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Wills and Dementia - not always straightforward

Feb 1, 2020

In this article, we look at how a particularly sad and difficult situation can impact negatively on inheritance. But, there is a solution. As ever, the answer lies in talking to a Wills specialist.

Imagine the scenario - and it’s not a pretty one. David and his wife Jeannie are pensioners - both in their early 80s. All is not well. Jeannie is living with dementia and is declining fast. She is now in a care home. This is being funded by the local authority. Even worse, David has cancer and doesn’t expect to live for more than just a few more months. He and the family are understandably worried about the immediate future. But it’s not just the elderly couple’s physical and mental welfare that are of such concern. It’s David and Jeannie’s Will, specifically the house they jointly own.

Local Authority ‘forced-sale’
It’s likely that Jeannie will survive David. When David dies, that’s when the financial problems will start. As matters stand, the elderly couple’s house will then be owned entirely by Jeannie. The local authority will almost certainly ‘forced-sale’ the property to fund her care, depriving the two daughters of their inheritance.

Switch to ‘tenants-in-common’
Fortunately, if David acts fast, there is a solution … and it works like this -

He needs to change ownership of the house from Joint Tenants to Tenants in Common. A Joint Tenancy is when Jeannie and David together own 100% of the property. Tenancy in Common is when each of them owns 50%. They instigate a process called Severance of Tenancy (non-mutual) to effectively divide the house into two.

Protecting the inheritance
The next step is for David to re-write his Will, putting his ownership into trust - the trustees being his two daughters. This means that, when David dies, the Local Authority can only make a claim on half of the house. The trustees are under no obligation to sell it. Furthermore, they can protect their inheritance further by installing tenants, thus reducing the property’s sale value.

When Jeannie herself one day dies, the Local Authority will be entitled to 50% of the sale value of the property with other 50% going to the two daughters.

Ask the expert - always
So often, old age fails to live up to the idyll of a tranquil and harmonious ‘drawing down of blinds’. Life can be cruel - often particularly, towards its end, as was the case for David and Jeannie. Fortunately, there are ways to ease some of the worry. The last thing elderly people need at times like these, is to suffer the worry of their loved-ones’ inheritance being unnecessarily jeopardised by punitive care fees. It’s in situations such as these that it’s always wise to seek the advice and support of a Wills and Assets expert.

Contact Tim Mullock on 01234 713021
Or email Tim.Mullock@AdeptAssetSolutions.co.uk

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