Purchasing a house is an incredibly exciting milestone, but before the keys change hands, there is a crucial legal decision to make. When you are obtaining an asset with someone else, whether through a purchase or simply inheritance, it is extremely important to understand exactly how that property is held.
In this post, I break down the critical differences between a Joint Tenancy and a Tenancy in Common, so you can make the right choice for your investment and your family’s future
Joint Tenancy: The “Survivor Takes All” Approach
When you hold property as Joint Tenants, you and your co-owner own the entire property together as a single legal entity. You do not own distinct “shares” (like 50/50); you both own 100% of the whole.
The most crucial feature of a Joint Tenancy is The Right of Survivorship. If one owner passes away, their interest in the property automatically transfers to the surviving owner(s).
If the property is left in a Will but one of the joint tenants to someone else, the gift fails due to the right of survivorship, as a Joint Tenant cannot leave their “share” of the property to someone else in their Will. The property bypasses the probate process entirely and goes straight to the survivor.
Married couples or long-term life partners who intend for the surviving partner to inherit the family home automatically and without the hassle of going through probate are the persons who usually choose to hold their property as Joint Tenants. However, there are many instances when estate planning in which a Joint Tenancy is very beneficial.
Understand how to simplify Probate and Estate Planning in Trinidad & Tobago.
Tenancy in Common: The “Distinct Shares” Approach
If you hold property as Tenants in Common, each owner holds a distinct, separate legal share of the property. These shares do not have to be equal, one person could own 70% while the other owns 30%, usually reflecting their financial contribution to the purchase.
There is absolutely no Right of Survivorship with a Tenancy in Common. Therefore, if a Tenant in Common passes away, their share does not automatically go to the surviving co-owner. Instead, it becomes part of their estate.
Therefore, this share of the property is controlled by your will. Your specific share of the property will be distributed according to your Will (or the laws of intestacy if you die without one). You can leave your share to your children, a trust, or anyone else.
Read more on the importance of hiring an experienced lawyer for will in Trinidad.
Business partners, friends buying investment property, siblings inheriting real estate, or blended families where an owner wants to ensure their specific children inherit their share of the property, are the persons who usually chose to hold their property as Tenants in Common.
So, Can You Change Your Mind?
Yes. If you are currently in a Joint Tenancy but circumstances change (such as a divorce or a shift in estate planning goals), you can “sever” the joint tenancy. This legal process converts the ownership into a Tenancy in Common, allowing you to leave your share to someone else in your Will. This process must be done by an attorney and a Deed will be prepared to reflect the change
Read more on deed-related legal services including Conveyance, Assignments and Assent.
How you hold your title is just as important as the property you are buying.
It directly impacts your estate planning and your family’s future. Always discuss your long-term goals with your conveyancing attorney so the deed can be drafted to protect your exact intentions.
