Care Fees Planning
When considering Care Fees planning, the first step to consider is how you and your partner own your property.
You may own your property as Joint Tenants which means the survivor of both owners will receive the full property on the death of the first partner, irrespective of any provision which may have been made in the deceased partner’s Will.
You may own your property as Tenants in Common which means you and your partner own a percentage of the property each (usually 50/50) and upon the death of the first partner, your percentage of the property will not pass to the survivor immediately.
You can check how you own your property by looking at your title with the Land Registry.
If you own your property as Joint Tenants, issues can arise when it comes to Care Fees. Whilst both owners are still alive, there is no issue with the property being considered as an asset to pay for care fees should one partner require long term care at a care home. The issue arises where one partner has died and the surviving partner inherits the full property but they require care. The full property can then be taken into account to pay for care fees if necessary.
If you own your property as Tenants in Common, only the surviving partner’s half of the property can be considered for care fees upon the sale of the property should they be residing in a care home.
Therefore, if you own your property as Joint Tenants, you may wish to consider severing your Joint Tenancy (changing to from Joint Tenants to Tenants in Common). When you own as Tenants in Common, you can leave your percentage of your property in your Will to whoever you wish to leave it to (more commonly, it is left to children). This is usually done through the inclusion of a Life Interest Trust within your Wills.
The Life Interest Trust leaves your half of the property to whoever you wish to leave it to upon your death but it also allows the surviving partner to remain living in the property until they die or wish to move out.
This safeguards half the property from Care Fees and in addition to this, should the survivor marry someone after your death, they will only own half of the property so there is no risk of the property passing to their new spouse.
HTF Legal is a specialist advisor in care fees planning. If you would like to discuss any of the issues raised in this article or have other questions about this topic please email enquiries@htf-legal.co.uk or call us on 01937 227 830.