How are joint assets handled in Estate Administration?

When someone passes away, the task of managing their estate typically falls to the executor(s) named in their Will – one of the questions we commonly hear from clients beginning this process is how jointly owned assets will be handled.

Joint assets can include property, bank accounts, investments and other valuable assets that are owned by two or more people – for example, spouses, civil partners or family members. In England and Wales, these assets generally aren’t included in the deceased’s estate passing under the terms of the Will and are instead transferred directly to the surviving joint owner.

However, it’s essential that clients understand the legal intricacies of joint ownership (and the exceptions to this rule) to ensure a seamless administration process and avoid potential conflicts between beneficiaries.

Joint assets: what you need to know

Joint assets often feature a ‘right of survivorship’ – meaning that when one of the owners passes away, the surviving owner(s) automatically inherit the deceased’s share of the asset.

For instance, if a married couple owns their house together, the surviving spouse will become the sole owner of the property upon the death of their partner.

There are two main types of joint ownership recognised by law:

• Joint tenants – this is most common for married couples or civil partners. With a joint tenancy, each owner has an equal share of the asset and when one owner passes away, their share simply passes to the surviving owner(s) by default, bypassing the estate administration process
• Tenants in common – this form of ownership is less common but can offer more flexibility in how the asset will be passed on. As tenants in common, each owner holds a distinct, separate share of the asset – and upon death, their individual share passes according to the terms of their Will (or, if there is no Will, according to the rules of intestacy)

What happens to joint assets during the administration process?

The treatment of joint assets largely depends on the ownership arrangement:

Joint tenants

Given that the right of survivorship applies automatically to joint tenancies, the surviving joint owner will automatically inherit the deceased’s share without the need to apply for a Grant of Representation.

However, the surviving joint owner will be asked to provide the deceased’s death certificate to institutions holding the joint asset (e.g. banks or property registries) to update the ownership records accordingly.

There may be exceptions to this principle in rare cases – for instance, instances where the joint asset is disputed, or if there is evidence that the asset was not intended to pass by survivorship.

Tenants in common

As each person’s share of the asset is recognised separately, the deceased’s share won’t automatically pass to the surviving owner(s). Instead, it forms part of the deceased’s estate which can mean an application to the Probate Registry for a Grant of Representation will be required.

If the deceased made a valid Will, their share of the joint asset will pass according to their wishes. If there is no Will, their share will pass according to the rules of intestacy.

What are the potential complications of managing joint assets?

While joint assets may seem straightforward, there can be complicating factors that present challenges for executors.

Here, we outline a handful of common examples – as well as how to mitigate them effectively:

Disputes over ownership

Disagreements may arise if there is ambiguity over the reason why the asset was jointly owned in the first place.

For example, if a parent and child own a property together, it could be unclear whether the parent intended for the child to inherit the property after they pass away – or whether the child was simply added as a convenience for managing the asset.

Tip: Executors should carefully review any available documentation (e.g. bank statements, property deeds and previous correspondence) that could shed light on the intentions behind joint ownership. It may be necessary to seek professional legal advice if disputes arise.

Debts attached to joint assets

When someone dies, any debts they owe may still be attached to assets they co-own. This can be a particular concern for jointly held property or financial accounts.

Tip: Executors should confirm that all debts and liabilities are cleared before transferring ownership of joint assets. Additionally, should the asset be sold to pay off debts, the proceeds must be used in accordance with the deceased’s estate plan.

Inheritance Tax (IHT) implications

It is important to note that joint assets are not automatically exempt from Inheritance Tax (IHT).

Although the joint asset may pass automatically to the joint owner by survivorship, the value of the deceased’s share in that asset forms part of their estate for IHT purposes and will need disclosing on any IHT account that is required.

Tip: Executors should consider seeking professional advice on IHT matters, particularly in cases where substantial joint assets are involved. With careful and effective estate planning, it may be possible to structure assets more tax efficiently to reduce the IHT burden down the line.

Assets in foreign jurisdictions

In situations where joint assets are held overseas, they may be treated differently depending on the local laws. For example, some jurisdictions may not recognise UK rules relating to joint tenancy – which can create additional hurdles during administration.

Tip: Executors should seek legal advice regarding the handling of international joint assets, as there may be cross-border legal complexities that need to be addressed.

Joint accounts and beneficiaries

Joint accounts, particularly bank accounts, can be a source of confusion during administration.

If the account comes under a joint tenancy arrangement, the surviving account holder typically retains the funds. However, issues may arise if the deceased has named beneficiaries in their Will – or if there is a misunderstanding regarding who owns what portion of the account.

Tip: Executors should notify all financial institutions holding joint accounts of the death as soon as possible and make sure that the account is properly assessed as part of the estate.

Handling joint assets in administration: a brief guide

• Gather relevant documentation – it’s essential to document the intentions of those involved in joint asset ownership. If there are any doubts, we recommend that the surviving owner seek legal advice, and confirm their legal position, as soon as possible
• Clarify ownership structure – executors should confirm the nature of joint ownership – i.e. whether assets are held as joint tenants or tenants in common early in the estate administration process to avoid any confusion later on
• Consult with professionals – joint asset administration can be trickier than it first appears – especially in cases where disputes arise, or assets are located abroad. For this reason, it’s always beneficial to enlist the help of a qualified Estate Administration solicitor, who will be able to navigate any hidden intricacies and find the best path forward
• Communicate clearly with beneficiaries – keeping all parties informed about where you’re up to in the administration process can help manage expectations and avoid unnecessary conflicts

How we can help

If you’re looking for assistance administering the estate of a loved one and/or have concerns about managing joint assets, our friendly Wealth Protection team can help guide you through the process.

Get in touch on 03333 058375, or via email at [email protected], for personalised advice based on your needs.