Mid Mountains Legal Blog

Severing a joint tenancy in a family law property settlement

Anthony Steel

If you and your partner own property together, you should tell your solicitor when first providing instructions in a family law property settlement. Your solicitor will usually perform a title search to ascertain if the property is held as joint tenants or tenants in common.

Joint tenants and tenants in common – what’s the difference?

If you and your partner hold your property as joint tenants, then a right of survivorship applies. This means that on the death of a joint tenant, the interest in the property of the deceased joint tenant automatically transfers to the remaining joint tenant.

If you and your partner hold the property as tenants in common, then there is no right of survivorship: ownership of the deceased’s share of the property passes as per their Will.

Should I sever a joint tenancy during family law proceedings?

One reason to sever a joint tenancy after separation is to protect any interest you hold in the property if you die before your family law property settlement has been finalised. Instead of the full interest in the property automatically going to your former partner, you can choose what happens to your interest by including it in your Will. This is one reason why we strongly advise you to update your Will as soon as practicable after separation.

To sever a joint tenancy, you must complete a Transfer Severing Joint Tenancy and lodge it with NSW Land Registry Services then give the other party notice that you have done this.

What is a Transfer Severing Joint Tenancy?

Married and de-facto couples purchasing property often purchase the property as joint tenants (rather than tenants in common). If you have separated from your partner with whom you own property as joint tenants, you should lodge a Transfer Severing Joint Tenancy as a precaution in the event of your death before your family law property settlement is finalised.

Lodging this document does not affect your family law settlement: it simply means that you and your partner will then each hold a 50% share in the property as tenants in common. You can then direct in your Will who is to receive your 50% share of the property upon your death.

Importantly, lodging a Transfer Severing Joint Tenancy does not mean that you are entitled to 50% of the real property (for example, the family home) in your family law matter. Ownership of 50% of the property, whether as a tenant in common or as a joint tenant, does not represent your entitlement under the Family Law Act 1975.

Your family law property matter will still need to be negotiated, documented and lodged with the Family and Federal Circuit Court of Australia. During that process, consent orders will be agreed to or a Judge will make orders concerning the division of the property. For example, the property may be sold and the proceeds of sale divided between the parties, or one party may retain the property and pay the other party an amount.

What now?

If you or someone you know needs advice in regarding the protection offered by lodging a Transfer Severing Joint Tenancy in a family law property settlement, contact us and take advantage of our free initial advice.

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