Many people are surprised to learn that their Will does not control everything they own. Assets held jointly with another person often pass outside the Will entirely. Getting this wrong can undo a carefully planned estate.
Joint tenants and tenants in common
When two or more people own land in Victoria, they hold it in one of two ways.
Joint tenants own the whole property together. When one dies, the survivor automatically becomes the owner of the entire property. This is called survivorship. The deceased’s share does not form part of their estate, so their Will cannot give it to anyone else.
Tenants in common each own a defined share, for example 50/50 or 70/30. When one dies, their share forms part of their estate and passes under their Will.
Your certificate of title shows which applies. Neither is better in itself. Joint tenancy is simple and suits many couples. It can produce unintended results in other situations.
Where joint ownership causes problems
- Second marriages and blended families. If a husband and wife each have children from earlier relationships and own their home as joint tenants, the survivor takes everything. The first spouse’s children may receive nothing, whatever the Will says.
- A parent on title with one child. Parents sometimes add one child to the title for convenience or to help with a loan. On the parent’s death, that child may take the whole property, leaving other siblings out.
- Siblings or business partners who bought together. Each may want their share to go to their own family, not to the co-owner.
- Testamentary trust planning. If the main asset passes by survivorship, it never reaches the trust created by the Will.
Bank accounts and shares
Joint bank accounts generally pass to the surviving account holder. Shares held jointly in a company are often treated in a similar way, although the company’s constitution and how the shares were registered matter. If you intend assets to pass under your Will, check how each one is held.
Can I change how property is held?
Yes. Joint tenants can usually convert to tenants in common by registering the change with Land Use Victoria. Doing this is generally not treated as a sale, but the tax and duty consequences should always be checked first, particularly where ownership shares change. Any change should be made together with a review of your Will, so the two work together.
A simple checklist
- Obtain a copy of the title for each property you own.
- List bank accounts, shares and investments, and note any held jointly.
- Check whether superannuation has a binding nomination (super also passes outside your Will).
- Ask whether the result on your death matches what you actually want.
How Chua Tan Associates can help
When we prepare a Will, we review how your assets are actually held, in Australia and overseas, so the Will does what you expect. We advise in English, Mandarin and Cantonese.
Related reading
Chua Tan Associates acts for families, executors, trustees and their professional advisers in estate planning, estate administration and estate disputes in Australia and across borders. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal or tax advice. Victorian law unless stated otherwise.
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