Joint Tenants or Tenants in Common

There are 2 ways of owning a property* – Joint Tenants (JT) or Tenants in Common (TIC). When a property is bought and registered with the Land Registry, the electronic title deeds will show who the owners of the property are.  We no longer require paper deeds. Properties are often owned as JT.  For example, if a couple (married or co-habiting) buy a house it’s usually as joint tenants (JT).

Why does this matter?

With Joint Tenants, if one partner dies, the other will automatically own the whole property as sole owner.

However, if they opt to jointly own the property as Tenants in Common (TIC), they own a distinct share each so they each can sell or leave their ‘share’ in their will to someone other than each other. This is useful if they have separate children, want to leave their share to different people, or don’t want their share to pass to a future spouse of their partner.   

The problem with this is that it means the property will need to be sold on the first death and the proceeds divided up at that time.  That doesn’t give security to the partner who is left.  This puts many people off making this type of planning. 

Is there something else you can do to protect both your partner and your children?

Yes!  We offer Property Protection Trust Wills.  A new Will is made which includes a Life Interest Benefit in the Will and allows the remaining partner/spouse to have the guaranteed benefit of living in the property, ie., remain in the property for life and treat it as if the whole property is theirs (but not own the other share of capital).  It’s also possible to sell the property to downsize if needed.  Then, on 2nd death the property is divided up according to the wishes of both owners.   At the same time as preparing the Will, we can convert the Property from JT to Tenants in Common.  It’s a fairly standard type of estate planning and costs less than you might think.

*It’s possible to check the property title deeds with the Land Registry for any registered property (for a small fee) to see how the property is owned, although the wording may need some interpretation. 

Case Study

DAVID is widowed and has 2 children – Darren & Daisy
KATE is divorced and has 2 children – Kieron & Kelly

Both have their own house.  They meet and get along well.  After a couple of years, they decide to pool their resources and buy a larger house together where they can all live.  They also talk about getting married

I visit them at their new home and discuss making Wills.  The key concern is how to be fair to everyone.  They opt for Property Protection Wills.  David wants to leave his 50% share of the property to Darren & Daisy.  Kate wants to leave her 50% share of the property to Kieron & Kelly.  The Wills are prepared with a Life Interest Benefit so each partner could continue as normal in the house after the first death, and also a ‘contemplation of marriage clause’ so the Will is not made invalid when they marry.

10 years later David dies, and his share of the property is put into trust for Darren & Daisy whilst Kate continues to live in the property for the remainder of her life.   She updates her Will after a few years to include gifts to grandchildren.  She can’t remove the share of property that David has already left to his children.  On 2nd death, the share in trust is released to Darren & Daisy and Kate’s share is passed on to her children Kieron & Kelly.