Survivorship Destination

Ownership can be established with a Survivorship Destination or on a "pro indiviso" (shared) basis. The main distinction lies in the outcome upon the death of one of the co-owners. If the property is owned jointly by X and Y, with a survivorship clause, and should either X or Y pass away, their respective share in the property's ownership automatically goes to the surviving co-owner. Conversely, with pro indiviso ownership, each owner's share is distributed according to their Will, or in the absence of a Will, by the laws of intestate succession.

When a property title includes a Survivorship Destination clause, the share of the first owner to pass away automatically transfers to the surviving owner without the need for any additional legal actions, thereby avoiding extra costs.

This arrangement is often chosen by married couples or partners buying a property together, as it offers security for the survivor by ensuring that the property cannot be claimed by anyone else through a Will, even if that Will was created after the property was purchased. This feature is particularly beneficial for unmarried couples, who might not automatically benefit from the legal protections afforded to spouses. Altering a Survivorship Destination requires the consent of all property owners.

However, despite the convenience of automatic property transfer upon the death of one owner, Survivorship Destinations may not suit every situation. They can unexpectedly impact inheritance tax planning and the financial assessment for care home fees, especially if one owner becomes incapacitated, making it impossible to revoke the clause. Furthermore, such a clause only addresses the property's transfer upon the first owner's death and does not cover what happens after the surviving owner passes away. Therefore, it's important to carefully consider the inclusion of a Survivorship Destination in the property title. If one is already in place, owners may need to think about revoking it ("evacuating the survivorship") when appropriate.

Pro indiviso shares

Pro indiviso shares

Owning property on a pro indiviso basis offers each owner greater control over the fate of their share upon their death. This arrangement allows you to designate your property share to the surviving co-owner through your Will, or alternatively, manage it in a way that may offer more advantages.

Opting for pro indiviso ownership can serve as a strategic measure against potential future care home expenses. This method prevents the automatic transfer of a property share to the surviving co-owner, a situation that might not always align with the best interests of the surviving party or the families/beneficiaries of either owner. A common strategy involves directing your share of the property to your descendants upon your death, either directly or by setting up a Trust. Consequently, upon the demise of the first owner, their half of the property is transferred to their chosen beneficiaries, who then become the owners of that portion. The surviving co-owner retains their half. This approach ensures that, should the surviving owner need to enter care, only their half of the property is considered for care costs by the council. The other half, owned by the beneficiaries, remains untouched for care home fees. However, it's crucial to weigh the implications of asset transfer, especially if the surviving spouse or partner still needs access to those assets.

Which Option is best for you?

Which Option is best for you?

Deciding between Survivorship Destinations and pro indiviso ownership depends on individual needs and goals, as both options offer distinct advantages. If you're a joint property owner, it's essential to understand how your property is titled to ensure it aligns with your intentions. A solicitor can verify your property's title status by reviewing the deed. Changing from a Survivorship Destination requires consent from all property owners, making it crucial to address this early, especially if you aim to safeguard your home from potential future care costs. Additionally, how your property is titled can impact strategies for minimizing Inheritance Tax liabilities.

Having a Will is critical to ensure your property and assets are distributed according to your wishes. A Survivorship Destination in your deed does not cover the disposition of the entire property after the surviving owner's death. Without a Will, your estate may be subject to intestacy laws, potentially distributing your assets to unintended heirs.

Regularly review your Will to ensure it reflects any significant changes in your personal situation or relationships, and seek legal advice as needed.

For enquiries about property titles in Wills, drafting a Will, or other related matters, consider reaching out to our Legal Service or private client team for personalised advice.

Exploring Survivorship Destinations?