Joint assets: how do you own yours?
13 June 2013
Lianne looks at common
misconceptions which arise with jointly owned property and how
people can dispose of their shares, if at all.
A misconception that I often come across with clients is that a
person is free to dispose of their share in a jointly owned asset
upon their death in any way they see fit. In reality, there are
vital distinctions to be drawn between the different methods of
ownership, with the way in which you own an asset in some instances
dictating where it will pass after your death.
Property and land
In a lot of cases, the main residence will make up the bulk of a
person's estate and it is particularly important to be aware of the
two methods of holding a property or land.
Where property or land is held between two or more people as
“joint tenants in equity” or “beneficial joint tenants”, the
co-owners hold the entire asset together. It cannot be
divided into constituent shares and, accordingly, no owner can
dispose of their interest in the property alone. As such, if one of
the owners dies, their share of such property or land passes
automatically to the surviving joint owner(s) on death. This
is known as "survivorship".
Where property or land is held as “tenants in common”, it is
treated as a metaphorical pie (cake, pizza… whichever takes your
fancy) and can be held in equal or unequal shares (slices!). With a
tenancy in common, each owner is capable of disposing of their own
share either during their lifetime or on their death.
It is important to think about how you want to own property and
how you plan to dispose of such property when you pass away.
If property is currently held on a joint tenancy then you are often
able to sever the joint tenancy by serving notice upon your
Assets, aside from property and land, owned by two or more
people are generally held on a joint tenancy and therefore often
pass to the surviving owner(s) on the death of any other owner.
This is an important factor to consider when looking at assets such
as joint bank accounts and jointly owned possessions.
As an asset held on a joint tenancy often automatically passes
or "vests" immediately with the surviving owners upon death, it is
not possible for personal representatives to vary the joint
ownership after death.
However, this is subject to an equitable doctrine known as a
'resulting trust' which states that assets or funds provided by a
party automatically revert to that party's estate on death, unless
there is evidence to the contrary. Such evidence is often
shown by contemporaneous documents at the time when a joint bank
account was opened, for instance.
However, it is safer not to rely on equitable doctrines.
As such, a co-owner who wants an asset currently held on a joint
tenancy to pass elsewhere is best advised to take appropriate steps
during their lifetime such as making a will, severing the joint
tenancy, drawing up a declaration of trust or other appropriate
That way you can have your slice of cake and eat it!
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