Disposing property – what can be disposed of by a will and what can’t – property ownership and control issues
Disposing property by will, in the will-making process requires considerations to be given to what you own in your individual name, as opposed to what you might control, see further below. As only property owned in a personal or individual name can form a deceased estate, it is only this which can be transferred by will, (or the rules of intestacy).
Other property may be owned in the name of a company or trust. In these entities an individual may have control through shareholdings or a power of appointment. When it comes to making a will, it is important to remember that such assets won’t form part of a person’s deceased estate and therefore cannot be disposed by their will. See the table below for examples of what are estate (disposable by will) and non-estate assets. Making a list of property, money and things to be disposed of and who owns what is important.
State and territory legislation on wills and succession state the property which may be disposed of by will. See links to the Succession Acts of NSW and Queensland, and the Wills Acts of Victoria, South Australia, Tasmania, WA, Northern Territory and the ACT here.
Disposing property in a will – what can you include?
A basic principle in property law is that you can’t dispose of property you don’t own in your own name. So any assets not in an individual name cannot be given away by will. The graphic above seeks to illustrate the point, and examples of what can and can’t be dealt with by a will are listed in the table below.
Disposing property by will – the legislation
Succession and wills legislation sets out in broad terms what property can be disposed of by will, for example follow the links below:
In New South Wales:
‘What may be disposed of by will?’, s 4 of the Succession Act 2006 (NSW).
In South Australia:
‘All property may be disposed of by will’, s 4 of the Wills Act 1936 (SA).
In Western Australia:
‘Provision that may be made by will’, s 6 of the Wills Act 1970 (WA).
In Northern Territory:
‘Property that may be disposed of by will’, s 6 of the Wills Act (NT).
What if jointly owned property is included in a will?
If jointly owned property is inadvertently mentioned in a will, it will automatically pass to the surviving co-owner(s) regardless of what the will says. This is because of the right of survivorship which attaches to joint ownership. The right of survivorship means that when a joint owner dies, the surviving joint owner or owners automatically own the deceased’s interest. When there is only one owner left, they will own the whole property. Then when they die, now being the sole owner, the property will pass to who they have willed it to – or according to the intestacy rules, if they have not made a will. Information on the different ways to own property with others may be read here.
Jointly owned property is outside the will and the probate process. Following the death of a joint tenant, updating the certificate of title on the public register is simply a matter of completing Land Titles Office formalities. This usually involves making a survivorship application on standard forms available from the Land Titles Office; clink here for a list of links to their websites click here.
Examples of assets disposable by will and those which are not:
|What can be disposed of by will – owned solely in a personal name||What can’t be disposed of by will – (generally)
|Real estate, land, residence, family home||Jointly owned property (as joint tenants): family home, joint bank accounts|
|Interests owned as a tenant in common||Superannuation fund – but member may nominate death benefit be paid to their estate|
|Bank accounts, but not if you have a joint account with someone else.||Reversionary pensions or annuities|
|Shares in public companies||Life insurance policies not owned personally|
|Shares in private companies||Property held in a trust: family discretionary trust|
|Other securities: bonds, managed funds||Property owned by a company or incorporated body|
|Units in a unit trust||Social security payments, benefits|
|Trust income||Personal licences to practise a profession, memberships of professional bodies|
|Life insurance policies owned personally||Personal licences, memberships of professional bodies|
|Intellectual property owned personally, eg
copyright held in artworks, literary works,
|Property held under a power of appointment|
|Personal & household items: furniture, jewellery, artworks, collections, cars, boats||Benefits payable to nominated beneficiaries|
|Personal loans to others||Domain names, websites|
29 November 2013, last updated 14 June 2017
© BHS Legal