SEVERANCE OF TENANCY FAQs
SEVERANCE OF TENANCY
Ensure Your Estate Planning and Property Protection with Kang Asset Management
Without proper estate planning, the distribution of your estate may not align with your intended beneficiaries. Kang Asset Management can assist you in organizing a Severance of Tenancy, a crucial step in safeguarding your property for the benefit of your loved ones.
A Severance of Tenancy is a legal process that allows Joint Tenants to change their property ownership status to Tenants In Common.
Why is Severance of Tenancy Important in Estate Planning?
If you co-own a property, a severance of tenancy is essential for most estate planning purposes. Whether you have established trusts or created a will, a severance of tenancy is required.
As Joint Tenants, also known as "Beneficial Joint Tenants":
- You have equal rights to the entire property.
- If you pass away, the property automatically transfers to the other owners.
- You cannot allocate your ownership of the property through your will.
Tenants in Common:
As Tenants in Common:
- You can own different shares of the property.
- If you pass away, the property does not automatically transfer to the other owners.
- You can allocate your share of the property through your will.
Severing the Tenancy of a Property:
There are several methods to sever the tenancy of a property. It can be done mutually by the co-owners or through a non-mutual severance where not all owners need to provide consent. An unequal severance of tenancy is also possible, allowing the property to be held in unequal shares.
Benefits of Severing a Tenancy:
Severing the tenancy provides numerous benefits, including:
- Ensuring the validity of your will: A severance of tenancy ensures that your share of the property is allocated according to your will or trust. Without it, your share would automatically pass to the surviving co-owners under the Right of Survivorship.
- Control and flexibility: By severing the tenancy, you gain full control over your share of the property, enabling you to sell or gift it as desired. This offers greater flexibility compared to jointly owned property.
- No additional charges: Currently, the HM Land Registry does not impose a fee for registering a severance of tenancy, eliminating any extra costs associated with this process.
Contact Kang Asset Management:
If you have received a Notice of Severance or would like to discuss changing property ownership, please contact us. We specialize in handling the formalities involved in these matters.
How can a Severance of Tenancy reduce the threat of third-party elements?
By organizing a Severance of Tenancy, Kang Asset Management can help protect your property and ensure it passes to the intended beneficiaries of your choice, reducing the risk of third-party interference.
What is a Severance of Tenancy?
- Typically, when individuals purchase a property together, they become Joint Tenants, meaning they both own the entire property. A Severance of Tenancy converts this joint ownership to Tenants in Common.
- As Tenants in Common, each owner holds a percentage of the property, usually 50% each, although unequal shares can be defined if desired, especially when contributions to the property purchase differ.
- The severance can be initiated mutually or by one party alone, with the joint owner being notified. This is particularly useful in divorce proceedings, preventing the automatic transfer of your share to your spouse if you pass away before resolving financial matters.
What are the benefits of a Severance of Tenancy?
- A Severance of Tenancy is a prerequisite for the effectiveness of a Protective Will Property Trust.
- If joint owners have contributed unequal funds towards the property purchase, severing the tenancy into defined portions ensures that the proceeds of the sale go
to the appropriate beneficiary according to the owner's will.
- Without severance, if one owner dies, the property automatically transfers to the surviving joint owner. Severing the tenancy avoids this automatic transfer, allowing your share to be protected by someone other than your partner.
- When a Severance and a Protective Will Property Trust are in place, any change in beneficiary choice made by your joint owner after your passing will not affect your decision, safeguarding your chosen beneficiaries.
- Protecting your share of the property for your loved ones becomes crucial in the unfortunate event of your spouse remarrying after your death. Severing the tenancy is the initial step in securing your estate for your children, ensuring it doesn't pass to your spouse's new partner.
Choose Kang Asset Management for expert guidance in protecting your property and estate for future generations.
Trust is an arrangement wherein a trustee holds assets as the nominal owner for the benefit of one or more beneficiaries. In essence, trusts are legal structures that facilitate the controlled holding or transfer of assets between individuals.
Are you seeking to safeguard your assets and secure the future of your loved ones? Our team of trust lawyers specializes in asset protection, providing you with peace of mind. With extensive expertise in trust administration, we ensure your assets are effectively managed.
Trusts are commonly utilized to protect assets for vulnerable or young beneficiaries, as well as to optimize tax savings. Our clients range from property developers and high-net-worth business owners to parents of disabled children, all seeking trust advice. We offer guidance on both lifetimes and will trust, and our services also encompass ongoing trust administration on behalf of trustees.
Lifetime trusts offer you the ability to securely and tax-efficiently set aside assets at any time during your lifetime.
Despite the misconception that trusts primarily serve tax-saving purposes, there are various types of trusts, each serving different objectives, particularly in safeguarding assets for family members and loved ones. While considering tax efficiency, it is crucial to structure matters appropriately, and our professionals are equipped to provide expert guidance in this regard.
What is the cost of establishing a trust?
We offer trust creation starting from £500.
Initiate your trust online
Schedule a call to discuss your options, including the possibility of a home visit.
(Additional charges may apply for tailored services.)
1. What are the reasons for setting up trusts?
- Holding assets on behalf of minor children until they reach an appropriate age to inherit.
- Providing for a spouse while ultimately safeguarding assets for your children.
- Preserving funds for vulnerable beneficiaries.
- Financing grandchildren's education expenses.
- Protect assets against claims stemming from divorce or bankruptcy involving children.
- Shielding assets from care fees imposed on a loved one.
- Ensuring the continuation of means-tested benefits.
- Mitigating inheritance tax liabilities.
2. What are the popular types of trusts?
- Age-contingent Trust
- Bereaved Minors' Trust
- Bare Trusts
- Bloodline Trust
- Children's Trust / Grandchildren's Trust
- Discretionary Trust
- Disabled Persons' Trust
- Home Protection Trust / Trusts of Land
- Lifetime Trust
- Life Interest Trust
- Nil Rate Band Trust
- Will Trust