For most married couples their principal asset is the family home.

In an increasing number of cases the family home has been used to finance the care of an elderly surviving parent in either a residential home or a nursing home. With fees in the region of 2,000 per month, the capital can soon decline, leaving a significantly reduced inheritance for the children. Such a scenario is unwelcome to parents who wish to preserve their estate in order to pass it on to their children.

The family home will only be taken into account in a financial assessment when the survivor of the couple requires long term care or both of them do. The reason for this is that the family home is disregarded in any financial assessment provided that the other spouse continues to live in the property.

Couples can use their Wills as a financial planning tool designed to help preserve the family home for the next generation. We set out below one of the options available.

The following steps need to be taken:

  1. Where they co-own their property, they own the property upon trust for themselves. There are two ways in which the property can be vested in their ownership, either as joint tenants or as tenants in common. Where they own the property as joint tenants the deceased’s interest in the property passes automatically to the survivor upon the first death. Where they own the property as tenants in common they each have a defined interest in the property. They are therefore able to leave their interest in the property under the terms of their respective Wills. A couple should therefore convert the nature of the ownership of their property to tenants in common.If the property is in the sole ownership of one spouse, which is sometimes the case, it should be transferred into their joint names and held as tenants in common.
  2. They each make Wills giving each other a right to live in the property in respect of their individual share therein. Upon the first death, the survivor will continue to own their half share interest in the property. He or she will also have a right to live in the property by virtue of the terms of the will of the first one to die. Their continued residence in the property will therefore be secure. In the event that the survivor goes into a nursing or residential home, the right to reside in the half-share interest of the first to die will cease. The half share interest in the property will then pass to the children. It will not form part of the estate of the survivor. As such it will not be taken into account in any financial assessment of him or her.

By adopting the above steps, the first one to die will be preserving at the very least his or her interest in the property for the children. It is an exercise well worth considering for the potential financial savings available.

For further information upon this subject contact Peter Kirrane or Dot Sharpe at the Dewsbury Office.


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