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Planning For Care Home Fees

Severance Of Joint Tenancy

How you own your home with your spouse or partner is very important. If one of you dies, what happens to your financial stake in the property will be very different depending on whether you are joint tenants or tenants in common.

This could affect:

  • Any outstanding mortgage
  • The level of funding you’re able to get for care home fees
  • The amount of inheritance tax that has to be paid on death
  • How the rest of your estate is taxed
  • Whether or not you can stay in your home.

Joint tenancy means that you or your partner inherits the property outright when the other dies. Although this can often be beneficial, it could also mean there is more inheritance tax to pay.

It can also push you above the threshold for any means-tested benefits you would otherwise be eligible for, including support for care home fees.

If you are tenants in common, you can leave your share of the property to your spouse, partner or to someone else in your Will, or you can put it in a trust for safekeeping. This can protect your estate from unnecessary tax and make sure your partner is able to keep living in the house when you’ve gone.

Our solicitors can advise you on the type of joint ownership that’s right for you. We have experts in conveyancing as well as tax and trusts and probate: we’ll be able to look at the whole picture to evaluate what’s best for you and your estate.

Call the team today on 0370 1500 100 – or use our online form and we’ll call you back.

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  • Vicky Day
  • Senior Associate Solicitor
Meet the team
Severance Of Joint Tenancy - More Information
    • What’s The Difference Between ‘Tenants In Common’ And ‘Joint Tenancy’?
    • Joint tenants have something called a ‘right of survivorship’. This means that when one co-owner dies, their share of the property automatically passes to the other.

      With a tenancy in common, each co-owner has their own separate share of the property. This share doesn’t automatically pass to the other co-owner upon death, so if you wanted your co-owner to inherit you would have to specifically name them in your Will.

      Alternatively, you could leave your share to someone else or even set up a trust to protect the capital. With the right planning you can make sure your spouse or partner gets to keep living in the house without being faced with an unmanageable tax bill or losing out on funding for care home fees.

    • Does My Spouse Inherit Our Home If I Die?
    • This depends on whether you and your spouse co-own the property as joint tenants or tenants in common. If you own it as joint tenants, your spouse will inherit the entire property by virtue of the ‘right of survivorship’.

      If you own it as tenants in common, however, you’ll need to make sure that:

      • Your Will names them as the sole beneficiary, or
      • They will be the sole beneficiary under the rules of intestacy.

      The rules of intestacy come into effect if someone hasn’t left a valid Will and could upset your inheritance plans if you’re not prepared. Read more about intestacy.

    • Can My Spouse Stay In The Property If Someone Else Inherits My Share?
    • If your spouse or partner owns a share in the property, they’ll still have a right to live there even if your share has passed to someone else.

      However, this can be complicated if the new co-owners don’t want them to stay there – for example, if they’d like to sell the property.

      Planning is essential to make sure you and your spouse or partner are both protected if the other dies. We’ll be able to advise on the best way to structure your assets to minimise tax but also ensure you don’t lose your home.

    • Meet The Team
    • Our partner-led team comprises experts in probate, wealth structuring and tax. In addition to our expertise in tax, trusts and estates, we also have our conveyancing team on hand to deal with all of your property needs.

      We are members of many professional bodies, including STEP (Society of Trust and Estate Practitioners), CIOT (Chartered Institute of Taxation), and CILEX (Chartered Institute of Legal Executives).

      All this means we have the multi-disciplinary expertise to give you the very best advice for you and your estate. Whatever your needs, we can help you plan effectively for the future.

      Meet the team

Irwin Mitchell are a very professional, trustworthy and straightforward company to deal with. I would recommend them to anyone."

Frank Clayton, client

Frequently Asked Questions

What Do I Need To Think About When Severing A Joint Tenancy?

Some of the things you need to think about when changing from joint tenants to tenants in common:

  • How much of the property will each of you own?
  • How will these shares be taxed, and is it cost-effective?
  • Does this affect the rest of your estate in terms of succession planning and tax planning?
  • Will you be able to make sure your spouse or partner can continue to live in the house if they want to?

Our expert team will be able to discuss your situation and evaluate whether severing your joint tenancy is the right thing for you. In each case it’s important to have a complete understanding of how this change will affect your estate as a whole, as well as the loved ones you want to provide for.

Call the team today on 0370 1500 100 – or use our online form and we’ll call you back.

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How Can Irwin Mitchell Help?

Within our multi-disciplinary team we have experts in probate, tax, estate planning and conveyancing. This means we can help you plan your estate in a way that’s tax efficient and protects your interests, both now and in the future.

Some of the services we can help with include:

  • Conveyancing if you’re buying a property
  • Tax and succession advice on how best to buy a property (jointly or as tenants in common) or change the ownership of an existing property
  • Drafting or reviewing Wills
  • Advising on property transfers and gifts
  • Planning for care home fees
  • Planning for later life – drafting Powers of Attorney and Wills.

We’re also able to help if your partner has died and you’re facing a dispute over being able to keep your home. Call us today for more information on 0370 1500 100 or use our online enquiry form.

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How Does Joint Tenancy Affect Care Home Fees?

Depending on your assets, you may qualify for funding support towards care home fees from NHS or your local authority.

Given that the average stay in a care home is 4.5 years and fees can cost thousands each month, whether or not you can get financial support could have an enormous impact on your estate.

If you have a joint tenancy with your partner and one of you dies, the surviving co-owner will inherit the whole property. This means they would probably not qualify for financial support, as their assets would be well above the assessment threshold.

By planning ahead with a tenancy in common, you could ensure that you or your spouse (whoever survives the other) still qualifies for financial support and doesn’t have to sell the home to pay for fees. This also protects your assets for your children or anyone else you want to inherit from your estate.

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