Severing Ties: Options for Property Owners Following a Relationship Breakdown

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When a relationship breaks down, it is not unusual for it to take months, even years, before a property settlement agreement is reached.

Whilst parties are attempting to reach agreement, there are actions that can be taken to protect their interest in any property that may be held in joint names. One of those protective actions could be to sever any joint tenancy’s and change the properties to be held as tenants and common.

Joint Tenants v Tenants in Common

If the property is held as joint tenants, if one of the people on title passes away, the benefit of the whole property will pass to the surviving person on title. If a person on title were to sever the joint tenancy and the property was held as tenants in common, if one person on title passes away, 50% of that property passes to the deceased’s person estate and is distributed as per their Will.

Essentially, if the marital home is held as joint tenants and one spouse passes away before an agreement is legally formalised, the property will transfer to surviving spouse. If the joint tenancy is severed and changed to tenants in common, if one party were to pass away before an agreement is finalised, 50% of the value of that property would pass to the deceased spouse’s estate and would mean that the deceased spouse could leave that value to a beneficiary in their Will.

However, if the parties are involved in property proceedings when a spouse passes away, property proceedings can continue where the deceased spouse’s personal representative takes their place. The personal representative is normally the executor of the deceased spouse’s estate.

Procedure for Severing Joint Tenancy

To enable a severance of the joint tenancy, assistance will be required from a solicitor or conveyancer to set up the transfer severing joint tenancy.

Severing joint tenancy only requires one of the people on title’s permission, and requires that the other person on title is notified once the transfer is lodged.

Once it is lodged, there is a period of thirty days for any co-owners to object, if there are no objections, the unilateral severance will be lodged by the Land Registry.

If there is a mortgagee on title, their consent to the severance will be required.

It is important to note that severing a joint tenancy and changing to joint tenants is not reflective of a property settlement, how the property will be dealt with will still need to be negotiated and agreed upon by the parties.

Vacating a Marital Property

It is strongly recommended that a party seek legal advice before vacating a marital property, unless there is an urgent reason to do so.

It can often be an onerous experience for a party to move back into the marital property or recover their personal items from the marital home once it has been vacated.

Updating Estate Documents

It is also prudent to ensure you update your Will, Power of Attorney and Enduring Guardian after a relationship breakdown.

This will ensure that any previous estate documents are revoked and will also include completing revocations of Power of Attorney or Enduring Guardian documents that name an ex-spouse and serving that revocation on them.

If you need assistance severing a joint tenancy or updating your estate documents, please contact our firm to make an appointment with one of our family or estate planning lawyers on (02) 4944 3322.

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