Joint Tenancy VS Tenants in Common when it comes to Probate

Protecting your partner’s interest in preparation for when you’re gone is a high priority. With expensive care fees becoming more and more of a drain on savings, many couples are now looking into ways to protect their assets. It’s becoming increasingly common for couples to change the way in which they own property. One way to do this is by changing the type of ownership from Joint tenancy to tenants in common. This can help to protect their assets in the future but how does this affect the distribution of your estate?

Joint tenancy

Joint tenancy is the most common way for partners and married couples to own a property. Joint tenants share equal ownership of the property and have the equal, undivided right to keep or dispose of the property. Joint Tenancy also creates a Right of Survivorship. The joint tenants all enjoy the same rights until one owner dies. Under the right of survivorship, when one joint owner passes away their share of the property is automatically inherited by the surviving owner, making them the sole owner of the property. It is important to inform the HM land registry of the death so that they have a current record of the property’s ownership. Due to the Right of survivorship, a property registered as this type of joint ownership will not have to go through probate as long as there is a surviving owner left to inherit.

Tenants in Common

A tenancy in common is when two or more people own a percentage share of a property. An owner’s percentage share of the property is what is counted as part of their estate. This means the one owner’s interest in the property is not affected by another owner’s debts or liabilities. Joint tenancy can be severed to become tenants in common, we see this happening more frequently in order to protect a partner from care home fees. It means that the debtors cannot collect their fees from a partner’s estate, only from the person who held the debt. This means that if one estate has been completely depleted by these fees the other owner’s interests in the property will be protected.

In these cases, it is easy to see why someone would change the way they own a property. However, you should consider how this change can affect the administration of your estate when you pass away. When a property is owned as tenants in common there is no survivorship clause, this means you can pass your percentage of the property to whomever you choose in your will. Depending on who you are leaving your property to, will dictate whether a grant will be needed. If you are leaving your share to the surviving owner a grant may not be required. If you are leaving your share of the property to someone else a grant will need to be obtained.

If as an executor you find yourself unsure of how a property is owned you can check with HM Land registry so that you are prepared when looking for a solicitor. Knowing if you are going to need to apply for probate for the pre-deceased owner could save you money when it comes to negotiating the cost for the extra work.

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