Probate and Property: Key Legal Considerations for Your Family Home

When a loved one passes away, dealing with their property can be one of the most complex aspects of estate administration. The family home often represents the largest asset in an estate, making it crucial to understand the legal processes, rights, and responsibilities involved.

Understanding Property Rights During Probate

Who Owns the Property?

During the probate process, ownership of the family home depends on how it was held before death. The deceased’s estate technically owns the property until probate is granted. This means the appointed executor or administrator has the legal responsibility to manage the property on behalf of the beneficiaries.

The situation becomes more complex with joint ownership. Properties held as joint tenants automatically pass to the surviving owner by right of survivorship. However, properties held as tenants in common require the deceased’s share to go through probate, with their portion becoming part of the estate.

Rights of Surviving Family Members

Family members do not automatically gain the right to occupy the property simply because they lived there with the deceased. Their rights depend entirely on:

• Whether they are named as beneficiaries in the will
• The legal ownership structure of the property
• Any specific provisions made for their continued residence

For unmarried partners or cohabiting couples, the situation can be particularly precarious. Without legal protection through marriage or civil partnership, they may face eviction unless the will explicitly provides for their continued residence.

The Probate Process for Property

Before Probate is Granted

You cannot sell a house during probate. However, executors can take preparatory steps, including:

• Marketing the property
• Conducting viewings
• Accepting offers in principle
• Arranging property surveys

All potential buyers must be informed that the property is still going through probate, which may deter some purchasers or cause delays in property chains.

Valuation Requirements

Properties must be professionally valued as part of the estate administration process. This valuation is crucial for:

• Inheritance tax calculations
• Ensuring fair distribution amongst beneficiaries
• Meeting the executor’s duties to obtain fair market value

Executors have a legal duty to sell property at fair market value, making professional valuation essential to avoid disputes with beneficiaries.

Financial Implications and Tax Considerations

Inheritance Tax on the Family Home

The family home significantly impacts inheritance tax liabilities due to its typically high value. Current inheritance tax thresholds for 2025 include:

• Basic threshold: £325,000
• Residence nil-rate band: Additional £175,000 when the home passes to direct descendants
• Combined allowance for married couples: Up to £1,000,000

Properties exceeding these thresholds face a 40% inheritance tax rate. Rising property values can push previously exempt estates into the taxable bracket, creating unexpected financial burdens.

Managing Tax Obligations

When liquid assets are not sufficient to cover inheritance tax, beneficiaries may need to consider:

• Payment plans with HMRC
• Borrowing against the property
• Selling other estate assets

The residence nil-rate band only applies when the family home passes to direct descendants (children, grandchildren). Gifts to other family members or friends do not qualify for this additional allowance.

Common Complications and How to Avoid Them

Mortgage Considerations

Outstanding mortgages complicate probate significantly. The executor must determine whether:

• The mortgage should be paid off from estate funds
• The property should be sold to discharge the debt
• Beneficiaries can assume the mortgage payments

Life insurance policies may cover outstanding mortgage balances, but these require specific nomination to be effective.

Multiple Beneficiaries

When several people inherit shares in the family home, disagreements commonly arise over:

• Whether to sell or retain the property
• Rental income distribution
• Maintenance responsibilities
• Occupancy rights

Clear communication and early legal advice can prevent these disputes from escalating into contentious probate proceedings that drain estate resources and cause lasting family rifts.

Property Management During Probate

Executors must maintain the property throughout the probate process, including:

• Insurance coverage continuation
• Essential repairs and maintenance
• Security arrangements
• Utility payments

These ongoing costs reduce the estate’s value and must be factored into distribution calculations.

Planning Ahead: Preventive Measures

Will Provisions for Property

Well-drafted wills should address:

• Specific instructions for property disposal
• Provisions for surviving spouses or partners
• Trust arrangements to protect vulnerable beneficiaries
• Clear expression of intentions regarding joint ownership

Lifetime Planning Options

Consider these strategies while still alive:

• Lifetime gifts of property interests (subject to the seven-year rule)
• Trust arrangements to reduce inheritance tax exposure
• Joint ownership structures to avoid probate
• Regular will reviews as circumstances change

Facing probate complications with your family home? Our experienced probate solicitors provide clear guidance through every stage of the process. Contact A L Law today for a confidential consultation and protect your family’s most valuable asset.