MegaSack DRAW - This year's winner is user - rgwb
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As above.
Just moved house. The solicitors we have used have been awful but that is another story. What is the deal with the above.
Long term tax issues? What if the wife does a runner with Julio (what if I do a runner with Julio)? Anything else come into play?
Can we have some worked examples of the pros and cons?
Do I need to bump?
Joint tennants - if either of you dies then the other gets the house regardless of any other family members or will.
Both shares are 50%
You have to both agree to any chages like selling or changing to tennants in common.
Tennants in common - their share gets distributed according to the will or normal rules if they die, so if you're not married and don't like the in-laws this could be a problem.
You can own different shares.
You can sell your shares separately without needing the other persons agreement.
There's also some stuff about paying for care homes, but that's a long way off for me! I think the former they can use the whole value, the latter it's limited to your share.
Thanks - that makes more sense.
Tenants in common is much more usual for friends who buy together or if you are putting in very different shares and want to protect your share. Joint tenants is usually best for couples.
I recall from when we last moved that Tenants in Common allows, in the event of one partner dying, you to leave their share of the house to the kids to avoid it all becoming liable for caring charges. Or something.
My partner and I changed our house from JBT to TIC so we could ensure the kids benefit in our wills. If not, one partner could simply cut out the kids in the event of one of us dying. Unlikely, but not impossible.
Tenants in Common (TIC) is used for multiple situations - The most common are when the property is owned in unequal shares, to mitigate the impact of care home fees in the event of the survivor needing care after the first partner died and to prevent sideways disinheritance.
As was said above TIC allows you to give your share by Will to whomever you want. It does not allow you to sell your share without the permission of the other owner - the restriction placed on the Land Registry is very clear on this.
As far as the worked examples go, the normal scenario is that you will write a Will that directs your share of the property into a trust on your death. The UWE-r Family Trust comes into existence on the date of your death. The terms of the trust are that the surviving partner can live in the property for the rest of their life, they will be responsible for the bills, upkeep and insurance etc. Then on their death the share that you put into the trust is paid out to beneficiaries that you specified when you wrote your will.
For care fees it works like this - Property say £300,000 on first death half goes into the family trust and half stays in the ownership of the surviving partner. If the surviving partner then needs care the Local Authority responsible for providing the care will do a financial assessment which will include the question do you own any property. The answer is I own half a house and the other half is owned by the UWE-r family trust. At this point the LA have to apply a 15% discount on the value of the property, 10% for having a non resident joint owner (the trust) and 5% to allow for the fees if it were sold. So the share being assessed for care costs is £150,000 - £45,000 meaning that £105,000 can be charged with care fees in the future and your chosen beneficiaries (in most cases your kids) are guaranteed some sort of inheritance. It also means that the nominated trustees can rent out the property to help to pay the costs which slows down the erosion of the capital.
For sideways disinheritance, the same type of trust arrangement is written into a Will. Then if you die and your partner remarries (which would revoke their original Will) your kids will be guaranteed get your share of the property in the future rather than the Wicked Stepmother/ Evil Stepfather or even worse their kids.
This happens far more than you would think.
From a practitioners point of view TIC is almost always the best option as it allows for flexible planning. About 2/3rds of the Wills that we write involve a TIC arrangement.
Word of warning though if you are unmarried and don't have a Will then TIC can be dangerous as the share of the property will be distributed according to the intestacy rules - Children then Parents and then Siblings etc and would never default to the unmarried partner. In that case Beneficial Joint Tenants would be the way to go.
Hope that helps.
Nick.
My partner and I changed our house from JBT to TIC so we could ensure the kids benefit in our wills. If not, one partner could simply cut out the kids in the event of one of us dying. Unlikely, but not impossible.
Might happen unintentionally if one remarries after the other dies, and does not survive that relationship meaning the house is passed to the new spouse's descendants not yours.
Again, unlikely but a good will and setup will deal with these things.
You have to both agree to any chages like selling or changing to tennants in common.
A joint tenant can unilaterally "sever" the joint tenancy if there isn't agreement, but the others have to be notified.
https://www.gov.uk/joint-property-ownership/change-from-joint-tenants-to-tenants-in-common
Yes wzzz, that's the kind of scenario we wanted to avoid and discussed with our will maker. Seemed a good idea to us.