Inheritance question

My MIL has had her 96 year old mother move into a nursing home recently. Her Moms property is currently being rented by her grandson with the aim of purchasing it once she passes away. First part of the question is is this ok to start with or would it be better to sell the property now while the grandmother is still alive? Second part is once sold and the proceeds split as inheritance equally among the 2 daughters, who receive the pension, what is the best way to avoid losing the pension if the cash is above the threshold that impacts their Centrelink payments?

 

Any inheritance will be counted as an asset for the pension even if given away or disclaimed. The exception is if living in the property. A way to avoid this is to get will changed now and miss out on gift which likely be many years worth of the pension.
It is only possible to change a will if the testator has capacity or for a court to make a will

 

The other way is for the MIL to make the gift while alove

 

A pensioner has a obligation to update Centrelink for changes of circumstance. The solution is possibly to ensure the pensioner/s receives nothing. Their children could become the beneficiaries. The kids could later give their parents some lesser benefit provided its not regular or large it they stays under income / assets rules. Changing the will IF the capacity of the grandmother is sound may be a option.

 

Here is a radical idea: The older lady's property needs to be sold to pay for her aged care costs and the grandson either buys it now at fair market value or he goes live somewhere else. Eventually the daughters receive their inheritances and will lose their pensions for a while. They spend down their inheritance by upgrading their own homes, going on nice long holidays, upgrading their cars or whatever they decide to spend some of the cash on. Be very careful with gifting. Use cash to cover their day to day living. Once their asset base is approaching the appropriate amount, reapply for their pensions.

Hi Terry, do you mean to gift the house to the daughters or the grandson?

If the grandson, this will be asking for trouble. If gifting to the daughters, they will still acquire large assets and will probably lose their pensions until their assets decrease again.

Have I missed anything?

 

Gift now is an option - but needs legal advice, especially at that age.

 

Gifting by centrelink beneficiaries can count large gifts like its still held and subject to deeming by the gifter. Eg sellinga exampt house can mean the cash is a asset unde rthe asseets and income tests and if gifting exceeds the minor threshold Nan may be assessed like she had the cash all invested. Lose some or all pension.

Financial advice on aged care before acting is wise. As is legal advice.