My daughter and her husband have suggested giving us the money to buy our council house. We would pay them a fixed rent, but the house would be in our names and we would leave it to them in our wills. We would benefit through a reduced rent and they would end up owning the property. Have we overlooked any pitfalls?
You should draw up a declaration of trust stating that your daughter and son-in-law are entitled to the property, or the proceeds from its sale, to reflect their part in its purchase. This will protect them from, for instance, a family rift which might lead you to change your wills; or, if you had to go into a care home, from the local authority putting a charge on the property. You should also decide who is responsible for insuring and maintaining the house.