Most home-owning married couples co-own their property in a legally binding contract known as a joint tenancy. Regardless of who has historically funded the property in terms of deposits and mortgage repayments, a joint tenancy means that in the event of the death of one spouse, the surviving person in the marriage automatically inherits sole ownership of the property. However, when a divorcing couple own property together, they need to clarify their position from an inheritance point of view. That’s where the severance of joint tenancy comes in.
Joint Tenancy and Tenancy in Common
In the context of divorce, the severance of joint tenancy is defined as an estranged couple changing property ownership status from a joint tenancy to what is legally known as a tenancy in common. Crucially, this change impacts what happens to the property in the event of an owner’s death.
As joint tenants your rights are as follows:
- You have equal rights in regard to the property.
- Your share of the property is automatically passed to the joint owner if you die, even if you don’t leave a will.
- The law doesn’t allow you to leave your share of your home to someone else in your will.
However, when you inform the Land Registry that you wish to register a change from a joint tenancy to a tenancy in common, the following applies:
- The property is divided into equal shares.
- You don’t automatically inherit your ex-partner’s share in the event of their death.
- You and your former spouse are free to leave your share of the property to whomever you choose in your will.
Why Keep Property After Divorce?
Choosing to own property as tenants in common is a decision you and your ex-spouse may arrive at for reasons including the following:
- Arranging for one parent to continue living in the family home with the children can be a way of preserving stability.
- Your or your former spouse may wish to live alone in what was once the marital home.
- Circumstances may dictate that you both need to live separate lives in the former marital home for a period of time.
- Factors such as the health of the property market, uncertainty about the future and the rigours of the divorce process itself may mean that you agree to delay any decision about selling property.
- You and your ex-spouse may own property that provides you with an income.
The Implications of a Tenancy in Common
If you find yourself living in your former marital home under the terms of a tenancy in common, you will naturally be concerned about what will happen in the event of your ex-spouse dying before you. One popular option, if financially feasible, is to aim towards buying your former partner out. This is often a mutually beneficial solution for both parties, as leaving a share of a property you no longer live in to someone outside of the original arrangement will benefit that person financially, but not without the potential for stress. In situations where one parent still lives in the property with children, retaining the joint tenancy may makes sense if the parent who moves out wishes for continuity for the family in the event of their death. Another option for families is to name children as beneficiaries tenancy in common as this guarantees the home for the family and can also be a tax efficient way of ultimately leaving the entire property to children. It’s also possible for tenants in common to name each other as beneficiaries of each other’s share of a property in their wills, however there is no guarantee that one co-owner will not change their mind in this scenario.
Tenancy in Common and Consent
Ideally, you and your former spouse will arrive at the decision to register as tenants in common as a mutually agreed part of your divorce. However, there is no legal requirement for one joint owner to obtain the consent of the other to register a tenancy in common. If you receive a notice of severance in the post without prior consultation, speak to your family lawyer for advice. Also, if you don’t already have a will and probate solicitor in place, ask your family lawyer to recommend one because as soon as a tenancy in common is registered with the Land Registry, it’s essential to make sure this change is formally implemented in your will.
How Will Joint Tenancy Affect My Divorce Settlement?
Whether your property is owned jointly as joint tenants or tenants in common has no bearing on any decisions made regarding it as part of your divorce. This is because in a divorce all property, whether jointly owned or not, can be treated as marital assets to be divided in a way that a couple, their legal advisers and if necessary, a court agree is fair.
Expert Local Family Law Advice
To discuss severance of joint tenancy or any other aspect of divorce, speak to our expert divorce solicitors.
