Joint tenants or tenants in common?

Rosem_2

We're remortgaging our house Can anybody tell me the difference between joint tenancy and tenants in common and what is the best for a married couple with adult children who do not live at home. Thanks

EdInvestor

These days tenants in common is preferred because it protects the assets better from inheritance tax and loss to pay for long term care.The couple also need to make simple wills, leaving their share to each other (which is not necdedssary for joint tenancy).

Leon_W

With a joint tenancy, upon either of your deaths, the property will automatically be left to the remaining spouse.

With tenants in common the house can be split 50/50, 30/70 or whatever but you personally have a defined "share" which upon your death can be willed to whoever you want ie: Children.

Having a house as tenants in common can be helpful when you may have Inheritance Tax liabilities upon your deaths, but as everyones situation is different there are no hard and fast rules as to which is best.

Robert_Sterling

EdInvestor wrote:

These days tenants in common is preferred because it protects the assets better from inheritance tax and loss to pay for long term care.The couple also need to make simple wills, leaving their share to each other (which is not necdedssary for joint tenancy).

As you rightly say first you change to Tenancy in Common as part of a plan to reduce Inheritance tax.

But then you go on to say leave your share of the house to the remaining spouse which would defeat the whole objective of changing JT to TIC.

You do not need to make a simple will.

You need to make wills which make use of a discretionary trust.

This can cost several hundred pounds but can save up to £120,000 in inheritance tax in 2007-2008 or slightly less in 2006-2007.

EdInvestor

My point was related more to long term care. Can't the trust thing can be done (if wanted) by a deed of variation after the first death?