When planning to pass on assets in Australia, many Chinese Australians make a will in the hope of leaving property to their children, parents or nominated beneficiaries according to their wishes. But many learn only after consulting a lawyer that Australian property held as Joint Tenants cannot be distributed by a will at all.
One client came to us specifically to make a will, intending to leave her share of a property to her child. During our discussions, our lawyer first confirmed how the property was held and asked whether it was held as Joint Tenants or Tenants in Common. The client was unfamiliar with these concepts. A title search showed that the property was held as Joint Tenants. Further discussion confirmed that, because it was held as Joint Tenants, it could not be included in her will. With our assistance, the client changed the form of ownership to Tenants in Common and made a will.
Joint Tenants: Protected by the Right of Survivorship, So the Will Does Not Control the Property
Most Chinese Australians are unfamiliar with Australian property-ownership rules: property held as Joint Tenants does not form part of the estate, and a will has no legal effect on that property.
Joint Tenants have a Right of Survivorship. When one joint owner dies, the whole title passes automatically to the surviving owner. The property remains outside the deceased person’s estate, and no wording in the will can alter that legal outcome.
Many people spend thousands of Australian dollars making a will, only to find that their most important property is not governed by it at all.
Tenants in Common: A Share of the Property Can Be Distributed Under a Will
Tenants in Common stand in sharp contrast to Joint Tenants.
Each owner holds a defined proportion of the property, such as 50%/50%. When an owner dies, that person’s share forms part of the estate and is distributed strictly according to the will, which may leave it to a child, parent or any other nominated beneficiary.
Many Chinese Australians encounter the same problem: when they originally signed the purchase documents, the conveyancer or agent may have selected Joint Tenants by default, and they signed without understanding the difference. Years later, when they want to plan their succession and make a will, they discover that the form of ownership has already determined how the property will pass.
It is not that a lawyer is unwilling to include the property distribution in the will. Under the Australian legal framework, a will does not control property held as Joint Tenants. A simple box selected when the property was purchased has already determined who will receive it in the future.
Can One Owner Convert Joint Tenants to Tenants in Common Unilaterally?
The key conclusion is: a joint tenancy can be severed unilaterally without the other owner’s signed consent. A unilateral application to sever it prompts LRS to notify the other owner. If that person does not apply to the court to object within 30 days, the severance will be registered automatically after 30 days; the other owner’s consent is not required.
This rule is particularly important if the relationship has broken down and the other owner is unwilling to cooperate with a change in ownership.
Important: changing the form of ownership involves completing formal documents, lodging them for registration with the land registry and following the statutory notice process. We strongly recommend engaging a lawyer or conveyancer to handle it.
If you make an error in the forms, fail to complete the statutory notice process or do not complete registration during your lifetime, the change in ownership will not take effect and substantial disputes and losses may follow.
How Should You Choose a Form of Ownership? Match It to Your Succession Objective
- If you want your spouse to inherit the whole property directly, Joint Tenants may be more convenient because it avoids the Probate process;
- If you plan to leave the property to a child, parent or another nominated person other than your spouse, retaining Joint Tenants will prevent your succession wishes from being carried out.
The central question in deciding whether to change the form of ownership is: who do you ultimately want to receive the Australian property?
Disclaimer: This information is general in nature and does not constitute personalised professional legal advice. Every person’s assets and family circumstances differ. Consult a registered Australian lawyer for advice tailored to any change in property ownership or preparation of a will.
