Law of Survivorship: Why Is It Essential When Buying a House?

September 11, 2023    propertysettlementlawyersperthwa
Law of Survivorship: Why Is It Essential When Buying a House?

When acquiring property with another individual, there are numerous factors to consider. One of these is known as the right of survivorship. This can influence what will happen to an estate if either of the owners dies before the other. It is essential to know how this right operates and how it might affect various aspects of your existence and the well-being of those around you. A property lawyer in Perth will assist you in understanding all the aspects of survivorship rights.

Numerous factors can directly affect how the right of survivorship is managed and methods to include or remove it from agreements, depending on the circumstances. It is important to understand what the law states about this aspect of buying estate and how it is dealt with in various instances.

What Is The Survivorship Right?

You’re probably curious about the law of survivorship and how it affects you if you buy a house with another person or people. Today, different kinds of joint property ownership include the right of survivorship. Yet, it has a different influence on tenancy and joint tenancy in common.

If a piece of property has been bought and possessed by many people, the right of survivorship is stated in the right of ownership to the real estate. If one of the holders dies, the remaining owner or owners are obligated to take on the liability for the deceased’s part of the real estate.

This will continue until there’s just a single owner left. At this point, the remaining owner owns the property and can do whatever they want with it in their last will. For instance, if two individuals jointly own an asset and one dies, the other will become the sole proprietor of the property, even if this is not specified in the will, since the two of them jointly purchased the property.

How Does The Survivorship Right Work?

The survivorship right works because if one of the joint owners dies, the remaining owner (or proprietors) will immediately inherit the dead person’s portion of the real estate. Only if the land was bought by multiple individuals and the right of survivorship was specifically included in the deed of ownership.

The reason for creating such kinds of agreements and their use in joint acquisitions is usually to keep the rights to the property between the owners. This guarantees that the asset remains with a specified set of people or entities while ensuring it cannot be distributed to anybody else unless its owners explicitly change this in front of a witness document signing lawyers. 

It is widely used to guarantee that living parties retain property ownership if they’re joint owners when one owner dies. A legal document with the right of survivorship is mainly used to ensure equal property allocation.

It is also utilized for company-related reasons to guarantee that it remains with the organization for business purposes. Some organizations may buy the property and then employ the right of survivorship to ensure that it stays with the company until it goes on sale later. This is a wise business decision for many organizations, particularly if they intend to keep the assets for a long time or generations. That’s why it has become a common company estate planning technique.

What Is The Distinction Between Joint And Common Tenancy?

In most cases, the survivorship right is applicable in joint tenancy circumstances. One issue to remember is that this right only sometimes applies to common tenants as each participant does not share an identical interest. A significant distinction between tenancy in common and joint tenancy affects how property is split when one owner dies. When one of the partners in ownership (also known as joint tenancy) dies, the recently deceased person’s interest passes to the surviving owners.

However, no law clearly states this to occur with tenancy in common because each partner has a separate transferable interest in the real estate by design.

In a situation with tenancy in common, the tenants can divide the ownership shares among their descendants as they want. This might be included in a will, specifying how the asset would be distributed. Because of these major differences, their lawyers recommend that numerous business partners adopt only joint tenancy arrangements to keep property from third parties if a single shareholder dies. This can secure ownership continuity and exclusivity.

How Will This Affect Estate Taxes?

Understanding the tax consequences of any shared property or joint tenancy scenario is important.

Fortunately, property interest flows directly and automatically from the person who died to the remaining owner or owners under the survivorship right. As a result, the property does not count as part of the deceased’s estate and is not subject to probate. Surviving proprietors will not be subject to estate taxes.

However, if the sole surviving owner dies, there is nobody to whom the asset immediately goes. As a result, the property becomes part of the estate of the last living owner. If their wealth surpasses the limit for relevant estate taxes or inheritance, they may face taxation at the state, federal, or both levels. Transferring the real estate to a trust could be a useful way to avoid including the property in an individual’s estate.

Also, adding someone other than your partner as a joint renter may be considered a gift after purchasing a property.

What Is The Distinction Between Separate And Community Property?

In most cases, the survivorship right applies to common property. This is significant for any contracts between spouses since it may directly influence partners who bring distinct real estate holdings to the marriage. As one individual had originally bought it before getting married, this form of real estate is viewed as separate property. Community property is characterized as acquired during the marriage and, hence, as an asset both parties own, even if their names do not appear on the title.

This difference can directly impact a remaining partner because a property designated as separate property is not immediately handed over to the remaining spouse if one dies.

Some states have wider definitions of shared property, but for the most part, this concept applies. If the partner wants the assets to include the survivorship right, they must modify the agreement. This is accomplished case-by-case and must be added through the court system and incorporated into the proprietor’s will. Yet, with jointly held real estate, the survivorship right applies by itself without any action on behalf of either party.


The survivorship right’s primary benefit is that it automatically transfers property ownership and keeps it probate-free. Survivorship application lawyers Perth will guide you throughout the process. On the other hand, the right of survivorship implies that you cannot transfer your portion of the possessions to your successor unless you are the last remaining owner. Those who want to leave their stake in a property to someone other than the co-owner should consider other possible alternatives.

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