I recently went to a webinar which was about using wills to sever joint tenancies. The topic is much more interesting and much more complex than it might first appear. However, I got the scent of something blog worthy when the presenter referred to the following quote by Deane J in Corin v Patten [1990] HCA 12: “In equity, where good conscience and actual or presumed intention may prevail over common law rights and interests, and tenancy in common is seen as a preferred instrument for the reason that it avoids the gamble of the tontine…”. Tontine? What was this “tontine”?

I was thinking it meant pillows or bedding and was some kind of oblique reference to joint tenants dying in their sleep.

It turns out that a tontine is an investment plan for raising capital which (according to Wikipedia) enables subscribers “…to share the risk of living a long life by combining features of a group annuity with a kind of mortality lottery. …. Each investor pays a sum into the tontine. Each investor then receives annual interest on the capital invested. As each investor dies, his or her share is reallocated among the surviving investors (which increases the annual interest for the survivors). This process continues until the death of the final investor, when the scheme is wound up.”    

Apparently tontines have been used as fundraisers for the construction of public buildings. There is also a variation where the capital devolves to the last survivor. This, of course, has been used as a plot in numerous detective crime fiction stories. It was even the subject of a 1996 episode of The Simpsons where Mr Burns and Grampa Simpson are the last survivors of a tontine to determine ownership of artworks stolen during World War II. Spoiler alert – no, Mr Burns didn’t kill Grampa (despite trying to) and government agents seized the art before either could get it.

So, I’m pleased to have added “tontine” to your vocabulary.

Creative commons acknowledgment for the photograph.


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