Tenants in common or joint ownership?

If two people own a property as joint tenants and one of them dies the other automatically becomes the sole owner.

If they own it as tenants in common then they will each have a specific share, eg half or a third, in it which they can leave to whoever they want when they die.

A joint tenant can sever the joint tenancy at any time to create a tenancy in common and the law will presume that the property is then owned in equal shares unless there is evidence of unequal contributions to the purchase.

Seek legal advice on what’s best to do in your specific circumstances.

Thank you GSM

Thinking specifically of wills:

Joint tenancy tends to be used by long-term couples, who have agreed together what will happen to their assets when the last one dies.
Tenants in common tends to be for those who have different wishes - usually because of children from previous relationships or specific family reasons.

Common issues that arise are:

After the death of the first joint tenant, the survivor can make another will that may not reflect the deceased wishes; such as deciding not to leave the house to their children, but the cats' home.

After the death of the first tenant in common, there may be issues about the survivor occupying a house now partly owned by other people. Solicitors are used to drawing up wills accounting for this, but it need careful consideration.

Ideally, Nannarose, people make or consider revising their wills at the same time as buying a property but I can tell you from my experience as a solicitor that they seldom do. It tends to be ‘something they will get round to when this is out of the way’. Therefore thinking carefully about whether to be joint tenants or tenants in common at the time a property is purchased is better than nothing. Unfortunately many people don’t pay for a good solicitor when they buy a property and therefore may not get particularly good advice. You should always think ‘What if I die tomorrow?’

But, as Tenants in Common, only 'your' share of the property can be taken into account when care is required. The person needing care will have their share taken into account when a contribution to care costs is calculated.

Sorry, didn't complete my post.

Joint tenants are liable to have the whole value of the property taken into account.

While the house is not sold to pay for the costs, a charge is place on the property and interest charged.

From that point of view, Tenants in Common is the best way forward.

The value of the property isn’t taken into account if a partner (unless divorced or separated) is living in it. But for goodness sake do consult a good solicitor!

I’m often taken aback by young women who are happily living with the father of their children but have no legal agreement about who owns. I’ve no issue if people don’t want to marry but it’s marriage that gives security. It’s so often the mother who comes out financially worse off. Not least because they’ve either taken a career/work break or more likely worked part time with young children.

I agree Iam. I don’t know why they are so apparently ignorant of how vulnerable they and their children are.

Just to note this applies in England, not in the UK as a whole.

England and Wales.

And do check carefully with your solicitor. We had a friend who was left very vulnerable - NOT her partner's intention!

Partner was a dreamy soul, who had a degenerative illness. His BiL (a good friend of ours) checked that he had a will in place, and was assured: tenants in common, partner's share left to his children, our friend to have the use of the house during her lifetime AND to be able to use its value to buy another property, taking the share across.
This had concerned us as house was out-of-the way, poor public transport and friend doesn't drive.

However, when the will was executed, it contained just the opposite - friend only to have the use of the house until it was sold!

So the children were itching to get their money and our friend didn't want to stay in a very unsuitable house; but her share would only buy a tiny flat. Also rather unsuitable, but at least near amenities, which is where she is now.

We are sad, as we know her partner didn't want that. Some may think it unfair on his children, who would have to wait a long time for their inheritance, but that was his wishes.

We changed ours to Tenants in Common about 8 years ago and in our wills each has left their half share to my son. If one of us goes into care they will only use the50% share of the house when making a financial assessment. If this hadn’t been done they would use the whole house as an asset but allow the remaining person to live in and put a charge on it, also interest is paid. So if the remaining person wishes to sell it would be difficult.

That is my understanding too, Barmeyoldbat.

Thank you everyone .I was concerned about the care situation. We were joint owners until a solicitor we consulted advised us on a very complicated will and we changed to tenants in common . We were not happy about he will,and went back to the more usual mirror thing but kept tenants in common.

kittylester

Sorry, didn't complete my post.

Joint tenants are liable to have the whole value of the property taken into account.

While the house is not sold to pay for the costs, a charge is place on the property and interest charged.

From that point of view, Tenants in Common is the best way forward.

This is not actually accurate. If a married couple/civil partnered couple are joint tenants and one (personA) needs residential care, then the house is not taken into account when their contribution is calculated. If the same couple are tenants in common, then the value of person A's share will be taken into account and person B MAY need to leave the house in order to fund the care. There is also the issue that moving from a tenants in common to a joint tenancy after person A's care needs may reasonably been foreseen, might be adjudged as deliberate deprivation and the value of person A's share may still be taken into account. Neither way is "best" but you do need to consider carefully what is best for you.

www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs38_property_and_paying_for_residential_care_fcs.pdf

I have recently been looking at Care charges for my mother and no charges are put on your residential property IF your partner or a family member claiming certain disability benefits remain in situ.
However, we own a house together which is rented out and that is subject to a charge from what I can understand. So, having been the dutiful daughter who gives her mother a lot of care, I will have the dubious honour of having a charge on something I purchased 30 years ago and have done all the work on in that time in order to give my Mum an income after her husband died suddenly. As his second wife his naval pension died with him and she was disabled so unable to work.
I should have got legal advice 30 years ago and we can't change anything now because we would be depriving the state of money to pay care fees. My advice to anybody is get legal advice before you change anything. In fact, it would be worth getting legal advice just in case you need to change something!

We have just been through this, changed our Wills to become tenants in common. We were specifically concerned about being able, if possible, to leave something for our children/grandchildren which would not be taken into account by Social Services if one of us needs a care home. We were told that if one of us needed care, only their half of the property value could be used to pay care fees. The remaining person has a right to remain in the property until they pass away. Of course, if both need care then you’ve had it, they’ll take from both. With care costs so high we felt this was the best we could do.

We were advised by our solicitor to think very carefully before considering changing to Tenants in Common as, should our children split from their partner, their interest in our home would form part of any divorce proceeds, potentially being passed out of the immediate family.

This is interesting and has made us look at our own arrangements.
I found this, which may be helpful to read.
www.opusgold.com/technical/the-iht-and-other-benefits-of-owning-property-as-tenants-in-common/

What a minefield !!

greenlady102

kittylester

Sorry, didn't complete my post.

Joint tenants are liable to have the whole value of the property taken into account.

While the house is not sold to pay for the costs, a charge is place on the property and interest charged.

From that point of view, Tenants in Common is the best way forward.

This is not actually accurate. If a married couple/civil partnered couple are joint tenants and one (personA) needs residential care, then the house is not taken into account when their contribution is calculated. If the same couple are tenants in common, then the value of person A's share will be taken into account and person B MAY need to leave the house in order to fund the care. There is also the issue that moving from a tenants in common to a joint tenancy after person A's care needs may reasonably been foreseen, might be adjudged as deliberate deprivation and the value of person A's share may still be taken into account. Neither way is "best" but you do need to consider carefully what is best for you.

What criteria is used to judge if person B may be required to leave the house? Do you have a link to this information? I would be very interested to read it.

We changed our will to tenants in common via our solicitor after much discussion, and that was never pointed out to us.

My understanding about care costs has always been up you are a joint owner/tenant and if you or partner needs care only the one specific share of the property is considered , and as long as the eg wife remains in the property then it is not included. However a charge will be placed on the person in care share of the property. It's so complicated, if the remaining partner wants to sell their share and the person in care agrees they too can sell to buy another property (home) for the partner. Eg downsizing or moving to new location. If any funds are left over from the sale then the person's in care share can be added to capital for assessment. A charge will be placed on the new property if the share is valued at more than the capital limit.