Risk management

When granny moves inThe number of people over pensionable age keeps rising.

As a result it is becoming more common for older people to move in with their adult children when they are no longer able to live alone.

This presents a number of risk areas for solicitors.If parents are selling their own homes, your instructions may simply be to deal with the property transfer.

But you must be alert to other problems that can arise and make sure that your clients have been informed of all the options.Perhaps the first question to ask is: 'Who is your client?' If the parent is just moving into existing accommodation in their son or daughter's home, this may be easy to answer.

However, if both parties are selling property in order to buy a new home, or if it is intended that the parent's money will be used to extend or adapt the existing home, then there are other considerations.

First ask yourself whether you can act for both parties, or whether one should instruct another solicitor for independent advice.Remember that they may have different aims - the altruistic motives of caring for an elderly relative at home are not the only ones that influence a major decision such as this.

If you were to act for only one party, would your advice be different from the advice you are giving now? If the answer is yes, then perhaps you should not be acting for both parties.If you do continue to act, then there are a number of questions to consider:l If the parent is putting money into the property, how will this be recorded in the title? Is there to be a deed of trust?l Are there tax implications for either party? Are you going to advise on tax issues? If not, make sure that you have clearly stated this in your retainer letter.l If it is intended that the son or daughter will inherit this investment (to reflect the care given to the parent), what about other family members' interests?l What if the arrangement breaks down - for example, they don't get on, the son or daughter's marriage ends, or the parents become so ill that they need residential care? Have the parties considered these possible outcomes?l Is there any possibility that the elderly client is acting under duress or undue influence? Are you satisfied that they have the capacity to instruct you?These may be difficult questions to raise.

Your clients may not want to consider the possibility that the arrangement will not work out.

But you should at least alert them to these issues.

As always, record the advice that you give them in a file note so that you can refer to it later if any dispute arises, and make sure that it is set out clearly in writing to the client.l This column was prepared by the St.

Paul risk management team.