You are probably reading this after receiving a report from us on your new proposed purchase. We will have asked you to think about how you wish to hold the property. You may know that there are two ways the equity in the property can be held jointly - "joint tenants" or "tenants in common". The terms can be somewhat confusing as they have nothing to do with either tenancies or renting the property. If you decide to own the shared property as joint tenants you will not have individual shares and if one of you dies the survivor will automatically become the outright owner (even if the deceased left a Will with contrary intentions). If you decide to own the shared property as tenants in common you will each own individual shares in its value and those shares will then form part of your respective estates following your death. You can leave your share in the property by Will to anyone you wish and if you do not make a Will then your share will be dealt with under the rules of intestacy. You could of course leave your share to each other or do so subject to conditions. Husbands and wives frequently choose to own their shared property as joint tenants (unless they want to provide scope for making tax planning measures or there is another circumstance which dictates that they should hold it differently, for instance where one or both spouses have children from a former relationship to whom they wish to leave their share in the value of the property). In most other circumstances where property is shared it will be held by the co-owners as tenants in common. If it is your wish to own your shared property as tenants in common we will draw up a Declaration of Trust setting out the percentage shares in which you are to hold the property, (this needs to be done to protect both parties even if the division is to be 50/50). If one of joint owners will contribute more money on the purchase of the joint property then this should be protected (as far as it can be when investing in property) by that person being entitled to receive a higher percentage share of the value in the property.
It is important to remember that there is little point in taking the trouble to own your shared property as tenants in common if you don’t also make a Will dealing with how you wish your share to be dealt with in the event of your death. It is also possible to use a Will to fine-tune arrangements for occupation of a formerly joint property, for example, if the survivor is not to inherit, provisions in a properly made Will could allow the survivor to remain in the property and the deceased’s share in it to pass only following the survivor’s death or vacation of the property.
We appreciate that all this talk of death may seem morbid but it really is better to have everything set out should anything untoward happen.The joint tenants/tenants in common concepts can be difficult to grasp. If you need any further information please do not hesitate to contact the person dealing with your case.
