How to Make a Will when You Own Property Jointly
02 August 2019
If you own a property jointly with another person you can make a Will to ensure that your share is passed on in the right way when you die. There are two ways a property can be jointly owned – either as joint tenants or tenants in common – and what happens to your share when you die depends on the type of joint ownership you have.
When making a Will, it's important to understand how your property is owned and what the implications of this will be when you die. In this article we explain what happens to a jointly owned property when one owner dies and how you can use your Will to protect your investment.
Types of Joint Property Ownership Explained
When you purchase a property jointly with another person it can be held either as joint tenants or as tenants in common. And there are some key differences between the two.
When a property is owned as joint tenants, neither person owns an identifiable share of it. Instead, the owners co-own the whole of the property. If one owner dies, the property will automatically pass into the name of the surviving co-owner. This is called 'passing by survivorship.'
When a property is owned jointly as tenants in common, each person owns a specific share of the property. This is often 50% each, but it could be weighted more in favour of one person. This is usually reflective of how much money each person contributes to the property purchase or the mortgage payments. When one owner dies, their share of the property will form part of their Estate for succession purposes and will be passed on in line with the terms of their Will (if they have one) or in line with inheritance laws if they don't.
How to Make a Will as a Joint Property Owner
If you die without a valid Will in place, then your Estate will be distributed according to the Rules of Intestacy. This includes assets in your sole name and your share in any property owned as tenants in common.
The Rules of Intestacy place your relatives in a strict order of priority, starting with your spouse or civil partner. These rules don't recognise certain family members (such as unmarried partners or step-children) and they may not divide up your Estate in the way that you would have chosen.
For this reason, it's important to plan ahead to ensure that what is likely to be your most significant asset ends up in the right hands after you die.
If you own your property as joint tenants but you don't want your share to automatically pass to the surviving co-owner(s) when you die, then you'll need to sever the joint tenancy. Once this has been done, you'll own the property as tenants in common instead. If you and the co-owners want to own the property in unequal shares then we strongly recommend you take legal advice to ensure that the proportions of ownership are accurately recorded in writing and legally recognised.
Once you own the property as tenants in common, you can gift your share of the property to anyone you choose in your Will, or you can divide this up between multiple beneficiaries if you wish.
Can the Surviving Owner Continue Living in the Property?
You may want your surviving co-owner to continue living in your share of the property after your death but may not want them actually to inherit your share of the property. This creates the problem that if you gift your share of the property to someone else, then the surviving owner could find themselves without a roof over their head after you die.
One solution to this issue to consider is whether to include a Life Interest Trust in your Will. This way, you can allow the co-owner to continue living in the property for the rest of their life, but they won't own your share. Then, upon their death, your share of the property will still be distributed to your intended beneficiaries in line with the terms of your Will.
Another benefit of a Life Interest Trust is that, if the surviving owner goes into care in the future, your share of the property can't be used to cover their care fees.