Survivorship: How does it work?

Probate can be a complex process and understanding how different types of asset ownership are treated after someone passes away is crucial. One key concept that often arises is “survivorship.” This principle dictates how jointly owned property passes to the surviving owner(s) outside the Will and, often, outside deceased’s estate.

At its heart, survivorship means that when one joint owner of an asset dies, their interest in that asset automatically passes to the surviving joint owner(s). This is a significant distinction because it means the asset does not form part of the deceased’s estate for distribution under their Will. Instead, it bypasses the Will and the probate process.

Property Ownership: Tenants in Common vs. Joint Tenants

The most common area where survivorship plays a role is in property ownership. The way you own property with another person has a significant impact on what happens after one owner dies.

Joint Tenants

If you own a property as joint tenants, the principle of survivorship applies. This means that if one joint tenant dies, their share of the property automatically passes to the surviving joint tenant(s). This happens irrespective of what the deceased’s Will directs.

Tenants in Common

In contrast, if you own a property as tenants in common, there is no right of survivorship. Each tenant in common owns a distinct share of the property, which can be equal or unequal (e.g., 50/50, 60/40). When a tenant in common dies, their share does form part of their estate and will be distributed according to their will or the rules of intestacy.

Choosing between joint tenants and tenants in common has significant legal and financial implications, and it’s a decision that should be made with careful consideration and legal advice.

Joint Bank Accounts

Joint bank accounts are another common example where the principle of survivorship typically applies. When one account holder dies, the funds in the joint account usually pass automatically to the surviving account holder(s). The surviving account holder can then usually continue to access the funds as the sole owner.

It’s important to note that while this is the general rule for joint bank accounts, there can sometimes be nuances depending on how the account was set up. Even if you believe that the account passes by Survivorship enquires should be made with the Bank to check the terms of the account.

Other Types of Jointly Owned Property

The concept of survivorship can also extend to other types of jointly owned assets, such as:

· Joint investment accounts: Like joint bank accounts, these often operate with the right of survivorship.

· Jointly owned shares: Shares held in a joint name may also pass by survivorship, depending on the terms of the shareholding.

· Certain types of chattels: While less common for significant items, some personal possessions held jointly might be treated with survivorship, though this can be harder to prove without clear documentation.

Why is Survivorship Important?

Understanding survivorship is vital for several reasons:

· Estate Value: Assets passing by survivorship do not count towards the deceased’s probate estate. This can significantly reduce the value of the estate for probate purposes, potentially impacting probate fees and the complexity of the probate application.

· Bypassing the Will: As discussed, assets subject to survivorship bypass the will entirely. This is why it’s crucial to ensure your property ownership aligns with your estate planning wishes.

· Speed of Transfer: The transfer of jointly owned assets by survivorship is generally much quicker than assets that need to go through the full probate process.

Seek Expert Advice

The rules surrounding survivorship and probate can be intricate, and the implications of different ownership structures are far-reaching. If you are dealing with an estate, or if you are planning your own estate, it is crucial to seek professional legal advice. A solicitor can help you understand how survivorship applies to your specific circumstances, ensure your assets are held in a way that reflects your wishes, and guide you through the probate process efficiently.