What happens to shared or joint assets when you pass away?

Shared or Joint assets most commonly refers to properties owned by two or more people. For example, a flat that was purchased by a couple or group of friends to use as their main residence. However, it may also include things like joint bank accounts, for example, if you have a shared account between you and your flatmates to pay the mortgage and/or bills. Or you may share a car with your significant other, only one of you may be the registered keeper, but you can both legally own the vehicle.

What happens to these assets when you pass away mostly depends on how the asset was acquired. In this article, we will dig a little deeper into what this might mean for you.

Starting with properties, there are two ways that property can be owned jointly:

• Joint tenants. This means that both owners have an equal share in the property and that, on the death of one owner, the surviving owner automatically inherits the whole property. This is known as the rule of survivorship.

• Tenants in common. This means that each owner has a separate share in the property, which can be of any size. On the death of one owner, their share of the property will pass according to their will or the laws of intestacy, if there is no will.

When you purchase a property, a conveyancer will typically advise you on which option is best for you. Generally if you’re married or in a civil partnership and purchasing together, you will purchase a property as Joint tenants, whereas people without a legally defined relationship are generally advised to purchase as tenants in common.

However, there are many instances where couples may purchase a property before they are married as tenants in common, and retain this status once they are married if they do not move home or remortgage the existing property. In such cases, even without a will, the laws of intestacy will typically result in the partner inheriting the property as a whole, but the uncertainty may cause additional stress for the surviving partner.

If you have a mortgage on a property that you own jointly, the surviving owner will usually be able to take over the mortgage payments. However, the lender may require them to provide evidence of their ability to make the payments.

Other shared assets, such as bank accounts and savings accounts, are also dealt with in a similar way as property. If they are owned jointly as joint tenants, the surviving owner will automatically inherit the whole asset. If they are owned as tenants in common, the deceased's share will pass according to their will or the laws of intestacy.

If you have a joint bank account, the funds in the account will usually pass to the surviving account holder on your death. This is because joint bank accounts are typically held as joint tenants, which means that the surviving account holder automatically inherits the whole account.

The bank shouldn’t require probate or letters of administration to transfer the funds to the surviving account holder. However, the bank may ask for a death certificate to confirm that the account holder has died.

There are few exceptions to this rule. For example, if the joint bank account was opened by a couple before 1987 and one of the partners dies, the surviving spouse may not be able to access the funds. In this case, the funds will be frozen until the estate of the deceased person has been settled.

If you have a joint bank account with someone who is not a close relative, you may want to consider changing the account to tenants in common. This means that your share of the account will pass according to your will or the laws of intestacy, if there is no will.

Vehicles can be more complex, in the UK there is no universal proof of ownership document (the V5C or log book is not explicitly proof of ownership). Most finance agreements/loans will grant the lender ownership of the vehicle until the debt has been paid. However, if you purchased the car using funds from a joint bank account, this is usually considered as evidence of joint ownership as joint tenants.

If you jointly own a vehicle but you’re not the registered keeper of the vehicle, the DVLA (Driver and Vehicle Licensing Agency) does not require probate or letters of administration to transfer the registration to the surviving owner. However, the DVLA may ask for a death certificate to confirm that the previous vehicle owner has died.