Should we buy as joint tenants or tenants in common?

Should we buy as joint tenants or tenants in common?

Should we buy as joint tenants or tenants in common?

POSTED BY Pat Cirillo ON 01 Jun 2018

The issue of whether couples should buy property as Joint Tenants or Tenants in Common may appear straightforward, however it’s a decision that can have immense unforeseen ramifications should things go wrong.

As an agent I must stress that as I’m not a solicitor I cannot and will not advise on the subject. Buyers should seek advice from their solicitor from an asset protection and estate planning view. So, the purpose of this article is not to proffer any course of action but simply to raise an awareness.

In brief, as Joint Tenants each person owns and equal share and, in the event, one dies, their share goes to the remaining owner. Whereas in Tenants in Common each owner can own unequal shares which can be sold to anyone else and upon the death of one owner, their share goes to their estate.

Most people simply take the Joint Tenants option because on the surface it looks obvious that if one dies you would simply want their share to go to the remaining partner. Let alone that in the excitement of purchasing particularly if newly partnered with still twinkling stars of love in their eyes, topics such as estate planning are not even on the horizon.

Let’s have a look at a possible scenario however of how situations can arise. A couple buy a property with money that was gifted to them by the parents of one of them. That partner that had the money gifted then dies very shortly afterwards and Joint Tenants, the remaining partner acquires ownership of the entire property. Legally and morally correct, however what if the parents that gifted the money had never approved of their child partner and now resent the fact that this person now has a property which was purchased with their money, albeit gifted away?

Or another outcome, and probably more common than you think, they love their child’s partner as much as their own, however the remaining partner then enters a relationship with someone who turns out to be gold digger that waits just long enough to lay claim to a big chunk of the estate and runs off.
In both cases the parents and in the second the surviving partner of the first couple and any children of that couple, in my opinion are powerless to do anything. Now perhaps a solicitor may say otherwise however I’m sure it’s a place that no one wants to find themselves in.

Its an example where things could have turned out much better if before the original purchase the issue had been faced and considered objectively. It may take time and even considerable cost, particularly where setting up trusts may be an option however the alternative of something going awry under the wrong structure can be financially crippling and heartbreaking.

The issue, of Joint Tenants or Tenants in Common is not simple and things do happen in life
So before purchasing, I would urge people to speak to their solicitor before you buy and consider your options objectively.