Severing the relationship

If a family home is owned jointly, notwithstanding the will of each divorcing spouse, the property will be inherited by the surviving spouse in the event of the other’s death before the property settlement.

However, there is a simple mechanism, namely severance of joint tenancy, which can preserve the asset for the benefit of each party’s estate if either spouse dies during the negotiations of property settlement.

The Argyle Partnership solicitor Nabil Wahhab says planners who do not advise divorcing clients of this mechanism could be found negligent by the courts.

The negligence would apply not to the deceased client, he says, but to the “intended but disappointed beneficiaries, namely the children or some other family member included in the deceased spouse’s will”.

Severance of joint mechanism is a temporary provision, lasting until ownership of assets is crystallised when the property settlement comes through,” according to Wahhab.

“However, the gap between separation and property settlement could last up to three years, often because people invariably take months to see a lawyer.

“People who are intent on divorcing never see their lawyer first — they see their adviser first.”

Wahhab says advisers can protect themselves from a negligence claim by including a detailed file note to say they spoke with the clients on such a date to advise them to implement joint severance.

The file note should be followed up with a short letter to “commiserate with the divorcing clients” and remind them of the need to invoke the severance of joint tenancy.