Wondering what is the difference between Joint Tenants vs Tenants in Common Qld? The difference in how your assets are held can make a big difference in how your estate is divided after death. Therefore it is very important that you understand the difference of these important terms.
If you need help with estate planning please don’t hesitate to contact one of our friendly lawyers on (07) 3073 2405.
Joint tenants vs Tenants in Common Qld
If you are wondering why this matters, these terms impact what happens to your property after death.
For example, if you own a house with your partner, a friend or your child, do you intend for the other party to automatically inherit your share of the house after your death or do you wish for your half to form part of your estate? Whether you hold that property as tenants in common or joint tenants will determine this.
What is tenants in common qld?
What does tenants in common mean? Basically if you own property as tenants in common, you own a share of that property. For example you might own a 50% share, a 25% share, an 11% share etc. If you own property in this manner, you can sell your half of the property and you can also leave your half of the property to someone other than your co-owner in your will.
If you own property as tenants in common, upon your death, your property does not automatically pass to your co-owner and is dealt with in accordance with your will. If you do not want your property to automatically pass after death to your co-owner it is necessary to ensure your property is held as tenants in common.
This is something you may want to discuss with your co-owner as it may mean they are forced to sell or buy out your beneficiaries after your death.
How can you check how your property is held and plan your estate? Our friendly team is happy to help with your estate planning needs. Contact one of our friendly lawyers on (07) 3073 2405.
What is joint tenants?
What does joint tenants mean? Alternatively, you may like to structure your property as joint tenants. Effectively, this means that two people are regarded as one single owner. If one or the other passes, the property automatically passing to the surviving person and is not dealt with under the will or as part of the estate.
Joint tenancy is often the preferred ownership style of married or defacto couples who wish to ensure that there is no estate dispute over the property after death. This means that the other party is protected against any potential claims as if one of the owner dies, their interest automatically transfers to the other owner.
Any property you hold as joint tenants will not be included in your will and is not an estate asset. Here’s an example:
Bob married his second wife Julia. Bob had 5 kids with his first wife Sarah before marrying Julia. Bob only has a house and wants to leave his entire estate to Julia. As he knows his children hate Julia and will probably contest his estate after his death, Bob decides to arrange his property as joint tenants with Julia before he passes.
When Bob passes, his children, as expected, try to make a family provision claim against his estate. As the only asset is a house, which is owned as joint tenants with Julia, they are unable to make a claim on the estate. To make it clear, it would be possible for the children to make a claim on Bob’s house if his house was held in his sole name or as tenants in common with Julia.
This scenario means that Julia is not obliged to sell her property or pay Bob’s children any compensation after Bob’s death.
On the flipside, if Bob did intend for his children to inherit from his estate and had a will stating they would take equal shares with Julia, his children would be left with nothing if Julia held Bob’s only asset is a house held as joint tenants. Bob’s will would not be worth the paper it is written on.
What should you do next?
Thinking of the best way to protect your estate and family moving forward? It is best to get legal advice before you apply for a change of ownership due to legal and tax implications.
As this is a complex area, it is best to consult a professional before making changes. If you need help with estate planning, please don’t hesitate to contact one of our friendly lawyers on (07) 3073 2405.
