UK - important info ref Local Authority care costs £££££

[jthspace]

Friend of my sister has just had all her assets taken by the local authority, to pay for her husband's care..... because they jointly owned their home and bank accounts.

This is entirely possible because of being joint owners on the deeds and weren't on the house / land registry as  "Tenants in common ".

Absolute disaster for my sisters' friends.

When we re-did our wills and set up Health & Financial Powers of Attorney for us both, the solicitor pointed out we were Joint Owners and recommended changing to Tenants in Common - that bit of advice was priceless. For info, total cost for 2 x Wills and 4 x Powers of Attorney was £1,700 which, in my opinion, was money well spent - just for the T-in-C advice for the future.

Protect yourselves by checking how you are registered and here is a GOV.UK link to see what to do.

https://www.gov.uk/joint-property-ownership

Check it as soon as possible, you don't know what's just around the corner!

[flash22]

it's been this way for 20+ years - the local authority will place a legal charge on the property once both owners pass, or the funds run out, and their estate or sale of the property settles the legal charge, there is also a 7/10 year rule to stop the property from being transferred as well and other loopholes have been closed up

been there, done that and got the stamped paperwork, LPA is now in 2 parts and can be done yourself, sometimes for free iirc the last one cost me £160 for both parts in fees to the OPG

[Bper]

1 hour ago, jthspace said:

Friend of my sister has just had all her assets taken by the local authority, to pay for her husband's care..... because they jointly owned their home and bank accounts.

This is entirely possible BECAUSE OF BEING JOINT OWNERS on the deeds and weren't on the house / land registry as  "TENANTS IN COMMON".

Absolute disaster for my sisters' friends.

When we re-did our wills and set up Health & Financial Powers of Attorney for us both, the solicitor pointed out we were Joint Owners and recommended changing to Tenants in Common - that bit of advice was priceless. For info, total cost for 2 x Wills and 4 x Powers of Attorney was £1,700 which, in my opinion, was money well spent - just for the T-in-C advice for the future.

Protect yourselves by checking how you are registered and here is a GOV.UK link to see what to do.

https://www.gov.uk/joint-property-ownership

Check it as soon as possible, you don't know what's just around the corner!

Hi Jeff,So is this correct If you own a property as joint tenants and one of you needs to go into care, the council can consider the entire value of the property when figuring out how much you should contribute to care costs. However, they generally can’t force the sale of the property if the other person is still living there.If you own the property as tenants in common, each person has their own share. The council will look at the value of the share owned by the person needing care. They might put a legal charge on that share, which means they can claim money from it when the property is eventually sold. The share of the other owner is usually protected. So both ways the property can be assessed for care costs and a legal charge can be put on the property. 

So both ways they will get their hands on your property. I assume she is still living there but has had a charge put against the property.☹️

So put the property in a Trust.

[flash22]

That is the long and the short of it, unfortunately, life span in a home is fairly short 3-18 months, even at a reduced rate you are looking at £1.8k-5k a month depending on the level of care required

[davidif]

I am a property law (mainly residential conveyancing) Solicitor and what has been said is all correct.

A Local Authority can impose a charge on a co-owners beneficial interest if as co-owners they hold the property in trust for themselves as Tenants in Common.  A Tenancy in Common at least 'ring fences' the other owners share.

 

[Bper]

7 minutes ago, davidif said:

I am a property law (mainly residential conveyancing) Solicitor and what has been said is all correct.

A Local Authority can impose a charge on a co-owners beneficial interest if as co-owners they hold the property in trust for themselves as Tenants in Common.  A Tenancy in Common at least 'ring fences' the other owners share.

 

Hi David, So putting the property in a Trust would prevent this from happening would it not.?

[davidif]

7 minutes ago, Bper said:

Hi David, So putting the property in a Trust would prevent this from happening would it not.?

Hi Bob, whenever a property is co-owned there is a Trust.

Either the co-owners hold the property on trust for themselves as Joint Tenants or on trust for themselves as Tenants in Common. This is how English Law deals with jointly owned property.

Whilst both co-owners remain alive each of their respective 'shares' in the property could be called upon to pay their care home costs (subject to the assessment of assets by the Local Authority)

When the first of the co-owners dies rather than their share passing to the surviving co-owner (as with a Joint Tenancy) it would be usual to ensure, via a Will, that their share passes to a Property Protection Trust. On the death of the second co-owner the Trust would come to an end and the property would pass to the intended beneficiaries so even if the surviving co-owner needed to go into care this would at least ensure that half of the value of the  property would be preserved for the beneficiaries.

With a Joint Tenancy, on the death of the fist co-owner their share automatically passes to the surviving co-owner and in which case if the survivor had to go into care the whole of the value of the property may be in jeopardy, 

[Bper]

14 minutes ago, davidif said:

Hi Bob, whenever a property is co-owned there is a Trust.

Either the co-owners hold the property on trust for themselves as Joint Tenants or on trust for themselves as Tenants in Common. This is how English Law deals with jointly owned property.

Whilst both co-owners remain alive each of their respective 'shares' in the property could be called upon to pay their care home costs (subject to the assessment of assets by the Local Authority)

When the first of the co-owners dies rather than their share passing to the surviving co-owner (as with a Joint Tenancy) it would be usual to ensure, via a Will, that their share passes to a Property Protection Trust. On the death of the second co-owner the Trust would come to an end and the property would pass to the intended beneficiaries so even if the surviving co-owner needed to go into care this would at least ensure that half of the value of the  property would be preserved for the beneficiaries.

With a Joint Tenancy, on the death of the fist co-owner their share automatically passes to the surviving co-owner and in which case if the survivor had to go into care the whole of the value of the property may be in jeopardy, 

Hi David,thanks but what I meant was an Asset Protection Trust, which can help protect your property from potential claims by creditors and manage assets for beneficiaries while safeguarding the property. These trusts are sometimes used to manage the impact of care home fees.

By transferring your property into an Asset Protection Trust, the legal ownership is passed to the trust and managed by the trustees. Although you, as the settlor, may still benefit from the property (like living in it), you no longer legally own it, which can make it more difficult for creditors to claim against it. If the Trust is set up years before it can't be deemed as avoidance of potential care costs.