The difference between joint tenancy and tenants in common

Q: What is the difference between “joint tenancy” and “joint ownership”? Some years ago my husband and I chose to put all of our possessions, including all our investments, into “joint tenancy.” I recently read that this is different from “joint ownership.” At present, our bank and investment accounts seem to under “joint ownership,” but when we looked at the original letter from our lawyer, he uses the term “joint tenancy.” Should this be changed? —Janine M. A: Most property can be owned either personally or jointly. Whether or not you should own property jointly with a spouse or other person depends on your intention. Jointly held property can also be held in two different ways: as joint tenants or as tenants in common. Joint tenancy invokes the right of survivorship, so that on the death of one of the owners, the ownership of an asset passes in equal shares to the surviving owners. Tenants in common, on the other hand, have their share of an asset become part of their estate, with the asset distributed on their death based on their will. Your lawyer’s advice to own property jointly may therefore be a bit unclear. Joint ownership could mean either joint tenancy or tenancy in common. Ask a Planner: Leave your question for Jason Heath » Most spouses own property as joint tenants, so that their respective shares go directly to their surviving spouse on their death. In some situations—like a second marriage—tenancy in common may be more appropriate. This can allow a house, for example, to be willed to the children of the deceased spouse. That said, a situation like this may be complicated, because you may not want your surviving spouse to be mourning your death, but now half their house is owned by your children. So always walk through the estate implications of the ownership structure of your assets. There are tax issues related to joint ownership. Even though you may want to own assets jointly with your spouse for estate planning purposes, simply adding a spouse’s name to an account doesn’t make the account joint for tax purposes. An account should, in theory, be taxed based on the proportionate contributions made by each spouse. So a true joint account for tax purposes should involve equal contributions by each spouse. If an account is fully funded by one spouse, it can still be held jointly, but the contributor spouse should be reporting the income on their tax return. The tax concept of attribution is what causes income from a joint account to be attributed back to the contributing spouse. Adding a spouse as a joint owner on most assets like bank accounts, investment accounts or real estate won’t generally create any immediate tax issues like capital gains. Adding them to other assets, like a private corporation, may however. Regardless, tax advice is always advisable when considering or changing the ownership of assets. In summary, I think you need to clarify your lawyer’s intention for recommending joint ownership of assets and furthermore, whether that should be joint tenancy or tenancy in common. Also, consider the tax implications if you are changing the ownership of any assets to ensure that you are staying compliant for tax purposes. Ask a Planner: Leave your question for Jason Heath » Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto, Ontario. He does not sell any financial products whatsoever.

About Jason Heath, CFP

Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.

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Christina Blanding says:

May 29, 2020 at 9:59 am

my boyfriend is 50% interest whereas the 4 other each hold 12.5%=50% combined. does that give my guy favor in any way over the property put into the trust? also he wants to purchase the house he was born in. and his mom said it in a handwritten codicle giving john increased interest for caring for her without any siblings help.they say its not valid

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Christina Blanding says:

May 29, 2020 at 10:04 am

hes also on a seperate trust where he will be given $ for whatever every 3 months by the fiduciary.
can he get the conservatorship removed and how thank yo0u

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Yo Le says:

December 15, 2020 at 12:40 pm

Can anyone help me….an ex and I bought a house together after separation, as at the time the children and I needed a place to live and coming out of the relationship as a stay at home parent, I didn’t have work history to apply for mortgage, so I asked him to help me go on paper. for the last five years, I have taken care of this mortgage on my own, but now things are ugly and he wants half, the problem is I cant be on this mortgage on my own or have anyone else who I trust or can qualify with me to get rid of his name What other options do I have to secure that this property is a 100% mine? what law or court or forms can I use?

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1. MoneySense Editors says:
  
  December 16, 2020 at 9:22 am
  
  Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.
  
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Shamas Jina says:

February 1, 2021 at 12:11 pm

1. My wife and myself have a joint bank account and also with a stock broker institution in KENYA; Is it safe to assume that the account will be automatically to the surviving spouse.

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Hazel Kennedy says:

March 9, 2021 at 3:05 pm

I own 25% of a family cottage and i would like to add my daughter as joint tenancy so that when I am deceased, my share will go to her.
What should I be aware of or is it just a simple matter of adding her name as joint tenent.
Thx

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1. MoneySense Editors says:
  
  March 11, 2021 at 11:17 am
  
  Thank you for the question. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.
  
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Sivapathsundram says:

June 17, 2022 at 4:15 am

I have a joint account with my wife in a bank. I would like to clarify in the absence of either one of us can the other person continue to operate the account without any hassle and do transactions like depositing and withdrawing as normal without any problem.

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