Keep asset for kids without losing age pension.

Hi

I am hoping someone can offer some advice on this situation which must face a lot of people.

My mother-in-law is 86 and has been living in a retirement village in Sydney for just under 2 years. She is on the age pension. She owns a house to the value of $1.5million. After 2 years in the retirement village the property is no longer considered her primary residence and is included in the assets test for the age pension. She wishes to leave the house to her two sons (one being my husband) when she dies.

She does not wish to lose the pension as it has other ancillary benefits for her plus if she has this asset the retirement village rates are also asset tested and go up from about $150 per week to about $1000 per week.

As she is about to be assets tested on the house and lose the pension is there any way she can sign over the ownership of the house to her sons (perhaps in a family trust???) so that it is not included in the assets test. We do not wish to have the house sold until her death because firstly it is a bad market to sell on at the moment plus another number of years of capital gain would benefit us in the long term.

Brother-in-law wishes to sell the house now (on a very low market) and split the money 3 ways with a third for each son to keep and a third for her to invest to pay the retirement village costs.

My husband and I prefer to see the house stay in her name or in her son’s names jointly but unable to be sold until she dies in order to benefit from both future capital gain plus the use of it as an asset should she ever need intensive medical treatment or nursing that required a large sum of money. It is, after all, her house.

Cheers

Anne