What property is yours to give by Will
Giving your instruction When preparing to make your Will you fist need to know what you own, what it's worth and what you owe.
But before you do this it is important to understand the rules govening property ownership. The principle reason for knowing this is that you cannot leave property that you do not own.
If you are single, have no shared ownership, you will have little problem. You are free to leave your property to whoever you wish and to whatever institutions you wish.
However is you own any property in shared ownership - such as joint ownership or ownership in common - you need to understand how this affects your right to give away this property by your Will.
Joint Ownership Where property is held by more than one person, as JOINT OWNERS in equity, on the death of one joint owner his interest automatically passes by survivorship to the surviving joint owner(s).
In England and Wales jointly owned property will pass to the survivor no matter how short the period of survivorship may be and despite anything said to the contrary in the Will. For this reason it maybe appropriate to sever (split) the joint ownership inter vivos (during lifetime) see Ownership in Common.
In Scotland the spouse has ´prior rights´ to a portion of the estate but they do not automatically inherit it all. If the deceased has left a Will then the ´prior rights´ are not applicable.
If you wish to pass your ínterest´ in the property to your children or others, you should hold your property as Ownership in Common rather than ´Joint Tennants´.
Apart from the obvious, the family home, some other types of property pass on death independendently of the terms in the Will.
These include nominated property, Life Assurance Policies, pension and Death in Service benefits, Joint Bank accounts.
Ownership in common Where land or property is held by more than one person as OWNERSHIP IN COMMON (also called Tenants in Common) the share of each co-owner in common passes on his death under his/her Will or intestacy.
Each owner in common is free to leave his beneficial interest (his share) to whoever he wants, however this can cause problems for the survivor particularly in the case of the matrimonial (or family) home.
The surviving spouse/civil partner/unmarried partner could be forced to sell the property to settle the gift of entitlement to the beneficiary. A simple solution to this is to give the survivor a 'life interest' in the property, enabling them to remain living in the house as long as they wish or for the remainder of their lifetime. It is only when the survivor dies that the intended named beneficiary in the Will can benefit and take the gift of the hosue (or proceeds of the sale)
Severing an ownership agreement To sever a joint ownership to ownership in common requires one party to notify the other as to their intentions to do so, with the other party/parties signs in agreement.
Both (or all) co-ownership in common sihn a Notice of Severance of Joint Tenancy, in effect notifying each other (or all co-owners) of the intention to sever the existing ownership status.
Where the property is subject to a mortgage or other loan, the, the mortgagee (lender) should be notified and the severance registered on the deeds through the local Land Registry Office.
We as an your Estate Planning Practitioner can advise you further on the action that you need to be taking and we can undertake to complete the entire procedure on your behalf as part os our service.
Summary
Joint Tenants
- property passes to survivor regardless of instructions in the Will
- property will pass irrespective of survivorship period
Tenants in Common
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ability to 'gift' your share of the property upon your death
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the family home may be your main legacy to your children - severance of tenancy can help protect the property from future unforeseen situations
- a life interest in your share will protect your spouse/partner from having to sell
SPECIAL NOTE
The types of ownership refered to above are more commonly known as JOINT TENANCY and TENANTS IN COMMON.
It is for ease of understanding that they have been referred to as JOINT OWNERSHIP and OWNERS IN COMMON.