Will newbie & House Tennancy Query

20vt-rs · 1 December 2017 at 2:35PM

Hi MSE's

I'm in the process of having wills drafted by a solicitor (joint my wife and I), and they have asked us if we would like to make a life interest trust. Speaking to them it involves making the registry of our home from joint tenants to tenants in common.

We've got a son and obviously of one of us goes then we'd like the other one to stay in the home, and we'd also like to pass this down to our son if we both go.

From what I gather, making this life interest protects our son in he sense that he will always be guaranteed the house (or part of) from or wishes even if things change after death. If we don't do this then there is nothing stopping the other half changing their own will and taking our son out.. (That is highly unlikely but you cannot read the future right)...

So I think this is right and I understand that, in which case this sounds like a sensible idea to do. But are there any other implications or considerations to take into account? What impacts are there outside of the will changing the tenancy, is this standard stuff for couples to do or generally are things left as joint tenants? I read a lot about this being more geared around people with previous marriages (which we are not)..

Any advise appreciated, thanks from a confused will newbie!

Yorkshireman99 · 1 December 2017 at 3:37PM

These are all things your solicitor should have explained to you. Nobody on here is in a better position to do so since none of us know any of the circumstances. Go back to him and ask him to clarify the position..

badmemory · 1 December 2017 at 3:53PM

Perhaps a couple of questions to ask yourself are - do you trust the remaining spouse to leave at least half of the property to any children if they remarry. What if the remaining spouse wants to downsize, do they have to cough up 50% then & not be able to afford a smaller place & have to stay in a place no longer suitable for their needs. What if they need to go in a care home for a longer than normal length of time (care homes are expensive), do you want them to be moved to LA only care after half the money runs out?

I'm sure there are lots more but at least something to think about.

20vt-rs · 1 December 2017 at 4:19PM

Hi both thanks for taking the time to reply, I have a call out with my solicitor so hopefully can get this understood much better

. I wanted to ask on here to try an get some simpleton views (9for me:)) as the solicitor does baffle me!

I trust my partner 100% absolutely and know that our son will always be looked after no doubt. From what I read on your response badmemory, it sounds like if we did this, and the survivor needed care, then only 50% of the house could be used, which may be limiting factor, and also may cause more limitations if they ever wanted to move. It sounds like swings and roundabouts but I am leaning towards leaving it alone now.

Will check with solicitor though and see what clarity I can get.

Linton · 1 December 2017 at 4:48PM

You need to work through every eventuality to understand the consequences. In the example of the surviving spouse needing their 50% of the house for care costs, how would they get it? You cant easily sell 50% of a house.

I would simply rely on my spouse to do the right thing. I fear it may cause more difficulties than it resolves to try to control people's lives from beyond the grave.

Is there any reason why you are expressing particular concern for your son's welfare? If not he presumably will have sorted his life out well before you die. If he has real needs then I suggest that discussing this in detail with the solicitor is a very good idea. One would hope that there isnt any "selling" of the will trust idea involved.

20vt-rs · 1 December 2017 at 5:05PM

Linton wrote: »

You need to work through every eventuality to understand the consequences. In the example of the surviving spouse needing their 50% of the house for care costs, how would they get it? You cant easily sell 50% of a house.

I would simply rely on my spouse to do the right thing. I fear it may cause more difficulties than it resolves to try to control people's lives from beyond the grave.

Is there any reason why you are expressing particular concern for your son's welfare? If not he presumably will have sorted his life out well before you die. If he has real needs then I suggest that discussing this in detail with the solicitor is a very good idea. One would hope that there isnt any "selling" of the will trust idea involved.

I had never heard of life interest trusts until I started setting up our joint wills, and now it is making things more complicated! Solicitor mentioned it but doesn't seem to give any advice either way, says its our decision, but it's all so confusing

There is no concern over sons welfare and I know both of us would always do the right thing, I am thinking this is going to over complicate things where it might not be needed.

troubleinparadise · 1 December 2017 at 6:35PM

The solicitor is doing their job in suggesting options to you, but sometimes this whole spectre of “what if” and the red herring of care funding (not everyone needs it, and the average time is a little under 3 years) makes people paranoid.

I would think more about your OH (or you) having shuffled off the mortal coil at a reasonably ancient age, and the survivor wanting to downsize to be nearer to family and having a little nest egg to bolster a pension; and if you have both gone, what then. Simplifies and clarifies things a lot more.

By all means change the house ownership to tenants in common to address the care home fees issue, but don’t get too complicated!

getmore4less · 1 December 2017 at 7:14PM

The size of the estate can make a difference to the thought process.

The downsize issue is easily fixed, spouse running out of cash not so easy.

One reason the life interest option is used is the tax treatment is almost the same as if the spouse inherits with transferable nil rate band IHT and CGT.

SevenOfNine · 1 December 2017 at 10:32PM

Make sure this is clear with regards to what happens should your son then predecease the surviving spouse.

Will newbie & House Tennancy Query

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