What Happens When a 'Tenants in Common' Property Owner Passes Away?

INTRODUCTION

As we've explored in previous articles on Joint Tenants and Tenants in Common, there are significant inheritance implications when co-owning a property. Understanding these implications is crucial for effective estate planning.

This article outlines what happens when a Tenants in Common property owner passes away and explores the options available in such situations.

IMPLICATIONS OF A 'TENANTS IN COMMON' OWNER'S DEATH

As explored in the article "Why Would I Convert My Property Ownership from Joint Tenants to Tenants in Common?" shifting to Tenants in Common allows a distinct advantage.

It allows joint property owners to control the distribution of their property share according to their wishes as outlined in their Will. It can then be distributed according to their Will or intestacy rules.

This arrangement differs from Joint Tenancy, where property passes to the surviving co-owners under the "right of survivorship."

If the deceased co-owner has not explicitly stated that they wish for their property share to be passed to their partner when they pass away, the surviving partner will be confronted with some crucial decisions.

They will have to choose between buying out the deceased person's share of the property or selling it so that the deceased person's share can pass to their Estate.

However, there are ways around this:

• The Right to Reside: The property owner can provide their partner with a "right to reside" for a specific period after they pass away, say six months or a year. This arrangement will give them sufficient time to decide on a course of action and make appropriate arrangements.

• Cohabitation Agreement: This type of agreement is often a good solution in such cases since it provides the surviving partner with clear guidelines and arrangements. It also reduces any uncertainty and the potential for conflict and provides peace of mind during a difficult time.

Both these options provide the framework for ensuring the surviving partner is sufficiently provided for, and the deceased individual's wishes are respected.

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