Wills - Property Ownership and Residential Care Subsidies
If you have made the decision to change the ownership of your property to ‘tenants in common in equal shares’ it is imperative that you make your Wills reflect that.
Under ‘tenants in common’ ownership, on the death of one of you, the deceased’s Estate would take legal ownership of the deceased’s share in the property.
Your Wills therefore need to be drafted to provide that on the death of one of you, the survivor still retains ‘possession’ and control of the property in practical terms.
This is achieved by each of you, in your Wills, leaving the survivor the ‘right to continue to occupy’ what is now the Estate’s share of the property. This allows the survivor to remain living in the property, or sell it in substitution of another, during their lifetime or until they enter another relationship or go into care themselves.
An expiry date should be put on this ‘right to occupy’, in that if they were to go into care, Ministry of Social Development would assess what they consider to be the value of the Estate’s share to the survivor, and include that figure in the assets of the person applying for the RCS, including interest on sale proceeds if the property was to be sold and the survivor went into care.
Therefore, your Will should include a right to continue to occupy the property for a set period of time such as until the survivor’s death or until they permanently vacate the property, i.e. go into care themselves.
At this point the deceased’s share would be distributed to the residuary beneficiary(ies) of the Will of the deceased (e.g. the children of the deceased), thereby removing the asset and the income from any RCS means assessment undertaken by the survivor.
This is only one example of how the way in which you own your property may affect your ability to claim a Residential Care Subsidy and consequently protect your assets from means testing.
Please call our office to arrange a time to meet with Michelle, who will be happy to discuss your own situation.
See our Blogs
“Gifting in respect of Residential Care Subsidy”
