An asset owned by multiple owners (most commonly property) can be held as tenants in common or joint tenants.
What is the difference? Tenants in Common
Each owner holds their individual share of the asset outright
The percentage interest does not need to be equal (i.e. the interest does not have to be 50/50 but the total of all interests must equal 100%)
When a tenant in common dies, the owners’ ownership interest do not change
The deceased owner’s share in the asset passes to the estate and then to the beneficiaries nominated in their will
Probate will need to be obtained to cover the deceased owner’s share of the asset (or letters of administration if died intestate (without a will).
The owners share ownership of the asset equally
Together all owners own 100% - there is no separate interest
When a joint tenant dies, the remaining owners acquire the deceased owner’s share automatically
The deceased owner cannot pass their share of the asset under their will, as it automatically passes to the remaining owners. This means the last living owner is entitled to gift 100% of the asset in their sole discretion.
The deceased owner’s share does not fall under the probate as it automatically passes to the other owner(s).
There are signification estate planning and asset protection consequences for the two ownerships. BHR Papalia can assist you should you need advice in this area.
Reference is made to View Legal flyer dated 1 January 2015