When two or more people buy a house, the title will be structured so that it is held jointly. Most titles are held equally between two owners of a property but more than two people can easily hold the title. The key factor is that the property is jointly owned. What could potentially be problematic is the inclusion of a survivorship destination.
What is a survivorship destination?
When a title is held in the name of two or more people, it can be structured in a way that allows each person to deal with their share in the property independently. Usually, the title would say that each individual, if we assume equal rights of ownership, hold the title to the property “equally between them and to their respective executors and assignees”. That means on the death of one of the parties, their executors will deal with the distribution of their share in the property.
However, when the title is held “equally between them and to the survivor of them and to the executors and assignees of the survivor” there is a potential problem when one of the owners dies.
Why is a survivorship destination a problem?
When the title is structured in this way, when one of the owners dies, their share in the property is automatically transferred to the surviving owner or owners. This happens without any formality or need for further legal work. If two people own a property with a survivorship destination, the survivor immediately owns the whole property when the other dies.
What if you make a Will leaving your share in the property to someone else?
If you make a Will bequeathing your share in the property to someone else, the survivorship destination still takes precedence. That means whatever you say in your Will, will be overridden by the survivorship destination in your title.
How do you change this?
It is straightforward to change the structure of the title. Solicitors call this “the evacuation of the special destination”. Your solicitor can draw up a deed which will change the structure from the special destination to the traditional destination. It will revert to a title held jointly instead of automatically transferring to the survivor on death.
Are there any other circumstances where the special destination will be evacuated?
Section 2 of the Succession (Scotland) Act 2016 contains specific provisions dealing with divorce, dissolution of civil partnerships and annulment. In such situations, the special destination is automatically evacuated.
What are the advantages of evacuating a special destination?
One advantage of evacuating a special destination is you can decide what to do with your share in the property. You may still want to bequeath your share in the property to the joint owner. There is nothing preventing you from doing that.
However, for estate planning purposes, it may be advantageous to transfer ownership of your property to, for instance, your children.
In cases of blended families where each partner may have children from earlier relationships, it allows each of the parties to transfer their ownership to their natural children on death. This is usually coupled with a liferent trust in favour of the surviving partner.
Specialist property lawyers, Rutherglen, Glasgow
Our solicitors have many years of experience dealing with all aspects of property and property law. We have acted for thousands of clients in greater Glasgow and Lanarkshire and across Scotland.
If your title contains a survivorship destination and you would like to discuss your options, please get in touch. We will listen to your concerns and guide you through your options.
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