Mum needs help in retirement

[skater]

When she passes, are you likely to be the only beneficary? Thinking out loud, so this maybe somewhat flawed. If so, then maybe she sells, and buys another property like you suggested with a Granny Flat. She lives in the flat, you in the house. You pay her 'board' to live in the house (equal to what you would pay if you had bought it). This would then give her a little bit of extra income.

This would mean the asset would stay in her name, so that she would not be "deemed' to be earning a certain percentage from the proceeds of the sale. When she passes, the property would pass to you.

 

[pully]

i would suggest your mother seek good financial advice before making any decisions.
is she concerned about her situation or is that your perception?

admittedly if her only source of income is the aged pension the $200000 mortgage seems rather a lot. was the mortgage organised when she was employed or had a partner to share the load?

i agree her age maybe a factor too, you have not disclosed that as yet.

i agree with others that taking on more debt would not be in her best interests.

if she could gain another source of income it would be helpful. is employment out of the question?

at the end of the day it is her life and her decision. good luck.

regards.

 

[propertyVIC]

get proper advice

If your Mum gives you/sells at a big discount to you then the pension will probably be affected. Get professional advice.

I think the idea of taking in a boarder is a good one. Depending on the area, she might also be able to rent out parking space.

Or, if she doesn't want anyone living with her, perhaps she could rent a room as an artist's studio.

 

[marg4000]

What does your Mum want?

So far we have heard what you think she SHOULD do, but what are HER thoughts?

Not wanting to sound snippy, but I am approaching retirement and would be more than a little put out if one of my adult kids came and suggested we sell OUR home to them at half price!!!
Marg

 

[Perp]

I am approaching retirement and would be more than a little put out if one of my adult kids came and suggested we sell OUR home to them at half price!!!

Don't worry, Marg, they'll probably just suggest you go straight to the ol' folks home...

(Ducking for cover)

 

[Aaron Sice]

geez - i look forward to not being in this situation when i'm older.

i think this thread has been a sobering reminder for us all.

 

[marg4000]

Probably inevitable as both mum and dad finished up in nursing homes with Alzheimers.
I'll put it off as long as possible, though.
Marg

 

[Sunfish]

i think this thread has been a sobering reminder for us all.

It's been a that, BC. Sadly I am nearly her age but with the help of the internet I expect to muddle through.

 

[Kath Russell]

Well said Blue Card.

FYI dean75 - http://www.fahcsia.gov.au/sa/seniors/pubs/accom_choices/Pages/10_move_family.aspx#10_moving

Just been looking into the same information lately myself.

 

[Sheryn]

I like the idea of buying the property of mum at a discounted price. But say it's worth 850k and I buy it at 400k with an interest rate of 6%, that's 24k ive got to come up with. No chance.

1. How old is your Mum?????? 55, 60, 65 or 70 years old?

2. No way can you buy her PPOR for 400K when it is worth 850K you would rip your Mum off by about half a million dollars!!!

3. 100K in Super is about 4000K short for a single person who owns their own PPOR IHMO.

4. How many rooms in your Mum's PPOR?

http://www.fahcsia.gov.au/sa/seniors/pubs/accom_choices/Pages/10_move_family.aspx#10_moving

5. Above is a good read, how many brothers and sisters do you have Dean 75?


Regards
Sheryn

 

[Aaron Sice]

i think you missed the bit where he lets her live rent free while providing her a large cash buffer and using the equity left to fund the "technically" empty home by paying the mortgage with an LOC.

i thought it was a good idea personally. sh'es prob going to leave it to him anyway, but he's giving her half back now....

 

[marg4000]

i think you missed the bit where he lets her live rent free while providing her a large cash buffer and using the equity left to fund the "technically" empty home by paying the mortgage with an LOC.

What if mum wants to move?

What if there is a falling out?

What if the son's financial circumstances change?

What if (God forbid) Dean dies? And is married with children? They will have prior claim on ALL of HIS assets.

Once the asset belongs to another then mum has no more control - usually to her detriment.

Without an asset to realise a bond for a nursing home if necessary, his mother will be restricted in choice and may have to accept what she can afford, not where or what she wants.

We STILL have not heard what mum wants, only what Dean thinks is for the best.
Marg

 

[MCS_80]

^^^^^^^

What if aliens invade Earth?

A well prepared contract between Mum and Son would get around all of these obsticles. It will be difficult, however, not impossible to make it a win win for everyone involved. The emosion has to be taken out of it, that will be very hard to do with a Mother and Son relationship, but not impossible.

Cheers

Mick

 

[dean75]

Marg4000, cmon your making out i'm coming up with these options. I wouldn't dare rort my mum, please.
She is 65 years old and all she wants is to pay out her 200k mortgage and use the 1400/mth she pays the bank and put it in her pocket while keeping her pension.
Now if I can help her anyway, I will, and if by doing that it works out good for me, good. Whatever the best result for her is first then me way way second. We are 3 sons so she has us all to think about whatever she decides if anything.
http://lacextra.legalaid.nsw.gov.au/Publications/FileUpload/Doc/ImprintFile396.pdf. Some ok info I found

 

[marg4000]

Marg4000, cmon your making out i'm coming up with these options. I wouldn't dare rort my mum, please.

Dean, I have NEVER said you are trying to rort your mum.

I have asked several times what your mum wants, firstly in post #7, and this is the first time you have given the details of your mum's age and actually told us that this is what she wants.

By giving the full details you make it easier for people trying to help. At 65 your mum has hopefully 20+ years ahead of her.

I have simply pointed out some of the potential pitfalls.

I am not too much younger than your mum. I have seen the scenario you mention played out several times with varying degrees of success. In two instances it has all ended in tears, in the worst case with the parents now on the pension and in a tiny Housing Commission unit after their son-in-law's business failed. All their capital was tied up in a shared house with their daughter and son-in-law, which went to pay debts.

I stand by my suggestion that your mum seek independent legal advice.
Marg

 

[fernfurn]

This actually happened. Mum & Dad put their house in sons name. Son got killed in an accident. Wife was a total ***** and then they were all worried about what she would do regarding the house. They werent able to will it to their grandkids because dil now owns it. (Must find out if there were any more developments as it only happened about 6 mths ago) Course next scenario is, she marries someone else and its out of the family forever........

 

[MCS_80]

This actually happened. Mum & Dad put their house in sons name. Son got killed in an accident.

Good point celica.

A well thought out contract/will/plan would have to be in place before anything like this would be put in place im guessing.

ie. Son makes a will stating if he dies, the Mother gets the house back and/or it is sold at market value and proceeds are split up accordingly.

Cheers

Mick

 

[Shaneelastic]

What a classic thread, I love reading these stories,
Since your asking for opinions this is mine.

Downsize to an area your mum is comfortable with. ie where her friends are close by. Any left over should be put into super to help her supplement the pension.

Much better option than you getting your grubby hands on her assets for 400K

 

[pully]

unfortunately if she is 65 and no longer employed i think she is not able to move money into super.
to get the full aged pension her PPOR is exempt for asset testing which is good for her. but she has little income by the sounds of it.

she needs financial advice. pity it was not sort before now, or perhaps her situation changed and no plan b was in place?

 

[dean75]

i think you missed the bit where he lets her live rent free while providing her a large cash buffer and using the equity left to fund the "technically" empty home by paying the mortgage with an LOC.

i thought it was a good idea personally. sh'es prob going to leave it to him anyway, but he's giving her half back now....

Thanks bluecard this Is what I was aiming at doing if it worked.