So How Do Assets Pass To Beneficiaries When Both Tenants In Common Owners Die?
Property that is owned by two or more people can be owned in two different ways –
Joint Tenants
- where the owners own the whole of the property together and they do not own separate and divisible shares. Couples often own their matrimonial home as joint tenants; or
Tenants in Common
- where the owners do own separate and divisible shares, eg 50/50, 60/40 or any other proportion you may think of. Investment properties or properties owned by people not related to each other are often owned as tenants in common.
Where property is owned as “joint tenants”, the interest of the deceased joint tenant death does not form part of their estate and is not dealt with by their Will. Instead, it passes automatically, by right of survivorship, to the surviving joint tenant. There is no need in those circumstances for the surviving joint tenant to obtain a Grant of Probate to deal with the property as it will pass to them automatically.
Where the property is owned as “tenants in common”, the interest of the deceased owner will form a part of their estate and will pass to the beneficiaries named in their Will.
In a recent case, we acted for a family in circumstances where a young couple and their only child, an infant, died together in an horrific accident. A subsequent coronial inquest was unable to determine the order of death of the young couple and their child.
In those circumstances, the law provides that where the order of death cannot be determined, the law will deem the eldest person to have died first.
As the father was the eldest in age, followed by the mother and then the child, for the purpose of succession law, the estate of the father was deemed to have passed to the mother, and in turn, her estate was deemed to have passed to the child.
As the child obviously had no Will, the “Rules of Intestacy” applied, which in this case, saw the estate of the child pass to the surviving grandparents of the child.
In another case, where a couple died owning real estate as joint tenants and without leaving a Will, the husband who was the eldest was deemed to have died first, so his share passed to the wife who was deemed to have died after him, and then under the “Rules of Intestacy” her estate passed to her near relatives with none of the assets passing to the relatives of the husband. Although this was not what the husband and the wife would have wanted if they had made a Will, the husband’s relatives missed out.
If you need assistance with an Estate matter or if you would like to learn more about how assets pass to beneficiaries call our expert Will & Estates Team now at 4324 7699 or visit our contact page.
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