Tenants in Common

jangor_2

Just looking for a basic understanding of this agreement. My sister's friend died recently leaving a husband and their two adult children. Their house was owned outright but for some reason they decided to opt for a Tenants in Common agreement some years back. Sadly the wife died three years ago and the husband realised he had totally misunderstood the situation in respect of Tenants in Common. He has taken legal advice but is unable to continue to pursue it due to lack of finance and fear of upsetting his two adult children. It appears that he is unable to move as the children are unwilling to release the house to him and he feels trapped in his own home. He is only in his early 60's. He has put a great deal of money into the property over the years, including paying the mortgage. The children were left a separate property by their mother which they presently rent out. I am just trying to make sense of Tenants in Common.

Fire_Fox

Presumably the wife left a will passing her half of the property to the couple's adult children?

McKneff

He could ask the children to buy his half from him.

Legally he should possibly be paying rent for the other half of the house that belongs to the children, but then i suppose it depends what was in the wife's will.

The up side of it is that if the husband is ever ill and has to go into a nursing home they cannot sell the house to pay for care as they cannot force the children to sell their half. I think that is the whole point of Tenants in Common.
(again, i dont know if a charge for care could be put on his half for when the house is eventually sold )

roger196

Joint tenancy is best avoided for the following reasons. W dies and all of house passes by survivorship to H. H then remarries and has children by second marriage. H dies leaving all house to second wife and children. Children of first marriage have been deprived of their inheritance.

Fire_Fox

Having lost both parents, if the children of the first marriage are worried about being 'deprived of their inheritance' they are heartless creatures. It sickens me how many people are obsessed by a windfall they will only get by being orphaned - I'd rather my parents enjoyed their retirement spending the money they worked damn hard for.

Richard_Webster

Holding as tenants in common means that the couple each have their own beneficial share that they can leave by will to someone lese. If they held as joint tenants the property would pass automatically to the survivor regardless of any will.

Under the old law on Inheritance tax before the husband and wife double allowance was introduced, holding a jointly owned property as tenants in common was a first stage in a number of IHT avoidance schemes. A lot of people thought that being tenants in common was all you had to do.

However in this case the wife's half share may have been left to children to avoid inheritance tax on the second death. When the law changed the couple should have changed their wills to leave everything to each other on the death of the first to die and then the the children on the second death.

jangor_2

I think I will try and obtain further information from the widower as I think both he and his deceased wife failed to understand the implications. From my sister's understanding, having spoken to her friend shortly before her death, she (the friend) stated that her husband would own the property outright on her death and that she had left the second house (this property was her fathers and left to her on his death) to her two children. The husband would like to move but cannot afford to buy the children out and the children are resisting any discussion of him being able to move. Thankyou for your responses.

greenface

get a solicitor o recheck everything and explain anything it wont cost too much for proper legal advise and would sure up any doubts he has ,
fire fox absolutly agree on will worriers you know what hey say where theres a will theres a relative.

localhero

It is likely they chose to own as tenants in common to try and make use of two nil rate bands which at the time was not transferable between spouses - though there may be other reasons for this arrangement.

The method used is a bit crude and it would appear that they didn't receive decent advice when making their wills. Whilst at the time the will would have been effective for IHT, there are other practical problems - one of which is playing out here. Better options existed that would have protected the surviving spouse.

Richard_Webster wrote:

When the law changed the couple should have changed their wills to leave everything to each other on the death of the first to die and then the the children on the second death.

I disagree.

A better option may have been to leave the surviving spouse a life interest in the estate which would give them the freedom to move/downsize etc whilst protecting the assets of the first spouse against the survivor requiring care or remarrying.

If the children are being difficult, (and I read it that they are also the husband's children) then perhaps he should reconsider whether he wants to leave his half of the house to them in his own will.

muskoka

If the person died fairly recently, I believe a will can be (can't remember the phrase for it), but say my mum died a year ago - I have up to TWO years to amend her will. This is not challenging the will, just amending it after her death. Can't remember what its called though. Maybe an option?


note - i'm not a lawyer

localhero

Rereading the first post, it is not clear whether the share as tenants in common has been left to the children or not. I am assuming the other property was given to the children in her will, if so what does the will say about the rest of the estate?