Joint ownership of assets

There are two ways to own assets jointly:

  1. Beneficial joint tenants

The nature of this ownership means that the asset is held equally between the parties.
On the death of one joint owner the half share of the asset will pass automatically to the survivor.
The share of the asset cannot be disposed of anywhere else through the terms of a will.
Commonly a house will be owned in this manner and it is often necessary to change the nature of the joint ownership to enable the house to form part of the estate planning process.

Changing the ownership to allow more flexible planning does not take away from the owners any beneficial interest. The process is a straightforward signature on a form and registration of the change at the Land Registry.

2. Tenants in Common

If a house is held as tenants in common between joint owners then each owner has the ability to dispose of their share of the asset under the terms of their will or make lifetime planning arrangements around that share of the house.

The shares on which the beneficial ownership of a house may be held can be unequal or equal and the most common example is where two individuals own their home equally but wish to make sure they protect their half share of it.

There are numerous reasons for this;

  1. A wish to provide for children to inherit the share
  2. A wish to avoid the share becoming available to fund care fees
  3. A desire to shelter the share from inheritance tax
  4. Protection from bankruptcy proceedings
  5. Protection from remarriage after death

The structure that is most commonly used to achieve this protection is a discretionary trust in a will.

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