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23 January 2008 at 2230L (GMT+11)
What Property?
The most valuable asset you may own or be buying together is your house.
You may also be in a business partnership, own shares, a life insurance or superannuation policy, a shack in the country or the car together. To ensure you are both adequately protected in the unhappy event that the partnership breaks up, it is vital that the relevant documentation reflects your respective interests and/or that you have a property agreement setting out those interests, with an agreed procedure for division.
See Property Agreements.
This is a delicate matter and any discussion with your partner may give rise to feelings that you do not trust each other. It may be preferable to consider the matter from the perspective that your respective families could otherwise unreasonably interfere and cause you or your partner significant stress at a difficult time. Be sensitive and introduce the subject for discussion carefully.
In Australia, the majority of States and Territories now have laws to safeguard gay and lesbian couples. In a number of other countries in Europe, Canada, the United Kingdom and in a number of States in the US, there are laws granting a degree of protection.
See: Laws - Country - County/Province/Region/State - Partners pages).
If it is your intention to provide for your partner in the event of your death or you wish to have someone look after your personal and financial affairs in the event of an accident or serious illness:
| See : | Inheritance, Wills, Death & Incapacity, Buying Property (particularly with regard to term life and incapacity insurance), Partners and The Revocable Trust. |
Ownership of Property
All property can be owned and held either "jointly" or in specific shares as "tenants-in-common". The documents of ownership should reflect the manner of holding the property and in land transactions in Victoria it is presumed to be held jointly if not otherwise specified.
- Joint tenants
Where you and your partner hold your property as "joint tenants", each of you has an undivided share in the whole title to the property. So if one or other of you were to die, the survivor automatically becomes owner of the whole property. This is irrespective of the Will of the deceased partner. Joint bank accounts also become the property of the survivor.
(In other jurisdictions this manner of holding may be referred to by different names, for example, joint proprietors. There are also variants such as a joint tenancy with right of survivorship (US New York) but with this latter form, any joint tenant can destroy the joint tenancy by transferring his interest to a third party or even by executing a deed conveying his interest to himself as a tenant in common [New York Times: "Real Estate Q & A Gay Partners and Ownership Rights" 08 FEB 2003
- Tenants-in-common
In a "tenancy-in-common" there are defined shares in the property or land. The practical effect of which is that if you split up, each of you has the defined interest which you can dispose of at will (but there may be some difficulties in finding a willing buyer and the market value is thus affected).
If you or your partner were to die, the deceased's share forms part of their own estate and their Will determines to whom the property goes.
If there is no will, a person is said to die "intestate" in which case the property passes to the next of kin (father, mother, brothers or sisters, even uncles and aunts and, subject to the certain circumstances and the duration of a domestic partnership, to a surviving partner).
See: Inheritance, Wills, Death & Incapacity for more important information.
Changing the Manner of Holding Property
You can change the manner of holding property from sole proprietorship to joint tenants or tenants-in-common however, in land and share transactions government stamp duties and charges may add up to a large sum.
Some jurisdictions now treat transfers between same-sex couples on the same basis as heterosexual couples, where such changes are specifically exempted from stamp duty.
If these exemptions are not available, then it is important for gay and lesbian partners to settle these matters prior to entering into the purchase contract.
Property Agreements
If when you purchase property you each initially contribute unequally it is advisable to prepare a property agreement to avoid later difficulties.
This agreement should include a formula for later valuing, putting the property on the market and dividing the proceeds of any future sale of the property fairly.
In the event of one partner dying, such an agreement may avoid relatives unfairly gaining at the cost of the surviving partner. It may also avoid clever "legal" arguments along the lines that the non-financial partner is simply holding the property in trust for the greater contributor or even that the interest was given in a situation where an "under influence" or pressure was exerted.
So, whilst the present situation remains unsatisfactory for gay and lesbian partners around the globe and you should seek legal advice before becoming involved in making and substantial or non-financial investments or outlays in relation to property.
See: Partners - Partnership, Living or Co-ownership, Cohabitation Agreement/s.