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Joint Tenants or Tenants in Common? The Difference Can Be All Important

Couples generally either own their homes as joint tenants or as tenants in common. The distinction between the two may not be widely understood but, as a High Court ruling in an inheritance case showed, it can matter very much indeed.

The case concerned a married couple who made mirror wills which, in broad terms, were intended to ensure that when the first of them died, their jointly owned home could continue to be occupied by the survivor. Following the death of the second spouse, the intention was that the property would pass equally to their four sons.

Following the wife's death, however, the husband made a fresh will by which he bequeathed 75 per cent of his estate to one of his sons and the remainder to the other three. In those circumstances, an issue arose as to whether the husband owned the whole of the house when he died at the age of 92 or only half of it.

The house having subsequently been sold for £500,000, the answer to that question was of great significance to the value of the respective inheritances of their surviving three sons and the heirs of the fourth, who died prior to his father. The issue hinged on whether the couple together owned the whole of the property as joint tenants, or in equal but separate parts as beneficial tenants in common.

If the former, ownership of the whole property passed to the husband by right of survivorship on the wife's death and was his to bequeath in his will. If the latter, the wife's half share formed part of her estate on her death and, subject to the husband's life interest, passed equally to the four sons in accordance with her own will.

Ruling on the matter, the Court noted that, when the couple purchased the house in the 1980s, the conveyance made no mention of their respective beneficial interests. As a matter of law, it was nevertheless presumed that, at that stage, they owned legal title to the property for themselves as beneficial joint tenants.

However, the Court found on the evidence that, prior to the wife's death, the couple had probably signed a document that severed the joint tenancy, converting it into a tenancy in common. The fact that no such document had been found after their deaths was not decisive. It would have been a single sheet of paper that could easily have been misfiled or even accidentally destroyed.

Even had there been no such document, the Court found on the evidence that they had in fact agreed to sever the joint tenancy. Alternatively, their course of conduct, in particular the making of the mirror wills, made it probable that they intended to hold the property as beneficial tenants in common. The couple's estates would be distributed in accordance with the Court's ruling.

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