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Legal News | 23.05.24

What’s yours is mine… or is it?

If two or more people own a property, they will own it under either a joint tenancy or a tenancy in common.  But what do these concepts mean?  Although the terminology is similar, the effects are very different.

Under a joint tenancy, the co-owners do not have distinct shares in the property. Instead, all the co-owners are equally entitled to the whole property. On the death of any one co-owner, their interest in the property passes to the surviving co-owner(s) automatically. This is known as the “right of survivorship”. If a co-owner purports to give their interest in the property to someone else in their Will, the gift may be ineffective.

Conversely, under a tenancy in common, the co-owners do have distinct shares in the property and a co-owner can give their interest in the property to someone else in their Will.

When deciding whether to own a property under a joint tenancy or a tenancy in common, co-owners may be influenced by several factors, for example, taxation or wider estate planning.

A joint tenancy can be converted to a tenancy in common by one co-owner serving notice on the other co-owners. Similarly, a tenancy in common can be converted to a joint tenancy by the co-owners executing a declaration of trust.

 

 

Posted By Our Wills, Tax, Trusts & Probate Team