The Benefits of Discretionary Trusts

From: The Will Company

Co-ownership of land and property by two or more individuals has some distinct implications. Usually, it may be entirely clear who the owners of a property are, however there are cases where there may be confusion. It is therefore important to understand how co-ownership operates and the implications for co-owners when completing their estate planning.


All joint ownership of land and property is held on a Trust of land. The holders of the legal title (the trustees) of that Trust are those named at the Land Registry. They will hold the property on Trust for those who have the beneficial interest or equity in the property. In the majority of co-ownership cases, it will be that the holders of the legal title at the Land Registry will be holding on Trust for themselves. This may not always be the case and it may be that the owners of the legal title and holders of the equity are not the same. In such a case, there will usually be express terms of the Trust of land in a declaration of Trust or similar document.

Without any evidence to suggest otherwise, the assumption would be that those named at the Land Registry are holding on Trust for themselves.

There are two different ways that joint owners can hold the equity of the property; joint tenants and tenants in common.

Joint Tenancy

In a joint tenancy, co-owners are considered as a single legal entity, collectively owning the property as a whole. This means they share an undivided interest in the entire property rather than having separate shares. One essential characteristic of joint tenancy is the “right of survivorship”. This means that if one of the co-owners passes away, their share automatically transfers to the surviving co-owners, irrespective of any provisions in their Will. The last surviving co-owner eventually becomes the sole owner of the entire property.

Key features of joint tenancy include:

Unity of Possession: Each co-owner has an equal right to possess and enjoy the whole property, and there are no distinct boundaries or divisions between their share.

Unity of Title: The interests of the co-owners must arise from the same document.

Equal Ownership: All co-owners have an equal share in the property, and they cannot possess individual parts of it.

Right of Survivorship: When a joint tenant dies, their share automatically passes to the surviving joint tenant(s), bypassing the process of probate.

Tenancy in Common

In contract, tenancy in common allows co-owners to have distinct, separate shares in the property. Each co-owner’s share can be equal or unequal, depending on the agreement. Unlike joint tenancy, there is no right of survivorship. If one co-owner dies, their share forms part of their estate and will be distributed according to their Will or the rules of intestacy.

Key features of tenancy in common include:

Unity of Possession: Like joint tenancy, all co-owners can occupy and possess the entire property regardless of their individual share.

Individual Ownership Shares: Each co-owner has a specified percentage of ownership, which may be based on their financial contribution.

No Right of Survivorship: When a tenant in common dies, their share is not automatically transferred to the other co-owner(s); it forms part of their estate and is distributed accordingly.

Severance of Joint Tenancy

A joint tenancy can be severed when one or more co-owners wish to convert it into a tenancy in common. This is often done to eliminate the right of survivorship and allow each co-owner to pass on their share through their Will.

Severance can occur, but is not limited to, the following methods:

Mutual Severance: Co-owners can mutually decide together to sever to tenants in common by completing a written mutual severance.

Unilateral Severance: Should not all co-owners agree, this can also be completed unilaterally by some co-owners serving notice to the other co-owners. This notice should be in writing and unambiguous about the desire to sever the joint tenancy.

Conduct: Severance can also occur through the conduct of a co-owner. For example, if a joint tenant sells or transfers their interest in the property to a third party, it will sever the joint tenancy with the remaining co-owners.

Conversion of a Tenancy in Common to Joint Tenancy

A tenancy in common can be converted to a joint tenancy, however, to do this a declaration of Trust would need to be completed.


In conclusion, co-ownership of land offers opportunities for individuals to jointly own property. Understanding the differences between joint tenancy and tenancy in common is essential, as each form carries specific legal consequences. Co-owners must be aware of the characteristics and implications of their chosen form of co-ownership.

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