The majority of homes in the UK today are owned as ‘Joint Tenancy’. This means that when a partner dies their share of the property automatically passes to their partner by the Will.
The use of a Severance document changes the definition of the tenancy of the property from ‘Joint Tenants’ to ‘Tenants in Common’. Your home is still owned by you both, however its’ value is now split into two distinct and separate halves.
On the death of the first partner the trustees (remaining partner) can now choose if they so wish to place half the value of the property in trust for the children through the ‘Will Trust’. The potential benefit is half the value of your home can pass directly to your children and is therefore a potential saving in Inheritance Tax.
Where land is registered it is essential to protect the interests of both parties, by asking for a restriction to be placed on the title at the land registry. If one party dies, and the other party seeks to sell the house, a purchaser must then make sure that arrangements are made to respect the interests of both parties. A restriction is best entered with the consent of both parties, and the form asks for this.
The price includes:
- drafting the Notice of Severance
- drafting the application for a Restriction
- land registry fee of £40
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