Married couple - should we do tenants in common?

pootleflump

We're about to buy our first home together (been married 18 years, but living in service family accommodation), I remember a friend advising me that we should get a mortgage as tenants in common.

The reasoning for this was that if one of us got seriously ill and had to go into a care home, with a joint mortgage, the other person could be forced to sell the family home to pay for the care, whereas they would be unable to do this as TIC.

Is this true, and is it something that would make sense to do?

Mojisola

pootleflump wrote: »

The reasoning for this was that if one of us got seriously ill and had to go into a care home, with a joint mortgage, the other person could be forced to sell the family home to pay for the care, whereas they would be unable to do this as TIC.

Is this true

You're talking about the type of home ownership, not the mortgage.

If one person needs residential care and the other owner will still be living in the house, its value is not counted in the financial assessment - the type of home ownership isn't relevant in this situation.

If the couple are 'joint tenants' and one partner dies, the other then owns the whole house. If the survivor needs residential care, the whole value of the house is taken into account.

If a couple are 'tenants in common', they can leave their share of the house to someone other than their partner. That means only the survivor's share can be included in their financial assessment.

pootleflump

Thank you. Trying to remember his advice; I think it might have been more about avoiding inheritance tax, by being TIC and having a trust set up.

If it's nothing to do with the mortgage, at what point do we decide whether to be joint tenants or TIC? Is it something you do through a solicitor after the sale?

pootleflump

Don't worry - just found out you do it when you register the property.

enthusiasticsaver

If you would leave your half of the house to each other I am not sure what the point of doing tenants in common is.

My mum and stepdad bought their flat as tenants in common so they could each leave their half to their respective children. Each has a lifelong interest so that they cannot be turned out if one of them dies. Re residential care the same applies and the flat cannot be used towards residential care costs unless the other agrees to sell it.

I think however if one of you needs residential care and the other is still living in the house the value is not used in financial assessment as mojisola says.

As you now know the way you purchase the property (either TIC or joint with it going to survivor) is decided when you actually buy it and registered to that effect.

pootleflump

enthusiasticsaver wrote: »

If you would leave your half of the house to each other I am not sure what the point of doing tenants in common is.

My mum and stepdad bought their flat as tenants in common so they could each leave their half to their respective children. Each has a lifelong interest so that they cannot be turned out if one of them dies. Re residential care the same applies and the flat cannot be used towards residential care costs unless the other agrees to sell it.

I think however if one of you needs residential care and the other is still living in the house the value is not used in financial assessment as mojisola says.

As you now know the way you purchase the property (either TIC or joint with it going to survivor) is decided when you actually buy it and registered to that effect.

You're right - it would be pointless if you left your half of the house to the other. I believe you're supposed to put it into trust, then the surviving person can borrow it back if they need it. That's about as much as I remember!