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Changing over to tenants in common

Dotz49

New member
May 11, 2022
7
0
I have started to worry about my increasing memory loss and would like to put my affairs in order whilst I am able. My two sons and I jointly own the bungalow where I live with my oldest son. My younger son has his own home. I hadn't realised the solicitor had made us joint owners. My thinking is that I should change this to tenants in common to protect my two sons (the one I live with in particular) should I deteriorate and need to go into care. My oldest son and I have always lived together - he is now 40 and we moved from the family home after divorce and purchased the bungalow in 2010. We were on low incomes, hence the shared ownership in order to get a mortgage. I am 73 years old and therefore in the event of my needing care my son will not have reached 60 years of age to enable the home to be disregarded. At this stage I would mainly like advice on changing to tenants in common, but if anyone has any advice on where my resident son will stand in all of this, I should be grateful. He is my main concern.
 

nitram

Registered User
Apr 6, 2011
25,438
0
North Manchester
The change to tenants in common is usually done when there are only two joint owners meaning that if one goes into residential care and the other dies the whole of the property does does not become available for care fees if the deceased joint one has willed it to A N Other than the owner in care.

Your case is different, if one of the three of you dies the remaining two each own half of the property outside of any will.
If you were in care both your sons would have to predecease you before you had full ownership of the property.

As for protecting your son the LA could take out a court order to force the sale also you or your attorney could argue that you oldest son has always lived with you and hope the LA uses discretion.

I assume you have granted LPAs, if not do it now.
 

Dotz49

New member
May 11, 2022
7
0
Thank you for your response, although my heart sank when I read about the LA maybe forcing the sale of my son's home. What I didn't say was that both my sons contributed their own money into the purchase of the bungalow so it's not as though I have just added them to the Title Deeds, or even sold or given them a percentage of the property. Does this make a difference? Also would the LA force a sale rather than putting a charge on the property.

Should I think about reducing my one third share in the property (we are hoping to gain planning permission to put a double garage with attached granny flat in the garden which my sons will pay for - if we get planning permission and start the work, would this be a good time to reduce my share of ownership).

I love living with my son but don't want him to be lumbered with me on his own and would hope the granny flat would at least separate us and I could have carers and hopefully avoid residential care.

From your response, I have taken it that there is no point in changing to tenants in common.

Thank you again for helping me.
 

canary

Registered User
Feb 25, 2014
18,819
0
South coast
Hi @Dotz49
The thing about changing to tenants in common is that it only has an affect when one of the owners dies. My OH and I are tenants in common and we have made our wills so that when one of us dies our share of the house will go to our children.

If I die before my OH and he moves into a care home, then although the house will have to be sold, only half of the proceeds will go to him, the other half will go to the children. If we had remained as joint owners, then the children would get nothing.

If you are all tenants in common your children can change their wills leaving their share of the house to someone else other than you (maybe to each other), but unfortunately, while you are still alive, you cannot prevent your share of the house from not being part of your assets. If the house was being occupied by a relative who was over 60 years old, it would be disregarded (exempt), but at the moment your sons are too young. However, the fact that they have contributed towards the cost of the house and its upkeep will make it far more likely that the Local Authority would give a discretionary disregard ie - they would decide to exempt it, even though they dont have to.

You cannot gift your share (or part of your share) of the house to your sones, but if they are paying for extensions that will increase the value of the house considerably then they could increase the proportion that they own in proportion to the amount that they have invested in it. This will have to be done carefully, to make sure that you do not fall foul of Deprivation of Assets - you will definitely need to use a solicitor who is aware of these problems.


Edit a typo that gave the wrong age
 
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nitram

Registered User
Apr 6, 2011
25,438
0
North Manchester
In the past CRAG clearly stated that the sale value of a fraction of a house with the other owners not prepared to sell was zero, this changed with the Care Act 2014 where nothing is said about the value of a fraction of a house.
There are rumours that LAs have force a sale via the courts, I've not seen any reported cases. Other members have been in the of the position of an LA trying to get the value of 'half a house'.

I think you could have a reasonable chance of the house being disregarded with your son living there.

The LA could have problems putting a charge on a third of a property and why would they, a deferred payment scheme would not work.

A 'granny flat' could make matters worse as it would provide a place for your son to live separate from the house and reduce chance of any LA discretion.

You could give your share of the house to your sons so that they each owned half, if you lived a further 7 years it would not be part of your sons' inheritance and clear of any IHT which it would be if you died.

Giving your share away could be regarded as deliberate deprivation of capital in any future financial assessment by the LA, it depends how long it is before it's obvious that you will need care.
If deprivation is decided the LA can ask for the cash or add the amount to assets in an assessment in effect forcing somebody else to pay for care.
 
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Dotz49

New member
May 11, 2022
7
0
Thank you Canary. Your reply gives a slightly diffeent perspective. If we change to tenants in common, then my sons could leave their share in their wills. If one of them died then his share would go to his brother and my share would remain at one third. If we remain as joint tenants then the deceased brother's share would be split between myself and my other son. So in effect, it is worth changing to tenants in common.
As regards the proposal to build the garage and granny flat, I think before the works start we should do as you say and ask a specialist to advise on how to legally record my sons' investment and to also ensure my lifetime right to live in the granny flat. Can anyone recommend a specialist solicitor - I don't suppose they have to be local to me. I can remember reading about someone in Bristol a long time ago who had a good reputation for advising the elderly - does this ring any bells with anyone.
Many thanks again.
 

Dotz49

New member
May 11, 2022
7
0
Thank you Nitram. I don't understand "A 'granny flat' could make matters worse as it would provide a place for your son to live separately from the house." If he lived there separately, (do you mean after my death), what difference would that make as it would be part of the bungalow as far as title deeds go and he would not be allowed to sell it separately, so if the LA forced a sale, they would have to sell the whole lot and my son would have to move, even though the LA would only be entitled to my one third share. Sorry that is so convoluted. I hope you get what I mean.

I wouldn't give my one third share to my sons as no-one can predict the future and money does funny things to people. However if we do build the garage/flat with their money, then I would expect to own a lesser share.

I thought the LA would put a charge on one third of the property, to enable them to recoup their money if the property is ever sold. Is it a fact that they wouldn't do that.

Thank you - all this information is so helpful.
 

nitram

Registered User
Apr 6, 2011
25,438
0
North Manchester
Thank you Nitram. I don't understand "A 'granny flat' could make matters worse as it would provide a place for your son to live separately from the house."
If you were in care and your share of the house was needed for fees the LA could be less likely to disregard the property in favour of your son as he would not be made homeless on the sale of the house.
Will own the granny flat?
How independent will it be ,access, services, some garden - some of this depends on land registry entries?

It's a good idea, if you can manage it, to have all options spinning in your head so you know what to ask when you take professional advise.
 

nitram

Registered User
Apr 6, 2011
25,438
0
North Manchester
I thought the LA would put a charge on one third of the property, to enable them to recoup their money if the property is ever sold. Is it a fact that they wouldn't do that.
With a deferred payment agreement the house has to be sold when the person in care dies, in your case it could be several years later when the house is sold.
This would so non standard I don't think they would be allowed to do it even if they wanted to.
 

Dotz49

New member
May 11, 2022
7
0
Hi Nitram - the double garage/granny flat would be part of the bungalow (bottom of the garden) and it will be a condition of the planning approval (if we ever get approval), to say that it has to remain as part of the bungalow and cannot be sold separately. The double garage is the main event here for my son/storage, with a granny flat part added on for me.
I agree about trying to weigh up all the options, but it seems as soon as I think things are clearer, something else pops up.
I have a few things in my head now but it would be really helpful if someone could recommend a good solicitor who specialises in this area.
Many thanks again.
 

nitram

Registered User
Apr 6, 2011
25,438
0
North Manchester
I wouldn't give my one third share to my sons as no-one can predict the future and money does funny things to people. However if we do build the garage/flat with their money, then I would expect to own a lesser share.
You would still own a third of the house, your sons in addition to their thirds would fully own the flat.
Is the flat going to be NA where N is the house number with a separate entry on the land registry and therefore have a separate council tax rating?
 

Shedrech

Volunteer Moderator
Dec 15, 2012
12,442
0
Yorkshire
Hello @Dotz49
A warm welcome to DTP

Your situation is quite individual, it may be worth getting professional advice, and also contacting your Local Authority to seek their thoughts
These sites may help

and

 

Dotz49

New member
May 11, 2022
7
0
With a deferred payment agreement the house has to be sold when the person in care dies, in your case it could be several years later when the house is sold.
This would so non standard I don't think they would be allowed to do it even if they wanted to.
I didn't know that - thank you. I thought the charge stayed with the house until it was sold at any time in the future. I'm so confused.
 

Dotz49

New member
May 11, 2022
7
0
You would still own a third of the house, your sons in addition to their thirds would fully own the flat.
Is the flat going to be NA where N is the house number with a separate entry on the land registry and therefore have a separate council tax rating?
The flat will always be part of the house so will have no separate title and no separate address. It will never be allowed to be sold separately. Once built it will just be part of the current property but I understand will have separate Council Tax banding.
 

Chaplin

Registered User
May 24, 2015
197
0
Bristol
I have started to worry about my increasing memory loss and would like to put my affairs in order whilst I am able. My two sons and I jointly own the bungalow where I live with my oldest son. My younger son has his own home. I hadn't realised the solicitor had made us joint owners. My thinking is that I should change this to tenants in common to protect my two sons (the one I live with in particular) should I deteriorate and need to go into care. My oldest son and I have always lived together - he is now 40 and we moved from the family home after divorce and purchased the bungalow in 2010. We were on low incomes, hence the shared ownership in order to get a mortgage. I am 73 years old and therefore in the event of my needing care my son will not have reached 60 years of age to enable the home to be disregarded. At this stage I would mainly like advice on changing to tenants in common, but if anyone has any advice on where my resident son will stand in all of this, I should be grateful. He is my main concern.
You’ve lots of advice here so plenty to think about but do seek some advice so that you can get a diagnosis. There could be other reasons for your memory concerns so do seek some support on your health too. Good luck and I hope for your sake you can resolve the minefield of financial matters.
 

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