Joint Tenancy vs. Tenants in Common

Both are ways to own property with another person.  What’s the difference?  There are three main differences:

1.  Right of Survivorship.  When one owner predeceases the other, the survivor owns 100% of the property.  This means that the property does not fall into the estate of the deceased owner, and is not distributed to his or her beneficiaries.  For example, if a husband and wife own a home as joint tenants and the husband predeceases the wife, the wife will own become the sole owner of the home, regardless of what is in the husband’s will.

When a property is owned as tenants in common, the interest in the property is distributed as part of the deceased’s estate.  In the above example, the husband’s share of the property would be gifted to the beneficiaries of his estate, as set out in his will.

2.  Percentages of ownership.  As joint tenants, both the husband and the wife in the above example have an equal and undivided right to and interest in the property.  This means they both effectively own 100% of the property, and each of their ownership interests is equal.

Tenants in common own a specific fraction or percentage of property – maybe 50% each, maybe 80% for one and 20% for another, maybe four owners at 25% each.

3.  Ability to sell, or not to sell.  With joint tenants, both owners must agree to sell the property; one owner can block the sale.  For tenants in common, each individual owner may sell his or her respective share of the property.  Note, however, that joint tenancy can be changed to tenants in common at the desire of any of the owners – by way of a court application.

Want to know how this affects your ownership in your home?  Give me a call to discuss it.