Joint Tenants v Tenants in Common?

Most couples are either buying, or own their homes in joint names (Joint Tenants). If one partner dies, the ownership of the house passes outright to the survivor. This however rules out either partner gifting their share of the property to anyone else. Many people consider giving their individual share in the house to their children on death, to ensure that the children receive their entitlement in the event of either the re-marriage of the surviving partner, or the surviving partner requiring nursing care!

 

The solution is to have the property owned EQUALLY rather than JOINTLY, as Tenants in Common.

Heritage Will Writers deal with all the paperwork and registration procedures with the Land Registry Office.

 

Nursing Care & Re-Marriage issues? Who Will Pay For My Long Term Care?

 

In the UK, each local authority has a duty of care to provide long term care to those who need it. They do however have the power to cover these costs with finances taken from you and your family. This means that they can force the sale of your assets, including your house in order to pay for these care costs.

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The Community Care Act.

 

Since April 1993, this Act has allowed local authorities to calculate the value of your assets at the time you are taken into care. They have the right to force the sale of your home. If they believe that you have given assets away in the past deliberately to avoid this, they may reclaim these back too.

 

If your capital assets exceed £23,250 you will be expected to fully fund your own care until you have £14,250 left. If your capital assets are less than £14,250 then your care will be paid for in full by the state. (These are the figures for England; the amounts vary in other parts of the UK.) In-between these amounts is a sliding scale of how much you are expected to contribute.

 

Each year, around 70,000 homes (200 every day) are repossessed by Councils throughout the UK to recover Long Term Care costs!

 

If you have difficulty selling the property, then the Local Authority will pay for your care for the first 12 weeks, after which they may agree to a ‘Deferred Payments Agreement’ which means they will pay for your care in the first instance, and recoup the costs once the property is sold.

Property will not be included in the means test if somebody still lives in it, for example:

• Your spouse, or a partner you are now separated from who has responsibility for a minor.

• A relative who is over 60 or incapacitated.

• A minor who is dependent on you.

• Occasionally, a person who gave up their own home in order to care for you.

 

Deliberate Deprivation

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The authorities will also look into past property ownership and if they feel you have purposefully transferred ownership of your property or put in a Trust solely to lower your capital, then they have the right to take these assets back. 

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This is why it is important to start planning for long term care as early as possible. If long term care is in your foreseeable future then the Local Authority will see it as a ‘deliberate deprivation’ of capital, and will be seen as a deliberate attempt at avoiding care costs. 

Local Authorities can access your medical records as proof so please do only set up provisions as part of you general Estate Plan.

 

With careful Estate Planning, it is possible to set in place strategies to protect your Estate from the implications of long term care. It is estimated that 1 in 4 of us will need long term care so it is important to start thinking about this as part of your Estate Plan now..

 

The Property Protection Trust - for JOINT home-owners. The Trust only comes into existence once the first partner dies; then their half of the home will be put into the Trust normally for the benefit of the children /grand-children, and at the same time ensuring the surviving partner has the legal right to occupy the property, together with the flexibility of selling up or moving home but ultimately ensuring that their right of occupation of the property will be protected.

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If the widowed partner then needs long term care, the Trust will continue to protect the 50% of the property that has been placed in it. This prevents that half of the home being used in the local authority’s assessment of capital. This means that once the surviving partner eventually passes away, any children / grand-children named as the Trust beneficiaries will get at least 50% of the property.

 

In addition, other couples might be concerned about the effects of the surviving spouse Re-Marrying, then predeceasing the new spouse, and as a consequence seeing all of the original property and assets pass to a completely new person and NOT the children from the original marriage!

Also, couples, whether married or living together as partners, and with children from previous relationships might also want to consider leaving their respective share in the house to their children?

The Property Protection Trust achieves protection for the deceased’s share of the house in all of the above scenarios.