Most couples we see at Wills & Legal Services own their property together. They’re known as joint tenants at the Land Registry.
Bizarrely, that means they both own 100% of the house between them. So if one of them dies, the other one – regardless of a Will being in place or not – will instantly own 100% of the house.
So, when couples come to us wanting a Mirror Will, that’s fine. Their wishes are clear. It’s an easy process for them to follow by having a Will in place.
Quite often, they will be leaving everything to one another. So the property is owned jointly, and as joint tenants, if one of them dies, the other one instantly owns it.
So, is a Mirror Will enough?
When people die, they leave everything to each other and usually this will be split between the children when the other partner dies.
Most people think that’s OK. If you go to a local solicitor, or a local will writer, that’s the advice they’ll give you: they will tell you to make a Mirror Will, leave everything to one another and then to the beneficiaries upon second death.
However, writing a Will in that way – when you’re joint owners of a property – actually leaves you vulnerable to two things in particular. These are:
This is a result of Marriage After Death – or MAD, as some people would call it – but you’d be mad not to read on, folks.
Imagine you’re a married couple, own your property jointly, one of you dies and in the Will it directs the property to the survivor.
The survivor then finds someone else, they marry that person, they die. The house is now a matrimonial asset in that new marriage. So, once you die and the property passes sideways to a stranger’s family – and when that new partner’s family dies – it goes down their bloodline. This means the children or the beneficiaries from the original bloodline end up with nothing. Not a penny.
Sideways disinheritance is becoming more and more popular as people remarry after a death. There are social factors to consider: we’re living longer; people want companionship; many men can’t look after themselves; even people in later life are finding partners and remarrying. This is the reality.
So you could see a stranger’s family scoop the inheritance that you’ve worked hard your whole life for, because it’s all gone sideways as a result of remarriage.
This is the second disadvantage – currently a hot topic. The cost of care today is £750 to £1,000 a week. One in four men and one in five women over the age of 65 will develop a care need.
It’s estimated that one in ten people will get a care bill of over £100,000.
In fact, 40,000 homes are sold each year to fund people’s care fees.
Therefore, it doesn’t take long for a stay in care to erode inheritance. Because only the last £14,250 is protected.
Now imagine you own your property jointly with your husband or wife, and you’ve put a Mirror Will in place to leave everything to one another. When one of you dies, the other one will then own 100% of the house.
But if you subsequently go into care, the local authority is within its right to means-test 100% of the value of the property, because that’s what you own.
Sound unfair? Well, yes, because the deceased person has paid for someone else’s care. But that’s the downfall.
Concerned? What’s the solution?
Quite simply, please get some professional advice from an expert. They will add some protection into your Will and set up what’s known as a Protective Property Trust. This does two things:
Conveyancing: The Trust changes the ownership of the property from joint tenants (where they both had 100% share of the house) to tenants in common (where Mr owns 50% of the property and Mrs owns 50% of the property).
The Wills are written differently: Instead of a Mirror Will, where you’re leaving your 50% of the property to your other half, you’re leaving it in Trust to the beneficiaries upon first death.
They can’t have it until the second person has passed away, because you’re protecting the survivors. The survivor still has the right to live in the property for the rest of their life, usually, and they can still move if they want to.
However, what this means is that if one partner dies, their 50% share of the property’s value goes to the beneficiaries, or to the children. Then if the survivor remarries, it’s only that 50% that will pass sideways to a new partner.
Similarly, if the survivor goes into care, the local authority can only means-test the survivor’s 50% share of the property. In effect, you’re protecting 50% of the value of the house.
The peace of mind for you is that if you die first, your 50% share is going to go to your chosen beneficiaries – regardless of what happens to your surviving partner.
If they remarry or go into care, your 50% will always go to whoever you’ve chosen.
That’s what you’ll get at Wills & Legal Services – specialist advice to protect your part of the property.
Every couple needs to have this advice, and it’s amazing how many couples we speak to have taken out a Will but have not received these words of wisdom.
If you would like to make an appointment for a free, non-obligation Estate Planning consultation with one of our experienced Paralegals, please call us on 01885 490380.