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Tenants in common question

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Background: Married, both living in our only property. 
Could someone list the advantages and disadvantages of changing the joint ownership of our house to "tenants in common".

Comments

  • Keep_pedalling
    Keep_pedalling Posts: 20,860 Forumite
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    The main reason for making the change is so that each share becomes heritable property that, rather than passing by survivorship on the first death, can be passed to other people through your will.

    For example you could leave your children your share in the property but give the surviving spouse a life interest through an immediate post death interest trust. This protects both your spouses’ security and protects your children’s inheritance in the event that your spouse remarries and fails to make a new will. 

    This is particularly important when you have blended families with children from previous relationships. 
  • sheramber
    sheramber Posts: 22,538 Forumite
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    Noint owners each owners each own 100% of the property. If one dies the other automatically owns the property. 

    Tenants in common each own a share of the property. When one dies their share does not automatically transfer to the other party. 

    It should be stated in a will as to what happens to their share.  

    Do you have a  specific reason for  asking that perhaps someone could give more exact guidance on. 
  • maman
    maman Posts: 29,734 Forumite
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    The main reason for making the change is so that each share becomes heritable property that, rather than passing by survivorship on the first death, can be passed to other people through your will.

    For example you could leave your children your share in the property but give the surviving spouse a life interest through an immediate post death interest trust. This protects both your spouses’ security and protects your children’s inheritance in the event that your spouse remarries and fails to make a new will. 

    This is particularly important when you have blended families with children from previous relationships. 
    Apologies for butting in with a question of my own. 

    We are tenants in common and have wills giving each other a life interest and then leaving our assets shared between our DDs from previous relationships. Hope that's enough detail. 

    That seemed to fit our needs at the time but, as we get older, I'm thinking how any potential care costs could affect our plans.

    My understanding is that if, for example, DH needed care then costs could only come from his 'share' of the property and his savings and income. 🤔 I need clarification on that.

    What we wouldn't want to happen was that, in the above example, that DH's DD could end up with minimal inheritance while my DD potentially (assuming I didn’t need care) could inherit what we originally intended. 

    Hopefully you've got the gist of what I'm asking. We will be going back to the solicitors to update the wills but wanted some advice on what we should be asking. 

    TIA 
  • poppystar
    poppystar Posts: 1,634 Forumite
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    edited 9 March at 8:45PM
    Yes, I think you have the understanding correct and the situation could work either way depending on which of you would need care - in fact it might be argued to be more likely that a surviving spouse would need paid for care. One way round that would be to have both halves shared by both DDs but that comes with the downside that the surviving spouse could then change their own Will in favour of just their DDs.

     TiCs is not perfect at achieving the equal split between DDs that you are after for the reasons you outline regarding possible care costs but it is in many ways better than joint tenants.
  • maman
    maman Posts: 29,734 Forumite
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    Thank you @poppystar.

    I take your point that the longer surviving partner could potentially be more likely to need care. 

    That's why we want to think about it now rather than continue with our existing wills which would tie up either of us from making a change which could give both DDs an equal share of what (if any) is left which was our intention all along. 
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