When Should a Joint Tenancy Be Severed?
3 minute read
Knowing when to sever a joint tenancy could make all the difference to your estate planning.
If you own a property with someone else, the way in which you hold that property matters more than most people realise. The legal structure of your co-ownership can have a profound effect on what happens to your home when you die, what happens if your relationship breaks down, and how your estate is ultimately distributed to the people you care about.
One of the most important decisions you can make is whether to hold your property as joint tenants or as tenants in common, and whether, given your personal circumstances, it is time to consider severing a joint tenancy. This guide explains the differences between the two forms of ownership, explores the circumstances in which severance is advisable, and helps you understand your next steps.
Table of Contents
Joint Tenancy and Tenancy in Common: What Is the Difference?
What Is a Joint Tenancy?
A joint tenancy is the most common way that couples and co-owners hold property together in England and Wales. Under a joint tenancy, the co-owners do not each hold a separate, identifiable share in the property. Instead, they collectively own the whole of it together.
The most significant feature of a joint tenancy is the right of survivorship. This means that when one co-owner dies, their interest in the property automatically passes to the surviving co-owner, regardless of anything written in a Will. You cannot leave your interest in a jointly held property to anyone other than the surviving co-owner, because in law you do not hold a distinct share that can be bequeathed.
For many couples who intend to leave everything to one another, this automatic transfer can seem straightforward and even convenient. However, as personal circumstances become more complex, the rigidity of a joint tenancy can become a significant disadvantage.
What Is a Tenancy in Common?
A tenancy in common is a different form of co-ownership in which each owner does hold a distinct, identifiable share of the property. Those shares do not have to be equal. They could be split 50/50, or they could reflect different financial contributions to the purchase, such as 60/40 or any other proportion the owners choose.
Crucially, when a co-owner dies under a tenancy in common, their share does not automatically pass to the other co-owner. Instead, it passes in accordance with the terms of their Will. If they do not have a Will, their share is distributed according to the rules of intestacy. If the co-owners are married or in a civil partnership and there is no Will, the intestacy rules may still result in the surviving spouse inheriting the share, but this is not guaranteed, particularly where there are children from the relationship or a previous one.
A tenancy in common therefore gives each co-owner much greater control over what happens to their share of the property after they die.
How Is a Joint Tenancy Severed?
If you currently hold a property as joint tenants, it is possible to convert that arrangement into a tenancy in common. This process is known as severing the joint tenancy, and it is a straightforward legal step, provided it is done correctly.
Severance is achieved by serving a notice of severance on the other co-owner or co-owners. The notice does not require the consent of the other party. It is a unilateral act, meaning one co-owner can serve it without the agreement of the other. However, the notice must be properly drafted and correctly served to be legally effective. Once served and acknowledged, the joint tenancy is severed and the co-owners become tenants in common, each holding an equal share unless a different arrangement is agreed.
It is also possible to sever a joint tenancy by mutual agreement, by conduct, or in certain other circumstances recognised by law, but a formal written notice is the clearest and most reliable method.
Following severance, you should also consider whether your Will needs to be reviewed or drafted, because your share can now pass under your Will to whomever you choose.
Important: A notice of severance should be carefully drafted and served in accordance with the law. Errors in the process can lead to the severance being challenged or ineffective. Professional assistance is strongly recommended.
When Should You Consider Severing a Joint Tenancy?
A joint tenancy is the default for many property purchases, particularly when a couple buys a home together. However, there are numerous situations in which it may be advisable, or even essential, to sever that joint tenancy and convert your ownership into a tenancy in common. Below we explore the most common and important of those situations.
1. You Want to Leave Your Share to Someone Other Than the Co-Owner
If you would like your share of the property to pass to a person other than your co-owner when you die, severance is the only way to achieve this. Under a joint tenancy, there is no mechanism by which you can leave your interest to a child, a sibling, a friend, or any other beneficiary of your choosing. The right of survivorship overrides any provision you might make in your Will.
By severing the joint tenancy, you create a distinct share that can be left to whomever you wish. This is particularly important where owners are not in a relationship with one another, such as friends or siblings who have purchased a property together, and each has their own family to provide for.
2. You Want to Protect Your Children's Inheritance
This is one of the most common and emotionally important reasons to sever a joint tenancy, and it arises particularly in blended families and second relationships.
If you and your partner hold a property as joint tenants and you die first, your interest passes automatically to your partner. Your partner then owns the entire property. While you may trust your partner to make provision for your children in their own Will, there is no legal obligation on them to do so. They may remarry, change their Will, or simply choose to leave the property to a different set of beneficiaries entirely.
By severing the joint tenancy and putting appropriate Will planning in place, you can ensure that your share is legally protected for your children, while still allowing your partner to continue living in the property. This is usually achieved through the use of a life interest trust in your Will.
3. You Wish to Use a Life Interest Trust in Your Will
A life interest trust (sometimes called a property trust or a right to reside trust) is a well-established estate planning tool that allows you to provide a partner with the right to live in your home for the rest of their life, while ensuring that the underlying capital ultimately passes to your chosen beneficiaries, such as your children.
For a life interest trust to work in relation to a jointly owned property, you must first sever the joint tenancy. This is because the trust can only operate over your distinct share of the property, and a joint tenancy does not give you a separate share to place into trust.
Once the joint tenancy is severed and your Will contains the appropriate trust provisions, your partner’s right to remain in the property is protected, but so too is the ultimate destination of your share.
4. There Has Been a Relationship Breakdown or Separation
Where a relationship breaks down and co-owners separate, severance of the joint tenancy becomes an urgent priority. If the joint tenancy is not severed and one co-owner dies before the property has been formally dealt with, the surviving co-owner will automatically inherit the entire property under the right of survivorship, regardless of the wishes of the deceased or any intended divorce settlement.
This can have devastating consequences, particularly where the deceased had children from the relationship or intended for their estate to pass to family members. Severance provides immediate protection by ensuring that each party’s share is legally theirs to deal with as they choose.
If you are going through a separation or divorce, severing the joint tenancy should be one of your earliest legal priorities. Do not delay on the assumption that a divorce settlement will eventually resolve matters.
5. Asset Protection Planning
Holding property as tenants in common after severance can assist with certain forms of asset protection planning. Two scenarios are particularly worth considering.
First, if the surviving co-owner were to become bankrupt after your death, a joint tenancy would mean the entire property (which they now own outright) would be available to creditors. Under a tenancy in common, combined with appropriate Will planning, your share can be structured in a way that reduces this risk.
Second, there are circumstances in which a surviving co-owner may require residential care in later life. Local authorities carry out financial assessments to determine eligibility for care funding. Where a surviving co-owner owns the entire property, its value is typically taken into account. Where appropriate trust planning has been put in place following severance, the position can be more favourable, though this is a complex area and professional advice is essential.
Asset protection planning in relation to care costs is a specialist area. Wise Owl Wills can help you understand what is possible, and will always advise you clearly and honestly about what planning can and cannot achieve within the law.
6. Unequal Contributions to the Purchase Price
When a property is purchased jointly, it is not always the case that each co-owner has contributed equally to the purchase price or the deposit. One party may have contributed significantly more than the other, or one may have received a family gift or inheritance that was used towards the purchase.
A joint tenancy treats both co-owners as collectively owning the whole property, which means it does not reflect any difference in financial contribution. A tenancy in common, on the other hand, allows ownership to be held in shares that reflect the actual contributions of each party. By severing the joint tenancy and documenting the agreed shares in a declaration of trust, you can ensure that the ownership arrangement accurately reflects the financial reality.
7. Greater Flexibility for Estate Planning
More broadly, a tenancy in common offers considerably more flexibility in estate planning. Where each co-owner holds a distinct share, both parties are free to make their own decisions about what happens to that share. This enables more sophisticated tax planning, the use of trusts, and the creation of structured inheritance arrangements that are simply not available under a joint tenancy.
For example, in larger estates, the ability to pass a share of the property directly to children or grandchildren can assist with inheritance tax planning. While the interaction between property ownership and inheritance tax can be complex, the starting point is always to ensure that the ownership structure provides the flexibility to plan effectively.
How Wise Owl Wills Can Help
At Wise Owl Wills, we understand that decisions about property ownership and estate planning can feel complicated and, at times, emotionally charged. Our role is to guide you clearly and calmly through the options available to you, so that you can make well-informed decisions that protect the people and things that matter most.
We can help you in a number of ways. If you are considering severing a joint tenancy, we can advise you on whether severance is appropriate in your circumstances and can draft and arrange the service of the notice of severance on your behalf. We can also review or prepare your Will so that your share of the property passes in exactly the way you intend, whether that is outright to a beneficiary, into a life interest trust, or through any other structure that meets your needs.
We work with clients across England and Wales and offer a professional, personal service. Whether your situation is straightforward or complex, we are here to help.
To find out more or to begin the process, please get in touch with us today. We are always happy to have an initial conversation about your circumstances before you commit to anything.
Frequently Asked Questions
What does severing a joint tenancy mean?
Severing a joint tenancy means converting the way you and your co-owner hold a property from a joint tenancy to a tenancy in common. This gives each co-owner a distinct share of the property that they can leave under their Will, rather than the share automatically passing to the survivor on death.
Do both owners have to agree to sever a joint tenancy?
No. In England and Wales, one co-owner can sever a joint tenancy without the consent of the other by serving a valid notice of severance. However, it is generally advisable to seek professional assistance to ensure the notice is correctly drafted and served.
What happens to a joint tenancy when you separate?
If you separate but do not sever the joint tenancy, the right of survivorship still applies. If one party dies before the property is formally dealt with, the other party automatically inherits the whole property, regardless of the deceased’s wishes or any intended settlement. Severance is strongly recommended as soon as a couple separates.
Can a joint tenancy be severed if one party is abroad or uncontactable?
There are provisions in law for serving a notice of severance even where one party cannot be contacted directly, including service at the property address. A solicitor or will-drafter can advise on the correct procedure in these circumstances.
How long does it take to sever a joint tenancy?
Once a notice of severance has been correctly drafted and served, the severance takes effect immediately. The Land Registry should also be notified so that the title register is updated to reflect the change in ownership structure. This administrative step typically takes a few weeks but does not affect the legal effectiveness of the severance itself.
Do I need a new Will after severing a joint tenancy?
Yes, in most cases. If you have severed a joint tenancy, you now hold a distinct share of the property that can be passed under your Will. If you do not have a Will, or if your existing Will does not address your share of the property, your estate may not be distributed as you intend. It is strongly advisable to review your Will at the same time as severing a joint tenancy.
What is the difference between a joint tenancy and a tenancy in common for tax purposes?
Both joint tenants and tenants in common may be subject to inheritance tax on their share of a property, depending on the overall value of their estate and the reliefs available. However, a tenancy in common can provide greater flexibility for inheritance tax planning, particularly in larger estates, because each co-owner can plan independently for what happens to their share. Professional advice is recommended for estate planning of this nature.
Is a joint tenancy or tenancy in common better for couples?
There is no single right answer. A joint tenancy can suit couples who want simplicity and are happy for the property to pass automatically to the survivor. A tenancy in common is better suited to couples who have children from previous relationships, who have contributed unequally to the purchase, or who wish to use trusts and more structured estate planning. A Will specialist can help you assess which arrangement best fits your personal circumstances.
Disclaimer
This article is intended as general information only and does not constitute legal advice. The information refers to the law of England and Wales. Tax thresholds and legal rules are correct at the time of writing but are subject to change. We recommend that you seek professional advice regarding your own circumstances.
Bio
This article was written by Stephen Rhodes. Stephen was called to the Bar of England and Wales in 1999 and brings over 25 years of in-house experience working with solicitor firms across the Manchester area, with a specialism in Wills and Probate. He now focuses exclusively on will drafting, helping his clients ensure their loved ones are taken care of exactly as they would wish.