The impact of asset ownership types on estate planning

Asset ownership types may have an impact on a client's estate planning. When people co-own property together, they do so either as joint tenants or as tenants in common. These two different forms of ownership impact what asset(s) form part of a person's estate which is capable of being controlled by their Will.

For real property, the form of ownership is described on the certificate of title. For other assets, the form of ownership is usually found in the documents creating the ownership of the asset or its transfer.

Joint tenancy means that the owners of the asset have an equal undivided share of the asset that occurs at the same point in time. On death, the asset automatically passes by survivorship to the remaining co-owner and, as such, does not form part of the deceased owner's estate and therefore not controlled by their Will.

In contrast, persons holding property as tenants in common means that they have a separate, divisible interest in the property that can arise at different points in time and for equal or unequal portions. On death, the co-owners portion of ownership forms part of their estate and will be controlled by their Will to gift or bequeath to a beneficiary.

It is important to know what co-owned assets fall as part of a person's estate and those which don't and if the automatic transfer of the joint tenancy assets to the co-owner is consistent with a client's wishes.

Inherit Australia’s legal bot include investigation into ownership types for all of the client’s assets. It includes assets owned by individuals or their related entities such as trusts ,companies and SMSFs. The bot investigates complex asset ownership structures and visualises the structure in the asset ownership chart. Armed with this information, our panel lawyers can apply the right solution for the asset structure as part of the client’s estate plan and how assets will pass on death.