Robert Cartmell explores the concept of the two types of joint asset ownership.
The use of trusts created during your lifetime or by Will by estate planning expert Robert Cartmell.
I, Robert Cartmell, having worked in ‘estate planning’ areas of work for over 25 years and a common question that I am often asked is ‘what are the options for owning property jointly?
View the ‘Tenants in Common and Joint Tenants’ video here.
Joint Property ownership
Many people do not realise that there are two main concepts of how property or assets are held ‘jointly’.
Those concepts are “Joint Tenants” and “Tenants in Common”
Joint Tenants
The main principles are
- The concept of ‘survivorship’. On death of a co-owner, the survivor inherits the ownership outright, no matter what is written in the Will of the deceased co-owner.
and
- The concept of equal ownership. Each co-owner owns an equal share in the asset.
Tenants in Common
The main principles are
- The concept of an individual percentage ownership and
- The concept of being able to designate the future destination of ownership of the share (by Will or Intestacy)
Ownership as tenants in common means that each party can have a designated share (and therefore it does not have to be equal).
On the death of a co-owner, the surviving person does not automatically inherit the deceased owner’s share. Such a share passes via the Will (or Intestacy) of the deceased co-owner.
When it is important to review property ownership?
When you are considering making or updating Wills;
When you are reviewing Estate planning – to ensure your children inherit your estate in the optimised way;
When you are reviewing how to protect a vulnerable beneficiary or when you are protecting assets from erosion from 3rd party claims; and
When you are looking at IHT planning arrangements.
Will-Trusts
If you are a couple and considering Will-Trust structures, it will usually be necessary to ensure that jointly owned property is held on a ‘tenants in common’ basis, so that the deceased co-owner’s share can pass via the protection structure of the Will-Trust (rather than automatically to the surviving co-owner).
The key is to take advice at the earliest opportunity and to understand where you stand.
Remember: plan, not panic.
Please visit our estate planning section for more information and do contact us for an initial meeting or discussion.