Severance Of Tenancy
When couples initially purchase a property, they often do so as joint tenants. In this arrangement, both partners collectively own the entire property, and if one of them passes away, ownership automatically transfers to the surviving owner. However, as circumstances change, this joint tenancy may no longer suit them. Here are some reasons why a joint tenancy might become unsuitable and how it can be addressed:
🌿 Estate Planning and Beneficiaries:
- Joint tenancy comes with the right of survivorship, meaning the property automatically passes to the surviving owner(s) upon an owner’s death.
- If you want to leave your share of the property to someone else (such as a child from a previous relationship), severing the joint tenancy is essential.
- Severance ensures that beneficiaries receive their rightful share without relying solely on the surviving partner’s provisions.
🌿Property Income:
- For rental properties or income-generating assets, severing the joint tenancy allows co-owners to receive income in unequal shares (e.g., 60-40 or 70-30).
- Creating a tenancy in common enables more flexibility in sharing rental income tax-efficiently.
🌿Separation and Divorce:
- In divorce proceedings, severing a joint tenancy prevents an ex-spouse from automatically inheriting the property upon your death.
- It also clarifies each owner’s percentage of ownership interest.
In summary, severing a joint tenancy converts ownership into a tenancy in common, providing more control, flexibility, and alignment with changing circumstances. If your joint tenancy no longer suits your needs, consider discussing severance with legal professionals to ensure your property arrangements align with your preferences.
