Key Post Is there any advantage in adding your spouse’s name to the deeds?

Brendan Burgess

Brendan Burgess

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This has come up a few times over the years. I have drafted this Key Post to treat the subject in a systematic manner. As always, corrections, comments and additions are welcome - Brendan

It seems to be assumed that when a couple get married and she moves into the house he already owns, they should add her name to the house and to the mortgage. ( For simplicity assume it’s she moving into his house)


  • Don’t add her name to the mortgage if he is in negative equity
  • Don’t add her name to the mortgage if he is in arrears
  • Don’t add her name to the mortgage if his income is not secure
She would become liable for the full mortgage. If there are mortgage problems at a later stage, the bank will come after her if he can’t pay it.
If he gets into difficulty later, they may be able to negotiate a capital write-off in return for her agreeing to add her name to the mortgage.

A lot of couples added their new spouse's name to the mortgage during the boom and now find themselves both liable for the mortgage.

If she gets into financial difficulties e.g. in her business, her share of the house will be regarded as an asset to help towards her liabilities.

There are plenty of other reasons for not doing it

  • If you split up, it will be a lot messier. The bank may not allow the home to be returned to his name.
  • There are legal costs involved
  • There might be a risk to a tracker.
  • If she has a mortgage it may limit her ability to borrow elsewhere e.g. to start a business.
  • She would be forced to get mortgage protection insurance. Of course, this might be a good idea anyway.
The Family Home Protection Act protects her anyway
He can’t sell it without her consent
He can’t remortgage it without her consent

The big advantage is that if he dies, the house passes to her without the need for taking out probate.
This is such a small advantage, that it does not justify the disadvantages.
There is a possibility that the will could be challenged if it’s not jointly owned, e.g. by a child the wife knew nothing about as happened here.

If there is equity in the home, it’s a good idea to come to a written agreement about ownership in the event of the couple splitting up
This may not have much legal force, but it would be helpful to have an understanding of what is being agreed. They could agree that he continues to pay the mortgage in full, and she will not claim any ownership. Or it could be that she will agree to pay the mortgage in full in exchange for ownership. Or it could be that she will move out if they split up.

Misleading advantages
“If he dies intestate, his children could claim a share of the house.”
But it would be easier to do up a will than transfer the house, although they could challenge the will.

“If she dies, the mortgage won’t be paid off by the mortgage protection insurance.”
But she can take out life cover anyway for that amount.

“He will get double the Mortgage Interest Relief if her name is on the mortgage”
He gets it anyway, whether her name is on the mortgage or not.
 
Thanks for Vanilla for the following very important addition.

It is a different question where there is no mortgage or a very small mortgage on the property

The added spouse has much more security

If he gets into subsequent financial difficulty, only half the equity in the house can be accessed by his creditors
In reality, they will probably get to keep the house.

The downside of this is that if she gets into financial difficulty, her creditors could force the sale of the home and he would lose "her" half.


When he dies, she gets the property automatically, without the need to take out probate.
Probate can be expensive.

Jointly owned property never forms part of an estate therefore cannot be subject to any challenge.Even where there is a will, there can be a challenge to an estate.
This would be very important if there is any hint that someone might challenge the will.
 
Thanks Brendan for this useful synopsis. I am quite surprised at the number of disadvantages. If the bank found out you were married could they enforce putting your spouses name on the mortgage ? What about the change in interest rate ? Is there a possibility of losing a tracker for instance ? Have any AAM posters come across this problem ?
 
Most of the advice in the key post relates to properties charged with a mortgage.


More information should be added though. Off the top of my head-
Where there is no mortgage there are more advantages- for eg 1. where one party has other debts that subsequently become secured on the property only half the equity is affected if there are joint owners. 2. The cost of taking out probate is much higher than the cost of a will. 3. The added spouse has security. 4. The property never forms part of an estate therefore cannot be subject to any challenge.Even where there is a will, there can be a challenge to an estate.
 
Vanilla

Thanks for those excellent points. I have rephrased them in a reply to my own post to give the points more prominence. Is my version correct?

Brendan
 
Just to clarify on this, in the case where there is no mortgage or outstanding debt of any kind(I'm thinking of my parents here), and the deeds are in the husbands name only, would it be advisable for the spouses name to be added? Thereby ensuring that the deeds/property is passed directly to the spouse without any reference to a will(deeds excluded from the estate), and also ruling out the possibility of a challenge I guess
 
Brendan Burgess said:
Yes. Assuming that they are not going to split up before he dies.

Brendan
Click to expand...

Thanks Brendan, in relation to other assets such as savings/possessions etc, what is the advantage in making a will? I am making the presumption that these would also be passed to the spouse(or 2 thirds at least, 1 third to children) if there was no will and things were otherwise uncontested.
 
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