Care home costs, part two

Care home costs part two:
Ways to Lessen the Burden of Residential Fees

Change of Tenancy / Evacuation of Special Destination?
A change of tenancy in Scots Law is known as an ‘evacuation of special destination’.  Most of us who live with a partner or spouse are most likely to own their property as a ‘joint tenancy’. Thus if your partner was to pass away and the property was owned jointly, then their half would pass on to you and you would own the property.

In care fee terms this is not favourable as that means if you alone were to go into residential care, they would assess the full value of your home as capital. Alternatively if you were to sever the tenancy and distinctly own half each then, for example, when your partner passed away, their half would go into a trust fund and you would only own half the property. The beneficiaries of the trust fund would be expressed in the will of the deceased and is likely to be their children or grandchildren.

So your position as ‘joint tenants’ would become ‘tenants in common’. Thus if you were to then go into residential care your amount of capital would only be half of the house rather than the full value. Of course complications could arise if for instance you needed to sell your half to pay for care but if this were the case it may result in the property having a ‘nil value’. Further, it would be reasonable to think that the beneficiaries of the house would wish to buy the other half but if this was not possible problems may arise.

In addition one must be cautious when taking action to carry out an evacuation of special destination as, for example, if any of the beneficiaries went bankrupt this could leave you homeless if the house was required to repay any debts.

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