In life, there are many ways of ensuring our legacy and caring for our family and friends. One of the most important steps that you can take to achieve this is making out a legal and thoughtful will.
When made correctly, your will can make it easier to sell your assets and pass on your possessions.
When it comes to real estate, there are two main ways to pass on your possessions:
- Full Administration – if the property was fully owned by the deceased, it can be passed on according to the wishes stated in a will.
- Survivorship – if the property was jointly owned by two or more people (e.g. a husband and wife) it automatically passes onto the surviving owner.
Let’s learn a little bit more about passing on a property to a surviving owner.
Transferring the Property
While the legal ownership of a property automatically passes to the surviving party, there are still tasks and paperwork to complete. These ensure that the change in ownership has officially taken place.
The process of transferring your property will depend on whether the ownership was considered a ‘joint tenancy’ or a ‘tenancy in common’.
A joint tenancy is where all parties own the property and not just an individual share. This kind of ownership is common among partners such as husband and wife.
Properties that the deceased owned as a joint tenant do not form part of his/her estate and as such do not get distributed by the will.
This means the property passes to the surviving owner (or owners) without them having to wait for the will to be administered. The last surviving owner of the asset will then own it completely.
It is, however, sensible to remove the deceased’s name from the title. To do this, the surviving joint tenant should make an Application by Survivor (survivorship application). Although a will and probate are not required, an application must include the death certificate and a statutory declaration may also be required.
Tenancy in Common
Tenancy in common is where the tenants each own a proportionate interest in the property, or in other words, the property is divided into defined shares and interests.
Tenants in common are free to choose what happens to their share of the property in their will. Other surviving tenants in common have no say over what happens to the deceased’s share of the property after they pass on.
Since the property is dictated by a will, a tenancy in common requires a grant of probate and administration before the share in the property can be transferred (or sold).
The property must then be disposed of in accordance with the wishes of the will and follow the standard procedure for administration of a will.
The Legal View
If you are considering purchasing land or any other significant asset, legal advice should be sought. It is important to consider how an asset is owned and what the long term effects of that may be.
Robert Wood and Associates has more than 36 years of experience with will and probate law and matters related to estate planning.
We can provide structured legal advice about the best method of owning an asset and the consequences that will have on estate planning and the later disposal of that asset (including tax implications).
For more information, give us a call on (03) 9762 3877 or contact us online.