ABKJ Newsletter - March 2014
Welcome to the March 2014 edition of the ABKJ newsletter. This is a free service provided to clients and business associates of the firm.
Please do not hesitate to contact our office if we can be of assistance in relation to any of the issues covered in this newsletter.
In this issue...
- Joint Tenants vs Tenants in Common
- Proud supporters of The Pyjama Foundation's "The Long Road" Charity Event
Joint Tenants vs Tenants in Common
When you purchase property with another person, your solicitor will ask you: Joint Tenants or Tenants in Common?
The purpose of this article is to explain the difference between these terms and how your decision can affect you in the future, particularly from an estate planning perspective.
Joint tenancy is a concept where each owner of a property holds the exact same (and equal) interest as all of the other owners. All joint tenants are therefore entitled to an equal share of profits if the property is rented or sold. Similarly, all joint tenants are equally responsible for the costs associated with owning and maintaining the property.
For many couples, owning property as joint tenants is preferable because of its survivorship rule. This means that when a joint tenant dies, his or her share will be equally distributed between the surviving joint owners with no stamp duty being payable on the transfer. It will not form part of the estate of the deceased owner and is generally outside the scope of a family provision application (i.e. any legal action brought by relatives challenging the will of the deceased).
Tenants in Common
Tenants in common is a concept where each owner has a separate and distinct interest in the land in specific proportions. For example, a husband and wife may own a property with equal 50/100 shares, or in 1/100 and 99/100 proportions (or any other proportion).
In some instances, the benefit of owning property as tenants in common is the ability to minimise the financial risk of one of the owners. For example, a small business owner may wish to minimise the amount of assets held in his or her name (while still remaining an owner) and therefore prefer to hold a minimal portion of the property only.
In other instances, the benefit of owning property as tenants in common is that an owner can nominate whom their share of the property will be transferred to. This decision can occur whilst the owner is alive (keeping in mind that such a transfer will attract stamp duty). Alternatively, the transfer can occur after the death of the owner by leaving a bequest in their will. Generally, people who are not in a familial relationship or who receive the property as a bequest with others choose tenants in common for this purpose.
If you own or are purchasing a property and you not sure what is the best tenancy for you, please contact our office and we will be happy to discuss your options with you.
Proud supporters of The Pyjama Foundation's "The Long Road" Charity Event
The Pyjama Foundation is a children’s charity that is breaking the cycle of disadvantage experienced by Australian children in foster care. The Pyjama Foundation recruits, screens, trains and supports Pyjama Angels - volunteer members of the community who work with the children in care and support their foster families. With over 39,000 children in care in Australia, it is a worthwhile cause that has the support of ABKJ Lawyers.
The Long Road is a non-competitive charity walking event that will be held in 13 locations around the country (in Brisbane, Sydney, Frankston, Cairns, Townsville, Mackay, Gladstone, Bundaberg, Sunshine Coast, Toowoomba, Ipswich, Logan and the Gold Coast) on Sunday 23 March 2014.
After supporting the Long Road Event in its inaugural year in 2013, ABKJ Lawyers is again proud to be an event partner of the Gold Coast event, to be held through the Federation Walk Coastal Reserve, on the Southport Spit.
If you are interested in supporting or participating in the event, please contact our office for more information, or visit The Pyjama Foundation website: