Give up the house on life annuity

Sounds really weird... My grandparents arranged it so that they sold their house (with a granny flat) at a fairly low price and in return have lifelong free right of residence. Since a young family with limited financial means bought it, both parties are happy with it.

I don't understand the negative responses now. Certainly, a sale with a final settlement is the more profitable option. But that also means that the aunt would have to move out. But maybe she doesn't want to. The life annuity is not made for inheritance matters, but for those who own property and want to secure a pension through their property already. The pension is supplemented and can be used if she ever needs care. Or if she has to go to a nursing home, it can also be used there for more exclusivity. It's like an insurance. The buyers are already paying for something they cannot use. Everything is a matter of time. The life annuity will certainly be an alternative to buying for some, which we can't even imagine at our age now. The idea that the cousin/brother of the OP takes over would require that he has the money monthly. Inheritance or not – for the lady, it is probably not such a crazy idea to sweeten her retirement with a life annuity every month.

Jeanne Calment came to mind spontaneously. At the age of 90, she handed over her Paris apartment to a then 47-year-old in exchange for a life annuity. The end of the story: the lady died at the age of 122; thus outliving the buyer of the apartment, which was overpaid threefold. I wish your aunt the same ;) Personally, I find the arrangement stupid. Can't she give the house to the chosen heir, who would then pay her something monthly? Then she would also have the good feeling that the house stays in the family.

I don’t understand the negative responses now. Surely, a sale with a final settlement is the more profitable option. But that also means that the aunt would have to move out. But maybe she doesn’t want that.

Now I have to clarify a few things: The offer does not come from the family but from an external "cooperative." And as already stated in the first post, she would receive the money monthly and lifelong right of residence in the house.

@ ypg She would not have to move out. Additionally, she would receive any achievable rent should a stay in a care home become necessary. The nephew has no interest whatsoever in the whole arrangement and would never enter into such a life annuity contract with her.

"Cooperative". And as already written in the first post, she would receive the money monthly and lifetime right of residence in the house

Be careful. Especially pay attention to the fine print. The numbers are not always truly guaranteed...

Now I have to clarify a few things: The offer does not come from relatives but from an unrelated "cooperative". And as already written in the first post, she would receive the money monthly and lifelong right of residence in the house.

@ ypg She would not have to move out. Furthermore, she would receive the achievable rent should a stay in a care home become necessary. The nephew has absolutely no interest in the whole arrangement and would never enter into such a life annuity contract with her.

I said or wrote nothing else. I understood it exactly AS YOU confirmed it again.

It has advantages for the lady, security!