Joint tenants and probate

[leela]

Hi. I am the joint tenant with a parent, of a rental property. The parent put all the money into the property, and receives all the rental payments. I am involved in name only. In a conversation about the house with the person who will be the executor of their will, that person said "As your Dad paid for the house, on his death it will be added to his estate when I come to do the Probate forms. Obviously, we will be able to offset part of the value as your name was on the deeds"

I understood that as joint tenants, the house would revert to me and not be part of the estate. Can the executor do this, and distribute the value of the house differently?

[Abo]

I had always thought that, no, that was not the case. When one joint tenant dies, ownership is automatically transferred to the surviving one.

https://www.pembrokewillwriters.co.u...via%20a%20Will.

[leela]

That was my understanding too. Surely an executor can't over-ride that? If she tried, would someone notice and refuse probate?

[des8]

If a property is owned as joint tenants the rule of survivorship operates.
This means that at the point at which one of the tenants passes on. the surviving tenant becomes sole owner.

However IHT might still need to be paid on your father's share, although the property will be yours and not distributed to other beneficiaries.
By way of explanation there is this from Tax on property, money and shares you inherit: Joint property, shares and bank accounts - GOV.UK (www.gov.uk) Joint tenants

You automatically inherit anything you owned as ‘joint tenants’.
You may have to pay Inheritance Tax if the whole of the deceased’s estate (all their money, property and possessions) is worth more than the Inheritance Tax threshold of £325,000 and the deceased’s estate can’t or doesn’t pay.

And this site gives further detail: Inheritance Tax and Jointly Owned Property | Peter Barry

[leela]

Thank you for the welcome, DES8! Inheritance tax shouldn't be a problem, as even with the house included, the estate is highly unlikely to reach the threshold.

I'm just really bemused by the executor's plan. I'm somewhat disturbed that she doesn't understand the legalities, given that she's been chosen as the executor and will be charging for her services.

[des8]

What the executor is saying is, in the context you describe, correct.
Although the property becomes yours by right of survivorship, the value of your father's share has to be declared.
As it is jointly owned that value is discounted somewhat.
If the value of his share of the property meant the total value of the estate exceeded the IHT allowance, then IHT becomes payable.
However that asset (the house) does not become part of the estate for distribution to other beneficiaries

[leela]

What the executor is saying is, in the context you describe, correct.
Although the property becomes yours by right of survivorship, the value of your father's share has to be declared.
As it is jointly owned that value is discounted somewhat.
If the value of his share of the property meant the total value of the estate exceeded the IHT allowance, then IHT becomes payable.
However that asset (the house) does not become part of the estate for distribution to other beneficiaries

Ah. I get it now! So you think she was talking purely about the tax side of things? I thought she meant that the house would become part of the estate for distribution purposes. She only mentioned inheritance tax later in the email, as if it was a separate subject, so I didn't link the two. Hopefully you're right then.