It’s a common and understandable assumption: “I’ve made a Will, so it covers everything I own.” For property and some bank accounts, that isn’t necessarily true, and the reason has nothing to do with the Will itself.
Two Ways to Own Property Together
In NSW, when more than one person owns an asset, most commonly a house, but sometimes a joint bank account, the ownership is structured one of two ways: as joint tenants or as tenants in common.
Joint Tenants: Survivorship Overrides the Will
When property is held as joint tenants, each owner has an equal, undivided interest, and there’s a right of survivorship built into the ownership itself. When one joint tenant dies, their share doesn’t form part of their estate at all; it passes automatically and immediately to the surviving joint tenant(s), regardless of what their Will says. This is why many couples buying a home together choose this structure: it’s simple, and it generally avoids the property needing to go through probate.
Tenants in Common: The Will Takes Over
When property is held as tenants in common, each owner holds a specific, separate share (which doesn’t have to be equal). On death, that share becomes part of the deceased’s estate and is distributed according to their Will — or, if there’s no Will, under the intestacy rules in the Succession Act 2006 (NSW). This structure is common for blended families, siblings buying together, or business partners, where each person wants control over where their own share ultimately goes.
Why the Distinction Catches People Out
The risk shows up when someone’s Will says one thing, but the way an asset is actually owned says another. A parent who remarries and buys a new home as joint tenants with their new partner, for example, may intend for their share to eventually go to their children, but if it’s held as joint tenants, it will pass entirely to the surviving partner instead, no matter what the Will says.
Checking How You Actually Own Things
The ownership structure for real estate is recorded on the Certificate of Title, held with NSW Land Registry Services; for a joint bank account, it’s worth confirming directly with the bank. A joint tenancy can be converted into tenants in common, known as “severing” the joint tenancy. This can be done by agreement between the owners, but it can also be done unilaterally by one owner acting alone, without needing the other owner’s consent, by dealing formally with their own share. If you’re considering this, it’s worth getting the mechanics right, since it needs to be done and recorded correctly to take effect.
This article is general information only and is not legal advice. Laws change, and every situation is different; please seek legal advice specific to your circumstances.
Speak With Our Wills & Estate Planning and Property Teams
If you’re not sure how your property or accounts are held, or want to make sure your Will and your ownership structure actually line up, our team can check this with you. Call us on (02) 9523 5535 or get in touch online.
