Title deeds v. Will: which legal document matters most?

It’s easy to get caught up in the hype of buying a property – especially if it’s your first home – but there are some important details you should take time to consider. The ownership structure is one of them. Go into this ill-informed and it’s a decision that could come back to haunt you – literally!

‘Til death do you part

Morose as it sounds, your solicitor will ask you how you want to own the dwelling, with some options automatically deciding the property’s fate if you die. Your choice will appear on the title deeds – the only legal document that really matters when it comes to proving who owns what.

A lot will depend on whether you’re buying alone or with other people, and whether your co-purchasers are friends, or if you have a life partner. The different ownership options include: 

• Sole ownership: this is applicable when only one person is purchasing the property and only one name will appear on the title deeds. A sole owner will use their Will to confirm who will inherit the property when they die.

• Joint tenants: this applies when two or more people buy a property together and they all appear on the title deeds (up to four names can appear). In the case of joint tenants, should one owner die, their share automatically passes to the other people listed on the title deeds. Becoming joint tenants is popular among married couples, people in civil partnerships and siblings who buy together but have no children.

• Tenants in common: if multiple, unrelated and unattached people buy together - such as friends – tenants in common is the most suitable ownership choice. Each buyer can hold a unique share of a property, reflecting the amount of deposit they put down and how much they contribute to mortgage repayments. When one owner in a tenants in common structure dies, their share of the property passes to the person who is nominated as a beneficiary in their Will.

Where there’s a Will, there’s a way?

Let’s start with some myth busting. There’s a wide misconception that a Will is the best way to pass on a property. Even if you specifically name someone in your Will, your wishes may be overridden by the title deeds. 

In almost all situations where a property owner dies, the default action will be to check who is listed on the title deeds. It is quite possible for this document to overrule what the Will says, highlighting how important it is to make the right ownership decision when you are purchasing a home.

Choose the best ownership option

For example, if you mistakenly went into a joint tenancy agreement with a friend but you used your Will to stipulate the property be left to your daughter, the title deed would take priority and your share would automatically be inherited by the friend. The correct option would be to hold the property as tenants in common and use your Will to pass the property on to a named descendent. 

Rising to the challenge

That’s not to say the decision is cut and dried after your death – but it’s a situation those left behind would prefer to avoid. Under The Trusts of Land and Appointment of Trustees Act 1996, a person can contest a decision detailed in title deeds or a Will if they feel they have a ‘beneficial interest’ in a property.

Just what is a ‘beneficial interest’? Anyone who has made a substantial financial contribution to a property could mount a legal challenge, including a person who has paid the mortgage and household bills, or covered the cost of repairs and renovations. 

Crucial takeaways

• Talk to your solicitor about who you are buying with, explaining your relationship to them

• Agree whose names are to appear on the title deeds

• Tell them who is funding the deposit, who is paying the mortgage and the split of household bills

• Make a Will that states how any property is owned and, in the case of tenants in common, who the named beneficiary is

• Keep your Will up to date

If you would like any clarification about property ownership, please get in touch.