Lawcovernotes August 2017

13. With housing affordability becoming harder, the number of properties with multiple owners is set to rise. Often, clients want to leave their half share in a property to someone other than the other half interest owner. The picture is further complicated by the increasing number of blended families. Lawcover sees a number of claims arising from issues such as joint tenancy severance. In a recent Lawcover claim, the testator instructed the solicitor that she wished to leave her share of a property to her son, subject to a life tenancy in favour of her husband, who was not the son’s father. When the solicitor questioned the testator about the nature of the tenancy, she was adamant that she owned a one half share as tenant in common. In fact, she held the property as a joint tenant with her husband. When the testator died the property passed to her husband by survivorship and the testator’s intended gift to her son failed. The son made a claim and the solicitor was found liable for his loss. In another Lawcover claim, the solicitor prepared a will for a wife who had recently separated from her husband. The will provided for her share of the property to be divided between her three children from a previous relationship. The wife died and the entire property passed to the husband. The wife’s children brought a claim against the solicitor for failing to advise that the joint tenancy had to be severed for the gift to take effect. Lawcover also sees claims resulting from tenancies in common. In one claim, the husband and wife held the property as tenants in common. On the husband’s death, his interest fell into residue, forcing the wife to sell the property. A claim was made arguing that the solicitor had a duty to enquire how the property was held in order to advise the couple about the consequence of the current holding of the property. Solicitors can take the following simple steps to prevent these types of claims: ^ ^ Conduct a title search of all real estate and confirm the details ^ ^ Ensure the testator understands the difference between joint tenancy and tenancy in common ^ ^ Explain the effect of the death of one of the beneficiaries when one or more share a gift ^ ^ Ensure that clients provide details of their circumstances and wishes Solicitors need to consider the ownership structure of real property when taking instructions for a will to ensure that the testator’s intended distribution eventuates. Rosemary Workman Senior Claims Solicitor Solicitors should carefully consider the ownership structure of real property when preparing awill.