Would you buy out your parents home in this scenario?

Okay I think I have got it now. You want to "protect your inheritance" by having your father give you his equity in his house. In other words, you want "your inheritance" now.

Is he on a pension? If he is you need to be aware of this:

*********************************
Seling or giving your home to someone else for less than market value

You are free to give any of your assets away, including your home. However it could mean that you lose your entitlement to the pension. Centrelink has very strict limits on how much of your assets you can 'gift' before your pension will be affected (the 'gifting rules'). You can give away assets of $10,000 in a financial year, with a limit of $30,000 over a 5 year period. Any assets you give away over this amount will be treated as a 'deprived asset' for 5 years from the date of the gift.
*********************************

http://www.legalaid.nsw.gov.au/publications/factsheets-and-resources/your-home-and-the-age-pension
 
I have to admit this is why I first thought it was a good idea but after considering the risks I quickly had more reasons to not use the equity.
Also, I am a firm believer in not mixing investments and family/friends. I've also lurked enough times on forums to see the disaster it brings. I can't even say why I'm considering it in this case but my gut just doesn't feel right about it this whole thing to be honest. I guess before I say I'm not doing this I just want to be sure that I've explored every possible option available so I don't feel so bad about it later.

RyanC, well said. it is very easy for us (me) to comment on your situation. I do not envy the position you have been put in. I wish you all the best and I hope everything works out for you and your family.
 
I had one parent who used her head for decision-making and another parent whose brain was located elsewhere. Your dad has made his bed now.
Time for you and your sisters to move on and make your own money. Don't worry about this 'inheritance' - that's his and you can do better anyway.
Use your head :cool:

+1...


My two sisters and I will share this our only inheritance eventually.


Ryan.


You want to protect YOUR inheritance!

You are not protecting your dad.

Very selfish of you.
It's your dad's home.
It doesn't matter who he would spend his life with.

You are imagining too much drama.
Go on and make your own money and life.
 
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I have to admit this is why I first thought it was a good idea but after considering the risks I quickly had more reasons to not use the equity.
Also, I am a firm believer in not mixing investments and family/friends. I've also lurked enough times on forums to see the disaster it brings. I can't even say why I'm considering it in this case but my gut just doesn't feel right about it this whole thing to be honest. I guess before I say I'm not doing this I just want to be sure that I've explored every possible option available so I don't feel so bad about it later.

If I was in the same boat I'd probably want to do the same to protect my old man from himself and look after my family (being him, I and my sisters), after all if it all goes south, he may wind up living with one of us.

You'd be kicking yourself if you didn't try and look after your family and explore the options when you had the opportunity

The Family home may not even be a good investment property and without this situation you may not even consider buying such a property, but that's not what this is about

Then again it may all go swimmingly well, you wind up with some new additions to the family and they live a long and fruitful life together
 
Okay I think I have got it now. You want to "protect your inheritance" by having your father give you his equity in his house. In other words, you want "your inheritance" now.

Is he on a pension? If he is you need to be aware of this:

*********************************
Seling or giving your home to someone else for less than market value

You are free to give any of your assets away, including your home. However it could mean that you lose your entitlement to the pension. Centrelink has very strict limits on how much of your assets you can 'gift' before your pension will be affected (the 'gifting rules'). You can give away assets of $10,000 in a financial year, with a limit of $30,000 over a 5 year period. Any assets you give away over this amount will be treated as a 'deprived asset' for 5 years from the date of the gift.
*********************************

http://www.legalaid.nsw.gov.au/publications/factsheets-and-resources/your-home-and-the-age-pension

He is on a pension! Great piece of information. Thanks.

You want to protect YOUR inheritance!

You are not protecting your dad.

Very selfish of you.
It's your dad's home.
It doesn't matter who he would spend his life with.

Admittedly, there is a minuscule part in me that's being selfish. If being a little selfish leads me to get the right answers and protect 30+ years of both my parents hard work when they were together then I'm guilty as charged.
If there is even a small chance I believed this was a spend his life together kind of relationship then I'd openly welcome a new member to our family, drama free. Sadly, it's not and I can't protect my dad from a stupid decision and the heartbreak and regret he will feel when it falls apart.
 
Your father is not Hancock. Your father is on pension. His house still have mortgage on it!

You under estimate your own father. Would you rather have your father sitting at home alone, staring at wall, no one to talk to waiting for his children to visit him etc, so that you can have your inheritance?
Do you really think that this lady will be very smart and have fully understanding on Australian legal system on taking your inheritance?

The way I see it, is a win-win situation for both your father and her. I don't look down on people because they want to live in Australia. If she can make him feel young and wanted, then let him be.

Inheritance is not an entitlement that you MUST have and protect while your father is still alive.
 
I think he is just trying to look after his Dad and is very worried about the motives of the new wife. A lot of harsh comments about his motives.

I would have the same concern if my 65 year old father was about to import a 25 year old girlfriend. Obviously the transactions has two sides to it but it would seem unfair for the new wife to pick up the 'family' wealth after a very short marriage if something bad was to happen (death or divorce).

Why not just suggest a pre-nup? I am not a lawyer so dont know the effectiveness of this.
 
I will leave aside the fact that the property belongs to your father and he is entitled to bequeath it to whoever he chooses.

And at around 65 years of age, statistically your father has 20 years left to live. A long time to be lonely - and who is to say this marriage won't last.

So you go ahead and have the property in your name. This action protects your interests, but does absolutely nothing for your sisters (unless all three names go on the title. )

Legally it is yours. You can do whatever you choose with it.

Unless your father sells it to you for full market value there will be a pension reduction which may impact on his quality of life.

You should consider what you can do to protect your sisters' interests in the event if your possible death. If you have kids, things can get very messy and it could well be that your sisters miss out entirely regardless of what is in your will. A relationship breakdown will have similar consequences.

Before acting I suggest you get legal advice.
Marg
 
Just to be clear and before anymore harsh comments, my motives are well intended and within my father's wishes. I did not initiate this to get my hands on my 'inheritance' early but I am the only one in my family willing to at least explore it because I understand and have the patience for money and legal matters.
I only began looking into this on my father's asking us to do so and saying to us he "wants the house to only be shared amongst his three kids." His exact words, not mine. He has worries about his new partners possible intentions, but is torn between head and heart.

I appreciate all the responses and have made appointments to talk with a lawyer and accountant to get proper advice. However with all I've learnt in and out of this forum I'm leaning towards not going ahead with it because of the risks and legalities involved. Difference will be I can explain to dad why I'm not doing it rather than just a giving a no without an explanation.
 
Hi Ryan,

As you have previously stated that Dad was keen to do something to protect the house and you are doing the right thing seeking a broader viewpoint on SS I do think some of the posts are not helpful.

Dad may get lonely and she may be excellent company for him, unfortunately the odds don't favour that outcome. I see similar couples often that are married but far from happy, the younger ones seem to have more hope but if she is under 40 then it is highly likely to be just a grab for Australian citizenship and his money.

It is quite likely she will try to get pregnant and that will obviously change everything, I think Dad needs to be spoken with and all this pointed out to him. Perhaps you need to take him with you to the lawyer and hear from them just how many problems may be created for his existing family.

After all this, it then becomes Dad's decision, does he tell her not to come and then start to read the Seniors newspaper lonely hearts section or if he still wants her here then so be it.

I know a few people who have found new friends in the Seniors newspaper, there are a Lot of lonely ladies out there.
 
I'd actually be buying from him at the price of the outstanding mortgage owing and associated costs to transfer title to me.

Sounds like a great deal for your dad. He get's a shitty $100k (or the bank does) and still has to pay you 300-400 per fortnight.

Are you sure it's his future bride that is trying to rip him off?
 
Okay I think I have got it now. You want to "protect your inheritance" by having your father give you his equity in his house. In other words, you want "your inheritance" now.

Is he on a pension? If he is you need to be aware of this:

*********************************
Seling or giving your home to someone else for less than market value

You are free to give any of your assets away, including your home. However it could mean that you lose your entitlement to the pension. Centrelink has very strict limits on how much of your assets you can 'gift' before your pension will be affected (the 'gifting rules'). You can give away assets of $10,000 in a financial year, with a limit of $30,000 over a 5 year period. Any assets you give away over this amount will be treated as a 'deprived asset' for 5 years from the date of the gift.
*********************************

http://www.legalaid.nsw.gov.au/publications/factsheets-and-resources/your-home-and-the-age-pension

A granny flat interest arrangement is something that allows such a large asset transfer with minimal or no impact on pension eligibility. See http://www.humanservices.gov.au/customer/enablers/assets/granny-flats
 
Hi Ryan,

As you have previously stated that Dad was keen to do something to protect the house and you are doing the right thing seeking a broader viewpoint on SS I do think some of the posts are not helpful.

Posting on a public forum, I was prepared to take the good with the bad. Fortunately, there has been many helpful suggestions that I can discuss with professionals so it's been worthwhile sharing.

A granny flat interest arrangement is something that allows such a large asset transfer with minimal or no impact on pension eligibility. See http://www.humanservices.gov.au/cust...s/granny-flats

Another gem. Cheers!
 
You and your dad must get legal advice. This sounds like an under market value transaction designed to defeat creditors and defeat the family law courts. The property could be attackable by someone.

If you dad died within 3 years, or possibly more, the property could still form part of his estate too.

And what about your siutation for - family law, asset protection on death, bankruptcy, incapacity etc.
 
The gold mine for the spouse-to-be in this situation as portrayed by Ryan C is actually the lifetime of welfare and benefits which comes with Australian residency.

In today's values a women in her early 30s outside the workforce who has two children stands to receive well over $1 million in welfare and benefits during her life in Australia.

You can live as a "poor" person in Australia yet be living like you are wealthy compared to the life you have left behind.
 
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Ryan C it might have been better to frame your concern as being a desire to preserve and protect your father's assets to make sure he doesn't end up living in a caravan or with one of his children rather than frame the issue as being about "your inheritance".
 
Hey Ryan,

Sounds like a tough situation. I think getting family law advice is sound advice.

The following is my thoughts and is not advice to you but something for you to explore.

What about putting the house in a family trust? Your father can continue to live and enjoy the house for his lifetime only. The three children are the trustees and you have four beneficiaries. Not 100% sure how the trustee/ beneficiaries would play out but just an idea.

I assume he will continue to pay for the mortgage only! This protects the house from being sold or the proceeds from going to the new partner. This forms part of the pre-nup and she is aware of it before she enters into the marriage/ in person relationship.

People setup family trusts all the time to stop children's partners from getting access to family money so why not use it this way? If it is legal plausible.

Please seek legal/ accounting advice before anything else.
 
Here is the best advice you will get hands down.
Get on the phone and call someone like TerryW who deals with this most likely everyday. All the responses you will get are peoples thoughts and whilst some have been constructive, others not, ultimately they mean nothing to the ACTUAL situation.

If your dad generally is concerned and wants the money to go to his kids and you seem the most capable of helping then why have the two of you not gone and seen a professional?

This is not a "What suburb do you think has good growth potential" topic, this is a very serious matter with potentially huge issues for all parties involved.
 
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