The estate planning process is one that requires a careful review of your personal assets. If you fail to properly understand how you own your assets you may fail to adequately provide for those beneficiaries you intend to benefit.
The family home is usually one major asset an individual wishes to dispose of under his or her Will. However, if a property is owned as joint tenants with another property owner then the rules of survivorship will apply. According to the doctrine of survivorship, property owned as joint tenants passes to the surviving joint owners.
The decision as to whether you should own a property as joint tenants or tenants-in-common is an important one and will depend on your individual circumstances.
Hypothetical scenario
John and Helen own a property at 1 Blueberry Place, Ocean View as joint tenants. John has three children from a previous relationship. Helen has no children.
John makes a Will that leaves his interest in the property to his three children. John is of the view that he owns 50% of the property and that when he dies he would like to leave it to his children.
John dies and under the doctrine of survivorship Helen becomes the sole owner of the property.
It is important you carefully discuss and advise your lawyer of your assets. A title search of the property would have shown the property was owned as joint tenants rather than tenants-in-common. In this scenario, John may have considered severing the joint tenancy to tenants-in-common in equal shares so that he owned a distinct 50% share of the property. On his death, the terms of his Will would then leave his 50% share of the property to his three children.
Transfer of ownership on death
If you own a property as joint tenants, the surviving joint owner will be required to lodge a notice of death with NSW Land Registry Services to record a change in the ownership. You usually will only require the certificate of title for the property and the death certificate of the deceased property owner in order to complete this process.
However, if the property is owned as tenants-in-common, then the property will pass in accordance with the terms of the deceased's Will. The executor will be required to lodge an application for a grant of probate of the Will of the deceased with the Supreme Court of NSW before they can arrange a transfer of the property. This will be required even if the property passes to a surviving spouse under the terms of the Will.
A Will is one of the most important documents you will sign in your life. It requires a proper review of your assets and discussions about your personal circumstances and what you hope to achieve on your death. There are a number of tools and searches we can use to properly advise and amend your structures if required) to ensure your wishes are fulfilled on your death.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
