Severance of Tenancy

The way the property is owned is fundamental to achieving a person's estate planning objectives and to preserving wealth. It is a key point upon which most estate planning is created.

Any property held jointly, with another, does not form part of the deceased's estate if held under a joint tenancy.

There are two ways in which two, or more people can own property in England & Wales.

One way of owning property is as joint tenants. Then, following the death of the first of the joint owners, the asset passes under the Law of Survivorship to the surviving joint owner (or owners if more than two joint owners). This happens automatically. Therefore all jointly owned assets, including property, cannot be passed to someone else other than the joint owner under a Will. This happens also under the Laws of Intestacy (the rules that apply if there is no Will). The Intestacy rules will almost certainly not match what a person's estate planning objectives might want to be.

The other way of owning property in England & Wales is as Tenants-in-Common (“TIC”). This is where each joint owner owns a specific proportion of the property (usually 50% each) but the total always adding up to 100%. Once you own a specific share of the property that asset can then be passed under the terms of your Will. Steps can then be taken to protect and preserve the wealth that has been created and can then be left to your beneficiaries.

We offer full advice and recommendation in respect of which method is appropriate.