Can one of the Siblings do this with the House?

bery_451

Hi,

First of all, an General Statement: A Trust is better than a Will if there are Minors (under 18) involved and also if the estate is worth more than £500,000. True or False?

Abbreviations: JT = Joint Tenants, TIC = Tenants in Common

Example of 4 Beneficiaries Inheriting from a Will in England:

- Specifying Share Percentages % for Beneficiaries is for TIC only. True or False?

- Beneficiaries Inherited as JT owners all get the same equal percentage % share each, specifying percentages % is not allowed in JT only in TIC. True or False?

- A beneficiary cannot cash out his/her share under JT ownership unless all JT Beneficiaries agree to sell the house unless that beneficiary changes his/her ownership status from JT to TIC then after this that single 1 beneficiary share owner can force the sale of the house via the courts unless there's minors under 18 living in the house then the judge wont allow the sale. Other beneficiaries who do not want to sell and keep the house have to buy out that beneficiary share with cash or with refinancing (all beneficiaries must sign this new debt before the bank lends out the cash). True or False?

Questions are;

That beneficiary that changed his/her JT status to TIC status has also changed the status of all the remaining JT beneficiaries to TIC?

So out of the 4 JT beneficiary owners, it just takes only 1 of them to change the ownership status of the remaining 3 JT Beneficiaries from JT ownership to TIC ownership just by Serving a Notice Severance to the other 3 beneficiaries, that isn't difficult to do and will be granted by the courts easily?

Keep_pedalling

Your questions cannot be answer with simple true / false statements, because it is more complex than will or trust (they are not a binary choice) . When a group of people inherit share in a house, unless one of them is a spouse or someone given a life interest in the house, in the vast majority of cases the house will be sold by the executors and the proceeds distributed to the beneficiaries. 

No one can be forced to be an owner of a property by a will and it is bad practice to leave a specific property in a will as you may no longer own it by the time of your death, so could accidentally disinherit beneficiaries.

Why don’t you tell us what the actual situation is and what you are trying to achieve? 

Gavin83

I expect you're asking the wrong questions here but without knowing the situation it's hard to say. Ultimately though a few of your questions are impossible to answer as it's not a scenario that can occur. If the house is owned as JT then it won't form part of the will as their half just passes to the surviving owner before the will is considered.

One owner can change the ownership type of the property to TIC without the permission of the other owners. However it doesn't work the same way in reverse, so to change a property to JT you need the permission of all owners. AFAIK it's not possible for a house to be owned by different owners via different methods so if one owner changes it to TIC it'll be that way for all owners.

However I can't see it makes any difference. While an owner can technically sell their portion of a property it's very unlikely as most people don't wish to buy a part of a property. To sell an entire property, whether JT or TIC you'd need the permission of all owners. However they can force a sale through the courts and the cost of that would likely fall on the estate and come out the proceeds of selling the property. If one party wants to sell it would be advisable to do so. If minors are involved then I'd also suggest that's the best course of action to take anyway.

Unless it's the sort of house that's been in the family for hundreds of years I can't see the point in holding onto it.

bery_451

Keep_pedalling said:

Your questions cannot be answer with simple true / false statements, because it is more complex than will or trust (they are not a binary choice) . When a group of people inherit share in a house, unless one of them is a spouse or someone given a life interest in the house, in the vast majority of cases the house will be sold by the executors and the proceeds distributed to the beneficiaries. 

No one can be forced to be an owner of a property by a will and it is bad practice to leave a specific property in a will as you may no longer own it by the time of your death, so could accidentally disinherit beneficiaries.

Why don’t you tell us what the actual situation is and what you are trying to achieve? 

Yes just double checking my legal understanding on what I learned from google searches. To check whether my understanding is correct or wrong because no doubt I will get a reply here saying to google it, so I googled it and wrote my understanding above.

You mean if a beneficiary has a spouse who is living in the property and do you mean sentimental interest when you say someone given a life interest in the house? So you mean for both of these circumstances the house cant be forced to be sold via the courts?

Of course when the testator dies, the testator doesn't own anything at that point as nothing can be taken to the grave so what do you mean in your 2nd paragraph?

Keep_pedalling

I mean that if I have inherited a share of a property I have the option of insisting that I receive the proceeds of the disposal If I don’t won’t to be a joint owner. If the other beneficiaries want to keep the house then fine but they will have to buy my share out to achieve that.

If on the other hand I want to protect an existing occupant whether that be a spouse or someone else then I would make a will that gave that person a life interest in the property through an immediate post-death interest trust. Your property would then be held in trust for the life tenant and your eventual beneficiaries would not actually inherit until the life tenant had died or the trust ended through a clause in the trust deeds had come into force such as them marrying or reaching a certain age. 

Google is not your friend here, if you are looking to make a will a face to face meeting with a local solicitor should be your first step.

bery_451

Gavin83 said:

I expect you're asking the wrong questions here but without knowing the situation it's hard to say. Ultimately though a few of your questions are impossible to answer as it's not a scenario that can occur. If the house is owned as JT then it won't form part of the will as their half just passes to the surviving owner before the will is considered.

Okay the situation example is a parent leaving the house for inheritance for 4 children who are all over 18. 

One owner can change the ownership type of the property to TIC without the permission of the other owners. However it doesn't work the same way in reverse, so to change a property to JT you need the permission of all owners. AFAIK it's not possible for a house to be owned by different owners via different methods so if one owner changes it to TIC it'll be that way for all owners.

Okay understood it just takes 1 shareholder to change the ownership status for all shareholders from JT to TIC but not that easy the other away around.

However I can't see it makes any difference. While an owner can technically sell their portion of a property it's very unlikely as most people don't wish to buy a part of a property. To sell an entire property, whether JT or TIC you'd need the permission of all owners. However they can force a sale through the courts and the cost of that would likely fall on the estate and come out the proceeds of selling the property. If one party wants to sell it would be advisable to do so. If minors are involved then I'd also suggest that's the best course of action to take anyway.

Okay to force the sale, the forced sale can only work under TIC ownership status? So for example 4 beneficiaries all have equal same share each under JT ownership status, 3 of them want to keep the house but 1 want to sell, that 1 beneficiary who wants to sell can force the sale of the whole house by changing the ownership status for all from JT to TIC?

Unless it's the sort of house that's been in the family for hundreds of years I can't see the point in holding onto it.

bery_451

Keep_pedalling said:

I mean that if I have inherited a share of a property I have the option of insisting that I receive the proceeds of the disposal If I don’t won’t to be a joint owner. If the other beneficiaries want to keep the house then fine but they will have to buy my share out to achieve that.

If on the other hand I want to protect an existing occupant whether that be a spouse or someone else then I would make a will that gave that person a life interest in the property through an immediate post-death interest trust. Your property would then be held in trust for the life tenant and your eventual beneficiaries would not actually inherit until the life tenant had died or the trust ended through a clause in the trust deeds had come into force such as them marrying or reaching a certain age. 

Google is not your friend here, if you are looking to make a will a face to face meeting with a local solicitor should be your first step.

What if the other beneficiaries don't have the cash at the time to buy your share out? What options do you have under JT or TIC statuses?

What you described, is it possible to make a Will & Trust combined into 1 or are these 2 separate legal documents?

Savvy_Sue

 

bery_451 said:

What if the other beneficiaries don't have the cash at the time to buy your share out? What options do you have under JT or TIC statuses?

The house goes for sale on the open market and the proceeds are shared out.

bery_451 said:

What you described, is it possible to make a Will & Trust combined into 1 or are these 2 separate legal documents?

A Trust can be created under the terms of a will.

But it really would help if you set out simply what the issues are. For example, you talk in your first post about judges not forcing a sale if there are minors living in the house. So are there minors involved? (I think you're wrong, as it happens: it's in no-one's interests for children to be living in a house which the adults responsible for them can't afford to pay the bills on, surely.)

Who has died, and is there a surviving partner? 

bery_451

Savvy_Sue said:

 
The house goes for sale on the open market and the proceeds are shared out.

That's what I'm trying to clarify, legally out of the 4 beneficiaries who inherited the house, who has the authority to sell and who has the authority to keep not sell and does this depends under JT & TIC ownership statuses?

Keep_pedalling

bery_451 said:

Keep_pedalling said:

I mean that if I have inherited a share of a property I have the option of insisting that I receive the proceeds of the disposal If I don’t won’t to be a joint owner. If the other beneficiaries want to keep the house then fine but they will have to buy my share out to achieve that.

If on the other hand I want to protect an existing occupant whether that be a spouse or someone else then I would make a will that gave that person a life interest in the property through an immediate post-death interest trust. Your property would then be held in trust for the life tenant and your eventual beneficiaries would not actually inherit until the life tenant had died or the trust ended through a clause in the trust deeds had come into force such as them marrying or reaching a certain age. 

Google is not your friend here, if you are looking to make a will a face to face meeting with a local solicitor should be your first step.

What if the other beneficiaries don't have the cash at the time to buy your share out? What options do you have under JT or TIC statuses?

Simple, the executors sell it and distribute the proceeds. 

What you described, is it possible to make a Will & Trust combined into 1 or are these 2 separate legal documents?

If you want a trust to come into effect on your death then yes you can draft a will that automatically creates the trust on your death. 

bery_451

Keep_pedalling said:

bery_451 said:

Keep_pedalling said:

I mean that if I have inherited a share of a property I have the option of insisting that I receive the proceeds of the disposal If I don’t won’t to be a joint owner. If the other beneficiaries want to keep the house then fine but they will have to buy my share out to achieve that.

If on the other hand I want to protect an existing occupant whether that be a spouse or someone else then I would make a will that gave that person a life interest in the property through an immediate post-death interest trust. Your property would then be held in trust for the life tenant and your eventual beneficiaries would not actually inherit until the life tenant had died or the trust ended through a clause in the trust deeds had come into force such as them marrying or reaching a certain age. 

Google is not your friend here, if you are looking to make a will a face to face meeting with a local solicitor should be your first step.

What if the other beneficiaries don't have the cash at the time to buy your share out? What options do you have under JT or TIC statuses?

Simple, the executors sell it and distribute the proceeds. 

What you described, is it possible to make a Will & Trust combined into 1 or are these 2 separate legal documents?

If you want a trust to come into effect on your death then yes you can draft a will that automatically creates the trust on your death. 

Who will draft a Trust and who will pay a solicitor to write up this trust legal document when you say its automatically created at death?