Sunday, June 6, 2010

Er, what is 'joint tenants'?

Where do you see this?

In estate planning and home ownership articles.

What does this mean?

Homeowners have two ways to specify how they share a property - as joint tenants or tenants-in-common.

When a couple hold a property under joint tenancy, ownership goes to the surviving party when one owner dies. If, say, the wife dies first, the property will belong solely to the husband.

But if the couple holds the property as tenants-in-common, their shares will go to their respective estates on their deaths.

Why is it important?

It is important to be clear on the holding status of your property as it will have a bearing on what happens to it when one owner dies.

This is especially so if one party has paid a larger share in buying a property and wants to have a bigger say on who should benefit from it when he dies.

Let's assume you paid more for your matrimonial home and it was bought in joint tenancy with your spouse. You discover he has an affair and file for a divorce.

It may be prudent at this point to change the holding status to that of a tenants-in-common so that you can will your share of the property to your children. If you fail to do so and you die before the property is split, ownership will go completely to your spouse, even if your will states otherwise.

So you want to use the term. Just say...

'My apartment is held by my sister and I as joint tenants. So if I should die first, she will get the entire property.'

Source: Sunday Times, 6 Jun 2010

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