Question about joint-owned (by mother and adult child) property/ selling and benefits? General advice as complicated..LONG, sorry!

[LeoandBoosmum]

Hi, Hope some one - maybe a solicitor or someone who knows property/ benefits laws well, can help. Thanks so much.

Due to illness I live with my mum in a property she and my dad bought. When my dad passed we had to go through probate (no will)which made my mum want to set up a will for herself as the process was traumatic. My mum wanted me to have some security and a few years ago - at her insistence - we saw a solicitor who agreed the best way forward was for my mum and me (as we are at the same address) to become joint owners of the house, with me inheriting her share in the case of my mum's death and my mum inheriting my share in the case of my death (ie total ownership would pass to surviving owner) , and the nieces and nephews inheriting in the case of both of us having passed (for the house to pass eventually to the nieces and nephews was my dad's wish, as stated verbally to us well in the years before he died).
I should add that I in no way contributed to the purchase of the house. My mum and dad bought it together.

I am, due to illness unable to work, (was also the case when the will was set up and home ownership was transferred into both my mum's and my names), and receive income-related ESA. I know the house you own, as long as it is your home and you live in it , is exempt from what the DWP call 'capital' BUT I would like to know what happens if we decide to sell and buy another house as it is becoming hard to maintain?
(I'm not sure if it matters but I get no other benefits (eg PIP) and mum does not get carers' allowance even though she helps me with daily care and living - this is because she works part time and, quite frankly, I could not cope with even more forms and stress and anxiety of more assessments and medicals.

My mum, due to the house coming with a large-ish garden which I cannot tend for health reasons and which she is finding more difficult to maintain at her increasing age, has been speaking of selling and downsizing (I would be going with her). It is a modest semi-detached (previously council owned) but is on a corner so comes with a large-ish garden, and is probably worth £100,000 ish (not totally sure of this, may be slightly more or less).

In my mind this has opened a can of worms:

A) we do not have a joint bank account so if the house goes up for sale and sells, where do the proceeds go? Would we have to set up a joint account for the specific purpose, even if we closed it afterwards.

B) if the house sold and I have a half share from the proceeds, do I need to inform the DWP? Is it considered capital even if you are going to use it buy another home? It would not be considered gain if we were to use the money to buy a smaller home? Surely they can't take my share towards a new house away unless we purchased a smaller, cheaper house and were each left with a sizeable amount of money left over to be split 50/50 at the end ie unless we were up on the deal?

C) is it better for the house to be transferred back into my mum's name solely? I'm not sure why we got the house shifted into joint names to start with. My mum was shaken up afer my dad died and we had to go through probate (mortgage was not fully paid at time of dad's death and mum could not have maintained mortgage repayments on her part-time wage, so there was a lot of uncertainty as to whether the house would be lost...but, fortunately, the mortgage insurance they took out paid out). I think this is maybe why she was insistent that I be added as a joint owner with her (not sure of her reasoning) but I'm concerned it will create more problems in the end.

IF we got the house put to full ownership by my mother would that look dodgy? Would we be doing anything wrong that we could be reported for (I keep thinking it was more sensible when my mum owned the house alone as, in the event of her death, she could have named me to inherit and if I died, she'd own it anyway (with a clause that when we both die the house passes to the nices and nephews as per my dad's wish?)
I am concerned that by seeing a solicitor to adjust the will (relinquising my 'share' and putting home solely in mum's name - the scenario I outlined just above - it will look dodgy and the solicitor my suspect some kind of fraud (not the intention which is why I am trying to get some advice)? I do not want to do anything underhanded or illegal but, at the same time, I don't want my being named as a joint owner if this affects my mum in an adverse way (especially as I was unable to contribute to the purchase of the house at all and she and my dad worked really hard to be able to buy).

Is it legal to have ownership transferred to mum's name soley, with me inheriting in the case of her death, and the nieces and nephews inheriting after we both die? That way she'd own it if I died anyway, so I'm not sure why we went the joint ownership route... I am wondering if this would have been better in the first place, why the solicitor did not advise this at the time, and whether it would be considered potentially fraudulent to want to change it back now? I repeat that I do not want to do anything illegal/ fraudulent but I do, if legally possible, want to protect my mum who jointly paid for the property with my dad, and esp as I made no contribution. If it's all above board to change it, what could we say to a solicitor regarding why we want to put it in my mum's name only? Would it appear suspicious? I'm not sure if I understand my own rationale for what I am suggesting apart from wanting to protect my mother as far as legally possible. Surely the solicitor will want to know the reason for a will change as perhaps the reason has to be stipulated in any amendment made to the current will/ or they have to inform some governing body somewhere. To add, the mother of the nieces and nephews has had another son too so we'd like to add him as a beneficiary with his sisters and brother (nieces and nephews are all sinlings) should we die.

To complicate matters, mum and I do not know where the house deeds are! The solicitor who did the will (and handled the mortgage) has changed hands (though it's still a solicitor's) and despite several attempts by my mum to get info re the whereabout of the deeds/ will, she has been fobbed off, been promised the solicitor will ring but he never did, and told to call the bank about the deeds (as, to quote them, 'they probably have them')...they DON'T and insist the deeds would have been sent to the acting solicitor way way bacl. The solicitors don't seem to have a record of the current will either but we do.
I was able to print something off from the land registry where it shows the property in my and my mum's name but I'm not sure if that is the 'deeds' or is a legal document (I did have to pay for it)...

I am sorry this is so long and complicated - probably very confusing in parts but I'm finding it hard to focus and explain it well - but I really hope some one can advise. Thanks for bearing with me.
Thanks so much. I appreciate it.

Joint names sensible due to potential care home fees either way. My uncle has done this with his son. As the house is jointly owned, it is disregarded for care fees. So sensible. If house values are the same, funds from one house sale usually go into solicitors client account and is then more or less transferred to vendor of new house. There is usually an allowable amount of capital you can have and still get benefits_ you gov would give you the answer. And seriously claim any needs related benefits you are entitled to.

I think you're getting yourself worked up over nothing!

There is no reason why your current, and new, house cannot remain in joint names. As the previous poster said it means the house cannot be sold to pay for care home fees in the future.

Presumably you'll be buying the new house as soon as you sell the current one, so not renting anywhere in between? In which case the money from selling your current house will go to the solicitor, who will then use it to buy your new house, pay estate agent fees and settle all legal costs.

Any money left over will normally go to you and your mum jointly. However if you don't have a joint bank account you can direct the solicitor to pay a separate cheque to both of you, or to pay the whole amount to one of you -your choice.

As far as benefits go I expect your share of any profit from selling the house would be deemed to be 50% yours, and you'd have to declare it once you'd received the money from the solicitor.

And deeds are all online now. Do not worry about any old paper copies. The solicitors will sort it out for you

Joint tenants means that if your mum died before you you are then the sole owner of the house without her half forming part of her estate.... Which means it doesn't attract inheritance tax. Which is definitely sensible. And protects the house from care home fees too.

Income relate Esa you can have 6000 in savings before it makes a difference. Over 16000 and you cease to get anything. Would strongly suggest that you do apply for dla as this is not means tested.

You can sell this house and buy another in joint names. If there is any surplus from the sales proceeds less the purchase price and legal fees / estate agents / stamp duty etc, this will be paid over by the solicitors at the end of the transaction.
You might have to declare the surplus after selling but I'm sure you would be allowed to use some for any renovation/ decoration/furnishing costs etc that would be needed after you bought a new house. Just keep all your bills and receipts in case.

Wow, thank you so much! You are all so knowledgeable and I really appreciate that yo took the time to read my message and respond, and with such valuable insights and advice! There was much in your replies that I hadn't even considered eg how joint ownership would impact care home fees. Thank you so much, you have really helped put my mind at ease. I do get very anxious and tend to overthink things, so your replies have helped me get some much-needed perspective.

it is very easy to overthink things when facing such a big change- hope it all goes well for you.

This is about capital gains tax, I'm hoping for some help here please!?

Keeping this simple!! I have a rental property in my name and my daughters. Daughter now wants nothing to do with it.. so... if she gifts her half to me with no money exchanging hands,
does she have to pay capital gains on her share (she owns another property which she lives in).
If so, where is this money supposed to come from as no money is involved? Or can she put her share in a trust for her nephew to avoid paying some or all?
Many thanks anyone!!!!!

I can only advise on the benefit side of things, I'm afraid.

Any money left over after the purchase of the new property will be regarded as 50% yours. If your 50% is under £6k, it won't affect your benefits. If it is over £6k but less than £16k, money will be deducted from your ESA at the rate of £1 per week for every £250 (or part thereof) over £6k (so if you have £10k, you will lose £16 pw, at £10,001, you lose £17pw).

If it's over £16k, your ESA will stop completely.

Be careful what you do with the money. If you go on a mad spending spree, the DWP can decide that you have deliberately disposed of the money to maximise your benefits and you can be treated as still having it.

It's a tricky area to advise on, as there are no hard and fast rules. Paying off debts is fine, but you need a paper trail to show that they are genuine. Buying new furniture, home improvements etc are ok, as long they are reasonable and not extravagant. Buying an average sort of car is fine, splashing out on a Maserati wouldn't be. A couple of weeks in Spain would be ok, going on a round-the-world cruise would probably be regarded as deliberate deprivation.

I also think you should apply for PIP (what used to be DLA, but a bit more complicated). Not only is it not means-tested, it could increase your benefit entitlement, if your mother doesn't count as a non-dependant.

Your mum should also consider applying for PIP or Attendance Allowance if she's over 65, and check if she might be entitled to pension credit. If she got any of these, it would mean she's not classed as a non-dependant and you'd be entitled to another £63 pw on top of your ESA and PIP.

Age UK have very good benefit advisers for your mum, as do CAB and similar advice organisations. They'd be able to help you with your PIP application.

Zombie thread.