Understanding Property Ownership Types

Understanding Property Ownership Types
 

There are mainly two types of property ownership: Joint Tenancy and Tenancy in Common, with each having significant distinctions. Upon purchasing a property, its ownership type is specified on the transfer document. Joint Tenancy is noted for the right of survivorship; this means that if one owner dies, their share directly transfers to the remaining owner(s), overriding wills or separation agreements.

Conversely, Tenancy in Common permits the distribution of each owner’s property share according to their will, without an automatic right of survivorship.

Recognising the differences in ownership structures is crucial for several reasons, including considerations for taxes, estate planning, and safeguarding assets. Often, purchasers of property might not fully grasp the implications of each ownership structure, leading to a desire for changes that come with substantial costs. Relationship alterations frequently necessitate ownership adjustments.

Changing Ownership

It is possible to change ownership types, but such changes can incur tax implications. Specifically, altering property ownership often triggers Stamp Duty expenses in New South Wales (NSW), calculated on the property’s market value at transfer time. For example, a switch from Joint Tenancy to a single owner for a property valued at $1.5 million could lead to an approximate Stamp Duty of $28,000, barring exemptions.

Estate Planning

To align estate management with personal wishes posthumously, individuals might change their property’s ownership type. Transitioning from joint tenancy to tenancy in common allows an owner to dictate their property share’s distribution through their will, offering more control over their estate.

Relationship Changes

Changes in personal relationships, such as marriage or entering a de facto partnership, might prompt the addition of a spouse or partner to the property title, shifting the ownership to either joint tenancy or tenancy in common. Similarly, separation or divorce could require removing a spouse or partner from the title. In NSW, property transfers between partners, whether married, separated, or in de facto relationships, may qualify for stamp duty exemptions.

Financial Considerations

Owners might also modify their property ownership type for tax optimisation, investment strategy alignment, or asset protection. Shifting to tenants in common, for example, allows for specifying different ownership shares, possibly offering tax benefits or aligning with individual investment preferences. Strategic financial planning might necessitate such changes for enhanced tax efficiency or investment outcomes.

Other Factors

Several other considerations can influence ownership changes.

Under the NSW Succession Act, the court can include a deceased’s ‘notional estate’—property controlled or benefitted from before death—in family provision claims, potentially affecting joint tenancy properties. Additionally, severing joint tenancy following a relationship breakdown can clearly define and protect each party’s interest, often a strategic estate planning move to ensure assets are distributed as desired, circumventing the automatic transfer inherent in joint tenancy laws.

In the context of family law, in the aftermath of a relationship breakdown, it may become necessary to sever this joint tenancy to ensure that each party’s interest in the property is clearly defined and protected and may prevent improper dealing of that property. In the broader context of estate planning following a relationship breakdown, severing joint tenancy is often a strategic step to ensure that assets are distributed according to the party’s wishes. It is a preventive measure against the risk of significant assets, like the family home, bypassing the intended estate plan due to the operation of joint tenancy laws.

Process

In NSW, changing property ownership involves legal steps, including completing specific forms for the Land Registry Services and potentially dealing with Revenue NSW for stamp duty matters. Consulting legal and financial professionals is essential to navigate these changes legally and effectively.

Changing tenancy is a significant decision with profound implications for property rights and estate planning. Individuals considering this should seek legal and financial advice to understand the implications fully and ensure that their interests are protected.

Disclaimer

This information is provided for general informational purposes only and should not be considered legal advice. Property ownership and its implications can vary significantly depending on individual circumstances, legal jurisdiction, and changes in law. It is crucial to consult with a qualified legal professional to understand the specific implications of your situation. Do not rely on this information for making legal decisions. Seek personalised legal advice to ensure your decisions are informed by the most current legal standards and practices and are suitable to your situation.

Do I Need to Disclose That?

Do I need to Disclose That? - Family Law

Navigating through family law matters can often feel like walking through a maze, with each turn presenting a new set of challenges and questions. Among the most frequent and significant questions is, “Do I need to disclose that?” This is particularly pertinent in family law proceedings in Australia, where the law mandates comprehensive and honest disclosure to ensure fair and equitable outcomes. 

But what does this mean for you, and how can you navigate these requirements effectively? Think of it not as a game of ‘hide and seek’ but more like ‘show and tell’.

Understanding the Requirement of Disclosure in Family Law:

In family law proceedings, disclosure is not a game of hide and seek with your assets and financial information. Instead, it’s a process of show and tell— a cornerstone principle that involves presenting all relevant information concerning your financial circumstances. This ensures that all parties have a clear and honest understanding of the financial pool available for division.

The Importance of Accurate Disclosure:

Proper disclosure is the foundation upon which accurate and appropriate advice is built. By fully disclosing all relevant financial details, you empower your legal team to provide advice that is tailored to your situation. This allows your lawyers to strategise effectively, anticipate potential issues, and navigate negotiations or court proceedings with a clear picture, thereby increasing the likelihood of a favourable outcome.

What Must Be Disclosed?

The requirement for disclosure in family law is comprehensive. You are obliged to disclose all forms of income, assets, and debts. This includes, but is not limited to, property holdings, bank accounts, investments, and even financial interests in trusts or companies. It’s not just your current financial state that’s under scrutiny; any significant financial transactions made in the lead-up to the proceedings must also be disclosed, particularly if they could be perceived as an attempt to minimise the financial pool available for division.  

The Consequences of Incomplete Disclosure

Failing to disclose assets or providing misleading information is not taken lightly in the eyes of the law. Such actions can lead to severe legal repercussions, including the alteration of property division in favour of the other party, hefty fines, and, in extreme cases, criminal charges. The courts are equipped with extensive powers to deal with non-disclosure, and they are unafraid to exercise these powers to uphold the integrity of the legal process.

Exceptions

There are some exceptions where disclosure may apply.  This can include cases where jurisdiction is disputed, such as where one party alleges a de facto relationship and the other does not; the process of disclosure can become more complex. This situation often arises when there’s a disagreement over whether the relationship falls under the Family Law Act. If there is no de facto relationship, then the Family Law Act will not apply, nor will the disclosure requirements.  However, it may be necessary to provide evidence not just of your financial situation but also of the nature and extent of your relationship. This evidence can range from shared financial responsibilities (or, more correctly, the lack of if you are disputing a relationship) to the intermingling of lives and future intentions. It’s crucial to approach these situations with a strategy tailored to the specific circumstances of your case, often necessitating professional legal advice.

How to Navigate the Disclosure Process:

Navigating the disclosure process can be complex and daunting. It’s not just about being honest; it’s also about being thorough and meticulous. Keeping detailed records, being proactive in providing information, and, most importantly, seeking the guidance of a knowledgeable legal professional are critical steps in ensuring that you meet your disclosure obligations effectively. Remember, it’s about ‘show and tell’, being open and transparent, not ‘hide and seek’.

Conclusion:

In family law proceedings, the question “Do I need to disclose that?” bears significant weight. The requirement for full and honest disclosure is a testament to the legal system’s commitment to fairness and justice. Proper disclosure not only contributes to a more transparent legal process but also ensures that the legal advice you receive is as accurate and appropriate as possible, safeguarding your interests and paving the way for a fair resolution. 

Disclaimer:

Please note that this article is for general information purposes only and is not intended to be relied upon as specific legal advice. Family law can be intricate and complex, and the requirements for disclosure can vary significantly based on individual circumstances, including disputed jurisdictions such as contested de facto relationships. We strongly advise consulting a family lawyer who can provide tailored advice and guidance based on your unique situation.

The Importance of Having a Will in New South Wales

THE IMPORTANCE OF HAVING A WILL IN NEW SOUTH WALES

It’s crucial to pause and think about the future. One of the most significant steps in future planning is drafting a will. While many might consider it a task for the distant future, the intricacies of estate law highlight its immediate importance. Here’s why everyone should have a will:

Protection of Assets in NSW: Sydney’s dynamic property market means many residents have significant assets. Estate law in NSW ensures that, with a valid will, these assets are distributed according to your wishes, safeguarding against potential disputes among beneficiaries.

The Consequences of Intestacy in NSW: Dying without a will in NSW results in an intestate estate. The Succession Act 2006 (NSW) then dictates the distribution of assets, which may not align with the deceased’s wishes, leading to potential family disputes as well as increased costs.

Efficient Probate Process: A clear and legally sound will can expedite the probate process in NSW. It provides clarity to executors, ensuring assets are distributed without unnecessary legal complications.

Charitable Contributions: A will allows a person to leave a legacy in the form of charitable donations, ensuring their philanthropic desires are met under NSW law.

Peace of Mind with NSW Regulations: Drafting a will in compliance with NSW laws provides peace of mind. It ensures that your wishes align with the legal requirements of the state, guaranteeing their execution.

The Need For Professional Assistance in NSW

Estate law in NSW is intricate. While DIY will kits are available, they might not capture the complexities of individual situations or the specific requirements of NSW law. A minor oversight can render a will invalid or lead to unintended legal consequences and costs. 

It’s advisable to consult with a local legal firm familiar with NSW estate laws. Our team at Redmond Hale Simpson is well-versed in the nuances of estate planning in Sydney and we’re here to guide you through this process. 

Most legally drafted will typically start from $400 and increases depending on the complexity.

Contact Us to find out more.

 

Redmond Hale Simpson is a proud partner for the Cancer Council’s Pro Bono Team

We are delighted to be part of the Cancer Council’s Pro Bono Team and we thank the Cancer Council’s Pro Bono Team for their hard work and recognition of our support below!

Happy National Pro Bono Day and Volunteer Week 2021

Today marks National Pro Bono Day and we’re also celebrating National Volunteer Week! For us, there is no better time to acknowledge the amazing work that our volunteer professionals, like you, do to assist cancer patients and their families on a pro bono basis throughout the year through the Cancer Council’s Pro Bono Program. The theme of volunteer week this year is “Recognise, Reconnect and Reimagine”.

Recognise
We want to take this opportunity to express our sincere thanks for all the time and expertise you have given, and continue to give, to people affected by cancer in your community. We know the past year has been challenging for all Australians, and yet you’ve continued to volunteer your professional skills to help cancer patients and carers navigate their legal, financial and workplace issues. Thank you.

Reconnect
In the spirit of reconnecting, we want to remind you that we are always available to catch up remotely via phone, email or video conferencing, so please feel free to reach out to us if you’re keen to check in.

Reimagine
It’s been incredible to see the innovation that has occurred across the legal, financial and workplace industries which has allowed you to continue to support and assist vulnerable clients during COVID-19. We are so grateful for the pivots you’ve made to ensure access to your advice and assistance, particularly during times when it hasn’t been possible to meet with clients face-to-face.

We would not have been able to assist so many cancer patients and their families without your ongoing support and we want to sincerely thank you for all you continue to do to help vulnerable members of your community when they need it most.

Many thanks
Cancer Council’s Pro Bono Team