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Joint Ownership - Joint Tenants or Tenants in Common?
When I am taking instructions for wills, I ask my clients if they own any property and if so, whether it is owned in their sole name or jointly. Many married and cohabiting couples own their home jointly and I am often met with blank or confused expressions when I ask if they know whether they are joint tenants or tenants in common.
Unsurprisingly, many people do not realise that there is more than one way of owning property jointly, and that this affects how a will is drafted.
These ‘tenancies’ have nothing to do with paying rent – they are just technical legal terms.
Joint Tenancy
With this type of property ownership, each owner is called a ‘joint tenant’. Each owns the whole of the asset rather than a distinct individual share. The characteristic of a joint tenancy is the right of survivorship. This means that when one joint tenant dies, the property in question (usually a house but can be other assets owned jointly e.g. a bank account) automatically passes to the surviving joint tenant(s), regardless of whether a joint tenant tries to leave the property to anyone else in their will.
Tenancy in Common
This type of property ownership means that each owner owns a separate share in the property. This could be an equal or an unequal share. That share can be bought and sold. The right of survivorship does not apply, so on the death of one of the tenants in common, their share passes according to the provisions they have made in their will (or according to the intestacy rules if they die without making a will).
Severing the Joint Tenancy
Increasing numbers of homeowners are taking advice on whether they should end their joint tenancy and instead own their home as tenants in common as a way to limit their liability to inheritance tax and care home fees or to provide for children from previous relationships.
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