This is a term which people often use very loosely, and often think is very easy to do: but changing a name on the title deeds is something which should be approached with extreme caution.
The issue usually arises after someone has passed away; but often, during their lifetime, the owner of a property or their children think it might be a good idea to change the name of the owner of the property.
If a named owner of a property has died, and that person was the sole owner, then whilst it is possible to transfer title to the property into the name of the executors pending sale, it is not usually necessary. It is often much more straightforward for the executors simply to sell the property and transfer title to the buyer without removing the deceased’s name from the title beforehand. They can easily do this once they have a Grant of Representation (usually a Grant of Probate) to the estate.
However if a property was owned by two or more people, and one of those owners has died, then it is possible to remove their name on the title deeds by sending a death certificate to the Land Registry and completing the appropriate form. Whilst this removes the deceased’s name, please be aware that if the joint owners held the property as tenants in common, i.e. subject to a restriction on the title, then the restriction will remain on the title preventing a sale by a surviving sole owner. Therefore it will be necessary, if appropriate, to clear off the restriction before the surviving owner can sell the property. Alternatively, the surviving owner will need to appoint a co-trustee to act with them in selling the property, to protect the interests and share of the deceased.
Many people think that it is a good idea to put the name of their children on their title deeds, so that either ‘things will be easier when I die’; ‘we won’t need probate’; ‘I won’t have to pay residential care fees if the house is not in my name’; or “it will be easier for them to get a mortgage”.
If you transfer names on title deeds for any of the above purposes, you risk severe consequences. Also, the nature of the transaction needs to be examined. If you put your children’s name on the title deeds, are you making a gift to them? If so, this will have inheritance tax consequences and is very likely to have to be declared to HMRC by your executors.
If you are putting their name on the title deeds so that it looks as if you do not own a property, and then you need to pay for residential care fees, this will be deemed as deliberate deprivation of assets. In that situation, if you cannot afford to pay for your care, you could even be made bankrupt, in which case the gift could be set aside and you would be treated as if you still owned the property. Your children could be made liable for the payment of your fees. Local authorities struggle to manage their budgets in order to provide care for older people and therefore they are likely to investigate very carefully, any application for the financial support of a person who has once owned a property.
If you transfer the title to the property into the name of your children, they would be perfectly entitled to secure a loan on the property: particularly if you are not in occupation of the property which you have transferred to them. If the mortgage then falls into arrears, the lender might enforce a sale. Even without a mortgage, your children as owners could sell the property without reference to you. They could potentially make you homeless!
Therefore, you should always take legal advice before proceeding further.
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If you need help or advice with changing a name on your title deeds, or any other personal legal matter, please get in contact with us at [email protected] or call us on (0118) 958 9711.