How can property ownership affect your Will?
It is important to understand that property can be jointly owned in different ways. Given the importance of the issue, it is surprising how many people are unaware of how they hold a property with their co-owner.
This article summarises the different types of joint ownership and how each type will affect your Will.
You can jointly own a property in England and Wales as:
Joint tenants
Tenants in common
Under a joint tenancy, the tenants are equally entitled to the whole property (each tenant owns 100%), and the right of survivorship applies. This means that upon the death of one co-owner, that co-owner’s interest in the property will automatically pass to the surviving co-owners regardless of what that person’s Will may say.
For example, John and Joan own a property together as joint tenants. John’s Will leaves his interest in the property to Jill. John dies before Joan. Despite John’s Will saying his interest is to pass to Jill, it passes to Joan by way of the survivorship rule.
With a tenancy in common, each co-owner owns a distinct share of the property, and the right of survivorship does not apply.
Therefore, unlike joint tenants, tenants in common can leave their share under their Will. Applying this to the above example, John and Joan own the property as tenants in common. John’s Will leaves his interest in the property to Jill. John dies before Joan. Because in this example the property is held as tenants in common, Jill will inherit as the rule of survivorship does not apply and John’s Will takes effect.
As the above examples show, if you own your property as joint tenants, your share in the property will not pass through your Will. Through survivorship, your ownership of the property will be automatically transferred to the surviving co-owner, irrespective of what your Will says.
How a property is owned can cause particular issues in cases involving second marriages with children from previous relationships and where there may be a desire to protect monies for one “side” of the family.
If a couple in a second marriage own the property as joint tenants, the survivor will inherit the property irrespective of what the deceased owner’s Will may say thereby potentially depriving the deceased party’s children from inheritance.
If your property is registered at HM Land Registry, they will have a record of how the property is owned. It is inexpensive to obtain a copy of the title to the property and the title will show how the property is owned.
If your property is unregistered, you will need to review the Title Deeds of the Property.
If you do not wish for your share in your property to pass to the surviving tenant, the joint tenancy must be severed. This is a relatively straight forward process and does not require the agreement of the co-owner.
We cannot express the importance of knowing how your property is held and what implications this can have on your Will.
If you have any concerns regarding your property ownership, please do not hesitate to contact our experienced specialists.
Contact Katherine to discuss this further.
