Covid-19: Separated couples and property ownership.

At a time of worldwide uncertainty due to the Covid-19 outbreak, people are reflecting on their individual circumstances and decisions that they have or have not made in respect of their financial arrangements in the event of their death.

One group of people who will need to consider such arrangements are  couples who have separated (either from marriages or from cohabiting relationships). In particular, you should consider the issue of any jointly owned property.

Upon purchasing a property with a partner, your conveyancing solicitor will usually ask you to confirm how you and your partner intend to own the property and your choice will be conveyed to HM Land Registry and noted on the title to the property. The choices usually presented to you consist of:

1. Joint tenants.
2. Tenants in common in equal shares.
3. Tenants in common in unequal shares.

Looking at the options individually:

Joint tenants.

If you elect to hold the property as joint tenants, in the event of your death, your share of the property will automatically pass to the surviving joint owner regardless of whether you have separated from your partner.

Tenants in common in equal shares.

This option means that you and your partner own the property in equal shares but in the event of your death, your share of the property will not automatically pass to the surviving owner. You can elect to leave your share of the property to anyone you chose under your Will (if you have one).

Tenants in common in unequal shares.

This option is available specifically for parties who purchase a property, but one party makes a greater financial contribution than the other. It enables the parties to agree that the property is not owned equally but rather in defined shares reflecting the contributions made by each party. Again, in the event of death, your share of the property will not automatically pass to the surviving owner and you can elect to leave your share of the property to anyone you choose.

The important question for separated couples to consider is ‘if I were to die, would I be content knowing that my share of the jointly owned property will pass to my former partner?’. If the answer is no, there may be steps you can take to ensure that this does not happen.

Firstly, if you and your former partner own the property as tenants in common in equal shares or in unequal shares, you do not need to take any steps to change the tenancy save for ensuring that you have a suitable Will in place directing what should happen to your share of the property upon your death.

If you own your property with your former partner as joint tenants, you may wish to consider severing the joint tenancy. By severing the joint tenancy, you and your former partner will own the property as tenants in common in either equal or unequal shares (which can be set out at the time of severance). You should then make a new Will or amend your existing Will to set out clear instructions as to what should happen with your share of the property upon death.

The process of severing a joint tenancy should be straight-forward and inexpensive. However, it is recommended that you seek legal advice if you wish to sever your tenancy as caution must be taken when defining what shares of the property belong to each party as this could have implications upon your entitlement if you and your former partner had a dispute about ownership in the future.

For many separated couples, at this time of uncertainty, taking steps to sever a joint tenancy will provide them with peace of mind knowing that their share of any jointly owned assets will be inherited by their chosen beneficiaries rather than their former partner.

If you have any questions about your specific circumstances or would like specific advice on severing a tenancy, please contact the Family Team at IBB Solicitors in absolute confidence on 03456 381381. Alternatively, email us at familylaw@ibblaw.co.uk.