If your parents own a property, and they are hoping to leave it to you in their will, please read my story, and make sure you don’t fall foul of the same error…
This story starts in 1985.
My mum and dad had split up some years earlier. Myself and my sister grew up, and left home, as you do.
After a few years on her own, Mum met Jim.
Jim’s wife had sadly died a few years before, and he had two sons from that marriage.
Mum and Jim got on well, and after a couple of years, decided to get married. They didn’t need two houses, so Mum sold hers, and moved in to Jim’s house.
Mum and Jim then lived happily together for 25 years or so, moving house a couple of times as they downsized, moved to be nearer family and so on.
In their later years, they both had health problems. Jim had a heart attack, Mum had a stroke. All very worrying at the time, but not unusual I guess.
Occasionally when Mum or Jim were feeling vulnerable, they would explain about the wills they had made. We would be saying “Oh don’t worry about that – you’ll outlive us all!” Trying to dismiss their worries.
Basically, they had created mirror wills, saying that Mum’s belongings and savings would go to myself and my sister when she died, and Jim’s belongings and savings would go to his sons when he died. Their house would be split 50/50, but with the understanding that, when one of them died, the other could live in the house until they no longer needed it (i.e. until they died). At that point the house could be sold, and the proceeds be split four ways and passed on to Jim’s two sons, and myself, and my sister.
So in 2010, when Mum sadly died, Jim continued living in the house for a year or so. After a while he sold the house and moved to a flat to be nearer his sons.
Jim died in 2012.
As his sons lived very close, they dealt with selling his belongings etc, including the flat he lived in.
This is where we discovered the problem.
Did you know if you buy a property with someone else (a spouse, or a partner) that there are two ways of owning it?
You can own it as Joint Tenants or as Tenants-in-Common.
Joint tenants means that you do not own any share of the property individually, but you own the entire property jointly. When one of you dies, the entire property then passes to the survivor.
Tenants-in-Common means that you each own a share of the property, usually 50% each. When one of you dies, your share of the property goes to whoever you define in your will.
Mum and Jim owned their property as Joint Tenants. So when Mum died, the entire property went to Jim.
When Jim died, the property was passed to his sons, who were his beneficiaries, as defined in his will.
So basically, despite the wills declaring that they wanted the property to be shared between all four children, the way the house was owned overrode that, and nullified the intentions of the wills.
Effectively, Mum and Jim were gambling their inheritence, based on which of them died first. The children of the survivor would then inherit the entire property.
I asked Jim’s sons if they agreed that this was just an error, and that the proceeds should be shared amongst us all. They declined.
I asked the conveyancing solicitors for compensation, as I felt they had not given Mum and Jim correct advice on the implications of them owning the property as Joint Tenants. They showed me the form where Mum and Jim had signed to say they wanted to own it as Joint Tenants.
It is clear to me that Mum and Jim made a mistake. They would not have gambled on which of them would have died first.
That mistake cost us a pretty penny.
Please don’t make the same mistake as Mum & Jim.
What to check…
- Do you have children from a previous marriage?
- Do you own a property with a new partner?
- Do you wish your children to received a share of that after your death?
- Make sure you own the property as Tenants-in-common.
I hope that helps someone…
Bye for now
Chris Smith
