Joint tenancy is a term within estate law that represents a form of ownership by two or more people, often married couples, who own a house jointly. Often people mistake this legal jargon for meaning tenant in relation to having a landlord. However Joint Tenancy is completely separate from renting and in reality is simply a form of ownership. The term means that the occupants have an equal share of the property and ownership over it. However they do not own a distinct percentage, as one would under Tenants in Common, therefore joint tenancy creates a Right of Survivorship. The Right of Survivorship means that when one occupant passes away their share of the property would move over to the survivor and they would own the property entirely. Many couples do not see this as a problem and are led to believe that it is something that they want. However, what many do not realise is that when one tenant passes away and the surviving tenant receives their share, this share is unprotected and very much subject to the Local Authority ’s means testing. Therefore, the whole property could be used by the Local Authority to pay for the surviving occupants’ care fees. Furthermore, under Joint Tenancy, when an occupant passes away, nobody other than the surviving occupant can inherit his or her share of the property, regardless of what the Will states. This could result in your children not inheriting anything if the Local Authority chooses to use the property for the surviving occupants’ care fees.
Tenancy in Common provides couples with a safer option than Joint Tenancy. Those who own a house under Tenants in Common can protect their house from care fees by incorporating a Property Trust and/or a Grandparent Wills into their Will. Therefore, a wife for instance can still be allowed to live in the property once their husband has passed away. However, because they each own a distinct percentage of the house, the deceased’s percentage will not be taken into consideration for the surviving partners care fees. Although the surviving partner may use their late spouse’s percentage of the property to either leave invested in the house or invest it into another property, they cannot spend it on anything other than property. This means that if you own a house under Tenants in Common and you incorporate a Property Trust into your Will, your percentage of the house Will be put in trust for your children which will be inherited by them upon your both you and your spouse’s death. If a Grandparent Wills is incorporated then the money you put in this trust for your children cannot be subject to their divorce fees or be inherited by their spouse if they die, but rather it would remain in trust for your grandchildren.
At April King we can guide you through the process of severing your Joint Tenancy and making you Tenants in Common. Our lawyers have the expertise to prepare a fully equipped Will for you that will protect your property from care fees. This will include a Property Trust which will ensure that half of your house will not be subject to care fees and it will be put in a trust that is not subject to the complications your children may face such as divorce fees or bankruptcy. Theses trusts ensure that half of your property cannot be taken into account for any of these complications. Moreover, with the Grandparent Wills in addition to the Property trust, we can guarantee that half of your property will never move sideways out of the family. For example, in the case of divorce or death of your child, your children and then your grandchildren will receive your property and assets as the Grandfather Wills goes.