Scarle and the joint property pitfall

The judgment in the Scarle dispute, which we considered in an earlier briefing, was issued recently. This concerned the tragic case of Mr and Mrs Scarle who died together at home of hypothermia. As it was not possible to determine the order of deaths, the court applied the ‘commorientes rule’ which treated Mrs Scarle (the younger of the couple) as having survived her husband for the purpose of deciding who inherited their estates. Therefore, although each of the Scarles had children from previous marriages, Mrs Scarle inherited, as the younger of the couple, and both of their estates passed according to the terms of Mrs Scarles’s will, Mr Scarles’s daughter receiving nothing.

This decision has attracted a fair amount of interest, being a rare application of the commorientes rule, ‘recent’ cases on this topic taking us back to the Blitz. However, thankfully, in times of peace it is not so common for couples to die together - so what
can we take away from this case?

As noted in our previous briefing, the first and most fundamental point is that it is essential that you make a will to ensure your chosen beneficiaries inherit your estate. This is particularly so in the case of more complex families, such as where there are
children from previous relationships.

However, a second, less well-known, issue is the importance of checking whether any joint property you hold with your partner is held as ‘joint tenants’. Often a joint tenancy will arise where a house or bank account is held jointly by a couple, as was the case in Scarle. If property is held as joint tenants, on the first death the deceased’s share of the joint property does not pass according to the terms of their will/intestacy but is automatically inherited by the surviving co-owner under general law (the ‘survivorship rule’) and will eventually pass accordingly to the terms of the survivor’s will/intestacy. Consequently, if the co-owners would like different beneficiaries to inherit their respective shares of the joint property (for example because there are children from previous relationships), holding the property as joint tenants will have the disastrous effect of disinheriting the family of the first to die in favour of the family of the survivor, as happened in Scarle.

Therefore, when considering who should benefit from your estate it is important to be alert to the potential pitfall of holding property as joint tenants. In particular, to ensure that your share of any joint property passes under the terms of your will, you should hold the property as ‘tenants in common’ rather than joint tenants, as the survivorship rule does not apply to a tenancy in common. If you already hold property as joint tenants,
you can convert this to a tenancy in common by serving written notice on the other co-owner – a simple measure that can nevertheless make so much difference in ensuring that your intended beneficiaries benefit from your estate.

If you require further information about anything covered in this briefing, please contact Christine Payne Smith, or your usual contact at the firm on +44 (0)20 3375 7000.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, September 2019