Is it good practice to check whether tenants in common have declared their respective beneficial interests prior to preparing a will. The Wills and Inheritance Protocol states,
‘If the client owns property with another person, check whether the beneficial ownership is clear. If it is not, advise the client that because disputes after death can be difficult and expensive to settle, it is preferable to take steps to clarify the position before death.’
I thought checking whether tenants in common have declared their respective shares might fall within this. However, it seems somewhat excessive to check this whenever clients own property as tenants in common.
Why is it excessive? Part of the initial meeting is establishing the clients assets, therefore interest in property. While assumed TiC is 50/50, it’s not always the case so should be established.
If by establishing it, you mean asking the client whether or not they have declared the beneficial interests and in what amounts, that doesn’t seem excessive, but, if you mean, going to the length of obtaining the TR1 to check whether a declaration was made, it seems a little excessive.
In the light of the decision in Carr-Glynn v. Frearsons (1999), I wonder if insurers would consider it “excessive” to check the Land Registry title mindful that it is now relatively straightforward.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
I am not suggesting one should not check the Land Registry to determine whether the property is owned as joint tenants or tenants in common. I am asking whether, once one has established the testator owns the the property as tenants in common, one should go on to locate the TR1 to check whether the tenants in common have declared their respective shares, and, if they have not, advising them to declare their beneficial interests.
Whilst I believe that most will just check the Land Registry title to see if there is a restriction, the entry itself does no more than indicate that a transfer of title cannot be made by a single trustee (other than a trust corporation) - it does not identify the underlying interests or shares.
The same restriction will appear on the register, whether the client holds as a trustee of, say, a property protection trust, or as a tenant in common. As the TR1 should include reference to the underlying trusts giving rise to the need for the restriction including, if as tenants in common, the shares to which each is entitled, it would seem appropriate to go to that level to ensure that any advice given is appropriate.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals