Are you going to lose your home?
When considering whether or not your home is at risk of being taken away from you and sold to pay for your care fees, there are a number of factors that need to be considered.
– Who lives in your home?
– Who owns your home (is it still mortgaged)?
– How is your home owned (Joint Beneficial Tenants or Tenants in Common)?
– What is the value of your home?
– Do you have savings or banks accounts valued over £23,250?
Local Authorities and care organisations have to look into these factors as a part of their decision as to whether or not they should take your home and sell it.
If there is someone over 60 living in your home it greatly reduces the risk to the home in the first instance. But what if they die or move out?
It is less likely that your home will be sold if you have a large amount of savings that can be used to pay instead, but what happens when this money runs out?
If the house is still mortgaged or is of significantly low value (worth less than £23,250), the chances of the house being sold are again reduced but not guaranteed.
So what about how your home is owned?
Joint Beneficial Tenants vs Tenants in Common
When you own a house as Joint Beneficial Tenants, you and another person, usually your spouse/ partner, both own an effective 100% of the house each. This means that should one of you pass away, the ownership automatically transfers to the survivor without the need for probate.
If you own your home as Tenants in Common, then you and your spouse/ partner each own an effective 50% of the house. This means that when one of you passes away, that persons share of the house needs to be passed on as part of the administration of their estate.
But here is another benefit to being Tenants in Common.
There are a set of guidelines known as CRAG (Charges for Residential Accommodation Guide) that tells the Local Authority and care organisations what to do when considering care fees. One clause in particular deals with property in this situation:
“Where an interest in a property is beneficially shared between relatives, the value of the resident’s interest will be heavily influenced by the possibility of a market amongst his fellow beneficiaries. If no other relative is willing to buy the resident’s interest, it is highly unlikely that any “outsider” would be willing to buy into the property unless the financial advantages far outweighed the risks and limitations involved. The value of the interest, even to a willing buyer, could in such circumstances effectively be nil. If the local authority is unsure about the resident’s share, or their valuation is disputed by the resident, again a professional valuation should be obtained”.
This basically means that where there is a property that is owned as Tenants in Common then as long as the property is not sold, the entire propertycould be taken as being outside of the net for means-testing. This could therefore leave your home in the hands of your family rather than it being sold to pay for your care costs.