SEVERANCE OF TENANCY
REDUCE THE THREAT OF THIRD PARTY ELEMENTS
Without the correct estate planning in place, your estate could pass outside of your chosen beneficiary/s. Fare Share Will will Help organise a Severance of Tenancy and protect your property for the benefit of those you love and 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.
- Tenants in Common means each individual owns a percentage of the property – this is usually 50% each but you can define unequal shares should you wish, for example, if you have put a disproportionate amount of funds into the purchase of the property.
- Normally a application is done mutually by both parties, however this is not necessary as it can be done by one party, as long as the joint owner is notified. This is normally useful in divorce proceedings where there may be 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 Protective Will Property Trust is only effective if the tenancy is severed.
- Where joint owners have contributed unequal funds towards the purchase of a property and the tenancy is severed into defined portions, proceeds of any sale will pass to the right beneficiary under the terms of the owner’s Will.
- If Severance hasn’t taken place and one of you dies, the property automatically transfers to the other owner, severing the tenancy avoids the automatic transfer to the joint owner Your share is then protected for someone other than the joint owner.
- if you have a Severance and a Protective Will Property Trust in place, should you die and the joint owner change their mind about regarding beneficiaries, this does not affect your decision and your beneficiaries are still protected.
- No one likes to think about their spouse re-marrying after they have died. Should this happen any existing Will they had would become void and the new partner would inherit whatever your spouse owned should they predecease them. what you both left for your children or loved ones might be passed 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.