January 4, 2023
Three Legal Assumptions to Avoid
3 common assumptions people tend to have about the law and their property interests, which can (and do) land people in difficult financial and emotional situations.
Article by Holly McCoy, Legal & Program Officer for Bushfire Community Legal Program
Here at the Bushfire Community Legal Program (BCLP), we want to ensure South Australians are well prepared and understand their potential legal risks.
During our time delivering the BCLP (and other legal services in the past), we have come to realise there are (at least!) 3 common assumptions people tend to have about the law and their property interests, which can (and do) land people in difficult financial and emotional situations.
We have heard the below statements all too often. Whilst we can only skim the surface in this article, we want to
make sure you walk away from having read this with a slightly better understanding of how the law works in each of these scenarios, what that might mean for you or your loved ones, and what measures you might need to consider taking to ensure your financial security and preparedness moving forward.
1. “We own the house together”
- If your name is not on the Certificate of Title (CT), you do not have a legal interest in the house (i.e. you do not ‘own’ it)
- You might be jointly listed on the mortgage but not the CT;
- Ask your bank for a copy of the CT or purchase a copy from SAILIS (www.sailis.lssa.com.au) to check;
- If your name is not on the CT then, without legal intervention, you have no control over how the property is dealt with – i.e. if it is sold, transferred, leased etc. (if, however, you are party to a joint signatory mortgage over the property, you may be able to prevent its sale);
- It is possible to be added to the CT after the purchase. However, independent legal and/or financial advice should be obtained first.
2. “If we break up, I am entitled to half of the property”
- The law does not apply an automatic equal division of property;
- Whilst parties can negotiate their own property settlement (and may agree to equally divide the property pool – assets and liabilities), the agreement may be rejected by the Family Law Court if it is not just and equitable (i.e. fair);
- To determine what is just and equitable, the Family Law Court will consider the parties’ contributions to the relationship, both financial (income, property they contributed to the relationship from the outset, financial/property gifts from family and non-financial (e.g. care of children, housework, gardening, property maintenance etc.);
- These contributions are weighed up and allocated a percentage to represent how much each party contributed to the relationship (e.g. one party contributed 45% to the relationship and, the other, 55%);
- Future factors are then taken into account (e.g. their age, health, earning capacity, care of children etc.) to determine if any adjustments need to be made;
- The final percentage represents how much of the net property pool each party is to receive. Negotiations need to then take place as to how, in reality, that will work (i.e. who will get what assets and who will take on responsibility for which liabilities etc.).
3. “If my partner dies, I will inherit everything anyway – so we don’t need wills”
- If everything is owned by you both jointly, you will likely be protected by the ‘right of survivorship’, meaning the jointly owned property should remain yours;
- However, anything owned in their sole name or as ‘tenants in common’ does not;
- Without a will, who inherits that property is determined by a priority list of people written in legislation (i.e. the law);
- If your partner has separated from a previous spouse, but not yet divorced them, their previous spouse is first in line to receive their estate. If you can establish you were domestic partners, the law states you will share the estate equally with their spouse (or any other domestic partners they may have!);
- Maybe that’s not the case but your partner left children behind (yours or otherwise).
- You (as their spouse or partner) are entitled to receive the first $100,000.00 of their estate. If their estate exceeds that amount, you are then entitled to half of what is left, and the other half has to be equally distributed amongst their children;
- There are other complications which may arise without a Will too. We therefore strongly encourage people to consider obtaining independent legal (and, depending on your circumstances financial/taxation) advice about drafting up a Will.
- Whilst you’re at it, consider getting advice about Power of Attorney and Advanced Care Directives too!
These assumptions tend to have considerable impact following a disastrous event (like a bushfire): some grants are based upon property ownership (i.e. only available/paid out to the owner of an impacted property), relationships can deteriorate and, sadly, lives can be lost. We hope the above information helps to debunk some of these assumptions and encourages you to think about your personal affairs and preparedness.
After all, you know what they say about people who make assumptions…
Proactive community members, community organisations, Councils, and Government Agencies are encouraged to contact BCLP about potential education sessions in SA communities. The BCLP is provided by Community Justice Services SA. Visit the BCLP’s Facebook Page for more information (please feel free to like and share the page too!). To contact BCLP, call 1300 850 650 or email [email protected].
Originally posted on WoTL News, December 2022:
Find out more about WoTL at: https://wotl.com.au/
About the Author
About Bushfire Community Legal Program
BCLP is a free legal service, aimed at assisting families/individuals, small businesses, and community organisations in high-risk communities across SA with their bushfire preparedness, relief, recovery, and resilience. Our focus is primarily on free legal education – providing and empowering these communities with the information and tools they need to prepare for and, potentially, mitigate, their losses in the wake of a bushfire.
Please note: This article has been produced for information purposes only. It does not constitute, nor should it be relied upon as, legal or financial advice. It is also only accurate as at date of publication, being: 13 December 2022 We cannot and do not guarantee its ongoing accuracy, as changes in the law may occur. It is strongly encouraged readers obtain independent legal and financial advice. For referral information, contact Community Legal Centres SA on 08 8121 4473. For referrals to a private (fee-for-service) lawyer, to have some of the abovementioned documents drafted, call the Law Society SA on 08 8229 0200.
Photo by Ian MacDonald on Unsplash