who owns the house?

bryanb

Mojisola wrote: »

"People with dementia living in nursing homes should have their nursing care provided free of charge by the NHS; this is known as the registered nursing care contribution (RNCC)"

Yes but this is only the "Nursing" element. The personal care element still has to be funded elsewhere.

Mojisola

bryanb wrote: »

Yes but this is only the "Nursing" element. The personal care element still has to be funded elsewhere.

I wasn't trying to say that care didn't still need to be paid for but if a family are paying for the nursing element when they don't need to then their money is going to be used more quickly.

There are a lot of people with Alzheimers who are paying the whole lot. If you don't know about the nursing element, you can't claim.

margaretclare

These Wills can be written so that the remaining spouse can do whatever they like....stay, downgrade, sell.

That was not what we were told at the beginning of this thread. The will is written so that in the case of the first death, the deceased's half is left to the children.

The survivor is going to find it difficult to sell half of the house when the other half belongs to the children. I would have thought that was obvious.

EdInvestor

The position about ownership via tenants in common, with each half left to children seems to be that because the ownership is split, the property is effectively unsaleable, ie from the point of view of raising funds to pay for care, worthless.
Therefore the council disregards it in the same way as it disregards property with a spouse, dependant child etc in occupation. .

The downside of signing over half of the property direct to the children is that the parent(s) can lose security if a child or children goes bankrupt or divorces. In addition the ownership split sets up a CGT liability for the children long term.[As mentioned the IHT issue is no longer a problem for many.]

The way round this seems to be to divide the property into TIC, but then leave each half *in trust* to the children, with control of the trusts still with the parents.

This means the parent has security and the LA can't access the property as ownership will still be split and thus property unsaleable. It also avoids the CGT. I think this might be what sloughflint is referring to.

However there will still IMHO be many cases where people have more than adequate pensions and capital to fund their own care via a care annuity and thus maintain control and flexibility over their accommodation and treatment, while still leaving a more than adequate legacy to their family.

moon-pig_2

Just to expand on Sloughflint and Edinvestor,

My family have had our Wills drawn up by a knowledgeable and regular contributor to this forum to minimise care fees liability once one of us has popped our clogs.

Because half of the property has no market value it can't be assessed for care fees.

My trustees have to hold the property of the first of us until the second of us dies. In the meantime if I or my wife (whoever dies second) want to downsize, the trustees can allow us to do so. If there's money left over then I or my wife can be given the interest from it, but the capital is safeguarded.

Additionally if either of us runs low on dosh the trustees can loan us money from the fund.

Here's a link to the site that explains it quite well. I did poste a link to the site in a previous thread but removed it, but here it is again.

http://www.heritagewills.co.nr/care_fees_mitigation.htm

sloughflint

EdInvestor wrote: »

.
The position about ownership via tenants in common, with each half left to children seems to be that because the ownership is split, the property is effectively unsaleable, ie from the point of view of raising funds to pay for care, worthless.
Therefore the council disregards it in the same way as it disregards property with a spouse, dependant child etc in occupation. .

Absolutely.
EdInvestor, you are definitely referring to the type of Will that my parents possessed and I suspect OP's parents have.

The downside of signing over half of the property direct to the children is that the parent(s) can lose security if a child or children goes bankrupt or divorces.

If people are interested in these types of Wills then they need to double-check this aspect.
I cannot believe that my parents would have embarked on their proposed course of action if this was a risk.
Then again maybe the solicitor didn't do a good enough job of advising them.

This form of Will would have been very popular pre 1990's because it was IHT efficient ( the first spouse's share of the property would not have been counted for IHT purposes on the second death). This was challenged by HMRC and the wording relating to the life interest of surviving spouse was deemed to create an interest in possession.
This I believe is where Discretionary Trusts became the more favoured route to reduce IHT liability following this decision.
Now that the NRB of surviving spouses are doubled ( if 100% passes to remaining spouse), I guess that these Wills are making a comeback.

Please note that TIC is crucial. Even if the Will states TIC and the tenancy hasn't been severed then above can't be done.

sloughflint

Oops. Moon-pig's post clears up the divorce/bankrupcy aspect.
There you go,VMS your Mum can now relax ( after she's made sure the tenancy is truly TIC)

To add:
VMS, maybe you could suggest to your Mum that goes to see the person that wrote her Will for her and get them to refamilarise her with the details and explain the wording properly to her.
The wording in these Wills can be a real pain to understand and it is easy for us when we talk about it to distort things and say "half the house will belong to the kids" when really the situation is slightly different ( Trust).
I am still optimistic that your parents' Wills have been written in a 'care home safeguarding, IHT, CGT' efficient manner but only a professional will be able to put their minds at rest.

EdInvestor

virgin_moneysaver wrote: »

sorry, I didnt make myself clear - say dad dies, is half goes to children & mum stays in house, mum then goes into home, as she technically only owns half the house surely they cant force a sale as its not her property outright?

That's correct. The difference heres from the "ideal situation" is that the two half interests have been left directly to the children, rather than in trust, thus no protection for the parents and potential CGT problem for the children when they eventually inherit and sell the property.

But as far as paying for care is concerned, there should be no liability.

sebastianj

Thought I will just say thanks tp Sloughflint, EDInvestor and some others, for very useful comments, because advice is perhaps the wrong term.
seb

sloughflint

Regarding removed posts:

By removing some other posts higher up, some other facts have been lost for new readers.


If any posts need to be removed then posts 21 and 24 contain misleading information for people new to the concept which was my point in the first place.
Factually correct posts are being removed and misleading ones are being left behind.:mad: