What if you inherit a property jointly?
If you have inherited a property jointly with other beneficiaries, be prepared for your ideas on the property to differ. It’s therefore essential to have open conversations about what you’d like to do with it.
Nicola Weldon, of law firm Ellisons, said: “One person may decide to buy out the others, or the beneficiaries may agree to divide other estate assets differently so that everyone receives a fair outcome. Whatever is agreed, advice should be taken and the arrangement properly documented.”
If you decide to keep the property, you’ll need to set out each person’s responsibilities, including who will pay for essential bills such as the mortgage, insurance and repairs, and how rental income will be shared. For avoidance of doubt, and proof should anything go wrong, it’s a good idea to record all of this in writing.
Ms Alexander added: “Beneficiaries should also understand how ownership is structured. A property held as joint tenants will automatically pass to the surviving owner on death, whereas an ownership share held as tenants in common forms part of an individual’s estate and passes according to their will or the rules of intestacy.”
Can you refuse an inherited property?
In a nutshell, yes. If you don’t want to inherit a property, you can refuse it. There are two main ways to do this: by disclaiming the inheritance or using a deed of variation.
Disclaiming the inheritance means formally refusing it altogether. You can only do this if you have not already accepted any benefit from it, such as moving into the property or renting it out. You must also refuse your entire entitlement to the property, not just part of it.
Mr Cobb said: “One thing you can’t do is use a disclaimer to redirect the house to someone else of your choosing. Once disclaimed, it simply passes under the rest of the will, or the intestacy rules if there isn’t one.”
If you want to redirect your inheritance to someone else, whether that’s a child, grandchild or other family member, a deed of variation can be a better option. You must complete a deed of variation within two years of the person’s death, and it must be in writing and signed by all beneficiaries affected by the changes.
A deed of variation can also have inheritance tax or capital gains tax advantages because, if it meets the relevant conditions, the gift is treated for tax purposes as if it had been made by the deceased and not by you. However, as the tax benefits can depend on your individual circumstances, it’s best to seek legal advice first.