The Lemon Fool

Hi,

Can anyone point me to a website that can explain the advantages and disadvantages of owning your house as joint tenants or as tenants-in-common. According to some friends who have just made the change to tenants-in-common, if any one of the couple has to go into care then the maximum amount used for care cannot exceed half the value of the property.
Assuming a couple own a property worth £400,000 and have no other assets. They have both made wills that bequeath the property to their children. The husband goes into care and dies after receiving £300,000 worth of care. The property now passes to his wife. When she dies the care home now want their £300,000 from the estate. However they can only make claim on half the property value, which was that owned by the husband. My understanding is that if the property was owned as joint tenancy them the whole of the estate would be available for care home costs.
I intend to see a solicitor regarding this but I am wanting to be forearmed with some sensible questions before the meeting.

Thanks Mike

I would like to know the answer too.

I thought they couldn't make you sell a house if there was someone left living there. Normally a spouse but might include a dependant or disabled family member.

I'm not an expert, but I would have thought that the amount should have been claimed from the husband's estate when he died. His share of the house wouldn't have passed to his wife if they were tenants in common. Any debt against it would have been settled before the rest of the estate passed to whoever was mentioned in his will (you say the children).

Was there a trust that allowed the wife to continue living there if the husband died? That might be relevant when more knowledgeable people come along.

Edited to add: I think it needs to be anyone over 60 or vulnerable living in the house that means it doesn't have to be sold when the person moves into a care home. I don't know whether that needs to be a relative or not.

An obvious benefit of owning any asset as joint tenants is that the asset passes to the surviving tenant instantly upon the death of the first tenant, without any need for probate. This is true even if the tenants are not spouses.

So in a simple situation where a couple own everything as joint tenants, there may be no need for probate and maybe no need even for a will.

An obvious disadvantage of a joint tenancy is that it only supports equal shares. If an unequal division is desired then TIC is better, or some kind of side agreement.

Also a TIC can be severed by either party in writing, at any time. But to go from JT to TIC needs both parties to agree.

Lootman wrote:An obvious benefit of owning any asset as joint tenants is that the asset passes to the surviving tenant instantly upon the death of the first tenant, without any need for probate. This is true even if the tenants are not spouses.

So in a simple situation where a couple own everything as joint tenants, there may be no need for probate and maybe no need even for a will.

An obvious disadvantage of a joint tenancy is that it only supports equal shares. If an unequal division is desired then TIC is better, or some kind of side agreement.

Also a TIC can be severed by either party in writing, at any time. But to go from JT to TIC needs both parties to agree.

Too late to edit but I now realise that the last sentence of my post immediately above this is the wrong way around.

JT to TIC can be effected unilaterally by either party, but TIC to JT needs mutual agreement.

artengill wrote:Hi,

Can anyone point me to a website that can explain the advantages and disadvantages of owning your house as joint tenants or as tenants-in-common. According to some friends who have just made the change to tenants-in-common, if any one of the couple has to go into care then the maximum amount used for care cannot exceed half the value of the property.
Assuming a couple own a property worth £400,000 and have no other assets. They have both made wills that bequeath the property to their children. The husband goes into care and dies after receiving £300,000 worth of care. The property now passes to his wife. When she dies the care home now want their £300,000 from the estate. However they can only make claim on half the property value, which was that owned by the husband. My understanding is that if the property was owned as joint tenancy them the whole of the estate would be available for care home costs.
I intend to see a solicitor regarding this but I am wanting to be forearmed with some sensible questions before the meeting.

Thanks Mike

Your friend has totally misunderstood the situation, quite possibly because he's been sold some sort of `living trust' / `protective trust' arrangement by the unregulated operators who sell such schemes (usually at extortionate prices).

In the scenario you describe, when the husband goes into care then his share of the house is not taken into account when assessing his financial situation so long as his wife continues to live there. He is assessed solely on the basis of his own assets, so that if he had over £23,250 he would pay the full fees, between £14,250 and £23,250 he'd contribute to the fees, and once his capital was down to £14,250 he'd pay nothing.

Consequentially your supposition that "When she dies the care home now want their £300,000 from the estate" is based on a complete misunderstanding of the situation. The value of his share was never relevant to the funding of the care home fees, so there would be no claim against that share.

You may wish to inform your friend accordingly.

Clitheroekid wrote:

artengill wrote:Hi,

Can anyone point me to a website that can explain the advantages and disadvantages of owning your house as joint tenants or as tenants-in-common. According to some friends who have just made the change to tenants-in-common, if any one of the couple has to go into care then the maximum amount used for care cannot exceed half the value of the property.
Assuming a couple own a property worth £400,000 and have no other assets. They have both made wills that bequeath the property to their children. The husband goes into care and dies after receiving £300,000 worth of care. The property now passes to his wife. When she dies the care home now want their £300,000 from the estate. However they can only make claim on half the property value, which was that owned by the husband. My understanding is that if the property was owned as joint tenancy them the whole of the estate would be available for care home costs.
I intend to see a solicitor regarding this but I am wanting to be forearmed with some sensible questions before the meeting.

Thanks Mike

Your friend has totally misunderstood the situation, quite possibly because he's been sold some sort of `living trust' / `protective trust' arrangement by the unregulated operators who sell such schemes (usually at extortionate prices).

In the scenario you describe, when the husband goes into care then his share of the house is not taken into account when assessing his financial situation so long as his wife continues to live there. He is assessed solely on the basis of his own assets, so that if he had over £23,250 he would pay the full fees, between £14,250 and £23,250 he'd contribute to the fees, and once his capital was down to £14,250 he'd pay nothing.

Consequentially your supposition that "When she dies the care home now want their £300,000 from the estate" is based on a complete misunderstanding of the situation. The value of his share was never relevant to the funding of the care home fees, so there would be no claim against that share.

You may wish to inform your friend accordingly.

That's very interesting and probably widely misunderstood. So, to be crystal clear, for care home fees, it makes not a jot of difference whether the family home is joint tenants or tenants in common? Thanks.