For most people across Northern Ireland the home is their most valuable asset. We pour money into our homes, redecorating and remodelling, constantly adding value to the place where we spend most of our time. We pay insurance throughout our lifetime to guarantee that the property is protected against damage and destruction. Reports estimate however that around 60% of UK adults die without a Will in place leaving their home subject to vintage laws that dictate distribution. It begs the question, why is it important to make the security of your property a priority on death?
Many believe that the property they own with another will pass automatically to the survivor on their death. This however depends on the legal title of how the co-owners hold the asset. If owned as joint tenants, it is true that the law of survivorship will activate and the survivor will automatically become the sole owner. If the legal title is held as tenants in common however, the share owned by the deceased will pass according to the person’s Will, or via the laws of intestacy.
The laws of intestacy prescribe how assets are devised in the absence of a Will. In Northern Ireland, these rules were drafted in 1955. As a result, the laws are old fashioned, and the rules often leave the modern family feeling disappointed, when assets are not distributed as hoped. For example, there are no provisions for cohabitees within the intestacy rules. Therefore, if an individual solely owns a property and they do not have a Will, any partner that they live with may be left without a home. Should there be no spouse or children, it is the parents and then siblings who are next in line to inherit from the deceased.
Another scenario where problems can arise is within the family unit. Where a married couple have children, if the property is owned as tenants in common, or if only one spouse is named on the title, the surviving spouse will not acquire full ownership. Instead, the spouse will take only the first £250,000.00 of the estate and thereafter the residue will be divided between the surviving spouse and their children. With most properties today being valued over £250,000.00 this can become a real problem when children are minors, or where there is a blended family.
Then there is the question of the mortgage. The debt follows the property meaning that should there be a surviving owner, the charge will become their sole responsibility. If the property was owned solely, the charge will become a debt of the estate meaning that the personal representatives will be accountable for discharge. Should there not be sufficient funds within the estate to pay the mortgage, it is likely that the property will have to be sold. When purchasing a property, it is therefore essential to discuss with your mortgage advisor what steps can be taken to ensure the burden of the mortgage can be released on death.
The simplest step to ensure control over your property on death is to create a Will. Comfort can then be taken in the knowledge that the tenancy of your family will be secure and that the property you have invested so much within, will end up with the intended owner as per your wishes. Should you wish to find out more about making a Will, please contact Rachel Scroggie at Millar McCall Wylie solicitors on 028 90 200050, or via rachel.scroggie@mmwlegal.com for more information.
