WHAT IS A SEVERANCE OF JOINT TENANCY, AND WHAT ARE THE USES IN WILL PREPARATION AND ESTATE PLANNING?

Where more than one person owns a property, it is possible to own the same as Joint Tenants or Tenants in Common. The difference between the two types of ownership are that, if you hold as Joint Tenants and one owner passes away, the property would automatically pass to the surviving Joint owners, regardless of what is in someone’s Will. If the property is held as Tenants in Common, it is possible to leave that share of the property by Will.

There are benefits to holding a property as Tenant in Common. Firstly, for care home fee planning so that the share of the property of the person that passes away first does not pass to the surviving joint owner to be used to fund their care fees, but instead passes into a life interest Trust. This type of Trust is created in the Will so that the surviving owner has a right to occupy the property for the rest of their lifetime and downsize using 100% of the proceeds of the property, but ultimately that share of the property is safeguarded for the named beneficiaries in the Will.

Another benefit may be for couples who own a property and who have children from different relationships to safeguard the respective shares for children. Drafting a Will in this way would be beneficial so that the survivor does not inherit the whole property to do with as they please in their own Will, which mitigates the chance that the children of the first to pass away do not receive anything.

Lastly, severing a joint tenancy is beneficial for divorcing couples, so that one spouse can sever the joint tenancy to stop the other one from inheriting the whole property on their death if the divorce has not been finalised.

A Will is essential in all circumstances where the property is held as Tenant in Common, to ensure appropriate safeguards for both the surviving joint owner, and the ultimate Beneficiaries.

A severance of joint tenancy must be done in writing and must be severed by service on the other party. In order to ensure that the severance of joint tenancy is effective legally, we recommend seeking legal advice.

If you require any assistance we have offices across West Yorkshire in Huddersfield, Halifax, Bradford, Guiseley, Leeds City Centre, Morley, Wakefield and Horbury.  We can also provide advice over the telephone or via a video call.  Please get in touch on  0800 015 0340 to arrange an appointment with one of our dedicated Wills experts.