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Tenants in Common

uhuru_2
Posts: 40 Forumite
I have found a lot of useful info on this site about this issue but still have one question I would like the answer to. Not sure if this is the correct board but I hope someone can help...
I am in the process of buying a property with my partner who is 15 years older than me. We both have children from previous relationships and wish to leave our share of the property to our own children but whilst also ensuring the surviving partner can remain in the house, should they wish to, indefinitely. My children are still minors however his are adults.
My concern is that, given the age difference and certain health issues of his, it is likely I will be the surviving partner and possible that that could occur whilst my children are still minors. In that event I would be likely to want to sell up and move back to where my family live. If he leaves his share to his children and leaves me a 'life interest' can I sell and would that then invalidate the life interest meaning his children would receive their inheritance from the sale proceeds?
I guess what I want is to be able to stay in the property without the worry of being forced to sell but to have the option to do so should I wish to. Presumably I could sell but would need their permission or something? If I am going to be 'tied' to the property I think I would rather not have the life interest and be forced to make the decision between selling and buying out his children on his death!
Any advice anyone, I'm getting totally confused!
I am in the process of buying a property with my partner who is 15 years older than me. We both have children from previous relationships and wish to leave our share of the property to our own children but whilst also ensuring the surviving partner can remain in the house, should they wish to, indefinitely. My children are still minors however his are adults.
My concern is that, given the age difference and certain health issues of his, it is likely I will be the surviving partner and possible that that could occur whilst my children are still minors. In that event I would be likely to want to sell up and move back to where my family live. If he leaves his share to his children and leaves me a 'life interest' can I sell and would that then invalidate the life interest meaning his children would receive their inheritance from the sale proceeds?
I guess what I want is to be able to stay in the property without the worry of being forced to sell but to have the option to do so should I wish to. Presumably I could sell but would need their permission or something? If I am going to be 'tied' to the property I think I would rather not have the life interest and be forced to make the decision between selling and buying out his children on his death!
Any advice anyone, I'm getting totally confused!
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Comments
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Having talked to my solicitor about something similar, I think what you might need is a trust (tennants in common won't do it). The assets remain in a trust, and the person who dies can write a letter to the trustees expressing their wishes. The trustees should then act in accordance with this.
In my case, it was for my partner to do whatever he wants with what he inherits from me while he is alive, but on his death, what was mine will go to charity rather than his family.
I got quoted just over £100 to set this up. Probably best to contact a solicitor.0 -
Thanks, I think you are right about the legal advice. The problem is, the solicitors we are using for the purchase of the property are conveyancing specialists and I am not convinced I trust them to set this up. I think I shall look for a solicitor who specialises in trusts and inheritance law etc to set up whatever we need as soon as possible after completion rather than as part of the transaction.
Presumably we would have to hold as tenants in common to be able to set the trust up as it wouldn't work if we were joint tenants? Hope I'm understanding all this.
My partners family are terrible when it comes to inheritance, they never shut up about who gets what. I trust his kids, it's other family members (his ex wife being one) who I know would influence their actions.0 -
My partners family are terrible when it comes to inheritance, they never shut up about who gets what. I trust his kids, it's other family members (his ex wife being one) who I know would influence their actions.
Where there's a will, there's a relative........much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0 -
You could, instead, leave the house to eachother and have life assurance policies to provide cash to leave to your children. This way they get the money quicker, rather than having to wait for the house to be sold, which can only happen once the other partner dies.Warning ..... I'm a peri-menopausal axe-wielding maniac0
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If he leaves his share to his children and leaves me a 'life interest' can I sell and would that then invalidate the life interest meaning his children would receive their inheritance from the sale proceeds?
I guess what I want is to be able to stay in the property without the worry of being forced to sell but to have the option to do so should I wish to. Presumably I could sell but would need their permission or something? If I am going to be 'tied' to the property I think I would rather not have the life interest and be forced to make the decision between selling and buying out his children on his death!
On the contrary 'life interest' gives you more protection!No permission required.
I know nothing of what DFC is describing so that's something else to explore but I do often comment on the Will/Trust side of things.
Most recent posts here: ( ignore the care fee slant in this case) taken from:
http://forums.moneysavingexpert.com/showthread.html?p=11126999As said further up, you will need to split your assets equally between you both. You house should be owned as tenants in common so that each half share can be willed however you choose.
Joint tenancy results in the half share of the house of the first spouse to die automatically passing to the surviving spouse regardless of what might be stated in a Will.( the same applies to joint bank accounts etc)the key difference to ensure that the surviving spouse is not put into an unsafe situation ( bankruptcy/ divorce/ complete control etc), would be NOT to pass the half share of the house straight to the ultimate beneficiaries but instead for it to be put into a Trust.
A choice of two here. Discretionary Trust and Lifetime Trust.
I am no expert but I have learnt a little about both types and will go through what I think are pros and cons of each.The life Interest Trust was very well explained in a link which features in the old thread that I mentioned further up.I couldn't explain it any better so won't try.
Here is the post and link.Because half of the property has no market value it can't be assessed for care fees.
My trustees have to hold the property of the first of us until the second of us dies. In the meantime if I or my wife (whoever dies second) want to downsize, the trustees can allow us to do so. If there's money left over then I or my wife can be given the interest from it, but the capital is safeguarded.
Additionally if either of us runs low on dosh the trustees can loan us money from the fund.
Here's a link to the site that explains it quite well. I did poste a link to the site in a previous thread but removed it, but here it is again.
http://www.heritagewills.co.nr/care_fees_mitigation.htm
Although the value of the whole house is counted for IHT purposes in the surviving spouse's estate with a life interest Trust, this will no longer be a problem for many couples since the IHT changes last October ( surviving spouse now entitled to double single IHT allowance ie £624 000 this year, £650 000 next and £700 000 in 2010).
Also,with the life interest trust, it will be 2 x the nil rate band that is in force upon second death – whereas with the DWT, the first nil rate band is frozen upon the death of the first spouse.
This type of Trust seems far simpler to administer compared to a Discretionary Trust where:
• there are costs involved ( exit fees, 10 year charge, professional financial fees if trust ever was to contain cash or other assets)
• is a time consuming option for the trustees ( requirement for Trustee meetings at the very least on an annual basis)
• probably necessitates solicitor involvement after both deaths. With a life interest Trust, many executors should be able to deal with each probate by themselves.
So apart from being cheaper to set up and administer, there could be an IHT advantage.
But crucially for your objective, Rexel, the whole property can be safeguarded from care fees, whereas with a discretionary trust, it’s arguable that only half the property is safeguarded.0 -
Just don't assume anything about who might die first, age differences etc.
My younger daughter married a man 10 years older than herself. Guess what? She didn't even see her 10th wedding anniversary - she died very suddenly aged 39.
Other than that, you've had a lot of good information from others.
Good luck![FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
Before I found wisdom, I became old.0 -
Sorry Uhuru. I've just realised you mentioned partner not husband!
That could make a difference with what I said re IHT ( doubling of NRB applying to married couples).
So if IHT was ever an issue then DT might be more appropriate.
Clearly professional advice required but hopefully you will understand things a bit better.0 -
Any advice anyone, I'm getting totally confused!
Yes - see a solicitor with particular experience of this area. If your partner's children have a life interest in the property, the trust can be worded so that you are free to move property if you need to do so and the same terms apply, with the proceeds passing to them only upon your death or remarriage. There can however be inheritance tax implications, upon your estate, so definitely one for qualified legal advice - the cost of that advice has to be weighed up against the potential for much greater costs if the legalities haven't been sorted out properly in the first place.Have a look here: http://www.lawsociety.org.uk/choosingandusing/findasolicitor.law
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What you need is a financial advisor who specialises in wealth preservation, most solicitors would not have the specialist knowledge required to give you exactly what you want. We have a similar situation (age difference and step families but we are married) we both have children who we want to eventually inherit but we have both worked hard to have a lovely home etc and don't want to be pressured into selling it to give anyone an inheriritance.0
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Yes - see a solicitor with particular experience of this area. If your partner's children have a life interest in the property, the trust can be worded so that you are free to move property if you need to do so and the same terms apply, with the proceeds passing to them only upon your death or remarriage. There can however be inheritance tax implications, upon your estate, so definitely one for qualified legal advice - the cost of that advice has to be weighed up against the potential for much greater costs if the legalities haven't been sorted out properly in the first place.
Have a look here: http://www.lawsociety.org.uk/choosingandusing/findasolicitor.law
I've just done a quick search on that link and found a named solicitor ( under the heading Wills and Probate)who really shouldn't be on there!0
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