Can You Avoid Probate?

6 Feb 2020

When one passes away, their property will, in most cases, be passed on to their beneficiaries under their will, if they have one. If they don’t have a will, the property will pass under the intestacy rules. In order for the beneficiaries to obtain title to the property, the estate will have to undergo the probate process, which can take a lot of time. However, with certain types of property ownership, property passes automatically upon death, without the need for probate.

When two or more people own property together, there are two different ways that they can own it – as tenants in common or as joint tenants. When purchasing a property, there is a section in the purchase deed (Land Registry form TR1) where one can state which of these options they wish to use.

Tenancy in Common: Each owner owns a specific share in the property which they can sell, gift to another or leave to someone in their will. The shares do not have to be equal, so if for example there are two owners, one owner can own a sixty percent share and the other a forty percent share. However, if the shares are unspecified, it would usually be assumed that they each own a half share. For more complex arrangements, a formal agreement, such as a trust deed or a co-habitation agreement, can be drawn up between the parties. When property is owned under a tenancy in common, the Land Registry will enter a restriction on the title so that when one owner passes away, the survivor would need to appoint a second person to act as a trustee in order to sell the property.

Joint Tenancy: Each owner owns an undivided interest in the whole of the property. The right of survivorship applies, which means that when one owner dies, their ownership interest automatically passes to the surviving owner/s without having to undergo the probate procedures. Very little paperwork is involved, and the Land Registry merely need to be sent a certified copy of the death certificate. Any of the owners can convert a joint tenancy into a tenancy in common by an act of severance.

Which method should I choose?  This is a personal choice.  Whilst there may be advantages to avoiding probate, there are other factors to consider such as taxation.

Article written by Jason Halberstam