How is your property held and how does it affect your Estate
Real estate can be the greatest asset that a person can have in their estate, whether it be a singular or multiple properties and it is essential that you are aware of the type of ownership that applies to your own property and make estate planning arrangements to ensure that it is dealt with in an appropriate manner according to your wishes.
How the property interacts with a person’s estate is dependent on how the real estate is held or owned.
There are three types of ownership: sole ownership, joint tenants, or tenants in common.
Sole Ownership
Sole ownership over a parcel of property is when a single person owns the entirety of the property. If you wish to gift the property to someone in your will, it is important that estate planning measures are taken to ensure that interest in the property is transferred to the preferred beneficiary.
If the transfer of interest is not specified in your will, your property may be sold by the Executor and the proceed to form part of your estate. This could cause hardship to your relatives and loved ones if there is an expectation that they would receive a specific property.
Joint Tenants
Property can be owned by two or more individuals as joint tenants. In this instance, ownership of the property passes by survivorship. This means that your interest in the property is divided equally amongst the other surviving persons if more than two people are on the title as joint tenants.
In a joint tenant arrangement, this automatic transfer of interest bypasses the estate of the deceased and is not considered an asset of the estate. As a result, this type of interest in a property is not controlled by a person’s will.
Tenants in Common
If more than one person owns a property and hold their shares as tenants in common, the co-owners of the property do not benefit from survivorship as in a joint tenancy; instead, the deceased’s interest in the property becomes part of their estate and is distributed by their will.
In these circumstances, it is important to consider estate planning options to have peace of mind that your interest in the property is given to the person you wish.
More Information
If you wish to obtain further information, advice or assistance in updating your Will, please contact one of our Will Lawyers in our Estate Planning team at Matthews Folbigg on 9635 7966, email us at estates@matthewsfolbigg.com.au or through the website www.matthewsfolbigg.com.au
DISCLAIMER: This article is provided to readers for their general information and on a complimentary basis. It contains a brief summary only and should not be relied upon or used as a definitive or complete statement of the relevant law. Liability limited by a scheme approved under Professional Standards Legislation
