Wills
Sole Ownership and Joint Tenancy
When making a will, it is vital to understand how your property is legally owned, because this can determine exactly what happens to it when you die.
If you own a property in your sole name, you are the only legal owner. This means you can decide in your will who should inherit your property, either by leaving it as a specific gift or allowing it to form part of your general estate. However, if you die without a valid will, the rules of intestacy will apply, which means the law decides who inherits rather than you. This can result in your property passing to relatives you may not have intended to benefit.
If you own your property as joint tenants, both owners have equal rights over the whole property. In this arrangement, when one owner dies, their interest in the property automatically passes to the surviving owner. This happens regardless of what is written in a will. Only once the surviving owner becomes the sole owner can the property then be passed on under their own will or, if they do not have one, under intestacy rules.
For many couples, this arrangement works well, but it is important to understand that it does not allow each owner to leave their share to someone else on death.
Tenants in Common and Protecting Your Share
Owning a property as tenants in common means that two or more people each own a defined share of the property. These shares may be equal, such as 50/50, or unequal, such as 75/25. This form of ownership can offer greater flexibility in estate planning because each owner can decide in their will who should inherit their share.
Many people choose to change from joint tenants to tenants in common as part of a wider plan to protect their assets. This can be especially useful where trusts are being considered. A trust can help safeguard a share of the property for children or other loved ones, reducing the risk that those assets could later pass elsewhere, for example, if the surviving partner remarries, changes their will, or requires care. For couples who want to protect the value of their home for the next generation, tenants in common can therefore be an important step in creating the right structure.
Where there is no will in place, the intestacy rules will again decide who inherits a deceased person’s share. This can create complications, particularly where the surviving co-owner ends up owning the property alongside other relatives. In some cases, this can lead to uncertainty or conflict, which is why careful planning and an up-to-date will are so important.
Estate Planning, Wills and Other Important Considerations
Changing from joint tenants to tenants in common is known as severance of tenancy. This process involves placing a restriction on the property title at the Land Registry. Importantly, making this change does not affect your mortgage, reduce the value of your home, or trigger any taxes. It is simply a legal adjustment that can support a more effective estate planning strategy.
Alongside reviewing how your property is owned, it is also important to make sure you have an up-to-date will. A will gives you control, clarity and reassurance that your property and other assets will pass according to your wishes. You may also wish to put a Lasting Power of Attorney in place so that, if you lose mental capacity due to illness or accident, trusted people have the legal authority to manage your property and financial affairs on your behalf.
If you have a mortgage, you should also think carefully about the financial impact of your death on those you leave behind. Many people take out life insurance so that the mortgage can be repaid, allowing loved ones to remain in the home without the added burden of having to sell. If you already have life insurance, it is worth checking whether the policy pays into your estate or directly to nominated beneficiaries through a trust, as this can also affect how the funds are distributed.
By understanding the legal ownership of your property and putting the right plans in place, you can help ensure your wishes are respected and your loved ones are protected.