Tennants in common

[Darnay]

Twelve months ago my mother was diagnosed with dementia, shortly afterwards they moved from their house into council sheltered accommodation. Mums condition was worsening and she had difficulty managing stairs, and the house was too big for them.

At the same time my partner and I sold our house two hours drive away and moved into their former home, so we could be closer to them both and support them. They are now five minutes away and I visit 2/3 times a day.

We organised a court of protection deputyship for my mum in October and changed the ownership of the family house we are now living in from joint owners to tenants in common.

Dad changed his will and left his share of the property to me and my brother equally. Obviously mums share is covered under the COP order.

I have an arrangement with my dad that my partner and I will remain living in the house and upon such time as they both pass away I will inherit the house and give my brother half its value. My brother is quite happy with this arrangement as he doesn't see our parents as much and is happy for me to live near them and care for them.

Now dad wants to sign his share of the house over to me completely, for my security, with the agreement i would gift my brother what would amount to his half equal share in money when they die. I'm unsure whether that would be wise due to deprivation of assets. What if he ever needed to go into somewhere that required a greater level of care.

Any thoughts?

 

[Pete R]

I'm unsure whether that would be wise due to deprivation of assets. What if he ever needed to go into somewhere that required a greater level of care.

Any thoughts?

Hi Darney,

I am not too sure anything up till now has been that wise.

Whatever the arrangements of any will, nothing comes into affect till your Dad dies. Up till then it is his asset and will count towards his capital if needing to go into care.

If your Mother goes into care first then 50% of the value will be classed as her asset and I would imagine then be self funding. The only way the house could be disregarded is by your Dad moving back in.

If your Dad also has to go into care then the other 50% would be classed as his asset and he would also be self funding.

Should your Dad die first then I could see the Local Authority investigating a case of deprivation on the basis of what you have described up till now and may want the full value counted as your Mother's asset.

If either or both go into care you may be able to get a Deferred Payment Agreement from the LA. They will pay for the care up till death when they would require the debt repaying. That will be from sale of the house unless you can find the money from another source.

It may well be worth having a chat with a solicitor.

I wish you well.

 

[Darnay]

Hi Darney,

I am not too sure anything up till now has been that wise.

Whatever the arrangements of any will, nothing comes into affect till your Dad dies. Up till then it is his asset and will count towards his capital if needing to go into care.

If your Mother goes into care first then 50% of the value will be classed as her asset and I would imagine then be self funding. The only way the house could be disregarded is by your Dad moving back in.

If your Dad also has to go into care then the other 50% would be classed as his asset and he would also be self funding.

Should your Dad die first then I could see the Local Authority investigating a case of deprivation on the basis of what you have described up till now and may want the full value counted as your Mother's asset.

If either or both go into care you may be able to get a Deferred Payment Agreement from the LA. They will pay for the care up till death when they would require the debt repaying. That will be from sale of the house unless you can find the money from another source.

It may well be worth having a chat with a solicitor.

I wish you well.

Cheers Pete

I understand the problems and scenarios you describe. Basically if either of my parents have to go into care the other will move back in with me and my partner.

I was a little unsure of the Tennant's in common issue you mentioned. I assumed if they separated ownership and dad changed his will, upon dads death, there would be very little the LA could do,as they they wouldn't be able to sell half a house - as at that time my brother and I would own half the house?

 

[Pete R]

Cheers Pete

I understand the problems and scenarios you describe. Basically if either of my parents have to go into care the other will move back in with me and my partner.

I was a little unsure of the Tennant's in common issue you mentioned. I assumed if they separated ownership and dad changed his will, upon dads death, there would be very little the LA could do,as they they wouldn't be able to sell half a house - as at that time my brother and I would own half the house?

Say your Mother goes into care first and your Dad moves back in with you the house would be 100% disregarded, Should your Dad need care later the value will be split between the 2 of them.

If your Dad dies before going into care then The LA will come calling. They will certainly look at when the wills were changed and if at that time it was likely care could have been anticipated. From what you have said it seems likely.

If they do not consider it all as your Mothers asset they will likely expect her 50% share. Before April 2015 the rules for the value of half a property were mostly considered to be nil. Since April 2015 The New Care Act omitted that part from the guidance, probably in my view to prevent this situation from occurring. It seems now that the LA can value half a house even if it is as notional capital and if you disagree to this then expect a costly legal battle. The LA can even apply for the house to be sold. It is as far as I know untested so far.

It may be worth accepting an agreed value and go down the DPA route if offered.

Good Luck.

 

[Darnay]

Say your Mother goes into care first and your Dad moves back in with you the house would be 100% disregarded, Should your Dad need care later the value will be split between the 2 of them.

If your Dad dies before going into care then The LA will come calling. They will certainly look at when the wills were changed and if at that time it was likely care could have been anticipated. From what you have said it seems likely.

If they do not consider it all as your Mothers asset they will likely expect her 50% share. Before April 2015 the rules for the value of half a property were mostly considered to be nil. Since April 2015 The New Care Act omitted that part from the guidance, probably in my view to prevent this situation from occurring. It seems now that the LA can value half a house even if it is as notional capital and if you disagree to this then expect a costly legal battle. The LA can even apply for the house to be sold. It is as far as I know untested so far.

It may be worth accepting an agreed value and go down the DPA route if offered.

Good Luck.

So basically we've had some really dodgy legal advice.

If I am to keep the house ideally neither of my folks can enter care, and if they do one or the other must move back in with me, which is something I always expected to happen anyway.

Thanks for your sage advice.

 

[mancmum]

Surely it would be worth putting half a house on the open market

Some of this is a conversation about what ifs but I am pleased to see posts about the new Care Act because there are still people posting saying that houses are disregarded.

What if half a property went on the open market. Surely the value then becomes the value of any offer that is received. If indeed an offer is received on half a house.

I suspect that unless you had a property in central London there might not be any offers.

 

[Pete R]

So basically we've had some really dodgy legal advice.

Darnay, I am no lawyer and only going on my reading of The New Care Act along with experience of my own lengthy battle with my LA over having my Moms house disregarded. Your legal advice could be correct and what "mancmum" says about being unable to find a buyer could also be correct.

I am no fan of this system however I believe the TNCA was worded this way for a reason and that was to allow LA's to challenge some (I certainly do not include you in this) peoples attempts to avoid care home fees.

Do the best for your parents and also look after yourselves.

 

[mancmum]

could we sell father a third of our house

We come at this from the other direction. Father moved in with us three years ago and I provide care. However, our children have now left the family home and in the normal course of things we would probably have downsized and used the resulting money to help the kids with the rest of their lives. As my Dad lives with us any move needs to consider him OR he could buy into the house ...bearing in mind that the plan could be to up the input from paid carers once my husband retires and in that case my Dad would need two of the four bedrooms.

I for one really wish there was some sort of framework to determine how this should work

At the moment I do receive 'housekeeping' from my Dad which pays for his food, towards the bills including the mortgage, etc.

 

[tigerlady]

Twelve months ago my mother was diagnosed with dementia, shortly afterwards they moved from their house into council sheltered accommodation. Mums condition was worsening and she had difficulty managing stairs, and the house was too big for them.

At the same time my partner and I sold our house two hours drive away and moved into their former home, so we could be closer to them both and support them. They are now five minutes away and I visit 2/3 times a day.

We organised a court of protection deputyship for my mum in October and changed the ownership of the family house we are now living in from joint owners to tenants in common.

Dad changed his will and left his share of the property to me and my brother equally. Obviously mums share is covered under the COP order.

I have an arrangement with my dad that my partner and I will remain living in the house and upon such time as they both pass away I will inherit the house and give my brother half its value. My brother is quite happy with this arrangement as he doesn't see our parents as much and is happy for me to live near them and care for them.

Now dad wants to sign his share of the house over to me completely, for my security, with the agreement i would gift my brother what would amount to his half equal share in money when they die. I'm unsure whether that would be wise due to deprivation of assets. What if he ever needed to go into somewhere that required a greater level of care.

Any thoughts?

You dont say how old your father is or what the state of his health is. If he is mentally and physically fit, I think the changing of joint ownership to tenants in common is perfectly ok, as it is not depriving your mother of her assets, its just clarifying that they own half each. Also I think it is ok if he leaves you his half in his will, as that is the usual reason for having tenancy in common - so each partner can leave their half to whoever they want.

If, however, he is in poor health and in reality could need care himself in the near future its probably a bit risky for him to sign his half over to you now. As well as the prospect of him needing care in the future, another aspect of that, which I apologise for mentioning but it has to be considered by solicitors, is that if you and your partner split up, your partner could claim half of your half of the house, putting your and your dad's security at risk.

Also is if something drastic happens to your father so that he is the first one to go into care, and you had your mum back in the house living with you, then the house would be disregarded anyway. The problems could occur then if your mother dies before your father, or if your mothers condition got so bad she had to go into care as well - then him signing his half of the house over would be considered a deprivation of assets

I think you must go over every possible scenario with your solicitors - I am not familiar with the New Care Act so I apologise if I have said something stupid or said something to offend you

 

[nitram]

"could we sell father a third of our house"

As you say your father now lives with you and you provide care it is likely that any redistribution of liquid assets could be viewed as deliberate deprivation of assets by the LA in any future assessment.

Instead of purchasing a share of the property which will incur legal fees he could just give you some money.

He can give you £3000 each tax year without any IHT implications, he can also use up any unused allowance for the preceding year This means he could give you £6000 before 06/04/16 and then £3000 during each following tax year.

I think he could also rent a room for £4250 pa without any tax implications
https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme
I said think because you might not be able to rent it to your father, you would have to check.