We receive queries on this subject regularly, so this post is designed to help answer those common questions or misconceptions.
If you hold your property as “Joint Tenants” with another person, you may decide that you want to change the ownership, so it is held as “Tenants in Common” instead. This will then enable you to gift your share of your home to whomever you wish within your Will. It is important for us to add that where the property is held as joint tenants and there is a Life Interest protective trust included in the Will, the Joint Tenancy ownership would need to be severed for the first deceased’s share of the property to be able to enter the protective Will trust.
What is the difference between holding the home as Joint Tenants and Tenants in Common?
Joint Tenancy
If you own your property as Joint Tenants with another person, this means that both owners own 100% of the property, not a specific share for each owner. You have equal rights to the whole property, and if the property is sold you will each be entitled to an equal share of the proceeds.
A Joint Tenancy creates rights of survivorship. The result is that when one owner dies, then the remaining owner(s) will automatically own the whole property. This means that a Joint Tenant cannot gift their interest in the property to anyone other than the co-owner by their Will.
Tenants in Common
If you hold your property as Tenants in Common, you will each have a divided specific share in the property. This is often an equal share, but it is also possible to hold the property in unequal shares. This is an attractive option for people purchasing a property together yet contributing different amounts towards the deposit.
Under a Tenancy in Common, each owner can deal with their share in the property separately, allowing them to gift their share to their own beneficiaries by their Will (e.g. biological children rather than stepchildren). This also opens more opportunities for planning to protect their share of the property by using protective trusts in their Will.
Can a title be severed from Joint Tenants to Tenants in Common?
Yes, it can.
Does the severance have to be mutually agreed between the homeowners?
No. There may be a situation where a home is owned jointly by husband and wife. However, they are now estranged, and one spouse wishes to sever the tenancy so that they may leave their share of the property to their children rather than their estranged spouse. This can be done and is otherwise known as a unilateral severance.
Is it the same process if my home is unregistered?
No, if your home is not registered with HM Land Registry, you can still sever a Joint Tenancy, however a different process is required.
To find out more regarding this subject, please Contact us without fear of consultation fees or obligation.
TRF Wills (TRF) was created by Michael Cotterill in 2005. He is a member of the Society of Will Writers and registered with the Information Commissioner’s Office.