Who gets the property when a spouse or partner dies? The answer is not always as simple as it might seem …
In our Wills and Estates practice area we deal with a large number of clients who have a significant portion of their wealth invested in real property. This could mean that a couple who have accumulated property assets in the form of their residential home, investment property or both will need to carefully consider how those properties are owned and how they will be dealt with if one of them dies.
In many of those cases people are often unaware of how the ownership of those properties might affect their entitlements. The resulting uncertainty can often lead to unnecessary stress and costs that could usually have been avoided with some forward planning and good advice.
In short, joint tenancy means that property will automatically transfer to the surviving owner’s name whereas ownership as tenants in common has to be dealt with by reference to the Will (if there is one) or under a separate process.
In circumstances where property is held by a couple as tenants in common and one of them dies without a Will, the situation can become much more complicated very quickly. The rules relating to transfers in those cases can mean that an Order to administer the deceased estate would first need to be obtained from the Court before the property could be transferred. The cost and potential uncertainty involved in that process represents an unwanted extra step in dealing with the death of a loved one.
As an added advantage, ownership of property as joint tenants eliminates the possibility of a claim involving that property and this applies whether or not there is a Will. Property transferred upon the death of a joint tenant does not form part of that person’s Estate and is not liable to be challenged by anybody seeking to contest the Will.
Although there can be certain advantages to owning property as joint tenants this is not always the best solution depending on the individual circumstances of each case. For example, properties are often owned solely in the name of one spouse or partner for tax reasons or to protect assets. How properties are owned – and whether a spouse or partner will have a particular entitlement - depends not just on the form of ownership but also a consideration of all aspects of proper estate planning including a professionally prepared Will.
Depending on your individual situation there are a range of possible options that may need to be considered when dealing with your property interests. Taking the time to deal with these issues up front - with the benefit of practical expert advice - is well worth the effort and can usually save your loved ones from having to deal with the significant cost and uncertainty of getting it wrong.