When owing property in British Columbia with one or more other persons, you can own that property either by way of Joint Tenancy or Tenancy in Common with your other co-owners but what exactly does this mean?
1.What is Tenancy-In-Common?
Tenancy-In-Common is a form of co-ownership whereby each person owns an undivided share in the parcel of property. Co-owners can have equal or unequal percentage interests in the property but no individual may claim exclusive possession to any specific part of the property.
Under a Tenancy-In-Common, when one of the co-owners passes away, his or her share in the property does not pass to the other co-owners but rather that deceased person’s share will pass to his or her beneficiaries in accordance with his or her Will or in accordance with the laws governing the distribution of estates of individuals who die without a Will. Tenancy in Common is more often seen when the co-owners are owning the property for commercial purposes and are not related.
2. What is Joint Tenancy?
Joint Tenancy is another form of combined ownership but the unique thing about this form of ownership is that when a co-owner dies then his or her interest is absorbed by the surviving co-owners meaning that if 3 people own a property as joint tenants and 1 of these people dies then the surviving 2 people are the owners. This is called the right of survivorship. Due to this right of survivorship, a property owned under a Joint Tenancy would not form part of the deceased’s owner’s estate and so the terms of the deceased’s Will do not govern the distribution of the deceased’s interest . This type of holding of title is most common between spouses but such a decision ought not be made without considering what is to happen upon the death of a spouse. For example, spouses on their 2nd marriage buying a home may wish to consider their children from a previous relationship ought to receive their interest in the home as opposed to their 2nd spouse.
Accordingly, it is critical to understand the distinction between owing property as Joint Tenants versus Tenants in Common when determining what you wish to happen to your assets after you die, if you or a loved one is in need of advice regarding how you wish your estate to be distributed upon death, consult Vancouver & Burnaby Wills & Estate Planning lawyer Andrew Rebane at Resolutions Law Corporation, Burnaby, British Columbia firstname.lastname@example.org or 778-372-7107.