Transfer of equity – creating possibilities

Transfer of equity

It is not uncommon for a married couple to have their home registered solely in the name of one of them, usually the husband. Historically the mortgage lender would be unconcerned with adding both parties to the deeds and simply register the title in a sole name.

Had the couple divorced, the likelihood is that the Family Courts would have based the division of assets on the basis that the couple were in fact joint owners.

We often find that a spouse not named on the title has always felt slightly puzzled by this arrangement and feels happier when the title is transferred into joint names.

Why transfer equity?

If the house is in the name of just one party, say the husband, then the wife is unable to leave her share of the property to whoever she wishes as on paper, she doesn’t own any of the property.

If the house is transferred into joint names as tenants-in-common then each spouse has control over their share.

Joint tenants to tenants in common

Sometimes both the husband and wife will be named on the title to the property but they will be registered as ‘joint tenants’. This means each party owns 100% of the house – there is no divisible share. If one spouse dies, the other continues to own 100% of the property. Usually the Land Registry will be updated to reflect the fact that the surviving spouse is now the only owner.

However, this is not ideal. If the surviving spouse requires care in the future, the Local Authority can take almost all of their assets (including their home) to pay for it. The Local Authority will wait until they have just £14,250 before stepping in to pay for their care.

A better way to arrange your affairs is to hold your property as tenants in common. Each of you owns a specific share (usually 50%) of the property which you can leave to whoever you like in your Will. This gives you the option to leave your share to your partner for life, and then your children or grandchildren. Should your partner need care after your death, the Local Authority cannot touch your share of the property as it doesn’t belong to them. This arrangement can also protect your assets from passing sideways out of the family, should your partner remarry after your death. Your share of the estate is kept safe for your children or grandchildren to inherit.

Get in touch

If you are not sure how you and your spouse or partner hold your property, get in touch with our team and we will find out for you. If you know that either your spouse is named solely on the register or you hold your property as joint tenants, we would be pleased to make the necessary changes for you.

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