Severance of Joint Tenancy
Joint Tenancy and Tenancy in Common
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A jointly owned property can be held either as joint tenants or as tenants in common. The form of ownership has important consequences, particularly if a relationship breaks down, or if one of the owners dies.
Joint Tenants (sometimes referred to as beneficial joint tenants)
Where property is held as joint tenants:
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Each owner has equal rights to the whole of the property
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On death, the property automatically passes to the surviving owner(s)
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An individual owner cannot pass their “share” of the property by will
This automatic transfer is known as the right of survivorship.
Tenants in Common
Where property is held as tenants in common:
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Each owner holds a defined share in the property, which may be equal or unequal (for example 50/50, 25/75, etc.)
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On death, an owner’s share does not pass automatically to the other owner(s)
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Each owner’s share forms part of their estate
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An owner may leave their share by will or transfer it into trust during lifetime​
Joint tenants are registered together on the title at the same time and are treated as a single beneficial unit. This is why survivorship operates automatically on death. By contrast, a tenancy in common does not require all co-owners to acquire their interests simultaneously; an interest may be acquired or restructured at a later date.
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"Changing from joint tenants to tenants in common is known as severance of joint tenancy."
Changing the Form of Ownership
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It is possible to change the way property is owned:
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From joint tenants to tenants in common, or vice versa
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From sole ownership to joint tenants or tenants in common
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From joint ownership back to sole ownership
Changing from joint tenants to tenants in common is known as severance of joint tenancy.
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These changes can generally be made at any time, provided the property is owned outright. Where a property is subject to a mortgage, the lender’s consent will usually be required before the form of ownership can be altered.
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Severance of Joint Tenancy in Estate and Long-Term Care Planning
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Severance of joint tenancy is often a foundational step in both estate planning and long-term care planning. This is because joint tenancy prevents an individual owner from controlling what happens to their share of the property on death.
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Once a joint tenancy has been severed and replaced with a tenancy in common, a range of planning options becomes available, including:
1. Will and Trust Planning on First Death
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Severance allows each owner to leave their share of the property under the terms of their will, rather than it passing automatically to the survivor. This makes it possible for a share of the property to pass into a trust on first death, while allowing the surviving owner to continue living in the property.
2. Protection Against Long-Term Care Assessments
In many planning arrangements, severance enables one owner’s share of the property to be placed into a trust on first death. As that share is no longer owned outright by the survivor, it may fall outside their personal means for future care cost assessments, depending on circumstances and structure.
3. Inheritance Tax Planning
Severance allows each owner to use their available inheritance tax allowances more effectively. Without severance, the first death often results in the entire property passing to the survivor, potentially wasting planning opportunities that rely on dividing ownership.
4. Asset Protection for Children or Other Beneficiaries
By severing the joint tenancy, a deceased owner’s share can be directed towards children or other beneficiaries via a trust, rather than passing entirely to the surviving spouse or partner, who may later remarry or change their own estate arrangements.
5. Protection Against Remarriage or Relationship Changes
Severance helps preserve the intended destination of a share of the property if the surviving owner later enters into a new relationship or marriage, ensuring that assets earmarked for children or other beneficiaries are not unintentionally redirected.
6. Flexibility in Later-Life Planning
Severance introduces flexibility by separating ownership interests. This allows future planning decisions to be made independently by each owner, rather than being locked into survivorship rules that may no longer reflect intentions or circumstances.
Summary
Where property is held as joint tenants, severance of the joint tenancy is very often a necessary preliminary step in long-term estate planning. Many commonly used trust-based planning structures rely on the ability to deal separately with each owner’s share of a property, which is not possible while the right of survivorship remains in place.
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