Signed, Sealed but not Delivered – How Joint Property Passes on Death

Posted on 9th November 2020

Many people believe that making a will is simple and can be done through DIY kits. However, they fail to appreciate the nuances of many relevant legal matters, including property ownership and joint assets. The recently published case of Fantini v Scrutton and Others [2020] highlights the importance of knowing how your property is held and therefore how it will pass on death. It also provides a warning to those who put off taking appropriate advice.

Joint Tenancy vs Tenants In Common

When considering who should inherit any joint assets after death, it is essential to ascertain how each asset is held.

When buying a house or making a will, individuals who are properly advised, learn that there are two ways in which property can be jointly held, namely as ‘joint tenants’ or ‘tenants in common’:

  • Joint tenants – this form of ownership means that survivorship applies. Therefore, if one owner dies, their share automatically passes to the joint owner(s). This is regardless of what is stated in the deceased person’s will (or under the rules of intestacy).
  • Tenants in common – this form of ownership means that each owner has a defined share in the property which can be left according to the terms of their will (or under the rules of intestacy) and will not automatically pass to the joint owner(s).

A joint tenancy can be converted by both parties signing a specially worded ‘Notice of Severance’ or one party can sign the Notice and it can be sent to the other joint owner for their information. The Notice is then registered with Land Registry who update the title accordingly.

Fantini v Scrutton and Others [2020]

In this case, mother and daughter were the joint owners of the Fantini family home in Christchurch, Dorset. On the death of both ladies, a claim was brought to the High Court to determine how the proceeds of sale should be distributed.

The daughter, who at the time was terminally ill, sought to convert the joint tenancy into a tenancy in common so that her half interest in the property could pass in accordance with her will on death.

The judge was asked to determine whether the change of ownership was effected before the daughter’s death.

The consequences of this decision were significant. If it was held that the change of ownership was not effected before death, then the mother would have inherited her daughter’s half share of the property by survivorship and as such, the entirety of the sale proceeds would pass in accordance with the mother’s will.

Alternatively, if the change of ownership was effective before death, then the daughter’s half share of the property would not have passed to the mother by survivorship and as such, half of the proceeds of sale would be distributed in accordance with the daughter’s will.

The judgement turned on the facts of the case and the sequence of events surrounding the service of the notice:

  • On 5 December 2013 the daughter signed a notice of severance which her solicitors sent by recorded delivery to her mother. Believing that the notice of severance had been properly served on the mother, the daughter’s solicitors then prepared an application to update the title deeds.
  • On 11 December 2013, the title deeds were formally updated to reflect the change of tenancy to ‘tenants in common’; and on 15 December, the daughter died.
  • In the new year on 3 January 2014, the notice of severance was returned to the daughter’s solicitors undelivered.

The judge looked at the timeline of events and held that the formalities of serving the notice of severance were not completed and it could not therefore take effect.

Consequently, the property was held as joint tenants at the daughter’s date of death and passed by survivorship to the mother. Now that the mother has also died, the entirety of the sale proceeds will have or will soon pass in accordance with her own will.

It is often the case that a person’s property is their most significant asset worth between thousands and millions of pounds. The outcome of this case therefore saw the daughter’s beneficiaries missing out on a significant inheritance.

As ever, we recommend clients to take regular professional advice in respect of their wills to prevent a plethora of expensive problems arising in the future. If you are in need of specialist legal advice, talk to our Wills & Probate solicitors on 0808 231 6369 or get in touch online

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