Many people will tell you that you need to make a Will when you a buy a home, but is this actually the case?
The short answer is that yes you should, regardless of your personal circumstances. Ultimately, making a Will is the only way you can ensure that your money and property goes to the people you want to inherit after you pass away. Among other benefits, it also allows you make your estate more tax efficient, reducing the amount of Inheritance Tax that falls due and maximising your loved one’s inheritance.
However, you may be of the opinion that, ‘well, my partner will inherit everything, so why should I bother?’
If that is actually the case and it is what you want, then fair enough. However, you should always check that not leaving a Will does produce the result you want. Too many people have been caught out because they did not realise that only married spouses and civil partners are allowed to inherit under the Rules of Intestacy (which automatically apply if you do not leave a Will).
This means that unmarried partners will inherit nothing if you do not provide for them and must either accept that or make a stressful and expensive inheritance claim.
One exception to this is if you co-own property with your partner, but it will depend on how you own your property.
Property ownership – who inherits?
There are three main ways you and your partner may cohabit:
- You co-own your home as joint tenants.
- You co-own your home as tenants in common.
- You or your partner solely own your home and allow the other to live there, potentially with the non-owner paying towards the bills, mortgage and/or household expenses.
Joint tenants and the ‘right of survivorship’
When people buy a home together, joint tenants is the default state of ownership. A joint tenancy means that the owners own the whole of the property together in equal shares (e.g. 50-50), even if they contributed unequal shares to purchase the property in the first place and/or make unequal contributions towards the mortgage.
The other key aspects of a joint tenancy are:
- If one of the joint tenants dies, their share of the property automatically passes to the other owners. This is called the ‘right of survivorship’.
- You cannot pass on your share of the property in your Will.
So, people who are not married or in a civil partnership can inherit jointly owned property from their partner, even if the deceased owner did not leave a Will.
Similarly, if a joint tenant tries to make a Will leaving their share of the property to someone else other than the other joint tenants, this gift will be invalid.
Tenancies in common
If you and you partner contributed unequal shares towards the purchase of your property – for example, you contributed 75% of the deposit and your partner contributed 25% – then you may not want to own as joint tenants.
Turning your tenancy from a joint tenancy to a tenancy in common allows you to own property in distinct unequal shares, unlike a joint tenancy where all the joint tenants own all the property.
You can create a tenancy in common by making a Deed of Trust which can be filed at the Land Registry. Most people make a Deed of Trust when they first buy the property, but you can also make one after completing the conveyancing.
It is also possible for any owner to sever a joint tenancy and create a tenancy in common.
The other effects of a tenancy in common are:
- The right of survivorship does not apply so your share of the property does not automatically go to the other owners if you die.
- You can leave your share of the property to whoever you like in your Will.
Providing for unmarried partners in your Will
It is very common nowadays for people to buy a home together before getting married or entering into a civil partnership.
It is also very common for cohabiting partners to make a Deed of Trust specifying their unequal shares in the property.
If this reflects your situation, you will need to make a Will if you want your partner to inherit. If you do not leave a Will, your partner will not inherit and your share of the property will either go to your children or other close relatives, such as your parents or siblings. This could cause significant heartbreak, practical issues and potentially even inheritance disputes.
What if a surviving partner has no legal property rights?
If you or your partner are not a legal owner of the property at all, making a Will becomes extremely important.
If the owner dies without leaving a Will and they were not married or in a civil partnership, the automatic position is that their partner will be left with nothing. The partner may be able to make a legal claim, such as a constructive trust claim for any beneficial interest they accrued in the property, however, this can be a long, exhausting and expensive process with no guarantee of success. Making a Will is much cheaper and simpler.
Get expert advice about property ownership and inheritance
At hpjv solicitors, we have specialist teams of lawyers who can provide all the advice you need about buying a home with your partner and estate planning when you co-own property.
Our expertise includes:
- Helping you buy your home.
- Advising on joint tenancies and tenancies in common.
- Drafting Deeds of Trust.
- Helping you make a Will to clearly reflect how you want your money and property to be passed on after you die.