TENANTS IN COMMON versus JOINT TENNANTS

sloughflint

Debt_Free_Chick wrote: »

Not sure which changes you're referring to - but the comparison, in general, of JT and TIC has always been the case. It's simply the way that the law treats the two different parts, as owned by each party.

Thanks DFC. I was just questioning what you put in your previous post in case there was something I didn't know about happening in April.

If the house is owned as JT and the one in care is the survivor then, on death of the other party, the one in care suddenly has an increase in assets - as they now own the whole property. I don't know what the LA would do in this situation - would they reassess the financial position?

It's the other way round that intrigues me ie if the partner living at home outlives the person in care and it's JT.

EdInvestor

sloughflint wrote: »

It's the other way round that intrigues me ie if the partner living at home outlives the person in care and it's JT.

In this case the council would probably have put a charge on the property, which would be invoked if the surviving spouse then decided to sell the property.With TIC in this case, the charge could only affect 50% of the value, rather than the whole lot.

moon-pig_2

Hi Bunking-off,

If you set things up properly you can safeguard the whole house from care fees in a tax efficient way, whilst at the same time safeguarding the surviving spouse from having to sell the house 1) because any of the children want their share 2) if any children get divorced 3) or go bankrupt.

The key is to own as TIC, leave the share to children, but give the spouse a life interest in the home, so that its sale is postponed until the second spouse dies.

I speak from experience after setting up our wills in this way. I used a willwriting firm in London who belongs to the Institute of Professional Willwriters. They came round to our house one evening, explained it all properly and were very reasonably priced.

Alfie_E

EdInvestor wrote: »

In this case the council would probably have put a charge on the property, which would be invoked if the surviving spouse then decided to sell the property.With TIC in this case, the charge could only affect 50% of the value, rather than the whole lot.

Following on from moon-pig’s link, more precise details for care fees can be found in Help the Aged’s Paying for Your Care Home Information Sheet. Start reading from the Your property section on page seven. Case study five, on page 26, covers jointly owned property.

Things are not as bad as you might have thought. The following are some key points to note.

• In many cases the value of the property will be disregarded.
  
  
• While the partner is living in the property, a care-fees debt will not be building up. If fees are being paid out of other assets owned by the person in care, once those assets are below the threshold, the council will become liable for the shortfall. No charge will be placed on the property.
  
  
• There are two stages to determining the capital value of the property, when assessing liability for care fees.
  
  
  • Determining the beneficial interest. For tenants-in-common, this will be clear. While in a certain legal sense, joint tenants each own the property outright, a beneficial interest can still be thought of. You start with 50-50, but look at the contributions to the purchase cost and maintenance and the length of the relationship.
  • Valuing that beneficial interest, which can effectively be nothing.
  
  That is, you don’t value the property, then divide up that value. You divide the property, then look at what that fraction of the property might be worth.
  
  
• It’s possible for the partner not in care to sell the property and move, without care fees becoming liable.

akh43

What is the position if you marry the person that has a house in his name?

If you chose not to add her name as it would cost, so it is still in his name only, do you have the same rights and entitlements even though technically your name is not on the house documents?

What happens if the husband dies with debts?

Thanks

sloughflint

Alfie_E wrote: »

• It’s possible for the partner not in care to sell the property and move, without care fees becoming liable.

I'm confused again. How if JT? Or is it explained in that link?

Alfie_E

sloughflint wrote: »

I'm confused again. How if JT? Or is it explained in that link?

Them’s the rules. In general, legislation and guidance notes try to be as fair and practical as possible, within whatever financial constraints the government has. Whenever you wonder why things are the way they are, it’s good to imagine the opposite case. Imagine that, the instant the house was sold, the council could earmark half the money paid. Three issues spring to mind.

• Month after month of newspaper headlines screaming things like “frail wife trapped in unsuitable home by husband’s care home costs.”
• There would be the anomaly where you would be able to swap properties. Only any difference in value being exchanged in money could be earmarked.
• If the person in care used that money to help buy a new property for his partner, what could the council do? They wouldn’t realistically be able to claim that he or she had deliberately deprived him or herself of assets and the value of the new property would still have to be disregarded.

webtalk

Thank you all very much for your posts. You've given me lots of reading to do - and then research to find out how we've purchased our place.

Di-Dough

when you buy a house your Solicitor will have filled in a Transfer Form and sent it to the Land Registry to register your Title to the property - it states on the Transfer Form how you will hold the property (tenants in common etc)

Debt_Free_Chick

sloughflint wrote: »

So going back to my previous post, if anybody is proposing to make or even have made their wills IHT and care fee efficient in the method described in post 30, it is essential to check that the tenancy really has been severed before it is too late.

Although it's worth bearing in mind that a JT can be severed, relatively easily, at any time. However, if you leave this until "care fees" become an issue, then you may find yourself accused of deliberately depriving yourself of assets. So, yes - I agree - don't leave it too late. I just wanted to clarify that if you haven't done it yet, you can do so with little legal work involved.