Mike’s dad had died a few years ago and his mum, June, was still living in their home which was a small brick and tile unit. June’s mobility was decreasing and Mike and his wife Beth were concerned about her living on her own. Mike and Beth went to look at a few retirement villages, but the problem was that June didn’t have a lot of cash. If she sold her unit, this would give her enough funds to buy an occupation licence for a small apartment in a village, but she wouldn’t have the money for the weekly fee and she wasn’t eligible for rest home care due to her health being too good. 

Mike and Beth had been thinking of downsizing, now that their youngest son had left home. However, now that they were thinking about June’s next steps, they thought another option might be finding a property that they could live in with June. They broached the idea with June who thought it sounded good but wanted to make sure that she would have her own space. She also wanted to talk to Mike’s older sister who lived in Wellington to see what her thoughts were.
Mike and Beth started looking at “home and income” type properties and they put their house on the market. At the same time June put her house on the market and a couple of months later both properties sold. They signed up to purchase a property which had a self-contained flat underneath that was perfect for June.
The plan was that June would put most of the sale proceeds into the property, leaving her with some money in the bank. The three of them went to see Mike and Beth’s lawyer to see how best to structure things. The lawyer said that there were different ways the situation could be structured, including a loan from June or part of the property being in her name. She did say that if Mike and Beth needed a mortgage, it is unlikely that the bank would allow June to be on the title to the property due to the responsible lending code. 
There were also practical matters to consider: Who would pay the rates and insurance, and in what proportions? What if Mike and Beth separated? If June’s health declined and she needed to go into care, who would pay for that care? And what if Mike and Beth later decided to sell the house? All valid scenarios that needed to be addressed at this stage of their lives.  
The lawyer also said that June needed to consider whether any funds she put into the property would need to be shared with Mike’s sister when June died and that changes would need to be made to her will. She also recommended enduring powers of attorney be put in place for June, but also for Mike and Beth.  
These were all significant questions that needed careful consideration, particularly at a time when Mike and Beth had just begun enjoying a new sense of freedom with their children having left home. Stepping into a caregiving role for June brought not only emotional responsibility but also legal complexity. While it felt overwhelming, they understood that putting the right structures in place now would protect everyone involved. Failing to consider future possibilities could lead to unnecessary legal issues and heartache, something they were determined to avoid.

Tammy McLeod, Managing Director, Davenports Law