Joint Tenancy vs Tenancy in Common

 

31st October, 2024

 

When purchasing property in New South Wales (NSW), couples often face a significant decision about how to structure ownership. There are several types of property ownership available, including sole ownership, joint tenancy, and tenancy in common. Each type comes with its own legal implications and benefits. For couples, whether de-facto or married, the two most common options are joint tenancy and tenancy in common. Understanding these options is essential for making informed decisions about your property and estate planning.

 

What is Joint Tenancy?

Joint tenancy is a form of co-ownership where each partner holds an equal share of the property. A key feature of this arrangement is the Right of Survivorship. If one owner passes away, their share automatically transfers to the surviving owner. This simplifies the process, as the deceased’s interest bypasses their Will and avoids the need for probate.

Couples, particularly those who are married or in a long-term relationship, commonly choose joint tenancy. It provides peace of mind, knowing that if something happens, the surviving partner will retain full ownership without any legal complications.

 

What is Tenancy in Common?

In contrast, tenancy in common allows co-owners to hold specific shares of the property, which can be equal or unequal. For instance, one partner might own 70% while the other owns 30%. The significant distinction here is that upon death, an owner’s share is passed according to their Will, not automatically to the other owner.

This arrangement can be beneficial for couples who wish to ensure that their share is distributed to their chosen beneficiaries. It’s also suitable for friends or business partners who invest together but want to maintain control over their individual shares.

 

Making the Right Choice

Choosing between joint tenancy and tenancy in common depends on various factors. If both partners want straightforward inheritance and share equal financial contributions, joint tenancy may be ideal. However, if there are differing contributions or complex family situations—such as blended families—tenancy in common might be the better choice.

 

Understanding how ownership structures impact your estate planning is vital. The type of ownership can significantly affect your Will and how your assets are distributed after your passing. At Bangalow Conveyancing, our team has access to experienced property lawyers from Castrikum Adams Legal who specialise in both property law and estate planning. They can help clarify the benefits and drawbacks of each option, tailored to your specific circumstances.

 

For more information on property ownership options in NSW, feel free to explore our Conveyancing Services or contact us directly on (02) 66870548 for expert assistance.

 

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