SEVERING JOINT TENANCY THROUGH WILL
A joint tenant who wishes to transfer his/her interest in a property may have nothing to actually give. In Corin v Patton (1990) 169 CLR (‘Corin’), Mr and Mrs Patton were joint tenants of a property. When Mrs Patton became ill, she decided to sever the joint tenancy and transfer her beneficial interest in the property to her brother to hold on trust for her children.
Although Mrs Patton had signed the transfer deed, she did not have the opportunity to procure the certificate of title and register the memorandum of transfer prior to her passing. The Court decided that Mrs Patton’s intention was insufficient to sever the joint tenancy. Hence, Mr Patton had automatic entitlement to Mrs Patton’s interest in the property (also known as right of survivorship) and Mrs Patton had nothing to give on death.
Deane J in Corin called such a scenario the “gamble of the tontine”. And to prevent this from happening, there are three ways to sever a joint tenancy: Severance by unilateral action, mutual agreement, or by course of dealing that intimates that all interests were treated as tenancy in common.
Severing Joint Tenancy by Unilateral Action
In McNamee v Martin as Financial Manager for John Boden McNamee [2021] NSWSC 568 (‘McNamee’), a joint tenant was able to unilaterally sever the joint tenancy by assigning the property as a debt to herself by way of a deed poll (unlike other deeds, a deed poll requires only one party to enter it).
Severing Joint Tenancy by Mutual Agreement or Dealing Treating Interests as Tenancy in Common
This requires all joint tenants to achieve severance by making mutual wills. For example, two sisters who were joint tenants agreed to make mutual wills whereby the survivor would hold the real estate of the remainder of her life. This means that their ownership would be treated as tenancy in common, severing the joint tenancy (re Wilford’s Estate; Taylor v Taylor (1879) 11 Ch D 267).
In another example, a husband and wife made a joint will whereby each spouse would live in the property after the other’s death, and half of the estate would be given to the wife’s daughter and the other half to the husband’s children. This arrangement granted life estate to the surviving spouse, severing joint tenancy.
Nature of Assets, Practical Solutions and Careful Will Drafting
Considering the wide array of arrangements that joint tenants could make, it is impossible to discuss all the examples in this article. Nonetheless, it is always important to determine the nature of a testator’s assets (land, shares, company, etc) and the way in which they are owned by the testator. This is to assist with raising practical solutions, which can be incorporated in a will, which should be drafted carefully.
In Rose v Tomkins [2017] QCA 157, de facto partners who owned a property as joint tenants wanted each person’s half to be passed to each’s children. One partner (A) made a will granting her partner (B) the right to live in the property, one half of the estate to her children, and the other half to her partner’s children. After A’s death, the Court decided that her will did not give effect to her intention of leaving her interest in the property to her children.
We recommend seeking assistance from a wills & estates specialist if you are considering severing a joint tenancy by way of will.