tenants in common - good idea or not?

frank_barany

Hi all,

I'm not sure if this is quite the right place to place this thread . . . but here goes!

Today I had a meeting, along with my parents, with a will writing salesman who, along with preparing a will, tried to talk my parents into changing their status as joint owners of their home to "tenants in common".

On the face of it, we can see the benefits of doing this i.e. avoiding IHT and protecting half of the value of the property in the event of the death of either of my parents . . . and preventing a local authority from accessing funds that would otherwise be claimed for paying residential care bills of the surviving partner. My question is . . . are there any disadvantages to doing this?

Also, how much should we pay to put this in place? The will writer we saw today has quoted around £200. Sounds a lot but is this reasonable? Any comments greatly appreciated. Thanks.

Frank

horace_2

My wife and I are in the process of changing our wills to "tenants in common".

Our Solicitor is charging £60 + vat in total.

horace

Disclaimer. This is not financial advice.

h

benood

We did this but paid a heck of a lot more, quite complex will though, don't think that there were any significant disadvantages for us.

MJMum

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Gold_Shogun

frank_barany wrote: »

Also, how much should we pay to put this in place? The will writer we saw today has quoted around £200. Sounds a lot but is this reasonable?
Frank

That sounds quite expensive for a simple will writing service (EVEN for a Discretionay Will Trust).

Have a look here ( http://www.draftwill.co.uk ) for a good service PLUS some useful info & guides for what you are interested in doing ... Their price is £79.95 for a PAIR of Discretionary Trust Wills

They also have a couple of handy downloadable guides here :-
http://www.draftwill.co.uk/pdfdocs/discretionary_trusts.pdf
&
http://www.draftwill.co.uk/pdfdocs/Making_a_Will_or_EPA.pdf

Cheers
Bob

Massive_2

If your assets are significant, you must also be aware that whilst such a transfer between married partners is exempt from CGT, You are still liable to SDLT if either portion of the value transferred is above any of the thresholds (starting at £125,000).

You would therefore begin to be liable for SDLT if you transfer property with value of £250,000 or more (and indeed lesser values than this, if a 50/50 split is not utilised).

Debt_Free_Chick

frank_barany wrote: »

My question is . . . are there any disadvantages to doing this?

In theory, the will can leave that person's share of the property to anyone. So, you father could "disinherit" your mother and vice-versa.

With a joint ownership, one share automatically passes to the other owner.

TJ27

We had a solicitor, not a salesman, specialising in family law around our house to draft will for both my wife and I. She charged £100 plus vat to draft two wills, one for each of us. I thought that was a bargain.

Personally I thought we should have opted for tenancy in common but for some reason we didn't do it. It's something which we might consider in the future, although it doesn't actually make a huge difference to us right now.

frank_barany

Well thanks to you all . . . really appreciate the responses and the advice. To Gold Shogun . . . I'll take a look at the website you recommended

It looks like we should certainly consider tenants in common but find someone who'll do it for less than we were quoted as long as they prepare the whole thing properly.

The will writer actually charged my parents £75 (no vat) for preparing their two wills, which I thought was reasonable. The £200 was for preparing the tenants in common trusts only. As ever, it's the add-ons where these people seem to make their money. I have to wonder though, from the responses I've had, how a solicitor's charge can be so different from that of a house calling will writer (in some cases cheaper . . . which surprises me) for doing exactly the same work. Shouldn't they all be quoting similar prices? Obviously needs some sort of regulation.

Thanks again to all.

Debt_Free_Chick

frank_barany wrote: »

I have to wonder though, from the responses I've had, how a solicitor's charge can be so different from that of a house calling will writer (in some cases cheaper . . . which surprises me) for doing exactly the same work.

I think that's the issue. I wouldn't expect a will-writer to do "exactly the same work" as a solicitor. If the will-writer were that good, surely they'd be a solicitor?

The laws around tax, trusts etc are so complex - and and problems or defects in the will generally only come to light on death, when the will has to be enforced. It is for this reason that I would want to use a solicitor - even if they charged more than the will-writer.

In my very limited experience, a will-writer is working from a number of "templates". So ... has he chose the right template for your parents circumstances? And ... is that template 100% accurate, for your parents specific circumstances?