Joint tenants or tenants in common? Why it matters

When was the last time you checked how your jointly owned property was owned?

There are two ways a jointly owned property can be held. Either as joint tenants or as tenants in common.

If you own your property as joint tenants this means that if you die your share of the property automatically passes to the surviving owner/s. This is irrespective of the terms of your Will or intestacy.

If you co-own your property as tenants in common then you own an identifiable share of the property which on your death would pass under your Will or intestacy and would not automatically pass to the surviving owner/s.

Why does it matter? 

On your death you may not want your property to automatically pass to the co-owners.

You may instead want your share to pass in accordance with your Will as your co- owners may not be the same people as those benefiting from your Will.

There may also be inheritance tax implications which mean that you don’t want your share to pass to the joint owners but instead want it to pass to a person who is exempt from inheritance tax reducing the inheritance tax due from your estate.

The jointly owned property may be part of your business and there may be a separate agreement setting out what would happen to your share in a partnership agreement or another legal document, which would not come into effect if the asset automatically passed to the surviving owner.

There are also times when it’s practically simpler (and more effective) to own as joint tenants. If one spouse dies it may make life easier for the survivor to receive their spouse’s share automatically.

Sometimes the intention is for the surviving co-owner/s to automatically receive the whole property on death.

Clients also often ask me about joint ownership for care home fee or other asset protection purposes and, again, part of this planning can impact our advice on the way a property should be held.

Again, if you have invested more than your co- owner (or have helped your children to purchase a property) you may wish to make sure that when the property is sold you get your investment back and or it is safeguarded for you.

How we can help? 

A simple search at the Land Registry would allow us to check how you own your property.

Once we have this information we can assist you to make sure that the property is owned in the appropriate way to achieve your objectives.