Safeguarding your property after separation

Introduction

Real estate will often be your most significant asset. If you separate from your partner, it is critical that you take steps to ensure that on your death, your property will pass in accordance with your wishes. Jointly owned property will not automatically pass in accordance with your Will, and it will depend on how the property is owned.

Types of joint property ownership

If you own real estate with your former partner, it will be owned in one of two ways:

1. Joint Tenants (also known as “Joint Proprietors”); or
2. Tenants in Common.

The type of ownership will be registered on the title for the property, and will determine how the property is dealt with on your death.

Joint Tenants

This is the most common type of ownership for couples.

If one of the parties dies, the entire property will automatically pass to the surviving party. This will occur regardless of what is stated in the deceased party’s Will, and regardless of whether the couple are still together, or separated, at the date of death. This means that, if you die, your former partner could still inherit your share of the property.

A formal family law property settlement will generally ‘sever’ a Joint Tenancy. This will have the effect of converting the ownership into ‘Tenants in Common’ (discussed below). You can then control what will happen to your share of the property, in your Will. However, it can take months, and sometimes years, to complete a family law property settlement, and there is a risk that one party might die before the property settlement is complete.

It is also possible to sever a Joint Tenancy prior to a family law settlement being complete. You will need to lodge the appropriate documents with the land registry, and it is recommended that you seek assistance from an experienced property lawyer or conveyancer.

Tenants in Common

When a property is owned as Tenants in Common, each party owns a separate share in the property. Typically each party owns a 50% share. However the owners can agree on different proportions (eg 25/75).

Your share of the property can be transferred in accordance with your Will on your death,  and will not automatically pass to the co-owner.  

However, if you do not have an existing Will in place, then your share of the property will pass according to the laws of intestacy. This could mean that your former partner may still inherit your share of the property (Read our article My loved one died without a Will. What should I do?)

The diagram bellow explains the difference between Joint Tenants and Tenants in Common.

Conclusion

If you separate from your partner, then you should consider how you own property with that former partner. You may need to take further steps to ensure that your desired beneficiaries inherit your share of the property, on your death.

You may also need to:

1. Review and update your Will (Read our article Have you recently separated? Do you need to update your Will?)
2. Review the beneficiaries of your superannuation (Read our article Protecting your superannuation following a separation).

How Sharrock Pitman Legal can assist?

We have an Accredited Specialist in Wills & Estates Law, and our lawyers can provide advice on options available to safeguard your assets after separation. Please do not hesitate to contact us on 1300 205 506 or email sp@sharrockpitman.com.au.

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The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

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