What happens to property in joint names?
People who are ‘co-owners’ of property hold it either as ‘joint-tenants’ or as
‘tenants-in-common’. Husbands and wives are usually, but not always, joint-tenants. This means that when one of them dies the other one automatically becomes the owner of the whole of the property, rather as if one parent dies, the other carries on in charge of the children.
A joint-tenant cannot make a gift in a Will of his or her share of the property, since there is no such share - the whole of the property is owned by all of its owners.
Partners who have been married before often prefer to own property as tenants-in-common. This means that owned property is notionally divided into shares, and when one of them dies his or her interest in the property forms part of his or her Estate. This then means that they can separately make a gift in their Will of their share of the property, perhaps to their own children from a
previous marriage.
A joint-tenancy can easily be converted into a tenancy- in-common when
appropriate, by signing a suitable notice. Such a notice should be placed with the deeds of the property. These principles also apply to other jointly owned assets such as bank and building society accounts and other investments.
The Risks
Sideways disinheritance most commonly occurs when a new partner outlives their husband or wife and inherits everything from them. They then leave their estate with a bias towards their own children/family rather than an even balance with that of their deceased husband/wife.
If the property is owned as tenants in common though, each party can place their share of the asset into trust for their beneficiaries while allowing their surviving spouse to continue to live in their share of the property, thereby ensuring that on the death of the survivor their share of the property goes to the beneficiaries detailed in the trust and not elsewhere.
