Do you know how your property ownership is registered on title?
When buying property with one or more other people, there are options for how to be registered on title with them. These options include being registered as joint tenants or tenants in common.
Either option can significantly affect the way in which a property is left to your loved ones in your estate when you die.
Being registered as joint tenants (also known as joint proprietors)means that you and the other person or people on title own the property “as one”. This means that if either person registered as a joint tenant dies, the property will automatically belong to the other person (or people). Consequently, the property does not form part of the deceased person’s estate and cannot be gifted to somebody else. This is called a “Right of Survivorship”.
Tenants in Common
Alternatively, you may be registered as tenants in common with another person (or people). This means that each person is registered on title as owning a specific portion of the property (such as 50 percent) and that portion can be devised in a Will as if it was owned solely by one person.
If you are not registered on title appropriately, your estate and the people you leave behind may suffer.
Being registered as joint tenants on title means that you have no power to bequeath the property to anybody except the surviving proprietor(s). If you wish to give your portion of a property to somebody other than the other joint proprietor(s) you will need to ensure that you are registered as tenants in common.
Being incorrectly registered as joint tenants can render gifts of property in a Will invalid. It can also decrease the value of your estate. This could be intentional if a claim is anticipated, but thought needs to be given to the way a property is registered to make a good estate plan.
Similarly, being incorrectly registered as tenants in common may mean that your portion of the property falls into your residuary estate, when you meant it to pass to a co-owner.
A Will needs to be tailored to your specific needs. We can assist with ensuring that your Will aligns with the way your property is registered and reflects your intentions. If you wish to discuss this aspect of your estate plan, please contact our Wills and Estates team on (03) 9870 9870 to assist you with your property and estate planning matters.
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