Intergenerational living

As a society, I think that we will see more multi-generational families living together. It makes sense on various levels, it provides security for families and can mean that vulnerable people aren’t living alone and dependant on the State for care in infirmity. There are lots of good positive aspects, provided that everyone gets on well and goes into the arrangement with open eyes and open discussion.

As a solicitor, I have seen many well-intentioned arrangements go wrong and I advise about the potential pitfalls and prepare legal documents to address points of potential misunderstanding in the future.

There are so many different situations that it is difficult to give general advice, each family unit is different and there is no standard formula to cover everything. I would emphasise the need for open discussion, it can be difficult in practice but it’s better to decide that it can’t work BEFORE irrevocable steps are taken, such as selling the family home and relocating.


Kim lives alone in the family home. Kim has three children and a clutch of grandchildren. Kim’s children have all moved away for jobs and won’t be returning to their home locality.

Kim’s health is good but they accept that as time moves on, their health may deteriorate and they do not wish to create any worry or burden for their children. The children say that Kim would never be a burden, but Kim is concerned.

After a discussion with the family, it is suggested that Kim sells the family home and one of their children Robin and their spouse Evelyn also sell, and a larger house is purchased with their pooled resources.

This seems like a good idea and Kim comes to me for my guidance and advice.

I am privileged that I am able to help and I mention the following;


1. It is important that Kim is protected, the main risk in relation to the couple is divorce. The matrimonial home is an asset within the divorce proceedings and Kim’s legal and beneficial interest must be defined clearly.

In practice, it means that the house is bought in the names of Kim, Robin and Evelyn as tenants in common and there is a legal Declaration of Trust setting out the interests, for example Kim owns ¼ and the couple own ¾. The Declaration can also include other terms for example regarding payment for outgoings and what happens if the parties fall out with each other.


2. If the house is simply bought in the names of the couple, Kim may be deemed to have gifted her contribution to the couple. This has a number of potentially serious tax and legal ramifications.


3. The inheritance tax position would be that in general terms the gift would be treated as a “gift with a reservation of benefit” because Kim is living in the house and therefore it is not a true gift. This means that it may be included in the inheritance tax assessment after death on Kim’s estate. It may be allowed if Kim is paying a full share of the running costs. The residential nil rate band is not available on lifetime gifts and may be lost to Kim’s estate.


4. Kim wants to leave their estate in equal shares and if their contribution to the house purchase is a lifetime gift, thought needs to be given to how to equalise the gifts to the other two children.


5. On the other hand, if there is an expectation that Robin and Evelyn will provide care for Kim if and when it is needed, Kim may wish to recognise and compensate for this in their Will. The Will MUST be kept under review, but see point 5 below.


6. Consideration needs to be given to Kim’s Will, what happens if they die before the couple? Kim will wish to balance the interests of the couple and the other two children. There are two conflicting matters to be addressed, the need for the couple to be able to stay in their home (in what is likely to be in their own later years) and the need for the other children (or their bloodline) to receive their inheritance.

This is not easy and much depends on Kim’s other assets, any lifetime gifts, and Kim’s wishes. There doesn’t need to be equality and also Kim should keep the Will under review, but see point 5 below.


7. Consideration needs to be given to what happens if Kim loses capacity to make decisions for themself. Kim should make Lasting Powers of Attorney and careful thought needs to be given to who to appoint. There could be a financial conflict between Robin and their siblings, is it reasonable to appoint them all as joint and several attorneys? Should it be an independent person? The appointment needs to work in practice and there should be a discussion. I have found over many years that if children don’t get on, they aren’t going to get on when their parent has lost capacity or died.

As a side note, there is a move to do DIY Lasting Powers of Attorney, but I would caution against this as they are crucially important legal documents and not a mere administration tool.


8. Note that a person who lacks testamentary capacity cannot make a Will and the existing Will could not therefore be changed (barring an application to Court for a Statutory Will). Kim’s Will can be drafted to cover certain contingencies and a Discretionary Will Trust underpinned with a letter of wishes may be useful.

You can see that this discussion could go on and on, there are so many different scenarios to consider, each having a set of legal points. It is not easy and there are many things that can go wrong at a future point when it is either very difficult and costly or impossible to remedy. The hurt and fall out within families is often beyond repair.


Underpinning the legal steps, is an honest and open discussion within the family and sound legal advice.


In this article, I have sought to make it age-free and gender-free. I think much of the discussion I hear and read is biased and this area is not at all based on the gender of people or age, infirmity is not necessarily linked to age at all and I am constantly amazed and inspired by my 90+ clients who are awesome in their wisdom.