My children gave me £80,000 to buy a retirement bungalow but they cannot be listed as co-owners, could their money be taken as care expenses?
My children have invested £80,000 in the purchase of my retirement bungalow. They didn’t have enough money, so they invested it in a place to live.
We couldn’t put it in a joint name because I had to be a pensioner to live there. How can I make sure they don’t lose their investment if for some reason I have to go to care?
It really worries me that they lose such a large amount of money.
Ownership dilemma: My children gave me £80,000 to buy a retirement bungalow but they cannot be listed as co-owners (stock image)
Tanya Jefferies of This is Money responds: Your children have generously helped you buy a house suitable for your old age.
You understandably don’t want your local authority to include your contribution in any financial assessment of your own assets should you need care in the future.
But as it is, his bungalow is only in his name, from the looks of it because the retirement complex he’s moved into only allows people over a certain age to live there.
However, it may be that there is no age limit for the property, only for the residence; you should check this twice.
Ask an experienced welfare attorney to explain your options for safeguarding your children’s ownership of your property.
Ben Tyer, private client attorney at GLP Solicitors, replies: As the bungalow is in your sole name, it will be treated as if it were yours, 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 that will classify you as able to pay in full. cost of care.
You say, however, that the reality is that the legal title does not reflect the true position because your children are the true owners of the bungalow (assuming they provided all the purchase money).
When the legal property is in one person’s name (you) but someone else (your children) enjoys the benefits of the property, such as the proceeds of the sale, this is called ‘beneficial’ ownership.
In these circumstances, the full value of the bungalow should not be taken into account in any financial evaluation.
Ben Tyer: As you are the sole legal owner of the bungalow, it will be included in any assessment of your financial means to pay for care.
But unfortunately you have said that there is no formal legal agreement that demonstrates the interest of your children.
The production of bank statements on the origins of the purchase money may simply be treated by the local authority as a gift from their children, so it is still likely to be included in any financial assessment.
What you and your children may have wanted is a legal statement about the actual ownership of the bungalow.
This is usually recorded in a deed of trust which states that although you are the legal owner of the bungalow, your children, having provided the purchase money, are in fact the underlying co-owners.
This arrangement is also usually reflected in ‘title deeds’.
Although the purchase has already been made, it may still be possible to get this deal going.
Since this will be ‘after the event’, I recommend keeping bank statements and evidence of the source of the purchase money and ideally keeping them with the deed of trust.
This is because, should you require financial support from the local authority for care, the late change/clarification of ownership through the trust agreement may be treated as a gift of the bungalow to your children and an attempt to Get rid of an asset so you don’t have to pay for care.
This is also known as willful asset forfeiture, the possible result of which is that you will be treated as if you still own the bungalow despite the trust and you will be charged the full price.
In the meantime, you should carefully check the rules at your retirement development, because there may be no age limit on buying the properties there, just living in them.
In any case, it seems unlikely that what I have proposed would not be allowed by the development, as it would logically be limiting the properties to those who have enough cash reserves to purchase the properties.
It would be wise to obtain legal advice and you may want to discuss these issues with the attorney who handled your property purchase or use. the Law Society search tool to find another.