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Ask Clare Your Own Question
Clare
Clare, Family Solicitor
Category: Family Law
Satisfied Customers: 34473
Experience:  I have been a solicitor in High Street Practise since 1985 and have specialised in Family Law for the last 10 years
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My father is in a private care home and my step mother has

Resolved Question:

My father is in a private care home and my step mother has asked me to loan her money to help cover the costs (without interest). She has suggested that the loaned money will be repaid upon her death and/or the sale of the house where she lives (jointly owned with my father). She is now living alone in a very desirable four bedroomed house (value approx. £550,000 with no o/s mortgage) and says that she does not wish to sell for sentimental reasons. However, I consider this to be only a part of the reason, the other part being that she (and her three children) realise that it is an appreciating asset. Inevitably, the house will be left to her and in turn to her three children and so, I think it only reasonable that the loan is in some way linked of the property and that, as I will be effectively enabling them to keep it, that I should also benefit from any increase in value. My question is what is the best legal framework to legalise such an arrangement. Please note that she has previously released some of the capital in the property in the form of of an equity release.
Submitted: 2 years ago.
Category: Family Law
Expert:  Clare replied 2 years ago.
HiThank you for your questionMy name is ***** ***** I shall do my best to help youIs she asking for lump sum or for monthly payments?Clare
Customer: replied 2 years ago.

Hello Clare,

She is asking for monthly payments.

Regards

Simon

Expert:  Clare replied 2 years ago.
How long have they lived in the current property?How much does she wish to borrow?
Customer: replied 2 years ago.

She has lived there for approx. 12-15 years, she wants me to contribute £500 per month for an indeterminate period ie; as long as my father needs care or until the house is sold. I think that any agreement should also stipulate 'until the house is sold, transferred or until she co-habitates but probably you can advise me what is best. Her children are all married with their own family homes.

Expert:  Clare replied 2 years ago.
is she willing to secure the loan on your father's share of the property - with you having a percentage share?
Customer: replied 2 years ago.

Hello Clare,

I don't know but I could suggest that however, it may be difficult because the full amount of the loan would not be clear from the beginning and the property is increasing in value. Also, she has already released some equity and that type of arrangement might contravene the terms of that loan.

Regards

Simon

Expert:  Clare replied 2 years ago.
You can have a private agreement between you without the Equity Release being a problem.Clearly the terms that you agree are a matter for the pair of you but there is no reason why wording which links the loan to a share of the equity shoudl not be used; and a restriction can be entered on the Title Register to protect you.Certainly the stipulation that the money is repaid when the house is Sold or Transferred or she Cohabits OR she leaves the property for more than six months would be reasonable.Having it as a formal document would protect youPlease ask if you need further detailsClare
Customer: replied 2 years ago.

Dear Clare,

Thanks, ***** ***** further question, which type of document would best cover this private agreement, deed of trust, loan agreement etc?

Thanks

Simon

Expert:  Clare replied 2 years ago.
A loan Agreement backed by a Restriction on the Register!
Customer: replied 2 years ago.

Thank you Clare.

Expert:  Clare replied 2 years ago.
You are most welcome I hope all goes well
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