Did you know that how your property is owned can matter more than what your Will says?
When buying property with someone else, the way you legally own the property often gets far less attention than its price and location. However, it can have serious consequences later on.
The two main ways to own property with another person are joint tenants and tenants in common.
‘Joint tenants’ is common for couples buying a family home together. You both own the whole property together. If one owner dies, their interest automatically passes to the surviving owner/s – regardless of what their Will says. This is called the ‘right of survivorship’.
‘Tenants in common’ is where each owner holds a defined share (for example, 50/50 or 75/25). When one owner dies, their share of the property forms part of their estate and is dealt with under their Will. It does not automatically pass to the other owner/s. This can be appropriate where there are blended families, unequal financial contributions, business or investment properties or other reasons for wanting your share to pass to someone other than your co-owner.
Whether you should own a property as joint tenants or as tenants in common depends on your personal circumstances and estate planning goals.
Understanding the distinction between these forms of ownership, and getting it right from the start, is an important part of good estate planning and conveyancing.
If you’re not sure how your property should be (or already is) held, or whether it still suits your situation, it’s worth getting advice now rather than leaving it to be sorted out down the track.
At Preshute Legal, we are experienced property lawyers who can help you to sort it out now so there are no problems later.
Book a free chat with us today to discuss whether you should hold your property as joint tenants or tenants in common.