This story is about a chain of events that resulted in mayhem for loved ones. Only the ex-spouse won.
Craig* (not real name) had been married to Jane* for over 10 years so although they decided to separate, they were still reasonable friends. They had no children and Craig* remained in the family home as he had promised his mum a return of a loan she gave on the house when he sold it from his half. The house was under joint ownership, meaning that Craig* and Jane* owned 50% each and was up for sale.
Craig* did not have a will.
Craig* met Clare* and fell back in love some months later and Clare* moved into the house. Jane* also met someone new but became hostile towards Clare*. Craig* and Jane* did not divorce as neither were in a hurry to re-marry and a status quo was reached on the house and maintenance.
Craig* sadly died instantly of a heart attack one weekend. Jane* became a tyrant. As the property was in joint names, and not tenants in common (which is what Craig* should have changed the house title to) Jane* became the instant owner of the house and kicked out Clare*.
Joint ownership has an invisible half-way line – if one of the tenants dies, the other is the automatic owner. This is normally arranged with spouses/life-partners.
A tenant in common has a visible line – if one dies, their 50% has to be distributed to heirs – if via a will then these are beneficiaries. If not will then through administration, which takes longer and costs more. This should be arranged under partnerships – investment property or separated couples.
The loan that Craig* promised to pay his mum back was not honoured as nothing was in writing. This was to be part of his mum’s pension. Clare* lost her home, and legally, she did not have a leg to stand on as Jane* was still married to Craig*.
Jane* inherited the £800,000 minus the mortgage of £300,000 and netted £500,000. As a UK spouse can inherit their UK spouse’s estate tax-free (when Jane* dies, her heirs would get a tax bill of 40% above an estate value of £650,000)
Jane* inherited all that Craig* held in investments and savings too as the UK allows a spouse to inherit all without children.
One might say that this was an unlucky chain of events but would have been easily prevented with a will and letter of wishes … oh and the change of the property owners on title. Many people do not understand the differences under ownership.
By putting the right documents in place, just in case you become incapacitated or die prematurely, you are ensuring that the right people inherit at the right time.