Tenants in common

Rocket_650

Hi, I recently read about when buying a house as a couple, it could be pragmatic to buy as Tenants in common so as to avoid a care organisation from asset stripping your house to pay for care if one of you are placed in a care home. Any advice please? Simon.

p00hsticks

If the co-habitee is over 60 at the point that care is needed, then currently the value of the property is ignored for care reasons while the other remains in the property.

The potential 'benefit' comes after the death of the first, when if held as TIC and they make a will they can will it to children (giving their partner a life interest to remain in it if wanted)  and so remove that half of the property from any future care assessment that might be made for the remaining partner. But if the couple are married, doing that does have IHT implications, so not a straightforward decision.  

An important other consideration is what happens when one dies, especially if the couple are not married, own property as TIC and have not made wills. In that scenario then the deceaseds part of the property would pass to the closest blood relatives rather than their partner, along with the rest of their estate. Owning as joint tenants, ownership would pass directly to the partner, regardless of any will, although with property prices these days they may find that IHT is due to keep it as they wil lnot benefit from the spousal IHT exemption.    

So there is more to it than just care considerations and no straightforward answer....

Keep_pedalling

Buying as TIC can be a useful thing to do for a number of reasons.

1. Protecting your children’s inheritance in the event of a surviving spouse remarrying after you die. 

2. Purchasing in unequal shares

3. Protecting your share of the home being spent on care for a surviving spouse. 

The 3rd one comes with caveats . It won’t work if you both need residential care at the same time, it needs to be done in conjunction with making a well drafted will and it is rather pointless if you have a home with a value well in excess of what it would cost to provide residential care for one person for a few years. Also pretty pointless if you have no children to leave your estate to. 

I should also point out that while one of you are still living in your home the house is discounted for any financial assessment for care costs, although unless you have no other assets to self fund you are going to have rely on cash strapped LA for care which will mean a long wait to get it and lack of choice in where you end up.

Albermarle

Rocket_650 said:

Hi, I recently read about when buying a house as a couple, it could be pragmatic to buy as Tenants in common so as to avoid a care organisation from asset stripping your house to pay for care if one of you are placed in a care home. Any advice please? Simon.

For accuracy a care organisation will not 'asset strip' your property.

If you have above a certain level of savings/investments, the local authority will not subsidise any care you need, and you have to pay for it yourself. If you do not have savings ( or they run out) but own your own home,  the local authority will fund your care home , and put a charge on the house to be paid when you die and the house is sold.

Also worth knowing that most people never go into a care home, and those that do most do not stay that long, but there are exceptions. More likely is that you will need some care at home, and in this case your home is not taken into account when assessing your ability to pay AFAIK. 

Rocket_650

Ok thankyou for the info, will talk with my mortgage adviser but with a clearer mind on the subject now. Regards, Simon. 

Keep_pedalling

Rocket_650 said:

Ok thankyou for the info, will talk with my mortgage adviser but with a clearer mind on the subject now. Regards, Simon. 

You also need to see a solicitor about your wills, especially if you are not married or in a civil partnership.

Bookworm105

Rocket_650 said:

Ok thankyou for the info, will talk with my mortgage adviser but with a clearer mind on the subject now. Regards, Simon. 

read the MSE guide on the subject...
Joint property ownership – your rights – MSE