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Understanding Property Ownership and Your Will

When it comes to planning your estate, how you hold your property can significantly impact your Will and the administration of your estate after you pass. Let's delve into the two primary ways you can hold property with your partner: as joint tenants or as tenants in common. Understanding these distinctions is crucial for effective estate planning.

Joint Tenancy

Joint tenancy means that the property is owned as a single entity by all parties involved, which can be up to four people. One key feature of joint tenancy is the principle of survivorship. This means that when one owner dies, the entire property automatically passes to the surviving owner(s). It's a straightforward approach but comes with some limitations. Notably, you cannot leave the property to someone else in your will, as it will automatically transfer to the surviving joint tenant(s).

Tenancy in Common

In contrast, tenancy in common allows each owner to hold a distinct share of the property, which can vary in size. This ownership structure offers more flexibility and control over your share of the property. If you hold your property as tenants in common, you can leave your share to someone in your will. This setup can be particularly beneficial for several reasons:

Advantages of Tenants in Common

1. Protection of Your Share: Upon your death, your share is protected and cannot be touched by the local authority, even if the surviving partner needs to enter a care home. The local authority can only assess care fees based on your partner's share, ensuring that your share remains protected for your children or other beneficiaries.

2. Benefit for Children from Previous Relationships: If you have children from a previous relationship, tenancy in common allows your current partner to live in the property for life while ensuring your children can inherit your share. This provides security for both your partner and your children.

Making the Change

If you currently own your property as joint tenants and wish to change to tenants in common, we can assist with this process. This involves a severance of joint tenancy, which will convert your ownership to tenants in common. Following this change, we can then discuss the option of drafting your Will to include a property trust to reflect the new ownership structure, ensure that your partner can remain living in the property after you die but ultimately ensure that your chosen beneficiaries inherit when the time comes. This type of trust can be flexible and accommodate situations such as moving to a new home, seamlessly transferring to the new property.

Get in Touch

Understanding the nuances of property ownership can be complex, but making informed decisions now can provide significant benefits and peace of mind for the future. If you would like to discuss your options and how they align with your estate planning goals, please reach out. We are here to help and provide any additional information you may need.