A critical issue for separated partners to consider is whether they hold real estate with their partner as “joint tenants” or “tenants in common”.
Do you know what the terms mean? And do you realize how important the distinction is? Hopefully this will help…
If you have separated from your partner, it is very likely that you do not want them to inherit any property that you jointly own with them in the event of your death. Simply making a Will leaving everything you own to, for example, your children, is often ineffective.
In NSW, there are two ways to jointly hold real estate (and some other types of assets). If you hold real estate as a “joint tenant”, this means that if one of you dies, the survivor automatically gets the deceased’s share, no matter what the deceased’s Will might say, or whether they have separated.
On the other hand, if you own real estate as a ‘tenant in common”, the deceased’s share goes wherever their Will says.
Usually, the decision as to which way you are going to hold the property is made when you first purchase it. Many people I have met never appreciated the important ramifications that this decision can have. Most people don’t even know which way they hold their property.
It is very important to determine in the event of the breakdown of your relationship whether you own property with your ex-partner as a “joint tenant” or a “tenant in common”. If you own your property as “joint tenants”, even if you change your Will, your ex-spouse would still inherit your interest in the property if you died, which may well not be what you desire for your family, particularly your children. Joint tenancies can, however, be severed and converted into “tenancies in common” in appropriate circumstances, and you should seek advice as to whether you take this step.
Generally speaking, there is little point in severing a joint tenancy unless you also review your Will.
I can quickly and easily establish which way your hold your property, and if necessary, help you change from “joint tenants” to “tenants in common”. What appears to be a confusing and threatening issue can actually be easily resolved with the right advice.