In this episode, Tamsin speaks to wills, probate and legacy planning solicitor Michelle Tonge of Private Client Solicitors about Wills and Powers of Attorney. They discuss how to make a will and power of attorney, when wills are no longer valid, why they should be reviewed regularly and important considerations.
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Michelle Tonge
Michelle is an Associate Solicitor at Private Client Solicitors who has been specialising in private client law since 2017. Michelle assists clients with all aspects of wealth preservation work and frequently advises individuals, families, and business owners in relation to wills, trusts, inheritance tax planning, lasting power of attorney documents and probate. Michelle is passionate about speaking to her clients and learning about their families and their lives. She understands that each family is different and ensures that her advice is down-to-earth, honest, and tailored to each client to overcome their worries.
Tamsin Caine
Tamsin is a Chartered Financial Planner with over 20 years experience. She works with couples and individuals who are at the end of a relationship and want agree how to divide their assets FAIRLY without a fight.
You can contact Tamsin at tamsin@smartdivorce.co.uk or arrange a free initial meeting using https://bit.ly/SmDiv15min. She is also part of the team running Facebook group Separation, Divorce and Dissolution UK
Tamsin Caine MSc., FPFS
Chartered Financial Planner
Smart Divorce Ltd
Smart Divorce
P.S. I am the co-author of “My Divorce Handbook – It’s What You Do Next That Counts”, written by divorce specialists and lawyers writing about their area of expertise to help walk you through the divorce process. You can buy it by scanning the QR code…
Transcript
(The transcript has been created by an AI, apologies for any mistakes)
Tamsin Caine 0:05
In today’s episode, I’m talking to Michelle Tonge of Private Client Solicitors in Manchester, all about wills, lasting powers of attorney and ownership of property. Hope you found this episode interesting and hope you find it incredibly useful. And I hope that you take some action as a result of listening to Michelle’s wise words. So let’s jump right in. Hello, and welcome to this episode of The Smart Divorce podcast. And today we’re going to be talking everything wills and powers of attorney. So strap in for a good one today. And joining me is the fabulous Michelle Tonge from Private Client Solicitors. Michelle, how are you?
Michelle Tonge 0:56
You are welcome. Pleasure to be here.
Tamsin Caine 0:58
So, I think it would be best to start if you can introduce yourself a little bit, kind of how you’ve got to where you’re where you are in the heady heights. And and then we’ll get cracking with it. We’re talking about wills.
Michelle Tonge 1:14
Yeah, perfect. So I’m Michelle Michelle Tonge. I’m an Associate Solicitor at Private Client Solicitors in Manchester. So I’m a solicitor that specialises as Tamsin said in wills, powers of attorney documents, a little bit of tax planning for clients. But what we focus on is how to preserve wealth for the next generation. So how to pass on to children, family members, and just make sure that everything’s running smoothly once you pass away, because it, it often doesn’t, unfortunately, because people don’t get the right advice. And so I’ve qualified in 2020, but I’ve been studying private client law for the past seven years. So it worked for the current practice for two and a half years. And we’re now a team of 34 in Manchester,
Tamsin Caine 2:02
Gordon Bennett. We should say at this point that Private Client Solicitors as a firm isn’t actually that old, is it?
Michelle Tonge 2:11
No, so. So the actual members of the firm, we’ve worked together for a lot of those for the past 10 years, I’ve been working with them for seven. But we used to work for quite a big practice. But we saw a little bit of a gap in the market where we wanted to provide that more boutique service to clients, and just provide that really quite down to earth and honest advice for a decent price. This is what we’re all about really,
Tamsin Caine 2:33
Absolutely and a cracking job, you do have it as well. And so let’s start off with with talking a bit about wills. So I guess the starting point is, what is it? And why should I have one.
Michelle Tonge 2:48
So a will is a document that specifies what you want to happen to your assets if you were to pass away, or when you were to when you were to pass away. So it’s really important to have in place because if you don’t have one, your assets could pass to people that you don’t necessarily want it we could have probably quite a long conversation about why it’s important to have one in place. But it is essentially a document that summarises exactly where you want things to pass.
Tamsin Caine 3:17
And if I don’t have one, what happens to my money?
Michelle Tonge 3:22
Yeah, so if you don’t have a will in place something called the intestacy rules apply, which is basically a piece of piece of law, which says what happens to your assets if you were to pass away. And there’s a specific order of who inherits in accordance with those rules. So they’re on the government website, and they actually have like a calculator where you put in what family members you have, and it shows you how your estate would pass in accordance with those rules. But those rules are often not what people want. One of the things that a lot of our clients don’t know is that just because your husband and wife and you’re married, are you single partnered doesn’t necessarily mean your entire estate would pass to each other under the intestacy rules. So it’s only I think it’s just above 300,300 22,000 That actually passes to the spouse, and then the rest would pass to between children and your spouse again. But that can lead I’ve dealt with the states where that’s led to minor children inheriting but then the surviving spouse has had to sell their property because because they’ve not got the money to pay their own children the inheritance. So it’s really it’s just making sure that you do everything you can even if that is what the intestacy rules say to have it in writing?
Tamsin Caine 4:36
Yeah, absolutely. So I can go to the post office and get a pack to draw up my own will.
Speaker 1 4:46
We all love a homemade will. Post Office do them WH Smith to do them. You can in theory, do your own will, and we would never say that isn’t something you can do but we highly recommend again Instead, there’s so many reasons for that I could probably talk all day about it.
Tamsin Caine 5:05
Some of the big ones,
Michelle Tonge 5:07
Some of the big ones, you’re not getting the right tax advice. So you might draft your well, but not be aware of the tax implications of what you’re putting in it. You might, you might even get drafted one way. But that’s actually read another way, and you’re not covering all instances. We’ve had some homemade wills that we’ve dealt with afterwards for the probate where there’s been that unclear and actually what they wanted to happen, that that well has been considered invalid by the courts. And I always I appreciate that wills, not necessarily cheap to do with a solicitor, but it is a very, very, very, very small proportion of your overall Oh, wealth. And that’s the document that directs where it goes. So it’s just, it’s so important to get it done correctly. So solicitors are regulated were backed by something called the solicitors Regulation Authority. So it’s our responsibility to make sure that’s done right. And we weren’t, but even if we didn’t, you’ve got another recourse. Whereas if you do in your will, yourself and you draft it incorrectly, there’s nobody to turn to that’s on you. That’s your fault. So there are other people out there who draft wills, such as well, writers who aren’t solicitors, some of them are probably really good. But again, they’re not regulated, and they’re not backed by insurance. So you’ve just got to make sure that you’re getting the right advice from a specialist.
Tamsin Caine 6:29
Yeah, absolutely. And in terms of things that you need to think about for you go and ceaseless to to get you well drafted. What what do I need to have with me? What things should I be thinking about? Before I go and see a solicitor?
Michelle Tonge 6:45
I think that the first step is to actually have a conversation. So you have a couple having a conversation between yourself about what you think you want happen, because I quite often have meeting with clients, and they’ve not actually had that clear conversation about where they want their estate to pass. So I can certainly give you the right advice about how it should be legally structured, but I can’t tell you who to give you money to because that’s the decision for you. So the first thing is really to have a think about who do I actually want to inherit this morning. And we’re both in agreement with it. And then also just to have an overview of what you actually own. So a lot of people accumulate wealth over the lifetime, they might have different pension pots, they might have different bank accounts, they might have different shares, but they don’t actually know what they own. But it’s useful when you have a meeting with a solicitor to do your will or somebody to do your will, if you can give them an overview of what assets you actually have. Because you might want to give a specific asset to a certain person, but even if you don’t, then we’re just dealing with the estate as a whole, we need to have an idea of the value of it so that we can give you the correct advice.
Tamsin Caine 7:55
And once I’ve, once I’ve come to see you and and we’ve talked about where you might want, let’s say situations fairly straightforward. We’ve got husband and wife, there’s two children, they want the children to inherit worldwide, each other to inherit, if not each other than then the children. There are other things that that we need to think about.
Michelle Tonge 8:19
Yeah, so So there are other things that you need to think about as well. So one is the tax aspects of it. So you need to have a think about whether it’s going to be an inheritance tax payable on your death, because that might change your opinion on how they will structured, you might want to include other things in the wills such as funeral wishes, for example. So you might want to specify where you to be whether to be buried or whether you’d be cremated, or whether you want to religious ceremony. There’s things like default beneficiaries to consider as well. So Armageddon scenario, everybody passes away, who’s to inherit our estate? Because if you don’t specify, it goes back to the intestacy rules, which we talked about previously. Also, a big one that people don’t have the conversation about before is, yes, you are giving to your children. But what age do children to inherit? Do you want to give an 18 year olds a big chunk of money? Probably not. I mean, different to others, but I know if I had that money at it, I would have probably blown it at university. So it’s things like that to consider as well. And also, if there’s anybody vulnerable in the family, you might want to think about protecting their money via what’s called a trust. So if anybody’s entitled to benefits, for example, or somebody’s quite frivolous with money, or if one of your children have a spouse or partner that you don’t necessarily like you might want to bring fence that money in protects it from kind of threats to the estate. And it’s really just having a look at Yes, this is what we want overall, but This definitely the best structure? And does this provide the family with the most protection going forward?
Tamsin Caine 10:07
And what? What about the executors of the will? How? How would you suggest going about choosing them. So if we’ve again, we’ve got husband and wife, and we’ve got two kids, and they’re both under 18.
Michelle Tonge 10:21
So executors are really, really important. So just to explain what an executor is, it’s the person who’s responsible for administering an estate. So they’ll deal with all the paperwork, they’ll apply for something called probate, if they need to do that the deal with Linetti inheritance tax, if it’s the situation you just described, where it’s a simple will between husband and wife, and then everything passed on to the two children at age Z, and it might be on the first person passed away. So the first of husband and wife that they’re happy to just appoint each other, provided that they’re happy with that they trust each other, implicitly, they’ve got no concerns about them being emotional, and being able to deal with it at that time. But then you really need to consider who are we appointed on the second death who’s looking after this money on behalf of our children until they reach that at the age of 80. And if they’re not already, you can’t appoint the children if they’re under 18. And even if they are above 80, and so they’re at 90, you still not might not want to put that responsibility on the children. And you might want to include an age of 25 in the will, for example. And so it’s just thinking about, who do we trust to look after that money for the children, whether that’s a professional, whether that’s a family member, whether that’s a friend, and those people are going to get on as well, because something we unfortunately see in practice, it’s quite often is that people point to executors who actually don’t like each other, whether that’s two children who like each other or two friends who don’t like each other, and it can cause problems further down the line, because it’s such a big responsibility to be an executive. So you’ve really got to think about it and be happy that that person is going to act in the best interests of the beneficiaries, the children.
Tamsin Caine 12:08
Wow. Okay. So that’s another thing that perhaps needs thinking about before, before they come and say, solicitor. Okay, so let’s say we’ve put the will into place. So I’ve done it, everything’s hunky dory until I die. Is that the case? Are there anything that that means that wills not valid any longer,
Michelle Tonge 12:31
There’s quite, there’s quite a few things. So we always recommend that you review your circumstances every three to five years. So we offer free will will review service for clients. The reason being is your circumstances might change in those three to five years. Or you might have a life changing event anyway, such as maybe have more children, maybe you have more grandchildren, maybe you get divorced, maybe you get married. But all of these things can impact how you will structured and particularly if you get married, that actually revokes a will. So the law says that if you get married, it’s as if you’ve not put that previous rule in place, unless you put the specific clause in it to start with. So you should certainly every few years, or it’s a life changing event happens get get that advice, just to make sure it’s still is off today. And also the tax legislation can change. So depending on who is who is in power, it might change from from one five year period to another five year period. So wherever you are in a lot of wills at the minute that were done before 2017, which now needs to be updated because the inheritance tax legislation change them. So it’s, it’s definitely worth reviewing it. So please don’t just do it and think I’ve done my Well, I never need to do it. Now.
Tamsin Caine 13:48
That’s me.
Michelle Tonge 13:50
You might get into it might be that it is still okay. And if it is we will tell you that and most of the time we do reveal well and say, Actually, this is completely suitable for your circumstances. But what might be your concerns when you’re in your 20s? Probably isn’t your concern when you’re in your 60s or 70s? So you might start thinking about things like care fees, inheritance tax, even younger than that, you might start thinking about those things. So review your will.
Tamsin Caine 14:18
Good advice. So marriage revokes the will, but divorce that doesn’t automatically revoke.
Michelle Tonge 14:26
Yeah, you’re right. Yeah. So when we’re with marriage that does reveal goodwill, because I presume the reason for that is that you’ve you’ve now married a person you say you will spend the rest of your life with them. So any will that you’ve made given things to somebody else now is invalid. With divorce, it doesn’t necessarily revoke your will. So your will is still in place. It’s still a legally valid document. However, it’s treated as though that person your ex had provided you are divorced have passed away before you so if you had a will, leaving 500,000 pet else to say your spouse or civil partner, if you then got divorced, that gift just wouldn’t happen. But that divorce would have to be final in order for that to be treated that way.
Tamsin Caine 15:12
That’s interesting. Crikey. Okay, so she get married, or if you’ve got married, rede your will, if you’ve got divorced, definitely redo your will.
Michelle Tonge 15:28
We get a lot of clients who started the divorce process, but haven’t finalised it yet. So they might have something called the decree nice i but they’ve not got the Decree Absolute, which is basically the final bit of the divorce. And until you’ve got that, if you will, is still valid. And if that and even if you don’t have a will the intestacy rules apply again. And the spouse is the first person to get it even if you separated.
Tamsin Caine 15:53
Yeah, and to be honest, there are situations where, where that actually does, where it makes sense for the for the spouse to get it during the divorce process. So we’re working with somebody who that did happen to there, they were in the process of getting divorced, they got the conditional order, they were waiting for the final order. And during that, during that time, sadly, her husband passed away. And we know, it’s a long and complicated story, which I won’t go into. But we knew that the husband wanted their son to inherit the estate, but actually, it made a lot of sense for her to inherit it for tax planning reasons. And you know, in those circumstances, actually, whilst you’re going through the divorce, and it’s not finalised it, does it make sense to kind of leave you well in place, especially if there’s children involved? Yeah.
Michelle Tonge 16:54
And the other point to consider is that if that did happen, because we’ve got, we’ve got two files at the minute where that’s actually happened as well, the spouse could still have a claim on the estate, if you put that spouse out of the will. So you’ve all got to be very cautious of, yes, I’m cutting this person out. We’re separated, don’t like them don’t want to have any of my phones, but then that could actually lead to quite long and upsetting and emotional legal proceedings further down the line. So you’ve got to be very careful and get the advice during that period, to make sure you’re considering absolutely everything.
Tamsin Caine 17:31
Yeah, definitely, definitely. So there’s another situation that I wanted to talk to you about, because this is something that happens a lot, and that we come across a lot. And that’s where there are, this is a second marriage. So there are perhaps sort of separate families, children from previous relationships, on on often both husband and wife side. And you might say, well, I want my spouse to inherit initially, but actually, I don’t then want them to be able to write my children out of an inheritance later on, and the things that you can do to protect that situation.
Michelle Tonge 18:14
Absolutely. Yeah. And it’s a really, really common situation now, particularly modern day family, that tends to be a lot of a lot of people situation. So what’s the issue with a simple will structure so the one we talked about at the beginning, where it’s everything between new partner, husband and wife, spouses, and then everything to children, is that if you’re saying, I give everything to my spouse, that spouse is then free to change their will, they could decide to cut your children out completely, they might get remarried again. So what we tend to recommend for that situation is that instead of doing a simple, we’re leaving everything to each other outright on first S, you incorporate something called a life interest trust. And what that does in essence is it means that your partner, your new partner can benefit during their lifetime. So they might have a right to live in the property because you wouldn’t want them to be homeless, they might have a right to any income, if they needed some money from the trust of trustees could give them what the underlying capital is preserved for the respective children. So it might be that you have the same wills structure in place what the beneficiaries of yours are your children and the beneficiaries of your partners, their children, and it just ensures that you’re still making sure each other river okay and you making sure you can eat benefit from your own wealth during your lifetime. But you can’t go and spend it you can’t go and give it away. And you certainly can’t cut the kids out in the future. Because it sadly, people do move on and families do fall apart. So it’s it’s making sure that you’ve protected it.
Tamsin Caine 19:50
Okay, tell me a bit more about trust cuz we’ve mentioned trusts a few times. So just very straightforward and simply what is a trust, what does it do? How did they how are they set up?
Michelle Tonge 20:03
So trust, I will not bore you with the details of our conversation, I always give the example to a client, it’s as if you lock in something in a safety box, and you decided who has the code to it to look after it. So a trust is to score three parts to it. So you’ve got your trustees, who are the people who control the trust. And as the name suggests, it should be people you trust, implicitly, then you’ve got your trust assets. So that might be in your will, it would be everything that you own at the date of death, and then you’ve got your beneficiaries. So who you want to benefit from that trust. So they might be partner, they might be spouse, they might be children, they might be friends, they might be charities. So it’s essentially a way of planning to protect, to give you more control or give the people you choose more control over that inheritance.
Tamsin Caine 20:58
Okay, so it’s not directly going into somebody’s bank account that might not be of an age or a mindset to work out for themselves how to control it.
Michelle Tonge 21:09
No, definitely not. The trustees who your points control it, although they can decide who benefits and when what they can’t do is spend that money on themselves necessarily, is meant to be for the benefit of the beneficiaries, so that they are made, and if they wanted tools, trust, because they give you so much flexibility, and so much tax planning opportunities that they definitely worth having a conversation about.
Tamsin Caine 21:38
Absolutely. And when you learn to use less to about you, well, they will undoubtedly talk to you about trusts and about whether they’re appropriate for your circumstances. ,
Michelle Tonge 21:47
Yeah definitely different types, depending on what you want to do. So there might be the Will there might be during your lifetime. And it all depends on what that person wants to achieve, and what their concerns are. And to be honest, that’s how we tend to staff the meeting, you know, what, actually, are you worried about happening? Yeah, yeah.
Tamsin Caine 22:06
That’s good advice. And the other thing that is kind of, I suppose future proofing or, you know, putting things in place, so that whatever happens to you, things will you’ll you’ve kind of given the control that you want to people you want to have it is Austin Powers of Attorney. So very basically, what is the left lasting power of attorney what to do.
Michelle Tonge 22:36
So just to start with, they are completely different to a well a completely separate document. And sometimes people get them a little bit confused, and lost in powers of attorney, it is only valid while you’re alive. And they used if you’ve lost mental capacity. So if you for some reason, Tammy decisions for yourself, that’s when this document comes into place that you can use. So there’s there’s two types of documents. One is for your property and finances. And one is for your health and welfare. So your property and finances. For example, if you couldn’t make decisions about your own investments, about your own pension, you can appoint people you choose, you return it to make those decisions on your behalf. And that one can be used if you still got capacity. And you can still make decisions for yourself. But if for example, you don’t feel well enough to go to the bank. So it might be that you say, Oh, please, can you go to the bank for me today because I want some cash out. So they could use that document to make decisions for you. But only again, they can only be used for your benefit. The other document is for health and welfare. So that’s equally as important document. And I think sometimes people don’t think it is and they tend to just put the finances in place. Because to me, nothing’s more important than my health, I would quite happily be poor and still have my health. It’s that document can only be used if you’ve lost capacity. And essentially, it’s in relation to things like life sustaining treatment. So if I was in hospital at a very small chance of coming back to consciousness, would I want the doctors to make a decision on my behalf? Or would my family and friends know what I wanted to happen? And who would rather make that decision, but then not just in relation to life sustaining treatment, they’re also quite really important if you have rented a pink tear, because if you can make decisions for yourself, you need some disposable to make those for you. So I don’t know if you saw on the news, a few I think it was during COVID There was a lady who had a mom in a care home who was in an iron fist. And she wasn’t happy with the care that the mom was receiving and this care how she had power of attorney just for finances. And she went to the I’m taking my mom out. She’s not happy here. I know this isn’t what she wanted. She actually ended up getting arrested and this lady was in the 70s itself because she had no leave The Law authority to take her mom out of a care home. And it’s really sad because you know, when you hear that story that she had a mom’s best interests at heart. But as far as a local authority was concerned, they didn’t know this person. They didn’t know that she had a relationship with a mom. And they said, No, what’s happening, we think it’s in our best interest to stay. And Chad’s go through the course. And that’s a very long and time consuming and emotional process.
Tamsin Caine 25:24
Wow. Crikey. I’ve never heard that before. That’s horrendous. I mean, I would always suggest getting both done. Because as you said, You want somebody to be able to make the decisions, things like whether you want somebody to be resuscitated. And my grandpa had a do not resuscitate on his file, which, which was ignored, unfortunately, on a number of occasions, but but things like that, you know, would you want do Do you know, if they won’t want their life support, turn it off, those sorts of things are massively important. And you know that if you’ve had those conversations with the family, they know what you would want and they will operate in your best interest. So know for me I’m with you. Health is is definitely is as important as, as the finances one.
Tamsin Caine 26:16
So what in terms of their finances one, so I have some questions, as you can imagine, for sure you come across it.
Tamsin Caine 26:26
Absolutely like, so you have your power of attorney, you fill the form, and you write it all up. And then it needs to be sent off to somewhere and you pay some money and from memory, it’s just under 100 quid. And that registered it does that mean for the finances, one from that point of registration, it can be used, if needs be,
Michelle Tonge 26:53
Yeah, it can. So you don’t have to register your Lasting Power of Attorney documents, you could just sign them and then they could be registered by your attorneys if you then lost capacity. But we do recommend doing that one decision about six months to come back from from where you send them to be registered the government body called the Office of the Public guard. And also, it’s, if you need them, for some reason, you probably don’t want to have to wait that six months. And another reason is that if they then come back, because they’re quite particular, in how they’re signed from the Office of the Public Guardian, I’m happy with them, you can then put one in place if you’ve lost capacity to be re registered. So we always recommend registering them. And yes, you correct and that they can be used from that day. So like we said before, if somebody wanted to go to the bank on your behalf, they could do if that document was in place, but you should never appoint somebody who you’d know, you should always be happy that that person is going to act in your best interests. And nine times out of 10, those documents just sit there until they are actually needed. Sometimes mostly in a solicitor’s office. And then if they are needed, then ready to go from day one.
Tamsin Caine 28:05
Rarely, and there was a case and I can’t, I think it was something from the news. I don’t think it’s somebody that I’ve worked with personally. But that was in a foreign country. And some there was some kind of emergency requirement for money, not one of these scam things because a no you see loads of those happening, but a genuine, they needed. They needed some money, moving about in the UK, transferring from one account to another for themselves, not sending it to like some random person in Sudan or wherever, but actually for use themselves, and they needed somebody to move some money about, and they use their power of attorney to enable them to do that. So as you said before it, it can be useful, but it’s not just about doing it when you retire. It’s it’s about putting them in place early on, because you never know when you might need it.
Michelle Tonge 29:03
Completely agree. So yeah, it’s just just to confuse you. There’s another type of power of attorney that can only be used if you have got capacity called a general power. So they’re often used. And the reason I bring them up is they’re often used if you just need the same week, you don’t want to wait for them to be registered. You’re in a different country and you need somebody success money on your behalf, you could literally just do a document with a solicitor that says I give this person authority to make this decision. But they are only valid while you’ve got capacity, while Lasting Power of Attorney documents when I’ve got faster and also when I’ve lost it so they’re the best ones to put in place. They just take a few months to do to register.
Tamsin Caine 29:45
Fair enough. And so if I liked say, I’m going travelling for a year, and I just want to make sure that should only thing should I need somebody to do anything financial In the UK while I’m away that that they can and there’s going to be no tripping up. What do I need to provide them with? Do they need? Is there a copy of the registered power of attorney that comes back from the Office of the Public Guardian?
Michelle Tonge 30:14
Yeah, there is. Yeah. So I would always make sure that people have either the original, or the list of certified copies. So places like banks, etc, will only accept certified copies of the documents, it’s also become a little bit more modern. Now with the finance document in particular, where they have they have a the banks will have like an online registration of who the attorneys are. And they can find, find who’s whose attorney for that person. But yeah, always make sure you’ve got identification whenever you go in anywhere, and always make sure you’ve got a copy of The Power of Attorney interesting case. Brilliant.
Tamsin Caine 30:50
Okay. And another thing that I just wanted to touch on with you, big, loud, so because it came up in a client meeting, morning, and I was like, Oh, that’s interesting, and something that I should talk to Michelle about. So this is about ownership, particularly of your main home, so your main residence. So this, this particular client without going into too many personal details, and asked me about the different types of ownership for a property, and why they might want to do something different from what’s in place at the moment. So to begin with, what are the different ways that you can own a property.
Michelle Tonge 31:33
So if you own property jointly, which a lot of people do, there’s two different ways that are very separate as to how to own property. So one is called joint tenants, and one is called tenants in common difference is that if you own your property as joint tenants, then that property, if one of you passes away, automatically passes to the surviving elder. So it’s as if you own that property as a whole. And you can’t direct in your will, where your share of that property goes, you own it jointly with that person, and it will pass to the survivor on death, by way of law doesn’t matter. What you will say is with the other option, so with tenants in common, you each own a distinct share of that property. So it might be that you eat, there’s two owners, and you each own it 50% 50%, or it might be the percentages are different. With tenancy in common, you can then specify who is to inherit that on your person. So the situation we’ve covered before about families where they’ve got children from previous relationships, they usually want to own their property as tenants in common because they want their property to ultimately at the end of the day, pass to their own respective children still have the right to live in it, but but they wouldn’t want the property to just automatically pass to the survivor. Sadly, we see a lot of cases maybe where people have done their own wills, or they’ve not got the rights advice, where they’ve not changed the ownership when they’ve been doing this the structure. And the property just negligently passes to somebody that didn’t want it to pass to. And that’s also the case if you get divorced as well. So even if you get divorced, if you don’t change that property ownership, then it’s not passing to who you want to.
Tamsin Caine 33:20
Absolutely, no, that’s massively important, isn’t it? To kind of think about that and I think I think you’re I think people kind of think Oh, that’s good idea. I’ll stroke and things like that. And and actually don’t change the build set the will often put everything in there but don’t necessarily do the final bit, which is actually the doing of making
Michelle Tonge 33:44
Even though the property is sometimes the biggest asset and but it’s you will get asked when you buy a property, how would you want to own it, you want to own it as joint tenants or tenants in common. But for most people, it’s either not explained correctly and in or it’s not talked about in conjunction with death. It’s not nobody talks about you, you’re not buying a house and you conveyed it to girls. But what if you die?
Tamsin Caine 34:06
What do you want to happen then?
Michelle Tonge 34:09
I know this is really happened to me like you’re buying your first house, what if so, it’s it’s thinking about the extra things. And when you do your will, it’s a natural time to do it. And we always look at how and if all properties are not just your main residence, it might be a common one that I’ve had a few times is people have inherited property from parents and kept owning them with siblings, not realise that they own them as joint tenants and then they pass away and this this both assumed the sibling gets the whole amount, because that’s not what they wanted to happen. So it’s so important to check the ownership and we can do it I think it costs us three pounds to download a copy of the title from the registry.
Tamsin Caine 34:50
Most people can probably just about cope with that. Sounds pretty good advice. I think there are there are some really good eggs Some calls of where property’s been owned as tenants in common, and it is absolutely the right thing to do. But it is about making sure that it’s right for you and your circumstances. So just just an example just to, I don’t know, just kind of show how it can work. So, my, my grandparents lived with my dad and my stepmom. And they, so they owned a house. It’s very complicated, but it was a house that was sort of split into two. So my dad and my stepmom lived in one, one half, like one side of the stairs, my grandma and granddad lived in the other side is that my granddad got, sadly, very poorly, and he passed away. And they chose 25 son, when he passed away, I think the way that they did it was then the each, I think that they then split it so that the gender dealt with the third. And then when my grandpa passed away, her third got split into and then they then my dad and my stepmom then ended up with her feet, which absolutely makes complete makes complete sense. And for their structure in the way that that worked, because obviously it was my grandma and granddad. And even though my stepmom wasn’t related to them, she’d lived with them. And she’s cared for them. And she looked after them when they were older. So they wanted her to inherit their, their part of the house even though even though she’s not loved family, because they were like, grateful to the way that she she’d cared for them and you know, in a lot of times to them and fed them in love with them, and so on. So, but circumstances like that can be absolutely ideal for attendance, income situation, but you’ve got to understand what you’re doing. And the pros and the cons, like what things can go wrong. So yeah. And I think if you talk to a solicitor they will explain. Explain that.
Michelle Tonge 36:57
Yeah, definitely. And on the other side of that, on the flip side, it might be suitable for you to own a tenancy in common. If you just want no hassle after the first person to pass away, and you just want your spouse to inherit the property, then that’s absolutely fine. We might as well own as joint tenants. So we have changed properties away from tenants in common back to joint, but you just have to make sure it’s 100%, the right thing to do. And also for clients who have, you want to make sure that all of their inheritance are to the children and that they might be worried about going in a care home in the future tenants in common is a very, very good way of building your property. Because you don’t necessarily want the entire property to pass and survive raffia if you and your dad isn’t important health, because at that point, it might end up going and going and don’t care for you. So you have to make sure it’s tenants in common and that you will structure correctly. There’s so many different things to consider. That’s why it’s useful to have the conversation.
Tamsin Caine 37:57
Absolutely. And have the conversation with somebody who who knows what knows what they’re doing. They know, I know, lots of people want to protect their property from being spent on care fees. Having said that, if you spent your life making decisions, and choosing nice places to live and wanting to, to give yourself choice, actually, you might think, well, I owe this money. It’s, it’s mine. And if it doesn’t go to the children, it doesn’t go to the children. But if it means that I can live somewhere nice that I choose to live, then you might be quite happy. And those are conversations that you need to have with the solicitors.
Michelle Tonge 38:33
That’d be my opinion on it. My clients do so from time to time, I really want to do some careful planning. And I think there’s quite a bit of cash there, you should you’re not swamped. Go to nice care who completely agree with you. And each the key is each person has different opinions on things and different views. And going back to what we said at the start different concerns. And if you’re adamant that that’s what you want to do, and you want to protect it, then we can probably help to do that. But at the same time, never starve yourself cash and assets just because Yeah. Your children. .
Tamsin Caine 39:07
Yeah And you might not want to go in the local government care home when you can go in somewhere nice with a nice big lake and park outside for you to go look at every day. That’s me. Yeah. We are just about coming to the end of our time together. Michelle, is there anything that I should have asked you or anything that you want to add?
Michelle Tonge 39:32
No, I think I think that’s that’s great. I mean, just from our perspective, it’s if anybody has listened to this and thought, oh my gosh, I need to review my will or I need some advice, where I’m always happy to have a conversation. You know, those listeners get a bad rap. Sometimes I’ve given you a big bill, but we were completely have to do a free will review kind of a free no obligation chart. It’s really important. Suppose that everybody gets access to a state funding advice. So even if it’s just a conversation, you don’t actually need to do anything, happy to have it?
Tamsin Caine 40:02
I appreciate that. And I know that you’re in Manchester city centre. Do you only work with people who who can come and see face to face? Or are you able to work with people remotely as well
Michelle Tonge 40:13
100% able to work with people remotely, I think everybody’s gone a little bit more in that direction, since we’re all working from home a little bit more. So we do have offices in Manchester, Manchester to centre, I would also go and see clients in around the Manchester area at their house, if that’s where they prefer. But also, sometimes it’s easier to actually just hop on a team’s call or a zoom call, or just have old fashioned phone call. But we work with a lot of clients remotely. We work with a lot of clients who have assets overseas, or who are based abroad. got clients in London got clients Liverpool, so yeah, basically anywhere across the UK or anywhere in the world, we can still help.
Tamsin Caine 40:52
Wonderful, it’s always worth covering that because they know we do have listeners from all across the UK. And somehow we have listeners in Mongolia as well
Speaker 1 41:04
Never done in that law, but anything to do with the law of England and Wales.
Tamsin Caine 41:13
Perfect. That’s brilliant. Thank you so much for joining me today. Michelle, it was really useful conversation.
Michelle Tonge 41:19
It’s been a pleasure
Tamsin Caine 41:26
I hope you enjoyed the episode of the Smart Divorce podcast. If you would like to get in touch please have a look in the show notes for our details or go onto the website www.smartdivorce.co.uk. Also if you are listening on Apple podcasts or on Spotify and you wouldn’t mind leaving us a lovely five star review. That would be fantastic. I know that lots of our listeners are finding this is incredibly helpful in their journey through separation divorce and dissolving a civil partnership. Also, if you would like some further support, we do have Facebook group now. It’s called ‘Separation divorce and dissolution UK.’ Please do go on to Facebook, search up the group and we’d be delighted to have you join us. The one thing I would say is do please answer their membership questions. Okay, have a great day and take care!