Argument still raging about housing the outlaws!
Discussion
^ I'd also agree that's the best solution but there's no guarantee that the OP spending £X amount on converting the annex will lead to an equivalent rise in the value of the plot.
I think the siblings are working on the assumption that if the parents invest their money in the conversion, that the investment would be worth much much more in years to come... But what if that isn't the case?
I think if the rent situation isn't possible (despite being the best solution) then how about:
In laws fund the development, it's recorded as a gift to your wife, and when the inevitable happens years down the line, the gift is deducted from any inheritance still due to come her way. If the inheritance due is lower than the gift, then you pay the difference back into the estate... Assuming that the plan is to divvy up the estate in equal portions.
I think the siblings are working on the assumption that if the parents invest their money in the conversion, that the investment would be worth much much more in years to come... But what if that isn't the case?
I think if the rent situation isn't possible (despite being the best solution) then how about:
In laws fund the development, it's recorded as a gift to your wife, and when the inevitable happens years down the line, the gift is deducted from any inheritance still due to come her way. If the inheritance due is lower than the gift, then you pay the difference back into the estate... Assuming that the plan is to divvy up the estate in equal portions.
Steve H said:
It's never too late to change direction or make it clear that you are willing to.
If the figure you originally came up with is the minimum you considered acceptable then don't shift, don't ask for outside advice, don't negotiate with the siblings who are offering to do nowt to look after their parents and just seem to be interested in protecting their inheritances.
I'd be making it clear to the outlaws and their offspring that this is the only way you can afford to do it. Tell they are still welcome to look at other options elsewhere.
You'd need your other half onside to make this work but nothing else is going to, if the independant guy agreed with you the siblings would still say it's not right, if he says the contribution should be lower then you're forced to take less than you consider acceptable; neither one is going to give you any peace and quiet.
ETA. The "we don't understand the financial stuff" part is a copout, safe bet that they just don't want to have to make a decision against the other kids because of the grief they will get. Peacemaking at your expense.
I hear you and agree on the copping out a bit from the outlaws, but I think they are a bit naively hoping it will all get sorted out without them having to decide "against" anyone...If the figure you originally came up with is the minimum you considered acceptable then don't shift, don't ask for outside advice, don't negotiate with the siblings who are offering to do nowt to look after their parents and just seem to be interested in protecting their inheritances.
I'd be making it clear to the outlaws and their offspring that this is the only way you can afford to do it. Tell they are still welcome to look at other options elsewhere.
You'd need your other half onside to make this work but nothing else is going to, if the independant guy agreed with you the siblings would still say it's not right, if he says the contribution should be lower then you're forced to take less than you consider acceptable; neither one is going to give you any peace and quiet.
ETA. The "we don't understand the financial stuff" part is a copout, safe bet that they just don't want to have to make a decision against the other kids because of the grief they will get. Peacemaking at your expense.
Edited by Steve H on Saturday 30th April 07:55
We probably naively were hoping the siblings would listen to reason, and thought we were making progress with one of them, but he just turned round and said we should share any uplift in value of the barn over the next20 years, even though we own it and we see the contributions from the outlaws as just that, a contribution to costs, it just needs to come as a lump in advance so we don't have to borrow another huge chunk of cash (I don't like carrying the amount of mortgage I have now, let alone another 120-150 grand...)
MrChips said:
^ I'd also agree that's the best solution but there's no guarantee that the OP spending £X amount on converting the annex will lead to an equivalent rise in the value of the plot.
I think the siblings are working on the assumption that if the parents invest their money in the conversion, that the investment would be worth much much more in years to come... But what if that isn't the case?
I think if the rent situation isn't possible (despite being the best solution) then how about:
In laws fund the development, it's recorded as a gift to your wife, and when the inevitable happens years down the line, the gift is deducted from any inheritance still due to come her way. If the inheritance due is lower than the gift, then you pay the difference back into the estate... Assuming that the plan is to divvy up the estate in equal portions.
This is exactly what we think shouldn't happen because that is, net, us just paying for the barn and the outlaws living in it rent free for up to 25 years!I think the siblings are working on the assumption that if the parents invest their money in the conversion, that the investment would be worth much much more in years to come... But what if that isn't the case?
I think if the rent situation isn't possible (despite being the best solution) then how about:
In laws fund the development, it's recorded as a gift to your wife, and when the inevitable happens years down the line, the gift is deducted from any inheritance still due to come her way. If the inheritance due is lower than the gift, then you pay the difference back into the estate... Assuming that the plan is to divvy up the estate in equal portions.
schmokin1 said:
I hear you and agree on the copping out a bit from the outlaws, but I think they are a bit naively hoping it will all get sorted out without them having to decide "against" anyone...
We probably naively were hoping the siblings would listen to reason, and thought we were making progress with one of them, but he just turned round and said we should share any uplift in value of the barn over the next20 years, even though we own it and we see the contributions from the outlaws as just that, a contribution to costs, it just needs to come as a lump in advance so we don't have to borrow another huge chunk of cash (I don't like carrying the amount of mortgage I have now, let alone another 120-150 grand...)
You're doing the right things for the right reasons, draw a clear line in the sand now or you will end up regretting it. If the other siblings want to do better then let them, otherwise it's none of their business and the outlaws will need to acknowledge that.We probably naively were hoping the siblings would listen to reason, and thought we were making progress with one of them, but he just turned round and said we should share any uplift in value of the barn over the next20 years, even though we own it and we see the contributions from the outlaws as just that, a contribution to costs, it just needs to come as a lump in advance so we don't have to borrow another huge chunk of cash (I don't like carrying the amount of mortgage I have now, let alone another 120-150 grand...)
I think you need to cost out the alternatives in order to try to show your position and what exactly it is that you want.
The siblings seem to want to protect their inheritance however with care home fees at over £1000 a week, what do the alternative accommodation arrangements offer the parents? Or rent somewhere else and have home help, which is also very costly.
Just to provide a bit of balance, it is a totally natural reaction for people to want to protect any potential inheritance. Whilst at the end of the day the money can/should/will be spent on care when someone is elderly, I don't feel there's anything wrong about planning for the future. A lot of people would be struggling if it weren't for the generosity of their parents in making sure they leave something behind, and equally most parents do want to leave something to help their offspring get a step up on the property ladder, or live a more comfortable life.
It does sound like the siblings are focussed on the financial side of things, rather than discussing the important stuff like whether the parents will likely have a better quality of life because of it.
The siblings seem to want to protect their inheritance however with care home fees at over £1000 a week, what do the alternative accommodation arrangements offer the parents? Or rent somewhere else and have home help, which is also very costly.
Just to provide a bit of balance, it is a totally natural reaction for people to want to protect any potential inheritance. Whilst at the end of the day the money can/should/will be spent on care when someone is elderly, I don't feel there's anything wrong about planning for the future. A lot of people would be struggling if it weren't for the generosity of their parents in making sure they leave something behind, and equally most parents do want to leave something to help their offspring get a step up on the property ladder, or live a more comfortable life.
It does sound like the siblings are focussed on the financial side of things, rather than discussing the important stuff like whether the parents will likely have a better quality of life because of it.
schmokin1 said:
NDA said:
Agreed.
I bought my mother a house - it caused issues.
You paid for it all and you still had problems????I bought my mother a house - it caused issues.
OP, you really need to get the in-laws to MTFU and make their family aware that it is their money, to spend how they wish, and tell them how it's going to be, before you get involved any further.
They also need to make specific instructions regarding your arrangement with them and how it will be concluded, in new wills.
Again, before you get in to this any deeper.
They also need to make specific instructions regarding your arrangement with them and how it will be concluded, in new wills.
Again, before you get in to this any deeper.
Sorry if these questions have been asked but:
How many offspring do your inlaws have ?
What are the inlaws current ages and health states ?
I think you need to go down the road of getting the whole debt in your name, pay for the lot and then rent it back to the inlaws at market rates. insist they pay all bills attached to the property as if they were normal tenants.
Or, don't have them as tenants and keep it all simple, rent it to someone else at market value.
This is a total time bomb waiting to happen and if you don't sort this now you will end up in a few years down the line after deaths with having to sell up to pay the others off, meanwhile you would have cared for and paid for the oldies while the others sit back and wait for payday. If you think they are out of order now just wait until the will is read and solicitors are appointed to make you pay what they think is owed.
The siblings sound like money grabbers right from the off so protect yourself. Its a good deed you are trying to do and good deeds rarely go unpunished.
How many offspring do your inlaws have ?
What are the inlaws current ages and health states ?
I think you need to go down the road of getting the whole debt in your name, pay for the lot and then rent it back to the inlaws at market rates. insist they pay all bills attached to the property as if they were normal tenants.
Or, don't have them as tenants and keep it all simple, rent it to someone else at market value.
This is a total time bomb waiting to happen and if you don't sort this now you will end up in a few years down the line after deaths with having to sell up to pay the others off, meanwhile you would have cared for and paid for the oldies while the others sit back and wait for payday. If you think they are out of order now just wait until the will is read and solicitors are appointed to make you pay what they think is owed.
The siblings sound like money grabbers right from the off so protect yourself. Its a good deed you are trying to do and good deeds rarely go unpunished.
The rent option keeps getting suggested and probably is the best choice but it's worth recapping that in the original thread the OP said -
schmokin1 said:
The inlaws will sell their place and give all siblings an advance on inheritance, once our costs are agreed and paid.
To rent for the rest of their lives I would assume the outlaws would want to ensure that they had enough in the kitty and the early payments would be out the window. The OP may not be too worried about this but by the sounds of things it's not a solution that the siblings would be happy with or quiet about.JQ said:
Surely the answer is you pay for the works and the in-laws pay you a Market Rent, which then covers those costs.
I'm sure there are mediation services out there, but from an impartial position, the above seems to be the obvious solution.
Yep as was suggested nultiple times in the previous thread this is what should be done.I'm sure there are mediation services out there, but from an impartial position, the above seems to be the obvious solution.
It seems to fall on deaf ears though. For some reason the OP doesn't like it. Any other solution will cause him big hassles.
rb5er said:
JQ said:
Surely the answer is you pay for the works and the in-laws pay you a Market Rent, which then covers those costs.
I'm sure there are mediation services out there, but from an impartial position, the above seems to be the obvious solution.
Yep as was suggested nultiple times in the previous thread this is what should be done.I'm sure there are mediation services out there, but from an impartial position, the above seems to be the obvious solution.
It seems to fall on deaf ears though. For some reason the OP doesn't like it. Any other solution will cause him big hassles.
Reasons not to do this would be threefold, I guess. Firstly, the OP might not have the money up front to do the work. Secondly, he might be worried that the in-laws will not live long enough to give him a full/sensible return on the capital invested and then leave him with a granny annex he doesn't then need / can't sensibly rent. Finally, wouldn't it be worse from a tax perspective? As long as the in-laws live seven years, the capital is a tax free gift. If he takes a market rent, he'll pay tax at 45% (PH marginal rate) on it. If it takes him over the threshold where he starts losing his personal allowance, it is even worse than that.
The reality is that there is something missin from this thread and the earlier one.
If the Inlaws are downsizing and giving equal lumps of cash in advance to their three children then it is obviously irrelevant what those children do with that money. Some may invest it, others could spend it on partying. It doesn't matter. That money has been given away and no longer forms any part of the estate.
So, should one of the children use that money to extend their home then that is totally irrelevant.
Now, when it comes to where the inlaws will live after downsizing then I would say that there is scope for negotiation if they plan to live in the extension. There's no commercial need to do so but there is the practical need.
Yes, you'll be getting money from them for the rent but if the other two siblings have a problem with their parents paying rent then the three children can pay the rent in the parents' behalf.
Yes you are going to get vast amounts of free childcare. Well there is a very good argument to negotiate a rent reduction based around the commercial cost of that. And then there is the simple matter that when the tables turn and they enter their palliative stage then it will be you and your wife doing that for free and the other two will not be doing anything.
And whatever the outcome you will be accused of stealing their inheritance. It's that simple. You can say or do whatever you like but once the parents die you will be accused of milking all the inheritance. All the ice creams your children got that theirs never did because they never had any involvement etc etc. Whatever happens you have that coming, regardless.
So, you either tell your inlaws to go and live on their own or with one of their other children or you accept the trade that you'll get free childcare and then have to give free palliative care but you'll never see their other children again.
Personally, I would wrap everything up legally and have the inlaws onsite and happily never see the other's again. They've shown their hand early and to me I would have cut them out by now.
But can you confirm that what you have said so far is exact? Ie will the advance inheritance be split equally and can you deliver a legally habitable and commercially rentable annex with just that advance gift? Or is the proposed deal a little more complex and this the other siblings have a legitimate cause to question the plans?
If the Inlaws are downsizing and giving equal lumps of cash in advance to their three children then it is obviously irrelevant what those children do with that money. Some may invest it, others could spend it on partying. It doesn't matter. That money has been given away and no longer forms any part of the estate.
So, should one of the children use that money to extend their home then that is totally irrelevant.
Now, when it comes to where the inlaws will live after downsizing then I would say that there is scope for negotiation if they plan to live in the extension. There's no commercial need to do so but there is the practical need.
Yes, you'll be getting money from them for the rent but if the other two siblings have a problem with their parents paying rent then the three children can pay the rent in the parents' behalf.
Yes you are going to get vast amounts of free childcare. Well there is a very good argument to negotiate a rent reduction based around the commercial cost of that. And then there is the simple matter that when the tables turn and they enter their palliative stage then it will be you and your wife doing that for free and the other two will not be doing anything.
And whatever the outcome you will be accused of stealing their inheritance. It's that simple. You can say or do whatever you like but once the parents die you will be accused of milking all the inheritance. All the ice creams your children got that theirs never did because they never had any involvement etc etc. Whatever happens you have that coming, regardless.
So, you either tell your inlaws to go and live on their own or with one of their other children or you accept the trade that you'll get free childcare and then have to give free palliative care but you'll never see their other children again.
Personally, I would wrap everything up legally and have the inlaws onsite and happily never see the other's again. They've shown their hand early and to me I would have cut them out by now.
But can you confirm that what you have said so far is exact? Ie will the advance inheritance be split equally and can you deliver a legally habitable and commercially rentable annex with just that advance gift? Or is the proposed deal a little more complex and this the other siblings have a legitimate cause to question the plans?
Hi all
I wasn't keen on the rent option initially because I didn't want to carry a load more debt and a heap of money would go out of the estate to pay interest, and I would be passing on that cost to the outlaws, leaving less all round for any final inheritance for all three siblings.
This is the way I had hoped it would work:
Outlaws pay above sum up front, in advance, as a contribution to our costs of buying a bigger property than we otherwise would have, ie one with an annex (it's our capital that is used to buy the property, the outlaws do not own any portion of the property, nor are we offering to sell any portion, as I don't see why we should stump up a lump sum to the siblings when the outlaws vacate the annex, just to stay on a property we currently own). This lump sum enables us to convert the barn, and the outlaws would have a pretty strong say in the spec and finishes, as a side benefit of paying up front. If you want to call the up front payment as payment in lieu of rent, fair enough, I don't see it makes much difference...The benefit is as above, no extra debt for us or for the outlaws no extra interest to be covered, against piecemeal payments.
Once barn is ready, outlaws sell house, freeing up capital for an equal split of however much they want to release. This split does not involve deducting from our share any money we had up front. The up front money is a contribution to costs, not an advance of inheritance, the split comes after these costs are covered.
The outlaws effectively get a lifetime lease, we would take no payment while they are in there, and also pick up the cost of renovating the barn to rentable standard when they vacate (remember this might be after 20 years or more). Also remember we are committing to provide them with accom for the period and can't just sell up and move willy nilly!
The sum we are asking for up front is about 1/3 of what the open market rent would be over a 20 year period. The outlaws are in good health, and at least one of them could be expected to live another 20 years. We said to the siblings if they both die or have to go into care homes in short order then we will pay back a sensible amount pro rata- I don't have a problem with that because we could then rent it out to cover our costs.
Anyway, we might have to go down a develop it ourselves and charge some rent model, or call the initial payment an interest free loan to be progressively written off as the years tick by, if we can't get any sensible agreement with the siblings....
If we have to get a mediator, fair enough (hence this follow,up thread) but either way the missus and I have to be reasonably happy with the financial arrangement or it won't happen.....
Cheers all
Schmo
I wasn't keen on the rent option initially because I didn't want to carry a load more debt and a heap of money would go out of the estate to pay interest, and I would be passing on that cost to the outlaws, leaving less all round for any final inheritance for all three siblings.
This is the way I had hoped it would work:
Outlaws pay above sum up front, in advance, as a contribution to our costs of buying a bigger property than we otherwise would have, ie one with an annex (it's our capital that is used to buy the property, the outlaws do not own any portion of the property, nor are we offering to sell any portion, as I don't see why we should stump up a lump sum to the siblings when the outlaws vacate the annex, just to stay on a property we currently own). This lump sum enables us to convert the barn, and the outlaws would have a pretty strong say in the spec and finishes, as a side benefit of paying up front. If you want to call the up front payment as payment in lieu of rent, fair enough, I don't see it makes much difference...The benefit is as above, no extra debt for us or for the outlaws no extra interest to be covered, against piecemeal payments.
Once barn is ready, outlaws sell house, freeing up capital for an equal split of however much they want to release. This split does not involve deducting from our share any money we had up front. The up front money is a contribution to costs, not an advance of inheritance, the split comes after these costs are covered.
The outlaws effectively get a lifetime lease, we would take no payment while they are in there, and also pick up the cost of renovating the barn to rentable standard when they vacate (remember this might be after 20 years or more). Also remember we are committing to provide them with accom for the period and can't just sell up and move willy nilly!
The sum we are asking for up front is about 1/3 of what the open market rent would be over a 20 year period. The outlaws are in good health, and at least one of them could be expected to live another 20 years. We said to the siblings if they both die or have to go into care homes in short order then we will pay back a sensible amount pro rata- I don't have a problem with that because we could then rent it out to cover our costs.
Anyway, we might have to go down a develop it ourselves and charge some rent model, or call the initial payment an interest free loan to be progressively written off as the years tick by, if we can't get any sensible agreement with the siblings....
If we have to get a mediator, fair enough (hence this follow,up thread) but either way the missus and I have to be reasonably happy with the financial arrangement or it won't happen.....
Cheers all
Schmo
schmokin1 said:
Outlaws pay above sum up front, in advance, as a contribution to our costs of buying a bigger property than we otherwise would have, ie one with an annex (it's our capital that is used to buy the property, the outlaws do not own any portion of the property, nor are we offering to sell any portion, as I don't see why we should stump up a lump sum to the siblings when the outlaws vacate the annex, just to stay on a property we currently own). This lump sum enables us to convert the barn, and the outlaws would have a pretty strong say in the spec and finishes, as a side benefit of paying up front. If you want to call the up front payment as payment in lieu of rent, fair enough, I don't see it makes much difference...The benefit is as above, no extra debt for us or for the outlaws no extra interest to be covered, against piecemeal payments.
You have answered the question yourself about why you have to "stump up a lump sum... just to stay on a property we currently own"... because they might die far in advance of "spending" the equivalent value of rent.e.g. Outlaws spend £150k doing up the annex and die a year later.
You are sitting pretty on a property you own but is far better than otherwise.
And calling it a "contribution to our costs of buying a bigger property" is just guaranteed to goad the siblings FFS!!!
1. You own the place outright. That was your choice. And you have paid/are paying for it.
2. You CAN pay to make the annex habitable and rent it out to randoms. That is your very real opportunity cost.
3. But you want to let the outlaws live there. Your and their choice. They have to live somewhere. Rent is the only OBVIOUS way to make the finances simple and above board, with literally no complicated asset-appreciation, net-present-value, long-lease estimation required.
Schmo - interest costs are almost nothing.
Remortgage and rent to them.
None of this is remotely sensible but of all the non-sensible suggestions, this is the only one that has a fart-in-a-hurricane's chance of keeping everyone happy.
Oh and for the record, 1/3 of the value of 20 years' rent is ridiculously low.
You are taking a massive punch to the balls AND your in-laws (siblings) think they are getting ripped off because they are financial retards.
Again you need to keep it as clean as possible.
Charge them market rent. End of story.
You are taking a massive punch to the balls AND your in-laws (siblings) think they are getting ripped off because they are financial retards.
Again you need to keep it as clean as possible.
Charge them market rent. End of story.
walm said:
You have answered the question yourself about why you have to "stump up a lump sum... just to stay on a property we currently own"... because they might die far in advance of "spending" the equivalent value of rent.
e.g. Outlaws spend £150k doing up the annex and die a year later.
You are sitting pretty on a property you own but is far better than otherwise.
You missed the bit about us paying it back pro rata if this very thing happens!e.g. Outlaws spend £150k doing up the annex and die a year later.
You are sitting pretty on a property you own but is far better than otherwise.
Otherwise, I agree with you but charging them rent will be a non starter too as that will be "profiting"!
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