PROPERTY OWNERSHIP AND CARE FEES

Most property, when owned by a couple, is owned as joint tenants. This means that upon the death of the first partner, the entire property automatically passes to the survivor. This situation is usually reflected in the majority of Wills.

For a couple in their late 70’s who jointly own a house worth, say £200,000, with Wills in place leaving their assets to their partner, what this effectively does is place the full value of property in the hands of the surviving partner. If that person subsequently requires care, then the full £200,000 of value will be liable to the means testing process.

As an alternative, the ownership of the property could be changed to tenants in common. This effectively severs the joint tenancy and places 50% ownership of the house with each individual. This then allows the Wills to be changed so that each partner can then choose to leave their half of the house to another member of the family.

If after the death of the first partner, the survivor subsequently needs care, this creates a very different position in that only 50% of the house value would form part of the financial assessment and the balance would be held by the chosen beneficiaries.

The rules under The Community Care Act regarding deprivation of capital in order to obtain financial assistance are very clear. Any gifts, trusts or transfers of assets made at any time can be set aside or ignored if there has been intent to deprive oneself of capital in order to obtain assistance from the State that otherwise would not have been available.

However, modifying the ownership status of a house and changing Wills to suit is not an infringement of these rules.

It should be emphasised that by utilising this option, the beneficiaries become half owners of the property on the death of the first partner. However, the survivor’s rights to occupy the property would be secured, by virtue of their consent being required to sell or dispose of it. However, consideration should be given to the future position of the beneficiary, for example in the event of divorce or death.

It should be appreciated that ownership of all jointly owned assets automatically pass to the other joint owner in the event of death, irrespective of the terms of a will and therefore the way in which all assets are owned can be vitally important.

As with all such legal matters, individuals are strongly advised to obtain independent and specialist help before undertaking any such measures.

	Changing tenancy Details of organisations specialising in changing the tenancy of property
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