By David Helm
Do you and your spouse own your own home? If you do, you will want to know if you own it as “joint tenants” or “tenants in common.” That’s because how you own your home, will impact what will happen to your interest after you die. If you have children, the difference between the two ownership types is important. This is especially true in the age of blended families.
In a joint tenancy, if one person dies, the other person automatically becomes the owner of the deceased’s interest in the property. Your Will does not have any bearing on your interest if that interest is registered as a joint tenant. On the other hand, if you are registered as a tenant in common each person keeps their undivided interest in the property. When that person dies, that person’s interest goes to his or her heirs as directed in their Will.
Most couples own their homes together as joint tenants. This makes sense if this is your first marriage. Upon the death of one of you, the other will automatically become the sole owner of the property.
In fact, being joint tenants is a useful estate planning tool, as it reduces the costs involved in probating a Will. If your spouse dies, full ownership of your home automatically transfers to you, without forming part of your spouse’s estate to be distributed under their Will.
A tenancy in common is also often the best choice for a second marriage, especially if you each have children from a previous relationship. This way, you can each will your half interest in your home to your children upon your death. Otherwise, what can happen if you’re joint tenants is that one set of kids can be left out in the cold, contrary to what both of you would have intended.
It can be tricky to know what’s best for every particular situation. If you want to know more about property ownership as an effective estate planning tool, contact us today!
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