Severing a Joint Tenancy - deliberate deprivation?

A and B are married and own a property as joint tenants.

A suffers from dementia and is in a care home. It was always assumed that he would die first, the property would pass to B by survivorship and could then be left to their children.

However, B has now been diagnosed with cancer and it appears that she will die first. She would like to sever the joint tenancy so that she can leave her half share directly to the children.

We don’t think that there is anything to stop B severing the joint tenancy unilaterally, even though A lacks capacity (there is no attorney or deputy to serve notice on).

However, would this be deliberate deprivation of assets for the avoidance of care home fees? A is not dealing with her assets in such a way as to to avoid paying her own care home fees, but rather B’s care home fees. The guidance is all worded as a person seeking to reduce the amount ‘they’ are charged towards care. But is this rather an artificial distinction? Has anyone come across this before?

Sarah Playforth
Thomson Hayton Winkley

I think you confused A and B in the last paragraph? I discussed this with Prof. King not long ago. B cannot be seen to be intentionally avoiding a liability she does not, and is not likely to, have. A will still be means tested on his assets if the local authority is involved.

Iain Cameron
Acer Legal

There are two elements to this question. Firstly, serving the notice of severance and then, secondly, the issue about deprivation of capital. I have done this on at least two occasions, although it has been a number of years since the last time.

We dealt with the severance by means of a unilateral declaration of severance that I served on the incapable spouse at their nursing home. They clearly didn’t understand what was being done but I gave them the severance and sat and chatted to them in the presence of another family member. I noted down the meeting and then submitted the severance to HMRC with a covering letter and that worked fine.

So far as the deprivation of capital goes, there may be others with more recent experience than me but my view would be that the incapable survivor will still have the proceeds of sale from half the home to support themselves and I can’t see how the local authority would be able to claim that the first to die was not making adequate provision for their incapable spouse knowing that they would have a substantial amount of cash to pay their fees.

With that in mind, I don’t see that your client is running any risk of being accused of depriving their spouse of capital and being subject to a claim from the local authority. Perhaps others with more recent experience could comment.

David Kitcat
Kitcat & Co

Small point. Do not forget to enter a Form A restriction at HMLR. It does not prove the severance but its absence might be used to argue that the severance was never intended to take effect.

Clifford Payton
Alpha Court Chambers