Whether you are contemplating separating from your partner or getting divorced, you should consider the consequences of what will happen to your share of the equity in your property.
Whilst you may not have figured out how you will divide your assets amongst you, the first step that you should consider taking is to protect your interest in your share of the property.
When purchasing a property, most married couples choose to hold the property equally as joint tenants. This means that they both own 100 per cent of the property. On the death of one, the property passes automatically to the other. This is known as the “rule of survivorship”.
Clearly, if you are contemplating getting divorced or separating, you would not want this to happen. It is a common misconception that once you are divorced, you automatically sever your ties with one another. This is not true. In order to prevent the rule of survivorship to continue, one would have to “sever the joint tenancy” into a tenancy in common.
To hold a property as tenants in common each own a specified share of the property. When one owner dies, their share falls into their Estate and passes in accordance with their Will, or if no Will is made, it passes through the rules of intestacy.
To sever a joint tenancy, a Notice of Severance needs to be served by one owner on the other owner. Once the Notice has been served, the joint tenancy has been severed and there is nothing that the other owner can do to prevent this.
A form then needs sending to the Land Registry. There is no fee payable to the Land Registry for this application. The Land Registry then make a Restriction in the Proprietorship section of the Property Register of the Title document. This will prevent the sale of the property by the other owner without the consent of the other. The restriction itself does not change the ownership from a joint tenancy to a tenancy in common, it merely reflects the change.
There is a greater trend for couples to live together than to marry. More often than not, cohabitees choose to hold a property as tenants in common to reflect the amount of capital invested by each person into the property. There is no scientific calculation in determining the exact percentage each owner should hold but it is common for cohabitees to also enter into a trust deed detailing the amount of capital invested. This is useful as it saves potential problems in the future should the relationship break down.
Finally, it is always advisable to review your Will to ensure that it adequately reflects your true intentions.
View details of Cohen Cramer Solicitors family law department here or for further information, contact Cohen Cramer Solicitors on 0113 244 0597 or visit www.cohencramer.co.uk
Tags: cohabitees, Cohen Cramer Solicitors, getting divorced, joint tenants, Land Registry, Notice of Severance, rule of survivorship, rules of intestacy, sever the joint tenancy, tenancy in common