You might be wondering what on earth your home has to do with a couple of chocolate bars. It’s nothing to do with taste; it’s just a handy way of explaining how you and your partner own your home. So, is your home a Mars bar or a Twix and why does it matter?

How we own property

In England and Wales, there are two elements to how we own property. There’s the legal title, which is registered with the Land Registry. Then, there’s the beneficial interest, which can sometimes be different.

For example, there was a case where a woman moved in with her other half in a property he owned. She’d worked to renovate the house and had basically rebuilt it, all with her own money and hard graft. This gave her a beneficial or equitable interest, which is where the value of your property sits.

Joint ownership – the Mars bar

With joint ownership, both you and your partner own your entire home. It’s like a Mars bar. If you want to share it with your friend, you’d have to cut it in half or hand over the whole thing because you don’t want it anymore. It’s the same with a jointly owned home. When one person dies, ownership automatically passes to the survivor. It’s a good option if you want to leave your home to your partner and them inherit your share automatically.

Tenants in common – the Twix

When you open a Twix, there are two bars inside, so you can easily give one to your friend if you want to share. It’s the same when you own your home as tenants in common. You and your partner each own a defined percentage. It doesn’t have to be 50/50; you can agree on any percentage you like to reflect each partner’s contribution.

In your will, you can leave your half to whoever you want, and your partner can keep their half.  Owning your property on this basis gives you lots of planning options, particularly if you are a blended family or want to protect your property so that inherited by your family rather than used for care fees or inherited by a new partner if your current partner remarried after you died.

Estate planning

If you own your home as a Twix, your will writer can do some clever planning to ensure your chosen people get your share of your estate whilst not leaving your partner without their home. For example, you can give your partner the right to live in the property after you’re gone, so they’re protected.  On their death, your share of your home is inherited by your children.  It can’t be used to fund the care cost of your partner or be inherited by someone else if they remarried. You can also use trusts to look after vulnerable people who can’t manage their finances or have means-tested benefits. A small outright inheritance can mean they lose their benefits and cause more financial upset and stress than you intended.

Get professional advice

There are advantages and disadvantages to consider when deciding which way to own your home.  As joint tenants, it is simpler and won’t require probate to transfer the house.  As tenants in common, it gives you more options to implement planning to protect assets, but it will be more complex, and you’ll need to apply for probate. The law in England and Wales means you should consider making provisions for those who you have a financial relationship with, e.g. your spouse, children and any other financial dependents in your will, and your estate could face a claim if you don’t. In the past, the Court has said that a surviving spouse shouldn’t be worse off as a widow (or widower) than they would have been as a divorcee. Getting legal advice can help you decide what provision to make.

Discussing your will with a professional and getting estate planning advice means your will can take care of your loved ones when you’re gone.

If you want to write your will or create a Lasting Power of Attorney, we can help. Get in touch using the form below or call us on 0116 380 0752.