Traditionally couples have chosen to own their homes as joint tenants where both partners own the whole of the home. If one person passes away, the home will automatically continue to be owned by the surviving partner, even if there is no will. This is known as the survivorship rule.
However, many couples choose to hold their homes as tenants in common. In these circumstances, where there are two co-owners, each would own a 50 per cent share in the property.
If you jointly own your property as tenants in common, when you die your share of the property will pass to your estate. If you have made a will, your share will be distributed in accordance with the wishes set out in your will, but if you have not made a will, your estate will be distributed in accordance with intestacy rules.
Appointment of a second trustee/overeaching
If you hold your property as tenants in common and wish to sell the property following the death of your partner, as the property’s legal owner, you have the right to do this. You can appoint an additional trustee in place of the deceased owner to give good receipt for purchase monies and enable the sale to proceed. This is known as overreaching.
It is worth noting that it is the remaining legal owners who have the right to conduct the sale of the property, not the beneficiaries of the deceased’s share.
How are the proceeds of sale distributed?
If overreaching takes place, then on completion of the sale the surviving owner and additional appointed trustee will hold the deceased’s share of the sale proceeds in a trust. These proceeds must be distributed in accordance with the deceased’s will or intestacy rules.
If the proceeds of sale are not distributed correctly, the personal representatives or beneficiaries entitled to the deceased’s share, can apply to the court under section 14 Trust of Land and Appointment of Trustees Act 1996 for an order relating to the exercise of the trustees’ functions.
In conclusion my advice would be that if you own your home as tenants in common, it is vital that you have a will, as this is the only way to ensure your share of the property is passed to the correct person of your choosing on your death.
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