How does your Joint Ownership of Property Connect to your Will?

Modern Problems

How does your Joint Ownership of Property Connect to your Will? Modern Wills increasingly provide for a surviving spouse/partner, who is also a co-owner of shared property, by way of an exclusive and unrestricted protective Will Trust for the benefit of that surviving spouse/partner, rather than the survivor merely absorbing the deceased’s share of property into their sole name.

The reason for this is to maintain the full use, enjoyment, and benefit of the first deceased’s share of a property for the survivor, but also to avoid the deceased’s share of that property from being lost, accidentally or otherwise, due to the subsequent circumstances of the survivor.

For example, if a survivor absorbs the ownership of the deceased’s share of property into their sole name, then if that survivor subsequently requires long-term care for which they must pay, then they shall be required to use the entire value of the property to cover the cost of their care if they live long enough to exhaust its value. With average monthly care costs now exceeding £5,000, exhausting the entire value of a property to cover care costs is a realistic possibility.

The Solution

A modern Will containing the correct wording would limit this potential exposure to the survivor’s share of the property only. Although the survivor would be entitled to continue enjoying the full use, enjoyment, and benefit of the deceased’s share of the property, the survivor would not be required to use this to pay for their care. Instead, the state would cover any shortfall. If the deceased’s share of the property (or any proportion of its value which is not spent by the survivor during their lifetime) remains after the death of the survivor, this would then pass directly to the beneficiaries stipulated in the Will of the FIRST DECEASED (very often the children of both co-owners).

This process also provides the same protection if the survivor marries after the death of their first spouse/partner. Only the survivor’s share of a property might pass to their new spouse (rather than their children), BUT NOT THE SHARE WHICH PREVIOUSLY BELONGED TO THE ORIGINAL FIRST DECEASED SPOUSE/PARTNER. Again, this would then pass directly to the beneficiaries stipulated in the Will of the FIRST DECEASED.

Hopefully, both these examples demonstrate the additional safeguards, incorporated into modern Wills, which can ensure that children inherit as much as possible after both their parents are deceased, rather than risking accidental disinheritance of those children due to the circumstances of their surviving parent.

The Hidden Danger

How you jointly own property has a direct link to the wording of a modern Will.

If you own a property jointly with at least one other person, you may own it together as “Joint Tenants”, or you may own it together as “Tenants in Common”.

What is the Difference?

Owning a property as Joint Tenants means that the co-owners are legally one unit collectively. Thus, if one co-owner dies, the remaining co-owner(s) automatically inherit(s) the deceased’s share by law, irrespective of the existence of a Will stipulating a different requirement.

Owning a property as “Tenants in Common”, either in equal or unequal shares, means that each co-owner has a distinct individual “share” in the property and in the event of their death, they may select who should inherit their share of the property in their Will, and how it should be inherited.

Why is this Important?

No matter how much protection your Will offers for your “share” of property if you predecease your co-owner(s), if you own the property as Joint Tenants, then the survivor shall automatically become the sole proprietor of the entire property. Therefore, any careful Will planning related to your “share” of property shall be ineffective as a result.

The previously examined modern solutions to modern problems (care fees, marriage of a surviving co-owner) are only possible if you co-own your property as “Tenants in Common”.

How can we Discover if we Own our Property as Joint Tenants or Tenants in Common?

If you have an up-to-date copy of the Land Register in relation to your property, then this will confirm how you jointly own your property.  If not, it is inexpensive to order a new copy. If you are not sure how to interpret the Land Register, then TRF Wills do NOT charge consultation fees, nor attach any obligation to answering this question for you.

How can I switch from Joint Tenants Ownership to Tenants in Common Ownership?

HM Land Registry currently charges NO fee, and it is merely a case of modest paperwork.

For further details WITHOUT consultation fees nor obligation, please visit TRF Wills.