What is the Effect of Severing a Joint Tenancy?
There are two ways in which property can be jointly owned – as Joint Tenants or Tenants in Common.
Joint Tenants
If you hold the property as Joint Tenants this means that you each have equal rights to the whole property. If one of you were to die then the property automatically passes to the other under what is called the right of survivorship. This would be the case irrespective of any contrary provision within a Will or under the rules of intestacy. The rules of intestacy determine who your Estate is distributed to if you do not leave a Will.
Tenants in Common
If you hold the property as Tenants in Common the beneficial ownership is in shares and these shares can be equal or unequal. The property does not automatically go to the other owner if one party dies. You can each pass your share of the property in your Will. If you do not have a Will then the property will pass under the rules of intestacy.
Severing a Joint Tenancy
You may not want the whole of the property to pass to the other joint owner. You can sever a Joint Tenancy. Severance is the process by which a Joint Tenancy is converted into a Tenancy in Common. A Joint Tenancy can be severed by serving a Notice on the other joint owner. The consent of the other joint owner is not required to sever the Joint Tenancy.
The Effect of Severing a Joint Tenancy
The effect of severance is to divide the beneficial ownership into shares. The property does not automatically go to the other owner if one party dies. You can each pass your share of the property in your Will. If you are married to the other joint owner and you pass away without having made a Will then your share of the property would still pass to your spouse under the rules of intestacy – it is therefore essential that you make a Will. Our Private Client Department can assist with making a Will.
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Please note the above is for information purposes only and is intended to be a short summary. It should not be treated as a comprehensive guide and should not be acted on without qualified legal advice.