Understanding Tenants in Common vs Joint Tenancy: The Impacts on Conveyancing and Estate Planning

Property ownership can seem complicated, but knowing the difference between tenants in common and joint tenancy is vital for buyers and sellers alike. These ownership structures not only affect how property is held, but they also play a significant role in conveyancing and estate planning, especially regarding wills and probate. This blog post will clarify the differences between these two ownership types and how they can impact your property journey.

What is Joint Tenancy?

Under joint tenancy, two or more people own a property together equally, and the key feature is the right of survivorship. This means that if one owner dies, their share automatically passes to the surviving owner(s), regardless of what the deceased’s will says. For example, married couples often select joint tenancy because it ensures that the surviving spouse retains complete ownership on the death of the first.

Although this may seem convenient, it removes control from the individual owner. The deceased cannot leave their share to children, relatives, or anyone else, even if that was their wish. For blended families, unmarried partners, or those wanting to leave an inheritance to someone other than the co-owner, joint tenancy can create unintended and unfair outcomes.

For example, if a couple owns a property as joint tenants and one partner dies, the surviving partner automatically inherits the whole property, even if the deceased’s will intended part of the share to go to their children.

Additionally, joint tenancy can complicate matters in cases of separation or divorce. If ownership is not formally changed, an ex-partner could unintentionally inherit the entire property upon death.

What is Tenants in Common?

Tenants in common allows two or more people to own distinct shares in a property, these can be equal or unequal (for example, 50/50 or 70/30). This structure provides each co-owner with independent control over their share, allowing them to determine who inherits it through their will.

If one owner dies, their share becomes part of their estate and is distributed according to their wishes, not automatically passed to the surviving owner. This ensures that each person’s investment and intentions are protected.

Tenancy in common is especially valuable for:

• Blended families, where individuals may wish to provide for children from previous relationships.

• Friends, unmarried partners or business partners purchasing property together.

• Investors contributing unequal amounts and wanting ownership to reflect that.

  
  

This structure promotes transparency, fairness, and long-term planning, giving each owner true control over their portion of the property.

Impacts on Conveyancing

When buying as tenants in common, a declaration of trust can be drawn up to outline each owner’s share and protect everyone’s interests. This document ensures clarity about ownership proportions and responsibilities from the outset.

While this adds a step to the conveyancing process, it provides long-term peace of mind and helps avoid disputes later. The ownership arrangement also makes it easier to transfer or sell individual shares if circumstances change.

Effects on Wills and Probate

Tenancy in common plays a key role in estate planning. Because each share forms part of the individual’s estate, it can be left to any beneficiary, offering true flexibility in passing on wealth.

This is particularly beneficial for families who wish to ensure their children or loved ones inherit their share of the property, rather than it passing automatically to a co-owner. It also allows for specialised estate-planning strategies, such as placing the property share in trust for dependents or loved ones.

In contrast, joint tenancy removes this freedom. The right of survivorship means your share passes to the surviving co-owner automatically, regardless of your intentions or will. This can lead to unintended disinheritance of family members or beneficiaries.

Choosing the Right Structure

Selecting between tenants in common and joint tenancy requires thoughtful consideration of your personal relationships and future plans.

If you purchase property with a partner who plans to live there permanently, joint tenancy might be better for ensuring the surviving partner retains ownership. However, if you invest together with friends or business partners, choosing tenants in common might help each party maintain control over their investment and future decisions.

Consider how you foresee using the property. Will it be a long-term residence, or do you plan to sell it in a few years? Knowing your long-term intentions can help guide your decision.

Before purchasing a property, it’s important to discuss your goals with a solicitor who can advise on ownership structures, draft a declaration of trust if needed, and ensure your will aligns with your chosen arrangement.

Final Thoughts

Grasping the differences between tenants in common and joint tenancy is crucial for anyone involved in property ownership, from buyers to sellers. Each ownership type carries implications for both conveyancing and estate planning, especially in terms of wills and probate.

Considering these implications helps individuals make well-informed choices that align with their unique circumstances and future needs. Seeking advice from a legal professional can provide essential guidance to navigate these complex issues, ensuring that property ownership aligns with all parties' interests.

While joint tenancy is often seen as the “default” choice, tenancy in common provides far greater flexibility, control, and estate-planning advantages, making it a more suitable option for many modern families, investors, and co-owners.

Whether you opt for tenants in common or joint tenancy, understanding the details of each choice can empower you to manage the complexities of property ownership and estate planning effectively.

Our team is here to help you navigate which option is best for you.

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