Owning Property As Joint Tenants vs. Tenants In Common

Do you and your spouse own your own home? You’ll want to know if you own it as “joint tenants” or “tenants in common.” That’s because how you own your home affects what will happen to your share after you die. And if you have children, the differences between the two ownership types are important.

In a joint tenancy, if one person dies, the other person automatically becomes the owner of the whole property. Your wills do not apply to your respective one-half shares. On the other hand, tenants in common each keep their one-half interest in the property. When one person dies, that person’s share goes to his or her heirs as directed in the person’s will.

Real estate, bank accounts, Canada Savings Bonds and even cars can all be jointly owned by two people either as joint tenants or as tenants in common.

Most couples own their homes together as joint tenants. This makes sense if this is your first marriage. Upon the death of one of you, the other will automatically become the sole owner of the house. Then if you have children, the house will probably go to the kids when the last spouse dies (through that person’s will).

In fact, being joint tenants here is a useful estate planning tool, as it reduces the costs involved in probating a will. If your spouse dies, full ownership of the house automatically transfers to you, without forming part of your spouse’s estate to be distributed under their will.

Where joint tenancy often works for first marriages, a tenancy in common is usually the best way for business partners to own property, as each partner will want to leave their respective shares to their own families.

A tenancy in common is also often the best choice for a second marriage, especially if you each have children from a previous relationship. This way, you can each will your half interest in your new home to your children upon your death. Otherwise, what can happen if you’re joint tenants is that one set of kids can be left out in the cold, contrary to what both of you would have intended.

But you’ll still want to have some security. You don’t want to be moving in with your new husband, and then discover that if he dies, his children will have a large say making decisions as new co-owners of the home you have lovingly created.

So each spouse could have a will giving the other a life interest in the home. That way, if your new husband dies, you can stay in the home and use his half share for the rest of your life. Then when you die, his share reverts back to his estate to be distributed to his children.

It can be tricky to know what’s best for any particular situation. Your lawyer can help if you want to know more about property ownership as an effective estate planning tool.

Written by Janice and George Mucalov, LL.B.s with contribution by COBBETT & COTTON. This column provides information only and must not be relied on for legal advice. Please contact COBBETT & COTTON for legal advice concerning your particular case. Names of the parties in reported cases have been changed or removed to protect their identity. Lawyer Janice Mucalov is an award-winning legal writer. “You and the Law” is a registered trade-mark. ©Janice and George Mucalov.

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