Joint tenants or tenants in common
Joint tenants or tenants in common?That is the question often asked when two or more people are purchasing a property in joint names.
Whilst it may be a question asked of a property lawyer it is also a question asked often of a private client lawyer.
In English Law there are two ways in which you can own property; the first is joint tenants, which means that on the death of one party the property passes to the survivor automatically.This is similar to owning a joint bank account and means that the property will pass, irrespective of the terms of the deceased’s Will, to the surviving joint owner of the property, by the right of survivorship.
Understandably, purchasing property as joint tenants for many couples is the obvious choice, particularly when financial affairs may be straight forward, and the intention is to leave everything to a surviving partner.
The alternative way of owning property, as tenants in common, means that each party owns a divisible share in the property.Typically, this may be on a 50:50 basis, but will not always be the case.If two individuals, who are not related, choose to invest in to a property for the purposes of generating income, or because they are contributing differing amounts, then it would be usual for such a purchase to be in their names as “tenants in common.”
By owning a property as tenants in common it will mean that that person’s share in the property will pass under the terms of his or her Will.If the co-owner of the property is not related then understandably this would be the preferred method, rather than it passing to the survivor, by the right of survivorship.
It is also by owning a property as tenants in common that you can then construct a Will providing protection over a deceased owner’s share, so that it is protected, should a surviving spouse or partner have to go into care and be assessed for their ability to pay their own care fees.
Please note that simply owning property as tenants in common is not of itself sufficient, it is the first step along the path to providing protection and must be done in conjunction with a properly prepared Will.
If you would like to discuss these issues further, or the preparation of Wills providing protection, please contact Richard Horwood.
Please note the contents of this blog are given for information only and must not be relied upon. Legal advice should always be sought in relation to specific circumstances.