Severance of Tenancy
Reduce the threat of third party elements
Without adequate estate planning your estate could pass outside of your choice of beneficiary. Helping you to organise a Severance of Tenancy is one way WEPC can help you to protect your property for the benefit of those you care about.
What is a Severance of Tenancy?
- Normally, when people buy a property together, they purchase as Joint Tenants, meaning that they both own the whole of the property. When a Severance of Tenancy occurs, they become Tenants in Common instead.
- Becoming Tenants in Common means you each own a percentage of the property - usually 50% each but you can define the portions into unequal shares if you wish, for example, if you have put a disproportionate amount of funds into the purchase of the property.
- More often than not the application is done mutually by both parties, however this is not necessary and can be done by one party alone as long as the joint owner is notified. This is useful when divorce proceedings are considered and there is a need to avoid your share of the property transferring automatically to your spouse if you should die before the financial situation is resolved.
What are the benefits of a Severance of Tenancy?
- A Property Protective Trust is only effective if the tenancy is severed.
- If joint owners have contributed unequal funds towards the purchase of a property and the tenancy is severed into defined portions, the proceeds of sale will pass to the right beneficiary under the terms of the owner's Will.
- If a Severance hasn't taken place and one of you dies, the property will automatically transfer to the other owner - severing the tenancy avoids the automatic transfer to the joint owner and your share can be protected for someone other than your partner.
- When there is a Severance and a Property Protective Trust - if you die and your joint owner change their mind about their choice of beneficiaries this will not affect your decision thereby protecting your chosen beneficiaries.
- No one likes to think about their spouse re-marrying or having a new partner after they have died but it could happen and in doing so any existing Will they had would become void. The new partner would inherit whatever your spouse owned should they predecease them, meaning your estate could pass to your spouse's new partner and not your children. Severing a tenancy is the start of you protecting your share of your property for your loved ones.
Property ownership
Many people don't realise that you can own property with other people in different ways. Furthermore, the way you own your property can have a significant impact when writing your Will. There are two main ways of owning property jointly. These are known as Joint Tenants and Tenants in Common.
Joint tenants versus tenants in common explained
If you own your property with someone as Joint Tenants it means that, upon death, the ownership of the property passes to the remaining owners that are alive and it does not pass under the terms of your Will.
However, if you own your property with someone as Tenants in Common, it means that you own a specific share of the property so that, upon death, the share of the property that you own can be included in your Will and go to the beneficiaries you choose.
How do I know if I'm joint tenants or tenants in common?
There are a couple of ways to check this. If the ownership of your property is not registered at the Land Registry, then you will need to inspect the Title Deeds to the property to see how you own it.
Alternatively, if the ownership of the property is registered at the Land Registry, they will have a record of how it is owned. This is something we can check for you as part of using our Will writing service.
Can I change the way I own property?
Yes, that is possible and we can make it easy for you. For example, you may own a property as Joint Tenants but you want to leave your share of the property to someone other than the joint owner. In that case, we can help you change the way you own the property to Tenants in Common. We will prepare all the necessary documentation for you to sign and where necessary deal with the Land Registry for you.
Reasons to change from joint tenants to tenants in common
Changing how you own your property is sometimes required when writing a Will. You may want to leave your share of the property to someone other than the joint owners. There are a number of reasons why you might want to do this, for example, you may want to leave your share of the property outright to someone else or place the property into a Trust.
Leaving shares of property in a Trust is commonly seen where you want to protect against it being used to pay potential care home fees or if you want to allow your spouse/partner to live in your share for their lifetime but, upon their death or subsequent re-marriage, the property passes to your children. These types of arrangements are dealt with through Trust Wills.
