Preventing the UK government from seizing your home to pay for your care.
The UK government seems able to grab money from the elderly, yet many people in the UK are unprepared for this. Part of the problem is if an elderly couple own their own home.Take for instance a couple with no children. Using such a couple as an example you will see what the problem is. Most couples have joint ownership of their property. This means that if. for example, one person became totally addled and needed full time residential care, the government could seize the couple's home to pay for it. This could in effect leave the other person homeless.
Not a nice scenario for an aged couple, is it? It does seem however that there is a way around this potential disaster.
A lot of it boils down to the ownership of your home. Most couples in the UK in the past were advised to be joint owners. In other words joint tenants. This is where the problem lies
If you have children being joint tenants can mean that any potential inheritance they would have received is taken to pay for your care.
The advice ends to be to become Common Tenants.
Apparently this has been tested in law and proved unstoppable so far. Of course the government could change the law but that will not be easy. For now being Common Tenants means that you both have a half share of the property. This means that only half of the property would be sold to provide care. To date this has proved impossible to do
The ability for a government to take the value of your home for care was a legacy of the last UK Tory government. That said Labour did nothing to change this legislation for the better. Tenants in common used to be the choice for unmarried couples but it is prudent to change your tenancy to this now if you want to avoid losing your home to pay for care.
"This means that the co-owners are regarded in law as having separate and distinct shares. They may give their shares away by will, they may even charge or mortgage them to a lender. On death of a Tenant-in-Common the share of the deceased co-owner is protected by the requirement that another trustee has to be appointed before the land or property can be sold. If the shares are complex a separate trust deed will usually be drawn up setting the shares out".
This sounds confusing which is why it is usually recommended that a financial planner or the like does the work for you. If you are only just about to buy a home for the first time, it would be good advice to start as you mean to go on. That is become Common Tenants rather than Joint Tenants. This will save you work and money in the long run.
The other advice is to have a Power of Attorney set up whilst you are still young and fit. The important word her is FIT. The Power of Attorney can be kept until needed. Waiting until one person has died, and the other is perhaps unable to speak after a stroke, is not a good idea.
In simple terms it seems that if you are common tenants, you each own one exact half of the property. This means that only half of the property can be sold for care. As yet this has proved impossible. If you are joint tenants you both own the whole property and do not stand a chance.
Previously published on Xomba
Relates reading on other tenancy beneifts