https://moneypath.com.au/free-guides/the-estate-planning-strategy-most-australian-families-overlook/Two lines on a certificate of title decide what happens to the largest asset most Australians own. Most people have never read them, could not say which applies to their property, and assume the question is settled by their will.
It usually is not. If you own property as joint tenants, your share does not form part of your estate at all. It passes automatically to the surviving owner the moment you die, and your will has no say in the matter. You can write the most carefully considered will in the country and it will not touch that property.
For a couple in a first marriage leaving everything to each other, that is exactly what they wanted, and the arrangement works beautifully. For a second marriage, a co-purchase with a sibling, a parent who helped a child into a house, or anyone who wants their share to go somewhere specific, it can produce an outcome nobody intended and nobody can reverse.
This guide explains the difference, who it catches, how to find out what you actually have, and what changing it involves.
The difference, briefly
| Joint tenants | Tenants in common | |
|---|---|---|
| What you own | The whole property together, with no distinct share | A distinct share, which can be unequal |
| On death | Passes automatically to the surviving owner or owners | Forms part of your estate |
| Does your will apply? | No | Yes |
| Can shares be unequal? | No | Yes, in any proportion |
| Can you leave it to a trust? | No | Yes |
| Typical use | Couples who want everything to pass to each other | Blended families, business partners, unequal contributions |
The right of survivorship
Joint tenancy carries what lawyers call the right of survivorship. Each joint tenant owns the whole property together with the others rather than a separate slice of it. When one dies, the survivors simply continue owning the whole, and nothing passes through the estate because there is nothing separate to pass.
This has consequences that surprise people:
- The property is not dealt with by the will, however clearly the will is drafted.
- The property does not need to wait for probate before the survivor can deal with it.
- The property is generally not available to pay debts of the deceased’s estate.
- In most Australian states, the property is generally beyond the reach of a family provision claim against the estate, because it never formed part of it.
That last point is genuinely useful in some circumstances and genuinely damaging in others. It depends entirely on whether the automatic outcome is the outcome you want.
The blended family problem
This is where the title choice does the most harm, and it is common enough that it should be checked in every second marriage.
Consider a man in his late sixties, remarried, who owns a home worth $1.1 million with his second wife as joint tenants. He has two adult children from his first marriage. His will says half his estate goes to those children, and he has told them so. His superannuation has a binding nomination in favour of his wife. He also has around $80,000 in the bank.
When he dies, the home passes to his wife automatically. It is not part of his estate. The super passes to his wife under the nomination, and is not part of his estate either. His estate is the $80,000. His children receive half of that, so around $40,000 between them, rather than the several hundred thousand dollars everyone assumed.
His wife’s own will, entirely reasonably, leaves her estate to her own children. Within a generation, the entire value of the home has moved to one side of the family. Nobody acted badly. The title said joint tenants.
The alternative is not to disinherit a spouse. A common structure is to hold the property as tenants in common while giving the surviving spouse a right to live there for life or until they choose to move, with the capital eventually passing to the first spouse’s children. That requires a tenancy in common to work, because a joint tenancy interest cannot be directed anywhere. Our guides on testamentary and family trusts and estate planning generally deal with how those structures are built.
Five other situations where the title decides the outcome
Unequal contributions
One party puts in $400,000 and the other $150,000. As joint tenants, that difference is invisible and legally irrelevant. As tenants in common, the title can record the actual proportions, which matters on sale, on separation and on death. This comes up constantly where parents help an adult child buy, a scenario our guide on the bank of mum and dad covers in more detail.
You want the property to go into a trust
Testamentary trusts can offer meaningful tax and protection advantages for beneficiaries, particularly where children are young, a beneficiary has creditor exposure, or a relationship is unstable. None of that is available for a joint tenancy interest, because the interest never reaches the will. If a testamentary trust is part of your plan, the title has to support it.
Asset protection
Where one member of a couple carries professional or business risk, holding property in defined shares is part of a broader structuring conversation. Our guide on how each wealth structure protects your wealth sets out the wider picture. This needs proper legal advice, and it needs to be done well before any risk materialises rather than after.
Separation, before a property settlement
Separated couples frequently remain joint tenants for years while a settlement is negotiated. If one dies during that period, the entire property passes to the other automatically, regardless of what either of them intended or what a settlement would have produced. Severing the joint tenancy is a standard protective step in that situation, particularly where health is a concern or a settlement is likely to take time. Our guide on retirement planning after divorce covers the surrounding decisions.
Buying with a sibling, a friend or an adult child
Co-purchases outside a couple relationship are almost always better as tenants in common. Few people intend that their share of an investment property should pass automatically to their brother rather than to their own children, but a joint tenancy produces exactly that.
When joint tenancy is the right answer
It often is, and this article is not an argument against it.
For a couple in a first marriage with shared children, who intend everything to pass to the survivor, joint tenancy is simple and effective. The survivor deals with the property immediately rather than waiting for probate, which matters at a difficult time. The transfer process on death is straightforward. There is no need to value a share or negotiate with an executor.
It also has a protective quality worth understanding. Because the property never becomes part of the estate, it is generally outside the reach of a family provision claim in most states, including South Australia. New South Wales is the significant exception, having notional estate provisions that can allow a court to designate survivorship property as available for a family provision order. Those provisions are unique to New South Wales. If your property is in another state, the survivorship outcome is considerably more final.
How to find out what you have
Your certificate of title, or a title search, will state it. Where two or more owners are listed without any indication of shares, the ownership is generally a joint tenancy. Where the title records proportions, such as one half each or seventy and thirty hundredths, it is a tenancy in common.
A conveyancer or solicitor can obtain a title search quickly and inexpensively, and your original purchase documents will also show what was elected at the time. It is worth checking rather than assuming, because the election was often made years ago in a stack of settlement paperwork, sometimes by default, and frequently without any discussion of what it meant.
If you own more than one property, check each. It is common to find them held differently without anyone having decided that they should be.
Changing it: severing a joint tenancy
A joint tenancy can be severed, which converts the ownership into a tenancy in common. In most Australian jurisdictions this can be done by one owner without the consent of the other, by registering a transfer at the land titles office. It is a standard conveyancing transaction and it is not expensive.
Three points about it:
- Consent is generally not required, though notice requirements and mechanics vary between states. This is why it is available as a protective step during separation.
- Severing into equal shares does not usually change anyone’s underlying beneficial interest, so it is not typically treated as a disposal for capital gains tax purposes, and duty is often nominal or nil. Changing the proportions is a different transaction and can have both tax and duty consequences. Both should be confirmed for your circumstances before proceeding.
- Severing is only half the job. Once your share forms part of your estate, your will has to say what happens to it. Severing without updating the will simply sends the share to whoever your existing will benefits, which may not be what you had in mind either.
The reverse change, from tenants in common to joint tenants, is also possible and is sometimes appropriate, for example where a couple’s circumstances have simplified.
The other assets that ignore your will
Once people understand this about property, the natural question is what else works the same way. Quite a lot.
- Superannuation does not automatically form part of your estate. It is paid by the trustee, subject to any valid death benefit nomination. Our guides on why super and your will do not automatically work together and binding, non-binding and reversionary nominations deal with this in detail, and it is the second most common surprise after joint tenancy.
- Life insurance held outside super is paid according to the policy ownership and any nominated beneficiary.
- Joint bank accounts generally carry the same right of survivorship as joint tenancy property.
- Family trust assets are not owned by you personally and do not pass under your will. What matters is who controls the trust after your death.
- Company shares pass under your will, but control of the company may depend on the constitution and any shareholders agreement.
A will covers what a will covers. For many households, that is a minority of the total value. Our guide on what the executor role actually involves is worth reading with this in mind.
The South Australian position
South Australia consolidated its succession law in the Succession Act 2023, which replaced the previous separate wills, probate and family provision legislation and made a number of changes, including to who can bring a family provision claim and to the factors a court must consider.
What the reforms did not introduce is a notional estate regime of the kind New South Wales has. That means the general position in South Australia remains that property passing by survivorship is outside the estate and outside a family provision claim against it. For anyone using joint tenancy deliberately, that is significant. For anyone who assumed their will would handle the house, it is significant in the opposite direction.
Estate law is state based and the detail matters, so this is an area where a South Australian solicitor should be involved rather than general guidance from a website. Our guide on powers of attorney and advance care directives in South Australia covers the other documents that should be in place alongside a will.
Where Professional Advice Adds Value
We are financial planners, not solicitors. Drafting wills, advising on the legal effect of a title and preparing severance documents are legal work and belong with a lawyer.
What we do at Money Path is the part that usually gets missed. Establishing what you actually own and how, across property, super, insurance and any trust or company interests, and then working out what would happen to each of them tomorrow. That exercise almost always produces at least one surprise, and the most common one is a joint tenancy nobody remembered electing.
From there the work is modelling the outcomes. What each beneficiary would actually receive under the current arrangements, what a surviving spouse would need to live on, whether a life interest arrangement leaves them genuinely secure, and what the tax position looks like for each beneficiary. Those numbers are what make the legal structure a decision rather than a guess, and they are what we take to your solicitor so the drafting is done against a clear brief.
If an inheritance is on the other side of this for you, our guide on financial planning for a windfall deals with what happens next.
Frequently asked questions
What is the difference between joint tenants and tenants in common?
Joint tenants own the whole property together with a right of survivorship, so on death the share passes automatically to the surviving owner and the will does not apply. Tenants in common each own a distinct share, which can be unequal, and that share forms part of the estate and passes under the will.
Does my will override a joint tenancy?
No. A joint tenancy interest passes automatically to the surviving owner by the right of survivorship and never forms part of your estate, so there is nothing for your will to deal with. This applies no matter how specifically your will refers to the property.
How do I find out how my property is held?
Check the certificate of title or obtain a title search through a conveyancer or solicitor. Where owners are listed without any shares specified, it is generally a joint tenancy. Where the title records proportions, it is a tenancy in common. Your original purchase documents will also show what was elected.
Can I change from joint tenants to tenants in common?
Yes. Severing a joint tenancy converts it to a tenancy in common, and in most Australian jurisdictions one owner can do this without the other’s consent by registering a transfer, though mechanics and notice requirements vary by state. Severing alone is not enough. Your will then needs to say what happens to your share.
Does severing a joint tenancy trigger capital gains tax or stamp duty?
Severing into equal shares generally does not change anyone’s beneficial interest, so it is not usually treated as a disposal and duty is often nominal or nil. Changing the proportions is a different matter and can have both tax and duty consequences. Confirm the position for your circumstances before proceeding.
Why does this matter so much for blended families?
Because a joint tenancy with a second spouse means the family home passes entirely to that spouse, whose own will then determines where it goes next. Children from a first relationship can end up receiving very little, even where the will appears to provide for them generously, because the largest asset never entered the estate.
Can someone contest property that passed by survivorship?
In most states, including South Australia, property passing by survivorship is outside the estate and generally beyond the reach of a family provision claim against it. New South Wales is the significant exception, with notional estate provisions that can allow a court to treat survivorship property as available. Take advice specific to your state.
Taking the next step
This is a five minute question with a permanent answer. Find out how each property you own is held, then ask yourself whether the automatic outcome is the one you want. If it is, do nothing and be glad you checked. If it is not, it is fixable now and completely unfixable later.
General advice warning: This article contains general information only. It does not take into account your objectives, financial situation or needs, and it is not legal or tax advice. Property, succession and stamp duty laws are state based and differ significantly between jurisdictions, and this article describes general principles with reference to the South Australian position. The legal effect of a title, the mechanics of severance and the drafting of a will are legal matters. You should obtain advice from a solicitor in your state, and from a registered tax agent on any tax or duty consequences, before making changes. Seek personal advice from a licensed financial adviser before acting on any financial aspect of this information.
