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  • Is your property held jointly?

    The problem with buying a house is that you are dealing with law that is almost 100 years out of date. When the Law of Property Act was passed in 1925, most houses were rented; those that were purchased usually just went into the husbands name; couples who were not married – “partners” is the phrase that we now use – just didn’t buy houses together.

    Social attitudes have changed a lot in the last 90 years. More couples buy houses where they are in second relationships and where they need to protect their contribution towards the purchase, in case things don’t work out, or to protect the interests of children from a previous relationship. Conversely protecting gifts from parents can also be an important feature.

    This can be a real minefield and of course we don’t like talking about it. However if you duck or ignore the issue, it can have far reaching consequences for you and your family. The deeds or title information document should reflect any agreement reached.

    There are 2 ways that you can hold property:-

    1. Jointly.

    This means that if one owners dies, the other person named of the deeds automatically inherits.

    2. In common.

    Here each party holds a share – this can be 50/50, 60/40 etc and means that if the properties separate, the starting point is that the property is divided between the parties in accordance with the contributions made when the purchased it. It also means that if one party dies, the deceased children will inherit the share in the property.

    for example;

    An unmarried couple, both with children from a previous relationship, buy a house together. They own it “jointly“. One dies. With a jointly owned property the other person named on the deeds inherits, not the deceased children. The second owner dies. The second owners children inherit and the first owners children get nothing.

    The above is a little simplistic but it has happened. The initial reaction is to say that if the parties make a will to say that when the survivor dies, both families inherit. That may or may not work; wills can be altered or revoked (e.g. by a subsequent marriage). That’s why you need to get the deeds right.

    The answer is to take specialist advice at the beginning of the transaction so that the various options can be discussed and the deeds drafted accordingly and back this up by making a will. Any agreement reached that is not reflected in the deeds will just be storing up problems for the future.

    If you already own a property and are concerned that the deeds may not reflect your circumstances, again take professional advice; it may be relatively easy to resolve the situation.

     

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