Tenants in Common

Under the law, property can be held in joint names in two ways, tenants in common and joint tenants. They have significantly different effects when one of those joint owners dies.

Where a property is held as joint tenants, then the property automatically passes to the survivor.  This is the most common way a property is held between husband and wife or civil partners. This means that regardless of any Will, the property will belong to the survivor to deal with as they wish.

Where a property is held in joint names as tenants in common, this means that each joint owner’s share is passed according to their Will, or the laws of intestacy if there is no valid Will.

There can be good reasons for holding property in joint names as tenants in common.  If a married couple own their property in their joint names as joint tenants, on the death of the first spouse, the property would pass to the survivor who would then hold the property in their sole name which could be subject to assessment for care home fees.  If the couple had held their property in their joint names as tenants in common, then they could have left the share of the property of the first spouse to die to another member of the family and so protect that share from assessment for care home fees.

A married couple who each have children from previous relationships might consider holding their property in their joint names as tenants in common and each making Wills, leaving a life interest in their shares of the property to each other, so that their respective shares in the property would pass by Will on the death of the surviving spouse to their respective children.

Holding property as tenants in common is also often used for tax planning, so that a half share of the property of the first spouse to die could pass into a trust rather than to the surviving spouse.

It could also be useful in the case of co-habitees to protect their respective shares in case they split up.  In that situation, it would be advisable to have a declaration of trust prepared to confirm the respective shares of the joint owners.

For more information please contact any member of our Probate team; Humphrey MartenJane Dwyer, Jennifer Beaujeux, Jeremy Holding.

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