Can I cut my care costs with this simple home ownership change?

In our bi-weekly series, readers can email in with any questions about property to be answered by our expert, Jonathan Rolande. Jonathan is a professional property buyer and housing commentator who has bought and sold over 1,000 properties. If you have a question for him, email us at money@theipaper.com. Question: My brother-in-law recently told us that he and his wife had recently changed their property ownership from joint to “tenancy in kind”. He tried to explain to us their reasons, which seemed to be based on their concern regarding the potential payments for future care home payments, saying that the other tenant’s ownership and savings couldn’t be touched to pay for care with “tenancy in kind”, whereas this was not the case with joint ownership. I would be grateful if you and your team could explain whether this is the case and what any advantages or disadvantages there could be. Answer: Many couples who own their home worry about what happens if one or both need care later in life. The costs can soon erode a lifetime of savings. I believe your brother-in-law means owning your home as “tenants in common”, and he is right, up to a point. If you own a property as “joint tenants”, the survivor inherits the whole house when one of you dies. If the survivor later needs residential care, the council will generally count the full value of the property when it decides what they can pay. Tenants in common own a defined share each, usually 50 per cent, though shares can be unequal. Each can leave their share to someone else in a will. One common choice is to leave it in trust for the children. When the first of you dies, the survivor keeps their half and the other half passes into the trust. That can protect that share for the next generation.But several points need great care. Your savings are still assessed normally. Changing how you own the house does nothing for cash, investments, or other assets. It also gives no protection while you are both alive. If one of you needs care while the other stays in the property, the council will normally ignore the home. There are practical drawbacks. The survivor does not own the whole house outright. They may need to involve the trustees or beneficiaries when they sell, move or release money from the property. That can become awkward if family relationships are not as good as than they once were. Timing is important too, as councils can investigate arrangements made to avoid care fees. This is called “deliberate deprivation of assets”. No rule says that acting five or even ten years beforehand makes it safe. The council looks at your reasons for the change and whether you could reasonably foresee needing care, so there is no guarantee of success. Changing to tenants in common takes more than a will. You must serve a written notice of severance on the other owner and keep proof that it arrived and ask the Land Registry to enter a restriction, which records the change on the title. Before you act, please ask a solicitor to check how the trust is written and how it fits your own circumstances. This is one of those times when good legal advice is essential.