What Property Can I Give?
Leaving the family home to your children in a Will may not have the effect you would expect. It may have to be sold to pay for long-term care, or your spouse could remarry after your death.
If you are single, have no minor children and own all your property outright, with no shared ownership, you will have little problem. You're free to leave your property to whoever you wish and to whatever institutions you wish.
However if you own any property in shared ownership - such as joint tenancy or tenancy in common - you will need to understand your rights to give this property in your Will.
Joint Tenancy
Where property is held by more than one person as JOINT TENANTS in equity, on the death of one joint tenant his interest passes by survivorship to the surviving joint tenant(s).
Jointly owned property will pass to the survivor despite anything written in the Will. For this reason it may be appropriate to sever a joint tenancy (see Tenancy in Common).
Apart from the obvious family home, some other types of property pass upon death independently of the terms of the Will. E.g. Nominated property, Life Assurance Policies, Pension and Death in Service Benefits, Joint Bank accounts.
Tenancy in Common
Where land or property is held by more than one person as Tenants in Common, the share of each tenant, passes on death under their Will.
Each tenant in common is free to leave his beneficial interest (his share) to who-ever he wants. However, it is then important that the Will is drawn up correctly to ensure no problems are caused for the surviving partner, particularly in the case of the matrimonial home.
The surviving spouse (or partner) can be left a 'life interest' in the property, enabling them to reside in the house as long as they live. It is only when the survivor dies that the beneficiary(ies) can benefit from the gift.
Often as is the case with married couples, they appoint each other as the first sole Executor/Trustee of their estate. This then ensures the spouse has control over both shares of the property should he/she wish to move after their partner has deceased.
Severing a Tenancy Agreement
To sever a Joint Tenancy to Tenants in Common requires only that one party notifies the other as to their intention, the other party then signs in agreement.
Both parties sign a Notice of Severance of Joint Tenancy, in effect notifying each other of the intention to sever the existing tenancy agreement.
Where the property is subject to a mortgage or other loan, the mortgagee or lender should be notified, and the severance registered on the deeds through the local Land Registry Office.
SUMMARY
Joint Tenants
Property passes to the survivor regardless of the instructions in their Will
Property will pass irrespective of any survivorship period
Poor us of nil rate inheritance tax allowance
Tenants in Common
The family home may be your main legacy to your children - severance of tenancy can help protect the property from future unforeseen situations (long-term care)
Can help to reduce inheritance tax liability by utilising each persons allowance more effectively
Ability to 'gift' your share of the property to other than your spouse, therefore safeguarding your children's inheritance if your spouse remarries upon your death
A life interest in your share will protect your spouse from having to sell after your death