When you’re buying a house or property with a loved one, estate planning is rarely front of mind. However, how you own the house can have a huge impact down the track.
There are two ways to own property with another person (or persons). Each is treated differently in the event of your death.
Joint tenancy means that you both own the whole property ‘jointly and severally’. If you die, the property automatically passes to the other owner without the need to transfer the title.
Tenants-in-common, however, owns distinct and separate shares of the property. These may be 50:50 or any other proportion. If you die, your share of the property becomes part of your estate and is distributed in accordance with your will.
While you can change the form of ownership down the track, it can be costly. Therefore, the best time to consider the issue is when you first buy the property.