The recent case of Scarle has highlighted the importance of having up to date wills and also to look at how you hold any jointly owned property. Our home is usually our prized possession and often what makes up most of our estate. The way we own it has in impact on the way it is passed on after you die.
Owning a property
There are two common ways of owning a property with another person. Firstly as “tenants in common” which means that you own a percentage share in the property and secondly as “joint tenants” which means you are joint owners of the home. Most couples own as joint tenants so that on the first death everything asses to the survivor and then onward according to his or her will.
The Scarle case
In the case of Scarle this issue was considered when two step sisters battled over their inheritance. This hinged on which of their parents died first. The case received much press coverage due to the gruesome detail about how Mr and Mrs Scarle were both found dead in their Essex home. They were an elderly married couple. Their bodies had been undiscovered in their home for some days after they died from hypothermia. Much was at stake as if Mrs Scarle had died first everything would pass to her husband and on to his only daughter Anna. If Mr Scarle died first then his wife would inherit and the estate would then pass according to her will to her daughter Deborah. So the court had to decide the order of the deaths and therefore who inherited. The post-mortem results and expert evidence about the decomposition of the remains could not clearly determine this so, the court ruled on the basis of age. The court applied the rule in the Law of Property Act 1925 which provides that, where two or more persons die in circumstances where the order of death is uncertain, the eldest shall be presumed to have died first. The mother (ten years younger) was presumed to have outlived the father so everything passed according to her will to Deborah and not to Mr Scarle’s daughter Anna whose claim failed. Anna was left with large legal bills to pay as a result.
So in this case the home worth £280,000 and cash savings of £18,000 in the couple’s account was passed on to the mother and then given to her daughter as per her will. Had the couple owned their property as tenants in common and made proper wills, 50% cent of it could have remained the father’s share and passed on to his daughter. The other 50% could have remained the mother’s share and passed on to her daughter. In this this way both sides of the family would have benefited.
If the couple had taken advice and both made wills and held the house as tenants in common the dispute could have been avoided and both sides of the family fairly treated. Complications can arise when children from a former relationship are not named beneficiaries in a will and the estate is passed on to the surviving partner who then owns the full share and has no legal obligation to pass it on to that child. This is a common situation in modern families with stepchildren from previous relationships. The case hammers home the need to consider how a property is owned and to ensure you have a properly drafted will covering every eventuality.