What happens to your home when you die

When you die, your home passes to someone — but who that someone is, and how it gets there, depends almost entirely on how you hold it. The will is one factor; the form of ownership, the existence of any mortgage, and (for renters) the terms of your tenancy are the others. We get more questions about this than about anything else, so here is the whole picture in one place.

If you own the home jointly as joint tenants

This is the most common form of joint ownership for married couples and civil partners. On the death of one joint tenant, the surviving joint tenant takes the whole property automatically by 'survivorship'. The will doesn't enter into it. There is no need for the property to go through probate (though a death certificate is filed with the Land Registry to update the title). This is usually exactly what couples want.

If you own the home jointly as tenants in common

Each owner has a defined share — often 50/50, but it can be any split. On your death, your share passes by your will (or, if there is no will, by the intestacy rules). The other owner does not automatically inherit your share. This form is common among cohabiting couples (especially where contributions to the deposit were unequal), among siblings who buy together, and among blended families using life interest trusts. Most cohabiting couples we work with do not know which form they hold; the Land Registry will tell you in a few minutes.

If you own the home alone

The whole property passes by your will. If you have no will, it passes under the intestacy rules — to your spouse first (if married), then your children, then more distant relatives. A cohabiting partner takes nothing under intestacy. Your will can leave the property outright to a named person, or it can leave the right to live in it for life (a 'right of occupation') with the property passing to someone else on the occupier's death — useful when you want a current partner to remain in the home but for the eventual capital to go to your children.

If there is a mortgage

A mortgage does not die with you. It is a debt of your estate and must be paid before the property can pass clear to the beneficiary. Many homeowners have life insurance (often called 'mortgage protection') that pays out enough to clear the mortgage on death. If you do not, the executors will need to either sell the property or arrange for the beneficiary to take it subject to the mortgage (with the lender's consent). It is worth checking whether you have such cover and, if so, that the policy is up to date and correctly nominated.

If you rent

An assured shorthold tenancy (the standard for most private renters) does not pass by will — it ends, or transfers under specific statutory rules, depending on the tenancy and household. A spouse, civil partner or cohabitee living in the property may have succession rights under the Housing Act 1988 or 1985. Social housing tenancies have their own succession rules. If you rent and your partner lives with you, this is something to check with your landlord or council before you assume you've sorted it.

What about inheritance tax on the home?

The home is often the asset that pushes a modest estate over the inheritance tax threshold. The 'residence nil-rate band' (currently up to £175,000 per person) is an additional allowance that applies where the home is left to direct descendants — children, grandchildren, step-children, adopted children. It is one of the most valuable allowances available and is easily lost by drafting that doesn't qualify for it. Velati's questionnaire screens for this and structures the will to preserve the band wherever it can apply.