One aspect often overlooked by lawyers when preparing Wills is the critical consideration of how Real Property is registered on a Certificate of Title, especially when there is more than one owner. This registration has a significant impact on the provisions of a Will. Therefore, it's crucial for your lawyer to comprehend the difference between how Real Property can be held in Australia and how this affects your Will.
There are two primary ways in which multiple individuals can own and hold Real Property in Australia together, and these interests are registered on the title as either joint proprietors (also known as joint tenants) or tenants in common, in equal or unequal shares. Let's explore the differences and their relevance below:
Joint Proprietors (Joint Tenants)
Real Property held by two or more individuals registered on the title as joint proprietors isn't part of a deceased person's estate. Upon the death of one owner, their share automatically passes to the surviving proprietor(s) on title, regardless of the deceased proprietor's Will.
Tenants in Common
Real Property held by two or more individuals registered on the title as tenants in common is managed differently than that of joint proprietors. Each tenant in common owns their share of the Real Property separately from the other proprietors, and this can be addressed specifically in the deceased proprietor's Will.
When an individual who holds an interest in Real Property as tenant in common passes away, the executor of their Will is responsible for dealing with the deceased's share in the property, once Probate has been granted. This share can be either:
- sold (with the agreement of the other proprietors, or Court/Tribunal Order) and the proceeds are distributed to the beneficiaries in the Will; or
- transferred in specie to the beneficiaries in the Will.
How to transfer a property to spouse after death
If someone has passed away, the executor will need to transfer the property by lodging documents with the Land Titles Office, depending on how the deceased's interest in the property is held:
Joint Tenants or Joint Proprietors
In Victoria, deceased proprietors' share in Real Property held as joint tenants are transferred to the surviving proprietor through a survivorship application lodged with the Land Titles Office. The surviving proprietor(s) on the title must complete this transfer. This process can be executed relatively quickly by engaging a conveyancer or a lawyer who can lodge the transaction via PEXA.
Tenants in Common
Properties held as tenants in common must be transferred according to the deceased proprietor's Will and form part of the deceased's persons estate. The executor is responsible for managing this process and typically engages a lawyer to administer the estate. The property must be first transferred to the estate after probate is obtained by filing a transmission application with the Land Titles Office.
Once Probate is granted, the executor decides whether to sell (with the agreement of the other proprietors, or through a VCAT Order) or transfer the deceased's share directly to the beneficiaries in the Will. It's generally straightforward but obtaining consent may be necessary if there is a mortgagee.
Trust structures
Real Property held by a deceased individual as a trustee of a trust requires careful consideration, as how the property is dealt with depends on the terms of the relevant Trust Deed. In some cases, a deceased trustee may also be a beneficiary of a trust or the appointor.
When a deceased individual is an appointor of a trust, specific terms in the Trust Deed must allow for the appointor to pass the role to a nominated person in their Will. This is a complex legal process that requires the expertise of an experienced estate lawyer.
Other Assets to be transferred
Real Property is not the only asset that needs to be transferred after someone's passing. Administering an estate involves various assets, such as bank accounts, investments, superannuation, shares, personal chattels and more. Accessing these records and facilitating the transfer can be a complex process for executors. Our probate lawyers are here to ensure that the estate is distributed effectively in accordance with the provisions of your Will and the law.
If you have assets in different countries, you may need to have a Will specifically tailored to each country to manage those assets. An Australian Will typically only applies to Australian assets, and in rare circumstances, it may be recognised in a foreign country.
Understanding the intricacies of how Real Property is handled in deceased estates is vital for effective estate planning. Your choice of property ownership, be it as joint tenants or tenants in common, can significantly impact the distribution of assets according to your Will. This knowledge is crucial not only for your peace of mind but also to ease the process for your loved ones during an already challenging time. It's essential to engage with experienced professionals, such as estate lawyers, to navigate these complexities smoothly. Remember, a well-structured estate plan ensures that your wishes are respected, and your legacy is preserved for your beneficiaries.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.