Dealing with property in your Will
If you own property you may be wondering how this can be passed on to a family member or loved one in the event of your death. There are many different ways to own or have an interest in land in Queensland. This will affect how you can pass your ownership or interest on in your will. It is important for you to be aware of these differences so that your will can be prepared correctly.
Sole ownership of a property may be dealt with easily in a will. If a property is registered solely in your name, you can pass this on to any person or entity of your choosing in your will.
This is commonly how a husband and wife own their property. If you own a property as joint tenants, the ownership is not divided into shares and you have equal rights and responsibilities over the property.
When preparing your will you do not need to refer to the joint tenancy in your property as the remaining joint tenants automatically have ownership of the property when you die. Therefore if only one joint tenant remains they will get sole ownership of the property. If this is not what you intend, then you may sever the joint tenancy while you are still alive.
Tenants in Common?
You may own a property with other people as tenants in common. This arrangement may be beneficial for business partners or if you are purchasing an investment property with another person. Tenants in common each own a defined share of the property. This could be an equal share or a specific amount such as 30% and 70%.
Unlike joint tenancy, tenants in common may transfer their share in the property at any time. As a result, if you own property as a tenant in common you can specify who will receive your share of a property in your will.
A search of the Titles Registry held in the Land Titles Office will determine whether you own your property as a joint tenant or tenant in common. A lawyer may assist you with this process.
A life interest in a property allows for the use of a property for the duration of a person’s life. This may be granted by deed or under a will, and is recorded in the Titles Registry.
A life interest is often created to allow one person (often a spouse) the use of a property while preserving the property for another person (often a child) to receive upon the spouse’s death.
If you receive a life interest in a property, you are allowed to occupy and use the property with your interest in the property terminating when you die. You cannot pass this property on to someone else in your will.
If you wish to create a life interest for a person, you may do this in your will. This may be an arrangement you wish to set up with your spouse. If you currently have joint tenancy with your spouse, you may wish to sever the joint tenancy in order to become tenants in common which the. This then allows for the creation of a life interest in a will for the benefit of the surviving spouse.
If you create a life interest in a will, you may also wish to create a cash legacy to cover the ongoing costs of maintenance and repair that may be left to the life tenant.
Is there a mortgage on your property?
Another important consideration when dealing with property in your will is whether you have a mortgage on a property that you wish to pass on to someone else.
If you have a mortgage on your property this is a debt that will continue to be owed after your death. A person who inherits your property will take it subject to the mortgage. Accordingly, you may want to make arrangements in your will to have any mortgage paid out of your estate before assets such as property are distributed.
As with all areas of estate planning and will drafting, matters can become complex very quickly and seemingly minor oversights can have very large unintended consequences down the track. To get advice from expert estate planning lawyers, please call Certus Legal Group on 07 3106 3016 or contact us using the form on this page.
This article does not give legal advice and should not be relied upon as such. It is intended to provide general and summary information on legal topics, current at the time of first publication. You should seek professional legal advice before acting or relying on any of the content contained herein.