Changing Joint Tenants to Tenants in Common for Will

Giggidy

My father in law wants to get his affairs in order but just needs help with clarifying a few issues with regards to making a will.

He has a few pensions, assets and savings in the UK which he wants to split between his children and grandchildren. He also owns a house with his current partner, joint tenants and mortgage paid off. He wants to leave his half to his children which of course is not possible being joint tenants as it will of course pass over to his partner if he passes first. FIL is concerned that his partner could then leave the whole house to her own daughter in her will. Quick google suggests that he can complete a Joint Severance in Tenancy form to change this to tenants in common. He also needs to notify the land registry that the property is owned outright now that the mortgage has been paid in full.

Is this a simple process of just filling in the form (both are in agreement to change it) and posting off to Land Registry. Does a solicitor need to get involved at this point?

Secondly, FIL shares a property with his brother left to them by their father (once his wife passes on) in Barbados, which he wants to leave to his children. Does he need to get two solicitors (one in each country) to sort or can solicitors in the UK deal with overseas property?

Keep_pedalling

This would be a good idea for both your father and his partner, otherwise her daughter could lose out if she died first. The normal procedure is to give the surviving owner a life interest via an immediate post death interest trust however IHT can complicate things if either or both of them have substancial assets. This is especially the case if they are unmarried. They should both seek advice from a STEP qualified solicitor who will be able to draft suitable wills for them. 

He probably needs separate advice with regards to the Barbados property and a separate will to cover it. 

Giggidy

It absolutely would be in the best interest of both to make sure their respective children are covered in any eventuality. They're not married and don't think his assets would exceed the £500,000 IHT (as he will be leaving the house to his children.

Thanks for the info, really useful

Keep_pedalling

Giggidy said:

It absolutely would be in the best interest of both to make sure their respective children are covered in any eventuality. They're not married and don't think his assets would exceed the £500,000 IHT (as he will be leaving the house to his children.

Thanks for the info, really useful

There is a problem here, to provide security for the surviving partner it is best to make use of immediate post death interest trusts, however if they are not married then that loses the ability to claim the residential NRB so that would result in an IHT liability on the first to die. 

Leaving a share directly to the children creates different tax issues, one is CGT when the house is eventually sold and if either or both the children do not own their own home it will lose them their first time buyer status and an additional 5-8% tax on their first home purchase because it will be classed as a second house purchase.

If they married or became civil partners then this would overcome those issues. 

gjcody

Giggidy said:

My father in law wants to get his affairs in order but just needs help with clarifying a few issues with regards to making a will.

He has a few pensions, assets and savings in the UK which he wants to split between his children and grandchildren. He also owns a house with his current partner, joint tenants and mortgage paid off. He wants to leave his half to his children which of course is not possible being joint tenants as it will of course pass over to his partner if he passes first. FIL is concerned that his partner could then leave the whole house to her own daughter in her will. Quick google suggests that he can complete a Joint Severance in Tenancy form to change this to tenants in common. He also needs to notify the land registry that the property is owned outright now that the mortgage has been paid in full.

Is this a simple process of just filling in the form (both are in agreement to change it) and posting off to Land Registry. Does a solicitor need to get involved at this point?

Secondly, FIL shares a property with his brother left to them by their father (once his wife passes on) in Barbados, which he wants to leave to his children. Does he need to get two solicitors (one in each country) to sort or can solicitors in the UK deal with overseas property?

Rather simple, look at the Land Registry website; he in fact doesn't even have to have his Ex in agreement if he doesn't wish to talk to her!  

I would have expected that there was a Deed of Trust between them from the Separation/Divorce, that would be the first thing to look in to.

The Barbadian property will be dealt with under the Law there; that said, his share of the property must be included in his 'assets' for Probate here. There is a separate box on the forms for oversea property.  It is very complex, so if you can find a Solicitor 'within the Barbadian community' here, it may ease things somewhat, as they may have an in-country connections from previous Estates.

JGB1955

gjcody said:

Rather simple, look at the Land Registry website; he in fact doesn't even have to have his Ex in agreement if he doesn't wish to talk to her!  

I would have expected that there was a Deed of Trust between them from the Separation/Divorce, that would be the first thing to look in to.

I don't think the OP mentions owning a property with an 'Ex', just with the current partner.......

Keep_pedalling

gjcody said:

Giggidy said:

My father in law wants to get his affairs in order but just needs help with clarifying a few issues with regards to making a will.

He has a few pensions, assets and savings in the UK which he wants to split between his children and grandchildren. He also owns a house with his current partner, joint tenants and mortgage paid off. He wants to leave his half to his children which of course is not possible being joint tenants as it will of course pass over to his partner if he passes first. FIL is concerned that his partner could then leave the whole house to her own daughter in her will. Quick google suggests that he can complete a Joint Severance in Tenancy form to change this to tenants in common. He also needs to notify the land registry that the property is owned outright now that the mortgage has been paid in full.

Is this a simple process of just filling in the form (both are in agreement to change it) and posting off to Land Registry. Does a solicitor need to get involved at this point?

Secondly, FIL shares a property with his brother left to them by their father (once his wife passes on) in Barbados, which he wants to leave to his children. Does he need to get two solicitors (one in each country) to sort or can solicitors in the UK deal with overseas property?

Rather simple, look at the Land Registry website; he in fact doesn't even have to have his Ex in agreement if he doesn't wish to talk to her!  

I would have expected that there was a Deed of Trust between them from the Separation/Divorce, that would be the first thing to look in to.

The Barbadian property will be dealt with under the Law there; that said, his share of the property must be included in his 'assets' for Probate here. There is a separate box on the forms for oversea property.  It is very complex, so if you can find a Solicitor 'within the Barbadian community' here, it may ease things somewhat, as they may have an in-country connections from previous Estates

There is no ‘ex’ the Barbadian property was an inheritance that has a life tenant living in it so is almost certainly currently held in trust, so yes professional advice required from someone with expertise in Barbadian inheritance and trust laws required. 

The UK home is jointly owned with their current partner. 

Devongardener

We are currently doing this, a simple procedure of submitting the form to LR, both parties have to sign it.  The only problem is that it’s currently taking LR up to 5 months to process, which is very frustrating as I’m updating my Will and my solicitor wants the change completed first.

Keep_pedalling

Devongardener said:

We are currently doing this, a simple procedure of submitting the form to LR, both parties have to sign it.  The only problem is that it’s currently taking LR up to 5 months to process, which is very frustrating as I’m updating my Will and my solicitor wants the change completed first.

Both parties don’t actually need to sign it but it is preferable if you do.

I can’t understand why your solicitor would delay getting your wills in place until the LA actually amend their records as the change takes effect as soon as the LR receive the application. 

We receive thousands of applications on a daily basis which we process as quickly as possible.

Legal ownership rights are secured from the moment the application is received, not at point at which it is processed and completed. Every application we receive protects the transaction it is registering from the day we receive it. 

Legalhttps://www.gov.uk/guidance/hm-land-registry-processing-times

poseidon1

Giggidy said:

My father in law wants to get his affairs in oder but just needs help with clarifying a few issues with regards to making a will.

He has a few pensions, assets and savings in the UK which he wants to split between his children and grandchildren. He also owns a house with his current partner, joint tenants and mortgage paid off. He wants to leave his half to his children which of course is not possible being joint tenants as it will of course pass over to his partner if he passes first. FIL is concerned that his partner could then leave the whole house to her own daughter in her will. Quick google suggests that he can complete a Joint Severance in Tenancy form to change this to tenants in common. He also needs to notify the land registry that the property is owned outright now that the mortgage has been paid in full.

Is this a simple process of just filling in the form (both are in agreement to change it) and posting off to Land Registry. Does a solicitor need to get involved at this point?

Secondly, FIL shares a property with his brother left to them by their father (once his wife passes on) in Barbados, which he wants to leave to his children. Does he need to get two solicitors (one in each country) to sort or can solicitors in the UK deal with overseas property?

Re severance of Joint tenancy. Since both parties are in agreement all they need is to complete form below and lodge with LR ( no fee, no solicitor needed)

https://assets.publishing.service.gov.uk/media/64e8561adb1c07001422b422/SEV__2023-08-29_.pdf

Also if you have not already seen it, see below general guidance for the entire process- 

https://www.gov.uk/joint-property-ownership/change-from-joint-tenants-to-tenants-in-common

With regard to the property in Barbados I  gather from what you say that this property is probably in trust for his father's widow, so he actually does not have an actual share to will to his own children, but in all likelihood an expectant trust interest (under Barbadian law). If properly drafted that trust may already provide for his own children to inherit if he predeceases the widow, so if that is his only possession in Barbados, there may be no necessity for him to establish a Barbadian will, whilst the widow is alive. 

In view of the above, suggest the  Barbadian Will trust established by his father, be reviewed to confirm whether I am correct with regard to its likely terms.

As for the UK property, as suggested by Keep_pedalling, both parties should establish life interest trusts for each other of their respective shares, with the property then passing to respective children on 2nd death.

However if the parties are not married, this could have serious Inheritance Tax consequences for FIL depending on the value of his half share of the UK house, his pension pots ( if DCs), cash and other assets ( the house trust in Barbardos is an IHT excluded asset during the life of the Widow).

From April 2027 , all DC pension pots become liable to IHT on death.

 If the parties are not married, then presently your FIL only has maximum nil rate bands totalling  £500K and no spouse exemption for anything left to his partner.  In that circumstance, a life interest trust for his partner ( if unmarried) will use part or all of his £325k nil rate band, but the £175k residence nil rate band disallowed at that point. 

The complexity of both partners circumstances  ( if unmarried ) strongly suggest they require IHT planning advice as well as Wills. Therefore require a competent STEP qualified solicitor, with understanding of UK and overseas trusts and cross border estates experience. Depending on his location its unlikely the average High Street law firm fulfils this criteria. If unmarried, then marrying could be a very important tax planning initiative for them both. 

Finally, and returning to the Barbadian property trust, it maybe possible for FIL to gift his expectant interest to his children during his lifetime IHT free ( ie children directly inherit his half share when widow dies). Certainly worth while FIL bringing this up with a suitable lawyer, although the relevant deed of assignment would need to be drafted subject to Barbadian law.

Devongardener

Keep_pedalling said:

Devongardener said:

We are currently doing this, a simple procedure of submitting the form to LR, both parties have to sign it.  The only problem is that it’s currently taking LR up to 5 months to process, which is very frustrating as I’m updating my Will and my solicitor wants the change completed first.

Both parties don’t actually need to sign it but it is preferable if you do.

I can’t understand why your solicitor would delay getting your wills in place until the LA actually amend their records as the change takes effect as soon as the LR receive the application. 

We receive thousands of applications on a daily basis which we process as quickly as possible.

Legal ownership rights are secured from the moment the application is received, not at point at which it is processed and completed. Every application we receive protects the transaction it is registering from the day we receive it. 

Legalhttps://www.gov.uk/guidance/hm-land-registry-processing-times

Thanks for that!