Alan Borrowman, GSB

Time to ‘Break the Survivorship’?

6th December 2021

By Alan Borrowman, Director

A ‘Survivorship Destination’ is very common in the title deeds of jointly owned homes, basically this means that you will automatically inherit the other share of the property when the co-owner dies. Sounds straightforward and sensible, doesn’t it? But as you’ll see, this article from Alan Borrowman advises you to consider changing your title deeds if you have a ‘survivorship destination’ in them. Advice which could save you half of your property.

If you jointly own a house, the wording in the title deeds is very important because it tells you whether or not you will automatically inherit the rest of the house from the other person when they die. Holding a title in this ‘automatic transfer’ is what we call a ‘survivorship destination’, or the alternative being the other owner will not automatically inherit the share of the house and this is what we call ‘equal ownership’.

But with care home fees now being vigorously pursued by Councils, it would be our legal advice to act to ‘Break the Survivorship’. Advice which means that only half of the house can be taken into account for care home fees.

If you have a ‘survivorship destination’ in your deeds, you will automatically inherit the other share of the property when the co-owner dies.

In summary, there are basically 2 ways a person can take title to a property:

1. The first option is just equal so each person (say there is 2) would own a distinct half share.

2. The second option is ‘equally between and to the survivor’.

The second option ‘equally between and to the survivor’ is risky for care home fees. Historically this was the most common choice as it meant that when one person passed away the share they owned would automatically pass to the other. With the first option if one person died they would have to instruct a solicitor to formally transfer the other half share to them. A lot of people preferred the second option due to lack of fees.

However, nowadays councils are becoming more aggressive when it comes to care home fees and could force people to sell their properties to pay. There is a common misconception of a ‘7 Year Rule’ however the council can look back as many years as they like.

OUR ADVICE

So, if you have a ‘survivorship destination’ is it legal advice now to evacuate this, i.e., ‘break the survivorship’. This is done by doing a new Disposition and disposing it back to the owners in half shares.

Because if you do this, and then amend your Will to leave the half share of the house to someone else, children and so on, with a liferent (a legal right to live within the property for as long as they live/able/want to) in favour of the other owner, only half of the house will be taken into account for care home fees. So, you can at least save half of the property.

Please do not hesitate to contact me or one of the team at GSB to discuss your own situation and to receive legal advice on how best to protect yourself and your property in relation to ‘survivorship destinations’.

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