Tenancy and Wills

When purchasing a property jointly you need to decide whether to purchase the property as joint tenants or as tenants in common.

Joint tenants mean you both own an undivided interest in the whole of the property.  In theory each joint tenant owns the whole of the property.  The choice of joint tenancy is usually made by domestic partners.  Upon the death of a joint tenant, the Title can be simply and inexpensively transferred to the survivor by way of lodgement of an Application to Note Death at the Lands Titles Office.  This avoids the need to obtain a Grant of Probate from the Probate Registry until the surviving tenant dies.

Tenants in common mean that you each own a proportion of the property.  This could be a 50/50 ownership or it may be apportioned unequally for example 80% to one person and 20% to the other or owned by more than two people in different proportions. This option is often chosen by business partners or family groups (i.e. 4 siblings owning a holiday home) or by couples who are buying an investment property and wish to offset the losses primarily against one income.  It may also be used where one person has contributed more to the purchase price than the other or by couples with blended families who may wish to distribute their share of the property directly to their children through their Wills.

In terms of distributing real property through a Will you need to ensure that you do not confuse joint tenancy with tenants in common.

In a joint tenancy as outlined above, the interest of the first joint tenant to die passes on his or her death to the surviving joint tenant by right of survivorship.  Therefore the property bypasses the estate of the first joint tenant to die and will not form part of their estate.

The principle of joint tenancy applies to real property as well as personal property for example bank accounts, shares, cars etc.

A tenancy in common is a form of co-ownership where property is held in common with another person or persons however the share belonging to a tenant in common forms part of the estate of that tenant in common when he or she dies and therefore passes to his or her nominated beneficiaries under their Will.

In the event that there is no Will the rules of Intestacy apply.

It is very important that Wills be made upon purchase of a property, particularly when blended families are involved. Careful consideration should be given to how the property is held and that your Will distributes to the intended person or persons whether you are the first or last to die.

Our solicitors are skilled in the areas of Conveyancing and Wills and Estates so please do not hesitate to contact us should you require assistance in any of these areas on (08) 8312 4800 or by email admin@weatherlylawyers.com.au.