Many homeowners in England and Wales face a daunting challenge when a loved one requires residential care. For those with jointly owned property, the situation can become particularly complex — and the financial stakes are high. With residential care costing between £1,100 and £1,500 per week on average (and significantly more in London and the South East), understanding how joint property ownership interacts with care fee assessments is not just important — it is essential.
We understand the concerns that come with shared home ownership, particularly when one owner needs care. Knowing the legal and financial implications of joint property ownership in the context of care needs can mean the difference between preserving the family home and watching it be consumed by care costs. Between 40,000 and 70,000 homes are sold every year in the UK to fund care — proper planning can help ensure yours is not one of them.
Our experienced team is here to guide you through this challenging time. For a comprehensive understanding, you can refer to our detailed guide on care fees and jointly owned property.
Key Takeaways
- The type of joint ownership — joint tenancy or tenancy in common — directly affects how your property is treated in a local authority care fee assessment.
- In England, if your total assets exceed £23,250 (including your share of any property), you will be classed as a self-funder and expected to pay the full cost of your care.
- Seeking specialist advice early — ideally years before care is needed — can help protect your assets and give your family far more options.
- There are legitimate planning strategies, including severance of joint tenancy, trust arrangements, and deferred payment agreements, that can reduce the impact of care costs on the family home.
- Between 40,000 and 70,000 homes are sold every year in the UK to fund care — proper planning can help you avoid becoming one of those statistics.
Understanding Joint Ownership of Property in the UK
Understanding the intricacies of joint property ownership is vital for homeowners in England and Wales. Joint ownership can seem straightforward — two or more people share ownership of a property — but the way that ownership is structured has profound legal and financial implications, particularly when care needs arise.
Types of Joint Ownership
In England and Wales, there are two primary types of joint ownership: joint tenancy and tenancy in common. The distinction between them is critical, and it is one of the most important decisions any couple or co-owners can make regarding their property.
Joint tenancy means that all owners jointly own the entire property, with no individual having a distinct or identifiable share. The defining feature is the right of survivorship: when one owner dies, their interest automatically passes to the surviving owner(s) by operation of law, regardless of what their Will says. The vast majority of married couples in England and Wales hold their property as joint tenants — often without realising the implications this has for care fee planning and inheritance.
Tenancy in common, on the other hand, allows owners to hold distinct and defined shares in the property. These shares can be equal (50/50) or unequal (for example, 60/40 or 75/25). Crucially, there is no right of survivorship. When an owner dies, their share passes according to their Will — or, if they have no Will, under the intestacy rules. This is the form of ownership that opens the door to more sophisticated estate and care fee planning, because each owner’s share can be directed into a trust on death.
Legal Rights of Joint Owners
Joint owners have several legal rights, including the right to occupy the property, the right to receive a share of any rental income if the property is let out, and — depending on the type of joint ownership — the right to deal with their share independently.
- In a joint tenancy, all owners must agree on major decisions regarding the property. Neither owner can sell or mortgage the property without the other’s consent, and neither can leave their “share” by Will because legally they do not have one — they have an interest in the whole.
- In a tenancy in common, each owner can deal with their own share independently. They can leave it by Will, place it in trust, or (in theory) sell it — although in practice, selling a share of a home to a third party is unusual. Major decisions affecting the whole property, such as a sale, still typically require agreement from all owners.
Implications of Joint Tenancy vs. Tenancy in Common
The choice between joint tenancy and tenancy in common has significant implications, particularly when one owner needs care. This is where proper planning can make an enormous difference.
If a couple owns their home as joint tenants and one partner enters residential care, the local authority will treat the person entering care as having a beneficial interest in the property. While the property cannot usually be forced for sale while the other partner is still living there (a disregard applies — see below), the right of survivorship creates a different problem: when the partner living at home eventually dies, the entire property passes to the surviving care-home resident. At that point, the full value of the property becomes assessable for care fees.
If the property is held as tenants in common, each partner owns a defined share. This means each share can be dealt with separately — including being left by Will to children or placed into a discretionary trust (either through a Will trust or, with advance planning, a lifetime trust). When one partner enters care, the local authority assesses only their share of the property. And with the right planning in place, that share may already have been protected.
Understanding these differences is the foundation of effective care fee planning. It influences decisions on whether to sever a joint tenancy, how care fees are assessed, and the overall financial strategy for the family. For most couples, converting from joint tenancy to tenancy in common is one of the simplest and most effective first steps — and it costs very little to do. England invented trust law over 800 years ago, and the distinction between legal and beneficial ownership remains the cornerstone of property protection strategies today.
The Impact of Needing Care on Property Ownership
Needing care can have far-reaching consequences for property ownership, especially when the home is jointly owned. When one owner requires residential care, it triggers a chain of financial assessments and decisions that can fundamentally change the family’s financial position.
Overview of Care Needs
Care needs can vary widely among individuals, ranging from help with everyday tasks to full-time residential or nursing care. Understanding the level of care required is the first step in assessing the potential financial impact on the family home.
Types of care needs can include:
- Home care (domiciliary care): Assistance with daily tasks such as washing, dressing, and meal preparation in the individual’s own home. This can range from a few hours a week to live-in care.
- Residential care: Full-time care in a care home, providing accommodation, meals, and personal care support. Average costs are currently £1,100–£1,300 per week.
- Nursing care: Residential care with the addition of registered nursing staff for individuals with more complex medical needs. Average costs are £1,400–£1,500 per week, and can reach £1,700 or more in parts of London and the South East.
Financial Implications
The financial implications of needing care are substantial and often underestimated. At average rates of £1,200–£1,500 per week, a single year in residential care can cost between £62,000 and £78,000. Over several years, care costs can easily exceed the value of savings, investments, and even the owner’s share of a jointly owned property. When the average home in England is now worth around £290,000, it does not take long for care fees to consume the family’s most valuable asset entirely.
Key financial considerations include:
- The means test: In England, anyone with assets above £23,250 (including their share of a property, unless a disregard applies) is classified as a self-funder and must pay the full cost of their care. Between £14,250 and £23,250, a “tariff income” is calculated and you make a contribution. Below £14,250, the local authority funds your care.
- Property and the means test: If the person entering care is the sole occupant of the property, its value is included in the means test after the first 12 weeks (which are disregarded). If a spouse, partner, or certain other qualifying individuals still live in the property, its value is usually disregarded — but only for as long as they continue to occupy it.
- The impact on the other owner: Even where the property is initially disregarded, problems can arise when the remaining occupant dies, moves into care themselves, or needs to sell the property. Without planning, the full value may then be exposed to care fee assessments.
Decisions Required by Family Members
Family members may need to make difficult decisions regarding the property when one owner requires care. These decisions are often time-sensitive and emotionally charged, particularly if there are differing views among family members.
Decisions may include:
- Whether to sell the property to fund care costs — and whether there is actually any legal obligation to do so (there often is not, at least initially).
- Whether to apply for a deferred payment agreement from the local authority, which effectively allows the local authority to place a charge on the property and defer the care costs until the property is eventually sold or the person dies.
- Whether to sever a joint tenancy into a tenancy in common and place the deceased or remaining owner’s share into a trust through their Will.
- How to manage the property if one owner remains in the home while the other receives residential care.
Evaluating the Need for Care
Assessing the need for care is a critical step that requires careful consideration of the individual’s circumstances, the role of local authorities, and the wider impact on the family. Getting this assessment right — and understanding what it means financially — is the starting point for all planning decisions.
Assessing the Level of Care Needed
The first step in evaluating the need for care is to determine what level of support the individual actually requires. Under the Care Act 2014, adults in England have a legal right to a needs assessment from their local authority, regardless of their financial situation.
Key factors considered in a care needs assessment include:
- The individual’s ability to perform daily tasks such as bathing, dressing, preparing meals, and managing medication.
- Any medical or nursing needs, including conditions such as dementia, mobility issues, or chronic illness.
- The individual’s mental health and emotional wellbeing.
- The availability and sustainability of existing support from family members or informal carers — and whether those carers need an assessment of their own needs.
Role of Local Authorities
Local authorities play a central role in the care process. They are responsible for carrying out needs assessments, determining eligibility for support, and conducting financial assessments (means tests) to establish how much the individual must contribute towards their care costs.
It is worth noting that the local authority’s financial assessment and the needs assessment are separate processes. You may be found to have eligible care needs but still be expected to pay the full cost of your care if your assets exceed £23,250. Local authorities also have a duty to provide information and advice about care options, and they can arrange care even for self-funders — though at a cost.
For more detailed information on how local authorities assess care needs and the financial implications for jointly owned property, you can refer to our guide on care fees and jointly owned property.
Family Responsibilities and Considerations
Family members often play a crucial role in caring for their loved ones. It is important to understand that there is no legal obligation on family members to pay for an adult relative’s care in England and Wales — but there are practical realities and emotional pressures that cannot be ignored.
Family considerations include:
| Consideration | Description | Impact |
|---|---|---|
| Financial Impact | Care costs of £1,100–£1,500+ per week can rapidly deplete family assets, including the value of a jointly owned home. | Potential loss of the family home and significant reduction in inheritance for the next generation. |
| Emotional Support | The emotional toll of seeing a parent or partner enter care, combined with the stress of financial decision-making. | Risk of family conflict, carer burnout, and strained relationships — particularly where siblings disagree on the best course of action. |
| Care Arrangements | Decisions on whether to arrange home care, residential care, or nursing care — and how to fund each option. | Directly affects the quality of life for the person needing care and the financial security of the remaining family members. |
By understanding the level of care needed, the role of local authorities, and the practical responsibilities that fall on family members, families can make informed decisions that support the wellbeing of their loved ones while taking steps to protect the family’s assets. The key message is this: plan, don’t panic — and seek specialist advice as early as possible.
Property Valuation and Care Fees
Care fee assessments in England involve evaluating the value of a person’s assets, and for many families, the most significant asset is their share of a jointly owned home. Understanding how property valuation affects care fees is crucial for anyone dealing with the prospect of residential care for a co-owner.
How Property Valuation is Conducted
When a local authority carries out a financial assessment, they need to establish the value of the person’s share of any property they own. For a jointly owned property, this is not simply a matter of dividing the market value in half.
A professional valuation is typically obtained to determine the property’s open market value. However, the value of a share of a jointly owned property — particularly where the other owner is still living in it — is often significantly less than a simple 50% of the whole. This is because a share of an occupied property is very difficult to sell on the open market. The concept of a “notional discount” can apply, meaning the assessed value of the individual’s share may be substantially reduced.
We recommend that property owners seek an independent valuation and, where appropriate, challenge the local authority’s assessment if they believe it overvalues the person’s share. A specialist solicitor can advise on whether the valuation is reasonable and how to challenge it effectively.
Care Fee Assessments Based on Property Value
The value of a person’s share in a jointly owned property can significantly impact care fee assessments, but the rules contain important nuances that many families are unaware of.
Crucially, the value of the property is disregarded in the means test if any of the following people still live there: a spouse or civil partner, a former partner who is a lone parent, a relative aged 60 or over, a relative who is incapacitated, or a child of the care home resident who is under 18. In these circumstances, the property is not counted as capital in the financial assessment, regardless of its value.
However, once those qualifying occupants no longer live in the property — whether through their own death, moving into care, or moving elsewhere — the disregard ceases and the property value comes back into the assessment. This is precisely why forward planning is so critical: what protects the home today may not protect it tomorrow.
For more information on how care fees are assessed and the role of second homes, you can visit our page on care fees and second homes in the UK.
| Capital Threshold (England) | Care Fee Contribution |
|---|---|
| Below £14,250 | Local authority funds care (property share not counted if disregard applies) |
| £14,250 – £23,250 | Partial contribution — “tariff income” of £1 per week for every £250 (or part of £250) above £14,250 |
| Above £23,250 | Self-funder: you pay the full cost of your care until your assets fall to £23,250 |
It is essential to understand that the valuation of a jointly owned property and its impact on care fees can be highly complex. Seeking specialist advice well in advance — ideally years before care is needed — can help families plan effectively and explore legitimate options for protecting their share of the property.
Selling a Jointly Owned Property
Selling a jointly owned property, especially to fund care costs, involves several legal and financial considerations. Many families assume that selling is inevitable once care is needed, but that is not always the case — and understanding your rights and options is essential before making any decisions.
Processes for Selling the Home
Selling a jointly owned home requires agreement from all parties involved. Here are the key steps:
- Determine the ownership structure: Check the title at the Land Registry to confirm whether you hold the property as joint tenants or tenants in common. This fundamentally affects what happens to each owner’s interest.
- Obtain necessary consents: All legal owners must agree to the sale. If one owner lacks mental capacity, a deputy (appointed by the Court of Protection) or an attorney acting under a Lasting Power of Attorney (LPA) for property and financial affairs will need to act on their behalf.
- Obtain a professional valuation: Get an accurate valuation to determine the property’s current market value.
- Instruct a solicitor and estate agent: Engage a conveyancing solicitor and an estate agent to handle the legal process and market the property effectively.
Legal Considerations When Selling to Fund Care
When selling to fund care, there are specific legal considerations to keep in mind:
- Deferred payment agreements: If the local authority is involved in funding care, you may be able to apply for a deferred payment agreement. This allows the local authority to place a legal charge on the property, deferring the care costs until the property is sold or the person dies — avoiding a forced sale while a partner is still living there.
- Charging orders and beneficial interests: Be aware of any existing charges on the property (such as a local authority charge) and ensure that all beneficial interests are properly recorded and protected.
- Mental capacity: If the owner entering care lacks mental capacity to consent to the sale, the person holding their property and financial affairs LPA, or a Court of Protection-appointed deputy, must act in their best interests. The sale must be demonstrably in the person’s best interests, not just convenient for the family.
- Impact on means-tested benefits and care funding: The sale proceeds will become assessable capital. Once the person’s share of the proceeds is identified, it will be subject to the same capital thresholds (£23,250 upper limit, £14,250 lower limit) as any other capital asset.
Potential Tax Implications
Selling a jointly owned property can have significant tax implications. Key areas to consider include:
- Capital Gains Tax (CGT): If the property is the owners’ main residence, Private Residence Relief (PRR) should exempt the gain from CGT. However, if one owner has moved into a care home, there is a time-limited period (currently 9 months from the date they left the property) during which PRR continues to apply to their share. After that period, their share of any gain may become liable to CGT at residential property rates (currently 24%).
- Inheritance Tax (IHT): The sale itself does not trigger an IHT liability, but the proceeds form part of the person’s estate. If total assets exceed the nil rate band (£325,000 per person, frozen until at least April 2031), the excess may be liable to IHT at 40% on death. For married couples, unused nil rate band and any applicable Residence Nil Rate Band (£175,000 per person, available only where a qualifying residential interest passes to direct descendants) can transfer to the surviving spouse — giving a combined maximum of £1,000,000 before IHT applies.
- Income Tax: If the sale proceeds are invested and generate interest or income, this will be subject to income tax in the usual way.
By understanding these factors, you can make informed decisions about selling your jointly owned property to fund care costs — and avoid unnecessary tax liabilities in the process.
Remortgaging to Cover Care Costs
The need for care can lead to significant financial pressure, and remortgaging is sometimes considered by homeowners looking to release equity from a jointly owned property without selling it outright.
Remortgaging involves replacing an existing mortgage with a new, larger one — or taking out a new mortgage on an unencumbered property — to release cash. This equity can then be used to cover care costs. However, it is essential to understand when this is a realistic option and the potential consequences before proceeding.
When Remortgaging is an Option
Remortgaging can only be considered when there is sufficient equity in the property — meaning the property’s value is significantly more than any outstanding mortgage. The released equity can then be used to fund care, providing a financial bridge without forcing a sale.
However, there are practical barriers. Most mainstream lenders will not offer a mortgage to borrowers over a certain age, or where one borrower is in residential care and the remaining borrower has a limited income. Affordability assessments have become considerably stricter in recent years. Where a standard remortgage is not available, a lifetime mortgage (a form of equity release) may be an alternative — though this comes with its own costs and implications.
It is also crucial to consider that any increase in the mortgage balance reduces the equity in the property, which in turn reduces what will eventually pass to the family. If care costs continue for several years, the combination of mortgage interest and care fees can erode the property’s value significantly.
Potential Consequences of Remortgaging
While remortgaging can provide necessary funds in the short term, it is not without significant risks. Increasing your mortgage debt leads to higher monthly payments (or, with a lifetime mortgage, a growing debt secured against the property), which may be difficult to manage on a reduced household income — particularly when one partner is in care and no longer contributing financially.
There is also the risk that, in a declining property market, negative equity could result — meaning you owe more on the mortgage than the property is worth. This can make it impossible to sell the property or remortgage again in the future.
Key considerations include:
- The impact of increased mortgage debt on monthly outgoings for the partner remaining at home.
- The potential for interest rate rises, which could significantly increase repayments on a variable rate mortgage.
- The risk of negative equity if property values fall.
- The fact that mortgage payments reduce the estate, potentially affecting inheritance and the Residence Nil Rate Band (which requires a qualifying residential interest to pass to direct descendants on death).
- Whether the released equity will itself be treated as assessable capital in the care resident’s means test.
It is essential to weigh these factors carefully. Seeking advice from both a specialist financial adviser and a solicitor experienced in care fee planning is strongly recommended before remortgaging to fund care.
Living Arrangements After One Owner Requires Care
When one owner of a jointly owned property enters residential care, the remaining owner faces immediate and practical questions about their own living arrangements and the future of the family home.
These decisions are not just about short-term convenience. They have long-term financial, legal, and tax implications — particularly regarding care fee assessments, inheritance tax, and the protection of the family’s assets for future generations.
Remaining in the Home Alone
The most common initial arrangement is for the remaining owner to continue living in the home. This is often the preferred choice, and the good news is that UK law provides important protections in this situation.
As noted above, when a spouse, civil partner, or certain qualifying relatives continue to live in the property, its value is disregarded in the means test for the owner who has entered care. This means the local authority cannot force a sale of the property or include its value in the financial assessment while the qualifying occupant remains in residence.
However, important factors to consider include:
- Future vulnerability: The disregard only lasts as long as the qualifying person remains in the property. If they later move, die, or enter care themselves, the property may become assessable.
- Maintenance and running costs: Managing and maintaining the property on a single income can be challenging, especially if the household income is reduced by the care costs of the other owner.
- Planning for the future: This is the time to take legal advice about severing any joint tenancy, updating Wills, and potentially placing a share of the property into a discretionary trust through a Will — so that if the remaining partner dies first, their share is protected for the family rather than passing to the partner in care (and thus becoming fully assessable).
Renting Out the Property
If neither owner is able to live in the property — for example, if the remaining owner also needs to move to more suitable accommodation — renting out the property may be an option. This can generate income to help fund care costs while avoiding an immediate sale.
Consider the following:
- Rental income and care fee assessments: Any rental income received by the owner in care will be treated as income and taken into account in their financial assessment by the local authority. It will reduce the amount the local authority contributes (or increase the amount the self-funder must pay).
- Landlord responsibilities: Becoming a landlord brings legal obligations, including gas safety certificates, deposit protection, and compliance with housing standards. A letting agent can manage these responsibilities, but their fees reduce the net income.
- Tax implications: Rental income is subject to income tax. If the property is no longer the owner’s main residence, any future sale may attract Capital Gains Tax on the gain since the property ceased to be a main residence.
- Property disregard: If the property is rented out and no qualifying person is living in it, the local authority may include the capital value of the owner’s share in the means test — on top of assessing the rental income.
Ultimately, the decision on living arrangements after one owner requires care should be made with careful consideration of all available options and their long-term implications. Seeking specialist advice from a solicitor experienced in care fee planning and inheritance tax planning is essential to ensure that the chosen arrangement protects the interests of all parties involved.
Inheritance and Future Planning
Care needs can fundamentally alter the landscape of inheritance, making it essential to plan ahead — particularly for jointly owned properties. Without proper planning, residential care costs can consume a family’s entire estate over a matter of years, leaving nothing for the next generation.
Impact on Inheritance
The financial burden of residential care is one of the biggest threats to family wealth in England and Wales today. At average costs of £1,200–£1,500 per week, a care stay of three to four years can consume £180,000–£300,000 or more. For a family whose main asset is a home worth around £270,000–£290,000 (the current average in England), this can mean the complete loss of the family home.
When a jointly owned property is held as joint tenants, the right of survivorship means the entire property will eventually end up in the hands of the surviving owner — who may be the person in care. At that point, the full value of the property becomes assessable for care fees. This is one of the most common and devastating scenarios we see, and it is entirely preventable with proper planning.
Protecting the Future through Planning
There are several concrete steps that families can take to protect their assets and ensure their wishes are carried out:
1. Sever the joint tenancy: Converting from joint tenancy to tenancy in common gives each owner a defined share of the property. This share can then be dealt with independently — including being left by Will to children or placed into a trust.
2. Make or update Wills: A properly drafted Will is the foundation of any estate plan. For jointly owned properties held as tenants in common, each owner’s Will can direct their share into a discretionary trust on death. This means that if one partner dies first, their 50% share is held in trust for the benefit of the surviving partner (who can continue living in the property) and the children — but crucially, it is no longer the surviving partner’s asset and therefore falls outside their care fee assessment.
3. Consider a lifetime trust: For those who want to plan further ahead, placing their share of the property (or the entire property) into an irrevocable lifetime trust — such as a Family Home Protection Trust — can provide protection during the settlor’s lifetime, not just on death. The trustees become the legal owners of the property, while the settlor and their family benefit from it under the terms of the trust deed. This must be done well in advance of any foreseeable care need to avoid a deprivation of assets challenge from the local authority. There is no fixed time limit for deprivation challenges (unlike the 7-year rule for inheritance tax), but the longer the gap between the transfer and the need for care, the harder it is for the local authority to argue that care fee avoidance was a significant operative purpose.
4. Establish Lasting Powers of Attorney (LPAs): Both a Property and Financial Affairs LPA and a Health and Welfare LPA should be in place for each owner. Without these, if a person loses mental capacity, the family may need to apply to the Court of Protection for a deputyship order — a process that is expensive, slow, and ongoing.
Visiting our services page can provide more insights into how we can assist with your estate planning and care fee protection needs.
Here is an overview of key considerations for inheritance planning when care needs arise:
| Consideration | Impact on Inheritance | Planning Action |
|---|---|---|
| Care Costs | At £1,200–£1,500/week, care costs can consume the entire estate within a few years | Plan early: sever joint tenancy, update Wills, consider a lifetime trust for the property |
| Joint Property Ownership | Joint tenancy causes the whole property to pass to the surviving owner — potentially the person in care | Convert to tenancy in common and direct each share via Will or trust |
| Wills and LPAs | Without a Will, intestacy rules apply and shares cannot be directed into a protective trust. Without LPAs, expensive deputyship applications may be needed | Make or update Wills with trust provisions. Establish both types of LPA for each owner |
Family Agreements and Disputes
Family agreements become crucial when one owner of a jointly owned property requires residential care. The emotional and financial pressures of care decisions can strain even the closest family relationships, making it essential to work together effectively and, where necessary, seek help in resolving disagreements.
Collaborating with Family Members
When dealing with care needs and property ownership, family members must navigate potentially sensitive decisions together. Open, honest communication is the foundation of reaching a consensus that works for everyone involved.
- Discuss the level of care needed, the available options, and the realistic costs involved — residential care at £1,100–£1,500 per week is a figure that puts the discussion into sharp focus.
- Explore options for funding care, including the potential sale of the property, deferred payment agreements, equity release, and whether trust planning could protect some or all of the property’s value.
- Consider the implications for inheritance and future planning — ensuring that everyone understands the impact of different decisions on the family’s long-term financial position.
- Where possible, involve a specialist solicitor or estate planner in these discussions. Having an independent professional present can depersonalise difficult conversations and ensure decisions are based on facts rather than emotions.
Effective collaboration can help prevent disputes and ensure that decisions are made in the best interest of all parties — including the person who needs care.
Mediation for Resolving Disputes
Despite the best intentions, disputes can arise among family members regarding care arrangements, property decisions, and the division of financial responsibilities. Mediation can be a valuable tool in resolving these disputes, providing a structured and neutral process for discussion without the cost and adversarial nature of court proceedings.
Mediation can help families:
- Clarify the issues at stake and the goals of all parties — separating emotional concerns from practical and financial ones.
- Explore potential solutions that meet the needs of everyone involved, including options that may not have been previously considered.
- Reach a consensus that is fair and reasonable — and that can be documented in a written agreement to prevent future disagreements.
| Benefits of Mediation | Traditional Approaches (e.g., Court Applications) |
|---|---|
| Neutral third-party facilitation in a confidential setting | Often adversarial, with public hearings that can permanently damage family relationships |
| Encourages open communication and collaborative problem-solving | Can be confrontational, with each party represented by separate legal teams |
| Flexible, cost-effective, and tailored to the family’s specific circumstances | Rigid, expensive, and subject to court timetables — often taking months or years |
By considering mediation early, families can work through their differences and find a path forward that respects the needs and concerns of all members — while avoiding the cost and emotional damage of court proceedings.
Alternatives to Selling a Joint Property
Joint property owners facing care costs often seek alternatives to selling their home, looking to preserve the family’s most valuable asset while meeting financial obligations. When one owner requires residential care, selling the family home may feel like the only option — but in many cases, it is not.
Understanding the alternatives is crucial for making an informed decision. Each option has its own advantages, risks, and implications for care fee assessments, tax, and inheritance.
Equity Release Schemes
Equity release schemes allow homeowners aged 55 or over to access some of the equity tied up in their property without selling it. This can provide a lump sum or regular income to help fund care costs. There are two main types:
- Lifetime mortgages: The most common form of equity release. You borrow against the value of your home, with interest rolling up over time. No monthly repayments are required — the loan plus accumulated interest is repaid when the last surviving homeowner dies or moves into long-term care. All plans approved by the Equity Release Council include a “no negative equity guarantee,” meaning you will never owe more than your home is worth.
- Home reversion plans: Less common. You sell a percentage of your home to a provider in exchange for a lump sum or regular payments, plus the right to remain in the property rent-free for life. The provider receives their share of the sale proceeds when the property is eventually sold.
It is essential to carefully consider the implications of equity release. The amount released becomes assessable capital in the care resident’s means test. Interest on a lifetime mortgage compounds over time, which can significantly reduce the equity remaining for the family. Equity release also affects eligibility for means-tested benefits and can reduce or eliminate the Residence Nil Rate Band for inheritance tax purposes if the property value in the estate drops below the threshold or the qualifying conditions are no longer met. Independent financial advice is a legal requirement before proceeding with any equity release product.
Applying for Government Support
Another alternative is applying for government support to help cover or offset care costs. There are several forms of assistance available:
- Attendance Allowance: A tax-free, non-means-tested benefit for individuals over State Pension age who need help with personal care due to a physical or mental disability. This can be claimed regardless of your savings or property ownership, and it is not counted as income for care fee assessment purposes.
- NHS Continuing Healthcare (CHC): If the individual’s primary need is a health need (as opposed to a social care need), the NHS may fund the full cost of care. This is not means-tested. Eligibility is assessed through a multi-disciplinary team using the National Framework. If awarded, all care costs are met by the NHS — including accommodation in a care home.
- NHS-funded Nursing Care (FNC): If CHC is not awarded but the person requires nursing care in a care home, the NHS contributes a flat-rate payment towards the cost of the nursing element. This is paid directly to the care home and reduces the amount you need to pay.
- Deferred Payment Agreements: Local authorities must offer these to eligible self-funders whose main asset is their home. The local authority pays the care fees and places a legal charge on the property. The debt is repaid when the property is eventually sold — or from the estate after death. This prevents a forced sale of the home during the person’s lifetime.
- Local authority funding: Once the person’s assessable assets fall below £23,250, the local authority begins to contribute to care costs. Below £14,250, the local authority funds the full cost (subject to income contributions).
Understanding the eligibility criteria and application process for these benefits is crucial. Many families miss out on significant support simply because they were not aware it was available or did not apply. Seeking advice from a specialist in care fee planning can help navigate these complexities and ensure every available source of support is accessed.
By exploring these alternatives thoroughly, joint property owners can make informed decisions that balance the need to fund care with the desire to preserve the family home for future generations. As Mike Pugh often says: “Plan, don’t panic.”
Seeking Professional Advice
Navigating the complexities of care needs and joint property ownership is not something any family should attempt without professional guidance. The interaction between property law, care fee regulations, tax law, and family dynamics creates a web of considerations that requires specialist expertise to navigate effectively.
Expert Guidance for Care Needs
A solicitor specialising in estate planning and care fee protection can provide invaluable guidance on the legal implications of care needs on property ownership. This includes advice on severing a joint tenancy, placing property into trust, updating Wills, and establishing Lasting Powers of Attorney. As Mike Pugh puts it: “The law — like medicine — is broad. You wouldn’t want your GP doing surgery.” Care fee planning requires a specialist, not a general practitioner.
At MP Estate Planning, we use our proprietary Estate Pro AI system — a 13-point threat analysis — to identify the specific risks facing each family and recommend tailored solutions. Whether the right approach is a Family Home Protection Trust, a Gifted Property Trust, or simply a restructured Will with discretionary trust provisions, the answer depends on each family’s unique circumstances.
Financial Planning for Care Costs
A specialist financial adviser can help you understand the full financial picture, including how care costs interact with your income, savings, property, pensions, and state benefits. They can advise on options such as equity release, investment strategies for care funding, and whether an immediate needs annuity (which provides a guaranteed income for life to pay care fees in exchange for a lump sum) might be appropriate.
When you compare the cost of proper planning — a trust typically costs from £850 for straightforward cases — against the potential cost of residential care at £1,200–£1,500 per week, the value of planning becomes clear. A trust costs the equivalent of one to two weeks of care. It is a one-time investment versus an ongoing cost that continues until assets are depleted to £14,250.
By seeking professional advice early — ideally years before care is needed — you can ensure that you are well-equipped to handle the challenges of property ownership and care. Trusts are not just for the rich — they are for the smart. And as we say at MP Estate Planning: not losing the family money provides the greatest peace of mind above all else.