Elderly parents

[pieman]

My parents live in coastal town and are mid to late 80's. I have an undrawn LOC's of about 700k. If I lend them the money and they pay interest to me is there any down side apart from the opportunity cost of the lend to me that anyone can see? That money is set aside for ip's purchases etc so would be quite an opp cost to me.
To ease the transition the idea is to own both places as understandably, this is a big change for them. M keen as mustard Dad starting to see the benefits as he declines in health.
Have a good income (120k+) from IP's and other investments which perhaps they are best selling to fund purchase but siblings and I are keen to see them closer to us and in something that is easier to manage...ie no 800sqm of gardens. I will do anything for them but of course dont want to make it hard too hard for myself and family financially.
Im starting to think that I bankroll the move, to speed things up (as this can take a year or more) and then they start the sell down of some assets to repay me.
thoughts please

 

[Terryw]

Pieman,

I think you left out a bit of info. Are you going to lend them money to buy a house for them to live in?

If so, watch out for:
- Centrelink issues such as the effect on their pensions,
- make a written loan agreement
- register a mortgage

and,
- estate planning issues.

Make sure they have wills in place
make sure the wills take into account the loan to you

 

[pieman]

Yes will lend them the money to get them on their way rather than a mad rush to sell assets. The change from their existing living arrangements will be significant enough.
The idea would be for them to pay the interest bill so in effect I would be the bank. No centerlink issues as they have a large asset base and income

 

[Macca]

As there are others involved you are heading into very murky waters IMO.

So Many families disintegrate when money and inheritances are involved.

Maybe put everything on the market with one agent and tell them you want to sell one a year.

When the first one sells all the others are pulled except the PPOR. If you sell the PPOR no tax and sell one IP per year keeps the tax reasonable.

With that income they can easily rent something closer to everyone in the meantime.