When we make a Will, we usually leave everything to the survivor and then to our children. It may come as a surprise to know that your children could end up with very little or even nothing at all. This may happen if one or both of you need residential care. If you have assets over certain (low) limits you will be expected to meet all your own costs and these can be from around 300 to 700 per week or more. Nursing Home Fees When someone goes into residential care they are 'means tested'. All assets are taken into account, even the family home! You need to pay for your own care costs until you are down to your last few thousand, which includes the value of your home. However, you can protect a significant part of the family home if you act now! To wait and not take action until just before requiring care may be seen to be depriving yourself of assets. In this instance, the authorities have the power to ignore your action and declare the asset yours. It is important that you act as soon as possible, while you are fit and well. Severance of Tenancy Most couples own their home as 'Joint Tenants'. This means that if one joint owner dies the survivor would own the total value outright irrespective of what might be written in a Will. This means that the whole value would be means tested. The alternative is a 'Tenancy in Common'. This means that each party owns a share of the property and can deal with it as they wish. If one partner needed residential care, only their share of the property would be taken into account, therefore, preserving the share of the other partner. The difference with this arrangement is that your children would be guaranteed to inherit at least some of the value of your home. Remarriage This arrangement will also protect your share of the family home if your partner were to later remarry. This ensures your share goes to your family line rather than your spouse's partner's new family. A Property Trust in your Will would guarantee a right of residency but would not allow your share of the home to be passed to anyone other than your children. Prehandle this delicate issue and ask your financial planner about a Severance of Tenancy today. |
