In ancient Egypt, people once believed that their property would accompany them upon death. However, in 21st century Canada, it's no secret that one cannot take their real or personal property with them when they die. A Will indicates who will be the owner of property, what property will be owned, and how property will be owned when it's owned by two or more people.
Property owned by two or more people is typically owned in two ways: (1) joint tenancy or (2) tenants-in-common (also known as tenancy in common). It's important to understand this distinction between joint tenancy and tenancy in common when planning one's estate.
When property is owned by "joint tenancy," whoever survives retains all of the property because they all own all of the property. In other words, when one joint tenant dies, the entire property belongs to the surviving joint tenant(s). Only the last surviving owner, who owns all of the property, can give the property through his or her Will.
If Benjamin, Susan, and Mary own a property together by joint tenancy, then when Benjamin dies, his entire share of the property is not distributed according to his Will but passes to Susan and Mary. Similarly, when Susan dies, her entire share of the property is not distributed according to her Will but passes to Mary. Now that Mary retains the entire property, only then she can distribute the property to others through her Will. This right of survivorship is inherent in joint tenancy and not present when property is owned by tenants-in-common.
On the other hand, when property is owned by two or more people as "tenants-in-common," each person's share in the property is distinct. As a result, because of their respective fractional shares in the property, they must hold title to the property as tenants-in-common. Upon each tenant's death, their share of the property does not belong to the other tenants – but can be distributed according to his or her Will.
For example, Benjamin, Susan, and Mary own a property together by tenancy in common. Each owns an equal third of the property. When Benjamin dies, he can leave his share to his wife; his share does not have to pass to the other co-tenants, Susan and Mary. Similarly, if the property is now owned by Benjamin's wife, Susan, and Mary, then when Mary dies, she can pass her share of the property to whoever is named in her Will, subject to any other laws that may apply.
Further, let's say that Benjamin solely owns a cottage, and his Will states that upon his death, the cottage will equally belong to his two daughters, Susan and Mary, by joint tenancy. Either Susan or Mary can sever unilaterally the joint tenancy, which would cause their ownership interest to transform from joint tenancy into tenancy in common. Subsequently, Susan and Mary can sell their share or pass their share of the cottage according to their Will.
There are, of course, exceptions to the above. You should discuss your particular situation with a lawyer, to see if the above applies to you.
Because of the consequences that flow from owning property through joint tenancy or tenancy in common, one should understand the distinction when planning one's estate.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
