Do you own your property as joint tenants or as tenants in common? Depending on the answer to this question, the way your property is dealt with in your Will could be very different.
Where two or more people own a property together, it will be generally held in either one of two ways:
- Joint tenants (or joint proprietors); or
- Tenants in common.
Both forms of ownership have important implications for your Will and can impact your beneficiaries.
Tenants in common
Two or more people can have ownership of a property as tenants in common with each party owning a specific share in the property.
Because you hold your share in the property as an individual party, it means that you can deal with your share separately at any time. Your share can be gifted in your Will or can form part of your residuary estate. It is a distinct and separate interest from the co-owner’s share.
Joint tenants
On the other hand, joint tenancy means that the owners together own the property jointly as one.
Joint tenancy is commonly the method of ownership by spouses and domestic partners.
Owning property as joint tenants means:
- each of you hold equal ownership in the property;
- the right of “survivorship” applies which means that, when you one of you pass away, the ownership of the property is automatically transferred to the survivor; and
- you do not need a Grant of Property to transfer the property to the surviving owner.
Under the rule of survivorship, the deceased’s interest in the property never reaches their estate – it is automatically vested in the survivor and the survivor can be registered on the title as the sole owner.
Because of the right of survivorship, you cannot gift your share in your Will unless you are the sole surviving owner and the property now sits in your name as sole owner.
Property ownership and estate planning
Considering the method of ownership is essential in estate planning because each method will have a different outcome for your beneficiaries.
When taking instructions on your Will, we will ask how you hold any property as the method of ownership will guide us on how to best deal with this asset. By taking the time to get to know you and your circumstances, our Wills and Estates team can assist you in making a tailored Will which deal with your property and other assets in the best way to achieve your wishes. Please contact us for more information on +613 9614 7111 or by email to melbourne@nevettford.com.au.