Tenants in Common vs. Joint tenancy – Question.

benny5

A property is held as Tenants in Common by partners A and B (with both having wills bequeathing their shares to their children), will the beneficiaries have any claim on their share in the event of the death of either partner? Or will they have to wait for both partners to pass away?

I have seen something to the effect that the surviving partner can retain a lifetime interest in the whole property. 

However, I have also heard that a beneficiaries’ stake in the deceased estate can be regarded as an asset in the event of divorce/bankruptcy and could complicate matters prior to the death of the surviving partner.

I realise this is a very complex issue but any points would be appreciated.  

george4064

My understanding is as follows:

1. Joint tenants = if either partner A or B die, the other partner will automatically inherit the whole property.

2. Tenants in common = if either partner A or B die, their share of the property (50% by default unless it specifies otherwise in TR1 or if a deed of trust is in place) will be passed down to whomever according to their will.

RAS

Probably better reading up on the wills and probate section and posting there.

benny5

RAS said:

Probably better reading up on the wills and probate section and posting there.

Thanks for that. I have now posted on the other forum.

canaldumidi

benny5 said:

A property is held as Tenants in Common by partners A and B (with both having wills bequeathing their shares to their children), will the beneficiaries have any claim on their share in the event of the death of either partner? Or will they have to wait for both partners to pass away?

I have seen something to the effect that the surviving partner can retain a lifetime interest in the whole property. 

However, I have also heard that a beneficiaries’ stake in the deceased estate can be regarded as an asset in the event of divorce/bankruptcy and could complicate matters prior to the death of the surviving partner.

I realise this is a very complex issue but any points would be appreciated.  

If A dies, then A's children will inherit A's share. So assuming A & B own a 50/50 share as TiC, and A has 2 children (C1 & C2), then after A's death: B will own 50% and C1 & C2 will each own 25%.

It is possible there is more in A's will so exact wording may be critical, and also there may be wording in the Deed creating the TiC agreement - these may give B a right for example to sole occupation until his (her) death.

But failing that, the options are

* B could buy out C1 and/or C2 at an agreed price eg market value

* C1 &/or C2 could buy out B

* C1 and/or C2 could move into the property which they now jointly own with B

Then of course there is the tricky question regarding maintenance, repairs and improvements, and who pays what.

benny5

canaldumidi said:

benny5 said:

A property is held as Tenants in Common by partners A and B (with both having wills bequeathing their shares to their children), will the beneficiaries have any claim on their share in the event of the death of either partner? Or will they have to wait for both partners to pass away?

I have seen something to the effect that the surviving partner can retain a lifetime interest in the whole property. 

However, I have also heard that a beneficiaries’ stake in the deceased estate can be regarded as an asset in the event of divorce/bankruptcy and could complicate matters prior to the death of the surviving partner.

I realise this is a very complex issue but any points would be appreciated.  

If A dies, then A's children will inherit A's share. So assuming A & B own a 50/50 share as TiC, and A has 2 children (C1 & C2), then after A's death: B will own 50% and C1 & C2 will each own 25%.

It is possible there is more in A's will so exact wording may be critical, and also there may be wording in the Deed creating the TiC agreement - these may give B a right for example to sole occupation until his (her) death.

But failing that, the options are

* B could buy out C1 and/or C2 at an agreed price eg market value

* C1 &/or C2 could buy out B

* C1 and/or C2 could move into the property which they now jointly own with B

Then of course there is the tricky question regarding maintenance, repairs and improvements, and who pays what.

Sorry this is running on two forums (Death Funerals & Probate). Just to thank Canaldumidi for the input.

Given that the main asset is a property and not likely to be subject to IHT then the only advantage of the TiC may be, to protect beneficiaries’ entitlements against later care costs or remarriage of a surviving partner. 

canaldumidi

benny5 said:

canaldumidi said:

benny5 said:

A property is held as Tenants in Common by partners A and B (with both having wills bequeathing their shares to their children), will the beneficiaries have any claim on their share in the event of the death of either partner? Or will they have to wait for both partners to pass away?

I have seen something to the effect that the surviving partner can retain a lifetime interest in the whole property. 

However, I have also heard that a beneficiaries’ stake in the deceased estate can be regarded as an asset in the event of divorce/bankruptcy and could complicate matters prior to the death of the surviving partner.

I realise this is a very complex issue but any points would be appreciated.  

If A dies, then A's children will inherit A's share. So assuming A & B own a 50/50 share as TiC, and A has 2 children (C1 & C2), then after A's death: B will own 50% and C1 & C2 will each own 25%.

It is possible there is more in A's will so exact wording may be critical, and also there may be wording in the Deed creating the TiC agreement - these may give B a right for example to sole occupation until his (her) death.

But failing that, the options are

* B could buy out C1 and/or C2 at an agreed price eg market value

* C1 &/or C2 could buy out B

* C1 and/or C2 could move into the property which they now jointly own with B

Then of course there is the tricky question regarding maintenance, repairs and improvements, and who pays what.

 the only advantage of the TiC may be, to protect beneficiaries’ entitlements against later care costs or rthe only advantage of the TiC may be, to protect beneficiaries’ entitlements against later care costs or remarriage of a surviving partner. emarriage of a surviving partner. 

the only advantage of the TiC may be, to protect beneficiaries’ entitlements against later care costs or remarriage of a surviving partner.

If owned as Joint Tenants:

A dies. B automatically becomes the sole owner of 100%. When B dies, B's children inherit the property under B's will, so A's children are disenfranchised.

benny5

canaldumidi said:

benny5 said:

canaldumidi said:

benny5 said:

A property is held as Tenants in Common by partners A and B (with both having wills bequeathing their shares to their children), will the beneficiaries have any claim on their share in the event of the death of either partner? Or will they have to wait for both partners to pass away?

I have seen something to the effect that the surviving partner can retain a lifetime interest in the whole property. 

However, I have also heard that a beneficiaries’ stake in the deceased estate can be regarded as an asset in the event of divorce/bankruptcy and could complicate matters prior to the death of the surviving partner.

I realise this is a very complex issue but any points would be appreciated.  

If A dies, then A's children will inherit A's share. So assuming A & B own a 50/50 share as TiC, and A has 2 children (C1 & C2), then after A's death: B will own 50% and C1 & C2 will each own 25%.

It is possible there is more in A's will so exact wording may be critical, and also there may be wording in the Deed creating the TiC agreement - these may give B a right for example to sole occupation until his (her) death.

But failing that, the options are

* B could buy out C1 and/or C2 at an agreed price eg market value

* C1 &/or C2 could buy out B

* C1 and/or C2 could move into the property which they now jointly own with B

Then of course there is the tricky question regarding maintenance, repairs and improvements, and who pays what.

 the only advantage of the TiC may be, to protect beneficiaries’ entitlements against later care costs or rthe only advantage of the TiC may be, to protect beneficiaries’ entitlements against later care costs or remarriage of a surviving partner. emarriage of a surviving partner. 

the only advantage of the TiC may be, to protect beneficiaries’ entitlements against later care costs or remarriage of a surviving partner.

If owned as Joint Tenants:

A dies. B automatically becomes the sole owner of 100%. When B dies, B's children inherit the property under B's will, so A's children are disenfranchised.

Thanks for that.

In this scenario the beneficiaries are from the A & B relationship so no stepchildren issues.