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Storey & Gough issues its clients with a regular newsletter which highlights developments which have taken place in the firm. Our latest issue can be viewed below:
January 2016
What is the status of property ownership and debts incurred after two people decide to get married?
When two people decide to get married, one of the assumptions made in relation to property and debts are that such burdens will be shared between the parties. However, this may not always be the case, and this piece will look at the general approach the law may take in relation to property ownership and debts between spouses.
Who owns property acquired before marriage?
Any property owned before marriage, will generally still belong to the person, even after the formal arrangements have taken place. A person is able to transfer any property from their sole name to joint ownership, while not incurring any stamp duty. However with that being said, there is no legal obligation for a person to transfer any sole property to joint ownership.
Who owns property acquired after marriage?
Property obtained after a marriage for the most part, belongs to the person in whose name the property was purchased under.
Property jointly owned
Married couples often purchase property together that usually takes the form of either a joint tenancy, or a tenancy in common.
Joint tenancy: a couple who is either married or part of a de facto relationship, will have an equal share in ownership of a property in a joint tenancy. As a consequence of the equal ownership in a joint tenancy, the property cannot be sold without the consent of the other party. In the event that one party passes away before the other, the surviving party gains ownership of the whole property. Ownership of a joint tenancy property passes to the surviving spouse due to the fact that title never forms part of the estate of the deceased.
Tenancy in common: parties who own tenancy in common property, will have an individual share that can be equal or in another proportion. In contrast to a joint tenancy, upon the passing of one of the parties, ownership does not automatically pass to the surviving party due to the fact that each tenant in common may deal with their share of the property in any way they see fit. This means that the deceased person may leave their share of the property to another person besides their spouse.
Loan security
Security for a mortgage or loan can be obtained from property owned individually or by both parties.
Can both parties to a marriage be responsible for the debts of their spouse?
Debts incurred under one name of a party to the marriage will generally be the responsibility of that party. The husband or wife of the debtor may not always have any legal responsibility of the debt.
What happens in the event of a marriage break down?
If the marriage comes to an end, the court under the Family Law Act 1975 (Cth) can assess the property owned by the parties, and make an order to transfer the property or debt from one party to the other, depending on the circumstances surrounding the case.