Your Will, your house and where your assets could end up

Two stepsisters recently asked the court to help determine which of their parents died first in tragic circumstances. The answer would determine which of the stepsisters inherited their parents’ property and their joint assets.

The background circumstances that led to this dispute are, on the face of it, fairly uncontroversial. John and Ann Scarle were married and they each had a child from a previous relationship. John had a daughter called Anna, and Ann had a daughter called Deborah.

John and Ann purchased a house together which they owned as joint tenants meaning that were one of them to die, then the other half of the property would pass automatically to the surviving spouse under the “rule of survivorship”. So, if John died first then his share of the property would pass automatically to his wife Ann. Conversely, if Ann died first then her share of the property would pass to John. All of their joint assets would also pass to the other on the first person's death.

In a sad turn of events, John and Ann were both found dead by the police in their house, after concerned neighbours raised the alarm. They had both died of hypothermia after they had been burgled and their back door left open. The police were unable to identify which of them had died first. At the time of their death John was 79 and Ann was 69. Neither of them had left a Will, so the intestacy rules applied. Those rules set out who inherits a person’s estate where no Will is left. In this case, Anna inherits John’s estate and Deborah inherits Ann’s.

In these circumstances, you may be wondering what happens to the property? The rule of survivorship states that the property passes to the surviving co-owner. Of course, that rule doesn’t help in a situation like this where it is not possible to work out who survived who. This is where the Law of Property Act 1925 comes into play. Despite being nearly 100 years old, this piece of legislation still sets out the current law. It states that where two people die together and it cannot be determined which of them died first, the older of those two people (in age) is assumed to have died first.

In this case John was the oldest and so his share of the property passed to Ann and then consequently to her daughter Deborah, as she inherits all of Ann’s estate under the intestacy rules. That is unless Anna was able to show that Ann died first and so the property passes to John and then to her. 

This led to a bitter court battle between Anna and Deborah involving eyewitness accounts, medical records and expert evidence. This is, of course, highly emotional and costly. Eventually the court ruled that John died first, as the eldest, so Ann inherited the property and their joint assets. This means that the property and any joint assets will now pass to Deborah. Anna, as the losing party, was ordered to pay the majority of Deborah’s legal fees.

This case serves as a stark reminder that it is important to take advice about what you want to happen to your estate. While John or Ann would have been provided for under the intestacy rules if one of them had died earlier than the other, those rules can produce unfair or undesired results in circumstances like these, which you could not plan for or expect. 

A simple Will would have gone a long way to solving this problem and saving a lot of time and money. It is also key that property owners understand the nature of how they own their property, and the distinction between “joint tenants” and “tenants in common”. Many joint tenants are unaware of this rule of survivorship, simply assuming that their share of the property will pass in accordance with either their Will or the rules of intestacy. This is not always the case.