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Financial dilemma after death of FIL

(34 Posts)
DILimprover Wed 17-Feb-21 18:53:47

My FIL has recently died. My MIL has a tiny pension, but owns (outright) two properties - the 4-bed detached house she lives in and a small flat (in a much less expensive part of the UK) that is rented out. We don’t know in detail about their finances, but roughly know the rental income, which will make up the main source of funds for my MIL to live on. We think she may have about £600 pm, with smallish (several thousand) savings. She lives a frugal lifestyle, but it doesn’t seem a lot to live on. The council tax where she lives in the SE is £3000 pa, but she will now be eligible for the single person discount.
When my FIL was alive he looked after the finances and used to say “You’ll have to look after us (financially) when we are older”.
There are two children, my husband and an older brother, also married with children.
I feel sorry for my MIL. Difficult time anyway, but I can imagine that worrying about finances on top of everything else must be stressful.
My husband’s brother (from right after my FIL died) was asking whether she will move out of her house. Understandably I think she found this quite upsetting. My hubby and I talked offline and I recommended that he should just reassure her that there is no need to make any rushed decisions and definitely stay put for a few months to see what the new costs/outgoings are for living alone and also what the income will be when we understand how much pension will be passed on from my FIL. If there is a small shortfall, I said to my husband that we can make up the difference.
If there is a big shortfall, I suggested to my husband that she could always move out of the 4-bed and live in the flat (which is close to family and old friends) for several months or a year or so. In view of the size and location disparity I think she could earn £1000 extra per month, which could build a buffer and savings to then allow her to move back to the 4-bed and would enable her to live without selling the properties.
Here is the bad bit (deep breath)... I am not keen on providing long term financial support (beyond £50-100 per month) to my MIL. We have zero savings, but a relatively good income (which goes on our three kids and enormous mortgage which we took on to buy a family home just outside London). We are not profligate, have camping holidays (!) and rarely eat out, but we do provide the kids with extra opportunities (swim lessons, private music and group drama lessons etc) and I see what a huge difference this makes to their lives. It sounds really mean spirited of me not to want to help/support, but my husband and I work so hard to give the kids these extra opportunities which they really appreciate and I have not ever factored in financing my MIL through the last 20 years of her life. My husband had no financial support as a young adult (I assume money was always tight) and he worked holiday jobs and took on student loans to get through university.
So my question is does anyone have experience of this kind of situation? Any recommendations or thoughts of how to help without depriving our own kids of the extra opportunities I would like to provide for them?
How much do you need to live a comfortable life as a pensioner?
My MIL is a private person. Should I or rather my hubby raise the solution of swapping properties to rent for a short period or is it none of our business?
Help please!

suziewoozie Wed 17-Feb-21 19:02:06

You are not bad, mean spirited nor have to justify why you wish to prioritise your children over your MIL. She has choices to realise cash which is more than some older people have. It was their responsibility to plan for what is not a rare occurrence. If she asks for advice you can offer it or even ask if she needs advice.

Blossoming Wed 17-Feb-21 19:03:02

I think your MiL should speak to a good financial adviser. Age Concern is a great place to start.

DILimprover Wed 17-Feb-21 19:08:13


DILimprover Wed 17-Feb-21 19:09:37

I didn’t know about the age concern financial advice. She might find that really helpful - I will certainly pas that on. Thanks

Hithere Wed 17-Feb-21 19:14:51


I dont blame you for not wanting to support your mil financially. Depending on your age, she has 2+ decades in this earth.

The good news is that she has assets.

I think you should sit down in a month or two max with her and make a spreadsheet with her monthly expenses and value of the assets to make educated decisions about her financial future.
She should also receive some financial education so she can take care of her own finances.

GillT57 Wed 17-Feb-21 19:29:58

As your MIL sounds as if she is, asset wise at least,comfortably off there is no reason why you should make up the shortfall. They failed to make provision for their retirement and this is neither your fault nor responsibility. Depending upon where the rental property is, I would say that a rental income of say £700 per month in addition to her pension is adequate in the short term and many manage on less. Your BIL is possibly tactless but correct that your MIL may have to sell up and buy something she can afford.

PamelaJ1 Wed 17-Feb-21 19:32:43

Could you leave her a little time to adjust to being a widow before making big decisions?
If she is getting rent from a property and a pension she should have more than £600. Perhaps she isn’t getting a pension yet?
We left my mum for a year. During that time she decided herself that she needed something smaller and more easily managed. Perhaps your MiL will too.
She may decide to sell the house and live in the flat whilst she looks for something she wants to live in.

Cabbie21 Wed 17-Feb-21 19:33:37

Excellent advice already given.
There is no reason why you should need to support your MIL financially to the detriment of your children when she has such assets.
I am wondering what your father in law’s will stated and whether he did anything to mitigate any inheritance tax which may be due. It is possible that having to pay this may force a rethink about selling one of the properties.
Did he have any insurance policies which will pay out?
Your MIL may be entitled to more State Pension, based on her husband’s pension contributions. It is worth checking.
If there is a need to cover any shortfall then surely this should be shared equally between the two brothers, otherwise it is not fair.
Finally your MIL will probably need to make a new will.
But first it is time to grieve, to gather information, then take advice.

FlexibleFriend Wed 17-Feb-21 19:35:08

She could always take in a lodger or two to help with the finances and companionship.

Peasblossom Wed 17-Feb-21 19:37:11

This is a muddle but I don’t think you’ll solve it by swapping properties. Letting a property nowadays is complicated. There are legal requirements which are more stringent than living in a property you own. Gas safety checks, electric checked, Legionnaires disease assessment, insulation requirements to name a few. You will have to decide whether to use a letting agent or take the time and effort to keep up to date with changing legal requirements. You will also need Landlords insurance. I don’t think you would end up with much money from a one year let.

Also bear in mind that even if you and the tenant sign a fixed term lease that doesn’t mean you can require them to leave the property when you want to move back in. It could involve going to court to regain possession.

I wish I had some other ideas for you but just wanted to make you aware of some of things letting involved.

geekesse Wed 17-Feb-21 19:38:48

I cannot imagine why a widowed elderly lady would need a detached four-bedroom house and a flat. If letting the flat is a main source of income, that bit makes sense. It’s not a great idea to migrate between the two properties and rent out the currently empty one - I can’t imagine there’s much of a market for short-term lets of a large house full of someone else’s furniture and knick-knacks, except possibly to students who would probably wreck the place. The legal obligations of a landlord of a large furnished property would be a headache - maintenance, safety certificates, insurance etc.

Surely after a decent interval has elapsed, she should downsize. This will massively reduce her outgoings, and she can use the balance from the sale of the house to generate a little extra income. She may be due something from her husband’s pension, in addition to any pension/s she has in her own right.

I do not think for one moment that you and your husband should even consider underwriting the extravagance of her remaining in her large house for more than a few months. You aren’t being mean, you are being prudent.

Both her children and she would be wise to sit down together with an independent financial advisor to review her financial position and consider options.

welbeck Wed 17-Feb-21 19:51:39

Cabbie, no IHT is due, as was spouse's estate.
this from google:
Couples. People who are married or registered civil partners do not have to pay any Inheritance Tax on money or property left to them by their spouse. The rules for couples mean it is usually best for them to leave everything to each other. Everyone can leave up to £325,000 free of IHT

welbeck Wed 17-Feb-21 19:55:01

i also think the idea of moving into the rental flat etc is not a good one. apart from all the LL's liabilities, and whether there is a market for large rental properties, short term, there is the very real problems and cost of ousting sitting tenants.
far too much stress and uncertainty at that stage of life.

Cabbie21 Wed 17-Feb-21 20:08:53

Thanks welbeck, re IHT. I thought not but I felt the situation was not entirely clear.

GrannyRose15 Wed 17-Feb-21 21:15:00

Swapping properties is not a good idea especially as this would mean changing areas.
Leave your mil be for a while. It may turn out alright in the end and she may just be panicking about money. If she doesn't
have much experience with money this is understandable.
It is not wrong to prioritise your children over your mil.
She needs to get sound financial advice.

DILimprover Wed 17-Feb-21 21:25:39

Such good advice and lots of things I hadn’t considered. From all your posts, it does seem like my idea for swapping properties would be not so practical and more complicated in practice. FYI she has basically no/minimal state pension as she opted out of NI contributions for a number of years. I know it seems a bit unnecessary living in a 4-bed (though it’s detached it is a small ish town house), but my MIL and FIL worked so hard to buy the house and it is where they shared most of their life together. It is around the corner from my BIL, a safe area with good long term neighbours and within walking distance of shops, which is likely to become necessary as she now has cataracts. We both would feel sad if she was forced to leave through a slight shortfall in income. It sounds like a good plan to let her grieve for a month or two and then sit down to really understand the finances with professional help/advice. You have all helped me to feel that it is not my/our responsibility and that is freeing as I think you can’t help but feel a duty to a vulnerable relative. Thanks all. X

GillT57 Wed 17-Feb-21 21:26:10

Apart from anything else, swapping properties is very unfair on the tenant who is currently living there.

NellG Wed 17-Feb-21 21:35:40

Has your MIL asked for your financial help and advice regarding her future? If she hasn't I wouldn't impose it. Getting on in years doesn't mean people become incompetent and she may have thoughts and plans of her own regarding her future.

It sounds as though you mean well, and I think it's lovely that you want to try and help her - but in all honesty most help is better appreciated when it's sought. Maybe for now just let her know you are there for her should she needs your advice and support. You say they were hard up when your husband was young, then she's probably very adept at managing on very little. I say give her the chance to come to you should she need to.

Shandy57 Wed 17-Feb-21 21:38:48

Your MIL will be in a fog of grief for some time, and definitely shouldn't be considering any big decisions for at least the first year. Do you know if she is eligible for the Bereavement Allowance?

Floradora9 Wed 17-Feb-21 21:40:54

Am I missing something ,why can the flat not be sold to give her a good nest egg ?

DILimprover Wed 17-Feb-21 21:50:00

Oh sorry if I wasn’t clear - I would never suggest evicting anyone. I was thinking she would be fine in the medium term and when the flat tenant leaves of their own accord, that might provide a good opportunity to move into the flat for a bit while the house is put up for short term rental. Short term rentals are fairly popular for families who need a bridging property between selling and buying- we have done it ourselves. You pay a slight premium to curtail the rental period compared with a long term let but it is worth it to know you are not tied in and free to move on quickly.

Chardy Wed 17-Feb-21 21:50:44

Bereavement Allowance is a lump sum of £2500 and 18 monthly payments of £100 (as there are no small children).
This may take the pressure off all of you for a while.
Please don't sacrifice your family's finances.
I wish you and hubs good luck. This is a difficult situation.

Chardy Wed 17-Feb-21 21:51:26

Apply as soon as possible or you can lose some if the monthly payments

DILimprover Wed 17-Feb-21 21:52:07

Re selling the flat, it doesn’t have a huge value. At least as a rental it is both an appreciating asset and pretty much sole source of income. Thanks