Leaving Your Home to Someone in Your Will: Things You Need to Know
Deciding who will receive your home is an important part of will and estate planning. In many cases, you will simply stipulate which person (or persons) will receive your home, whether they decide to live in it or to put it on the market. You might also instruct that the property is to be sold, with the nominated person(s) receiving a percentage of the value. This also allows you to assign a portion of the value to any charitable organisations of your choosing. It's not always so straightforward and it depends on exactly how the ownership of your home is determined. So what do you need to know about leaving your home to someone in your will?
Sole Ownership
This is certainly the most straightforward option, and this occurs when the ownership of the property is entirely in your name. Those who inherit the home will receive the property along with any financial liability. This means that they will need to continue with any mortgage payments when the title is transferred into their name (or names) or repay any outstanding amount on the mortgage when the property is sold.
Joint Ownership
Joint ownership is the case when you own the property along with your partner and the title deed is in both of your names. It doesn't matter who has paid for the property (which can be considered to be the deposit on the home and the subsequent mortgage payments) as the title deed is in both of your names. Legally speaking, you are joint owners of the property, and it will automatically pass to the other owner after your passing. Your will cannot stipulate that anything different than this will occur, as the living owner will automatically receive ownership of the property to do with what they wish (although once again, they will also inherit any financial liabilities associated with the property).
Tenants in Common Ownership
Tenants in common (TIC) can happen when you've bought a home with friends or family members. The ownership of the property is divided into percentages, which are generally equal. For example, if four of you have bought a home together with a TIC ownership system, you will probably just own 25% of the home. You can bequeath your percentage of the property to anyone you wish to nominate, but this can cause issues. Your heirs will not simply be able to sell their inherited percentage of the property, unless the remaining members of the TIC system wish to buy them out. As a part owner of the property, your heirs might consider renting out your former room in the home in order to create an ongoing income, but this will need to discussed with the other inhabitants.
Deciding who will receive your home in your will is usually quite straightforward, but it's important to know that there can be a number of outcomes.