Well, you could do one of three things by the law of averages. You could live in it, rent it, or sell it and realise the value. However, in reality things are seldom that simple, especially if the house is in the United Kingdom because there are variations on these three basic themes.
# You could inherit the property if you owned it under ‘joint tenancy’ with your spouse. In this case, you would automatically inherit the other half of the title.
# However, if the deceased person owned the house outright, then their will would have to nominate you as the new owner, or part owner
# If you owned the house under ‘tenancy in common’ that would be a third matter. The will would determine whether or not you inherit the other half
# If you shared your life and your home with someone who died without a will and were not married, you could lose the roof over your head.
A Quick Note for Your Diary before Continuing
Most relationships evolve over time. At the start, one partner may own the home. As love grows it seems unnecessary to change the legalities. An unmarried partner could walk away with nothing if the owner does not leave a will.
If you are uncertain what would happen if you or your partner died then this could be the wakeup call you need. We are not solicitors. Our only gain would be to know you straightened things out while you still could.
Moving On to the Matter of Taxes and Debts
The value of a deceased person’s share of a property is part of their estate. The question of future ownership locks up until the executor has settled the late person’s outstanding debts, and taxes including inheritance tax.
In an extreme case they may have to sell ‘your property’ to finance this. You have three choices. Pay the debts yourself, purchase the property at an auction, or inherit the unspent value as cash.
# If you inherit the home and rent it out then you may have to pay tax on the income, and on any profit if you sell it later.
# If you already own a home, but keep the second one for holidays etc. then you need to nominate the home on which you pay capital gains tax when you sell.
If You Inherit a Property in a Trust
If you inherit a property held in a trust, then you are just a beneficiary entitled to live in it and enjoy it. The trustee in charge of the trust is the owner. They have no free will in this matter. They simply implement what the will says whether you like it or not.
When you inherit a house, things may not be as simple as you may think, as we have illustrated here. Always take expert advice if you are not sure. Remember to record your ownership with the Land Registry, so you can prove that you actually own the property.