When couples buy property together there are two ways in which the property can be jointly held, either as ‘joint tenants’ or ‘tenants in common’.
Being tenants in common means each partner owns a specific share of the property. This differs from becoming joint tenants where each partner owns the whole of the property together and neither partner has a specific or identifiable share.
While it’s most common for married couples to have a joint tenancy, it is possible for them to be tenants in common if they choose. Below are some of the reasons why a couple may choose a tenants in common agreement over joint tenancy.
- To ensure loved ones are provided for when you are gone
It is common for couples to have different wishes as to who they want to benefit from their share of the estate when they die, especially people who have children from a previous marriage.
By owning property as tenants in common each partner, through their Will, can leave their share of the property to the people they wish to benefit on their death. This would not be possible if the property was held as joint tenants as on the death of the first partner, the whole property will automatically pass to the surviving partner and will become part of their estate. This will happen regardless of any wishes the deceased may have made and could mean that people they intended to benefit from their estate will not receive anything.
- To protect your interest in the property
It is common for one partner to contribute slightly more than the other when buying a property together. By owning the property as tenants in common, each partner can protect the share they invested in the property in case of any disagreement in the future resulting in the property being sold.
When owning property as tenants in common, it is possible to enter into a declaration of trust. A declaration of trust (also known as a trust deed) is a legally binding agreement which clearly states how much property is owned by each partner. By having a declaration of trust couples can ensure their financial interest is protected in the event of any sale or dispute in the future.
- To protect property from care home fees
Many elderly people are worried that they may have to sell their property to pay for care home fees in the future. Owning your property as tenants in common and writing an appropriate Will have benefits when it comes to being assessed for residential care and can reduce the impact care home fees can have on your estate.
Author Bio: The Co-operative Legal Services can advise on tenancy in common and joint tenancy agreements. Visit The Co-operative Legal Services website for more information.
Co-operative Group Limited
PR Manager Corporate
Tel: 0161 827 5614