Is it worth checking who owns what?

When people make Wills and review their estate planning, it is an often-overlooked point to check how properties are held.

In some cases, it is assumed that properties are jointly held between spouses, but this is not always the case. Sometimes properties are inherited and placed only in one name, and it is certainly not unheard of for matrimonial homes bought many years ago to be held in the name only of a husband.

So, why would it matter if a property was only in one name?

Different circumstances can arise, which might mean it is advantageous for a property to be held in a certain way.

For example, it might be desired that on the first death of a married couple, the first deceased’s share of the property is to be left into a life interest trust to benefit the surviving spouse, and then on their death it would then pass on to their children. The object might be to prevent the share of the first deceased being impacted by care fees, if the survivor went into long-term care. Clearly if property is simply held by one party, this arrangement would be difficult to implement. It might therefore be sensible to transfer the property into joint names in these circumstances.

What about probate to deal with the property?

If someone dies with a property being left in their sole name, then a Grant of Probate or a Grant of Letters of Administration must be obtained and produced to the Land Registry so that the property can then be sold or transferred.

This is not terribly convenient if this happens in the event of a death of one spouse when the property is left to the survivor. The surviving spouse will be dealing with many other issues at that point in time and obtaining a Grant for this purpose can be very inconvenient. If a property is held in joint names, then the surviving spouse can generally deal with the property as the last trustee on the title. This is another good reason for checking how the property is held.

Should a property be held on a joint tenancy or tenancy in common?

This very much depends on the circumstances of joint owners. If a property is held on a joint tenancy, then it will pass to the surviving co-owner/owners by survivorship on any death.

If more control is needed over a share of a property, then the property should be held as tenants in common between the owners.

Converting the way that a property is held from a joint tenancy to a tenancy in common is known as “severing the joint tenancy”. This sounds very violent, but all it means is that the owners have distinct shares in the property that they can then control the destination of through their Wills. This might be useful if, for example, they were planning on leaving their share into a trust rather than directly on to the surviving owner or owners.