin of the purchase monies may simply be treated by local authorities as a gift to you from your children, so it is likely to still be factored into any financial assessment.
What you and your children may have wished for is a legal declaration of actual ownership of the bungalow.
Typically this is recorded in a deed of trust which states that although you are the legal owner of the bungalow, your children, who provided the purchase money, are in fact the actual co-owners.
This arrangement is also usually reflected in the “title deeds”.
Although the purchase has already been made, it may still be possible to make this agreement.
As this will happen ‘after the event’ I recommend keeping bank statements and proof of the origin of the purchase monies and ideally keeping these with the deed of trust.
Because in the event that you require financial support from the municipality for the care, the subsequent transfer/clearing of ownership via the escrow agreement can be treated as a gift of the bungalow to your children and an attempt to dispose of an asset you need for pay nothing for the care.
This is also known as willful misappropriation which can result in you being treated as the owner of the bungalow despite the trust and being charged the full price accordingly.
In the meantime, you should check the rules for your retirement savings carefully, as there may well be no age limit for buying the property, just living in it.
In any event, it seems unlikely that what I have proposed would not be allowed by development as this would logically limit the lots to those with sufficient cash reserves to purchase the lots.
It would be wise to seek legal advice and you could discuss these issues with the attorney who handled the purchase of your property or use the Bar Association’s search tool to find another.
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