Jointly owned property can be held in two different ways but many couples are unaware of their type of ownership, and the significance it has after their death. Most couples who purchase property do so as Joint Tenants. On the death of the first partner, his or her share automatically passes to the survivor even though they may have made a Will leaving their entire Estate to someone else. The other method, known as a Tenancy in Common, gives each party the right to leave their individual share to whoever they chose.

In the ordinary course of events a Joint Tenancy does not pose a problem for a typical married couple who would normally expect the survivor to automatically benefit on the death of one partner. However, there are unforeseen problems which can result in one of the party’s share being lost to a third party.

A typical example is a couple whose only or main asset is the property they own as joint tenants. If one partner is in care paid for by the Local Authority, the house cannot be taken into account in assessing means all the time the partner is still living in it. If however, the partner living in the house dies while the other partner is in paid care, his or her share automatically transfers to the other partners thus allowing the Local Authority to take into account the whole of the value of the property and – where it is vacant – place a charge over it so that care charges can be recovered on the surviving partners death.

THE PROPERTY TRUST has been developed to help prevent this particular problem by setting up a special form of Trust within each Will, each partner can help to protect their individual share in the property, and the ability to purchase another property in substitution if this is required. It can even provide for the surviving partner to sell the deceased’s part share in the property and invest it to provide an income. After the death of the surviving partner the property is sold and the original share is divided among the children or other beneficiaries. The Trust is only binding as long as the parties require it to continue. They may change their Wills and either cancel or vary the Trust at any time if circumstances dictate, all the time they are both capable of so doing.

THE PROPERTY TRUST provides additional benefits for couples who are divorced and have subsequently re-married and are worried that the children of their former relationship will not inherit their share in the jointly owned property if they die before their new partner. These fears are often heightened by the prospect of the surviving partner re-marrying and leaving the jointly owned property to a new partner. In this situation their share in the property may never be inherited by the children of the first marriage, and could ultimately benefit a stranger or their children. The Property Trust will protect each individual’s share in the property and ensure that it is ultimately left to their children or beneficiaries, but without forcing the spouse or partner to sell the property.