One question that a solicitor should always ask clients who are buying properties in joint names is how they wish to hold the property.
There are two ways to hold properties in England and Wales, either as Beneficial Joint Tenants or as Tenants in Common. What do these terms mean though?
If you hold the property as "Beneficial Joint Tenants" it is assumed that the property is held in equal shares by the owners of the property. If one of the parties should die their proportion of the property will automatically pass to the surviving party(ies). This bypasses any Will that has been made as the share in the property will pass outside of the deceased's estate.
If you hold the property as "Tenants in Common" again it is assumed that the Property is held in equal shares unless a separate trust deed is drafted. The fundamental difference between "Tenants in Common" and "Beneficial Joint Tenants" is that in the event of the death of one of the parties, that person's share does not merge or automatically pass to the surviving party, it is dealt with by your Will or, if you don't have a Will, by the Intestacy Rules.
Most married couples choose to hold properties as Beneficial Joint Tenants. Parties usually choose to hold as Tenants in Common if there are tax considerations, business considerations or if co-habitees have contributed differing proportions into a deposit and want this to be reflected in the event of resale.
It is possible to change a Joint Tenancy to Tenants in Common, either without the co-operation of one of the parties (although in these circumstances the property will then be deemed to be held in equal shares) or by agreement. This is called "severing the joint tenancy" a Deed can then be drawn up if the shares are not to be held equally.
Regardless of how parties wish to hold a property we always strongly advise clients that they should draw up Wills. If you hold the Property as Tenants in Common you can dictate what happens to your assets including your share of the Property in the event of death. If you hold the Property as Beneficial Joint Tenants you can dictate what happens to your assets in the event of a worst case scenario occurring, for example both (or all) parties dying.
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