What age to make a "tenants in common" agreement?

Pete_050

My wife and I are approaching mid 50's and in relatively good health and have been approached by our solicitor's and other legal services selling the idea of a "tennants in common agreement" which would effectively make our two young adult children immediate joint owners of our house. This seems like a good idea if we're in our 80's with the likelihood of one of us being on our own and going into a care home - thereby losing 50% of the house value in nursing home fees. The downside seems to be if one of us dies in the next 10 - 15 years then we lose flexibility to down size to release equity as our kids would get 50% or the released funds. This could be a particular problem for my wife as she's got very little pension to speak of. The kids will get everything anyway and we'll help them with housing etc when the time comes - but this just seems a bit of a drastic decision right now. We're thinking this is a decision to make maybe 10 - 15yrs hence.

It's obviously a very personal thing but your thoughts or comments on this would be very welcome as we are quite unsure about it!

Mojisola

Pete_050 wrote: »

My wife and I are approaching mid 50's and in relatively good health and have been approached by our solicitor's and other legal services selling the idea of a "tennants in common agreement" which would effectively make our two young adult children immediate joint owners of our house.

I would avoid any 'professionals' who are trying to get you to do this!

Some couples go down the route of changing from joint tenants to tenants in common and writing wills leaving their half of the house to the children with a life interest for the spouse.

This means that the children are likely to inherit at least half of the value of the property while the surviving spouse can use the rest of the capital to pay for residential care if that becomes necessary.

Pete_050

Thanks Mojisola,

It looks like a good thing to do to protect some of the children's inheritance and if only I could guarantee the rules won't change in 10 -15 yrs then I'd leave changing the will until then - to keep maximum flexibility in the meantime.

Yorkshireman99

Mojisola wrote: »

I would avoid any 'professionals' who are trying to get you to do this!

Some couples go down the route of changing from joint tenants to tenants in common and writing wills leaving their half of the house to the children with a life interest for the spouse.

This means that the children are likely to inherit at least half of the value of the property while the surviving spouse can use the rest of the capital to pay for residential care if that becomes necessary.

The so called professionals are being very unprofessional! It sounds like one of these schemes that claim to avoid care fees in the future. Don't touch it with a barge pole.

paddy's_mum

Pete_050 wrote: »

which would effectively make our two young adult children immediate joint owners of our house

Which would automatically put them in a position where an Order for Sale could be sought from the courts. (I'm not saying either child would try nor that a court would so order.)

It might also complicate any future divorce if the child's share of the property came into the financial reckoning.

I believe that you need to think long and hard about this.

Pete_050

paddy's_mum wrote: »

I believe that you need to think long and hard about this.

Thanks for your reply - that was my sentiment also. The inference I was getting was that this was "an offer that may not always be open to you because the Government may change the rules"

Mojisola

Pete_050 wrote: »

Thanks for your reply - that was my sentiment also. The inference I was getting was that this was "an offer that may not always be open to you because the Government may change the rules"

That sounds like the same kind of business tactic used by awful double-glazing salesmen - "This offer is only open until the end of trading today so sign here now!"

Yorkshireman99

Pete_050 wrote: »

Thanks for your reply - that was my sentiment also. The inference I was getting was that this was "an offer that may not always be open to you because the Government may change the rules"

Sounds like sales BS to me. Nobody knows what a future Government might, or might not, do.

paddy's_mum

Yorkshireman99 wrote: »

Nobody knows what a future Government might, or might not, do.

Including the government....!

AnotherJoe

Pete_050 wrote: »

My wife and I are approaching mid 50's and in relatively good health and have been approached by our solicitor's and other legal services selling the idea of a "tennants in common agreement" which would effectively make our two young adult children immediate joint owners of our house.

No it wouldn't unless there is something else you haven't explained.
The typical process is that you arrange your wills such that the surviving spouse after first death gets a life interest in the deceaseds half of the property and the right to live there or in another property bought with proceeds of first . This is to ensure the situation doesn't arise when one remarries after death and then dies without updating will and the children get nothing.

The thing that puzzles me is that you say you've been approached by your solicitors and other professionals about this. Surely this isn't just out of the blue and a heck of a coincidence ? What's going on here ?

74jax

My parents did this about 15 years ago, when they were about 65. The idea was the house would eventually come to my brother and I and we would keep it in the family - already been in family 60+ years.

Fast forward, mum had stroke 10 years after and dad has just died of cancer 6months ago - 15yrs after changing the deeds.

It's been a hassle really getting the house sorted. We want mum to own it all to help fund care home - she needs it more than we do.

I wish they had just left it as it was and it would have transferred to her automatically.

Dad worked hard all his life, and intended to leave us an inheritance - a good one, but they would never have dreamt things would turn out how they did.

During Dads last year's he gifted my brother and I money, he saw what we spent it on and I think that gave him and mum more joy than what the house as an 'inhertance' would. Yes it gets declared when he died and is subject to inheritance rules etc but he got to see us use some of his money to better our lives.