Protecting Your Property through Tenancy in Common

It is a common misconception that your property automatically goes to your spouse or your children when you die. However, there are several reasons why this will not happen so it is vitally important that you put steps in place to protect your property.

How you own your property and why this is important

What worries many of our clients is losing their home to long term care fees. Trying to escape these at the last minute leads to local councils screaming “deliberate deprivation”.  This means that the council will clawback anything you may have given away including cash and property.

A properly constructed Will can ensure a measure of protection, and the small cost involved in making a will could potentially save your estate £1000’s.

If you own your property jointly with another person or people, there are two ways that you might hold the property. You could be either joint tenants or tenants in common. But what are the differences between these two types of property ownership and why do they matter to you? In the context of joint tenancy and tenants in common ‘tenancy’ means ownership and has nothing to do with renting!

Protecting Your Property through Tenancy in Common | North East Funeral Plans

So what are the differences?

Joint Tenancy

If you hold your property as joint tenants with another person this means that both owners own 100% of the property, not a divided share. You have equal rights to the whole property, and if the property is sold you will each be entitled to an equal share of the proceeds.

A joint tenancy creates rights of survivorship. The result is that when one owner dies the remaining owners will automatically own the whole property; remember, they’ve all always owned 100% of it. This means that a joint tenant cannot gift their interest in the property to anyone by their Will.

Tenancy in Common

If you hold your property as tenants in common you will each have a divided share in the property. This is often an equal share, but it is also possible to hold the property in unequal shares. This is an attractive option for people purchasing a property together and contributing different amounts towards the deposit.

Under a tenancy in common, each owner can deal with their share in the property separately, allowing them to gift their share to their own beneficiaries by their Will. This also opens up more opportunities for planning to protect their share of the property by using trusts in their Will.

What do I do now?

If you aren’t sure how you hold your property and you know that your property is registered, your Will Writer can carry out a check of your title deeds to confirm this for you.

If you currently hold your property as joint tenants and would like to change to tenants in common, the process is relatively straight forward.  This is done by completing a notice of severance and sending a form for the Land Registry to add a notice to your title deeds.

If you would like help with protecting your property and ensuring that you have an adequate will in place, please get in touch. We provide a very informative and affordable service with a range of options.

Protecting Your Property through Tenancy in Common | North East Funeral Plans