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In a recent case Watson & Watson were retained by a husband. He sought advice in relation to parenting rights and property division options after he had separated from his wife but not divorced his wife. The husband and wife had been married for 8 years and had one child and had purchased a home which was registered in the joint names of the husband and wife.
The husband wanted to put in place a Parenting Agreement in respect of the child and to reach an agreement with his wife in relation to the division of property. He wanted to avoid commencing proceedings in Court.
Both the husband and wife were professionals and earned high incomes. The property that they had acquired after they married was valuable but was subject to a mortgage to the bank. The child had just commenced school, lived with his mother and spent time with the father.
Both the husband and the wife retained Lawyers who were instructed to attempt to resolve parenting and property matters and to make an Application to the Family Court of Australia for approval of Consent Orders.
Watson & Watson prepared and conducted a divorce application and obtained an Order for divorce.
What Happened after wife’s unexpected death
After the commencement of negotiations for settlement, the wife unexpectedly died.
There was no warning that her death was likely and no preparation for parenting arrangements had been considered.
There was no parenting Orders made by the Court and no property proceedings had been commenced.
What Happened – Parenting?
The husband sought urgent advice from Watson & Watson which was immediately provided. Watson & Watson advised the husband that with the death of the child’s mother, (his wife) he would have sole parental care and responsibility for the child. He was advised to immediately collect the child and have the child live with him. Advice was given to the husband in relation to how this should be achieved and what arrangements and communications needed to be made with the child’s other relatives (the mother’s family) to achieve a safe living situation for the child.
The husband acted on our advice and that is what happened.
What Happened – Property?
As the former matrimonial home was in joint names and the parties held the property as joint tenants, the deceased wife’s interest in the property (her share) passed by operation of law to the husband. In other words, the husband became the sole owner of the property. The property did not form part of the wife’s estate and would not be given to the beneficiaries nominated in her Will.
The wife’s superannuation entitlements and her personal property would form part of her estate and would be devolved in accordance with the Will.
What is the Law?
In Australia, property which includes real estate can be held or owned by one person or it can be held or owned by 2 or more persons as ‘joint tenants’ or as tenants in common.
In respect of property owned as joint tenants, the doctrine of survivorship applies and upon the death of one of the joint owners, the deceased’s share transfers automatically to the survivor.
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What Could Have Been Done?
It is possible to make Application to the Land Registry Services NSW for the conversion of a joint tenancy to a tenancy in common.
This is done by the filing with the Land Registry Services NSW of a transfer severing joint tenancy. The permission of the other spouse is not required. No stamp duty is payable. Where there is a registered Mortgage over the property, the mortgagee needs to be notified of the filing of a transfer for severance of a joint tenancy.
Had this occurred, the wife’s interest in the home would not have passed to the husband and would have formed part of her estate. The wife’s estate was significantly diminished by reason of the operation of the doctrine of survivorship.
Wife’s Legal Representatives
Could the wife’s legal representatives (the Executors in her Will) have commenced proceedings in the Family Court of Australia to seek to obtain a property division? The law is that no Application can be made to the Family Court of Australia for property division if one party to the proceedings dies prior to the commencement of proceedings. In this case no proceedings had been commenced after the wife’s death and proceedings could not be commenced in the Family Court of Australia which is now called the Federal Circuit and Family Court of Australia.
As no proceedings had been commenced in the Family Court the laws of succession and intestacy applied.
The husband obtained the wife’s interest in the former matrimonial home and took the house in its entirety.
Watson & Watson Advice
,the issue as to tenancy s
In circumstances where couples separate, it is often good practice to sever the joint tenancy.
If you are in a de facto relationship or marriage and are proposing financial/property settlement or parenting arrangements, it is prudent to seek advice first. Unforseen events including the passing of one party can have a significant affect on the remaining party and children of the marriage or relationship. At Watson & Watson our experienced Senior Solicitors can advise you of your rights and entitlements in relation to financial/property settlement and parenting matters and assist you in navigating what can be a difficult process in sensitive circumstances.
This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.
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