Do you remember the scene in Titanic where an elderly husband and wife choose to perish together rather than be separated? The couple were Ida Straus and her husband Isador Straus, Macy’s department store co-owner. Hankies aside, this story is interesting from an inheritance law perspective because it raises the question of what happens to jointly owned assets when a couple die ‘simultaneously’.
Unlike other legal jurisdictions in Australia[1], South Australia does not have any legislation governing cases of commorientes (latin for when two or more people die at the same time). Compare this, for example, to NSW, when in cases where there is no evidence as to who died first, the oldest person is deemed to have predeceased the youngest person.
Why is this important?
The order in which a married couple dies is important for inheritance purposes since it is the Will of the last survivor that determines where joint assets eventually end up – and therefore what can potentially be challenged and by whom.
So, what happens when the order in which joint owners died is undetermined? First, let’s talk about we mean by joint ownership.
What is joint ownership?
When people own assets jointly (more formally described as joint tenants), they:
- have an ‘equal undivided interest’ in the whole of the property; and
- the right of ‘survivorship’ applies.
This means that a joint tenant has an interest in the whole asset, but by themselves owns nothing, and accordingly cannot pass it to another person under his or her Will. The right of survivorship means that if one of the joint owners dies, the property will automatically pass to the surviving joint owner(s).
What does this mean for the joint assets of couples that die ‘simultaneously’?
In a recent South Australia case[2], there was insufficient evidence to establish that either of the husband or the wife died before the other. The court declared them to have died commorientes. Accordingly, the joint tenancy was not severed and neither party could dispose of their respective interest in their Wills. This resulted in the joint assets passing on an intestacy to the deceaseds’ heirs.
In South Australia, Part 3A of the Administration and Probate Act 1919 determines who will inherit in cases of intestacy, (rather than the terms of the Will).
Not fair?
In times like these where blended families are the norm, the position in South Australia seems unfair. For example, let’s assume you are the child and stepchild of the deceased couple. Their Wills demonstrate their intention for you to inherit all joint property on the death of both of them, but they die simultaneously in a car accident and all of a sudden, the disposition of their jointly held assets is subject to intestacy law. You may inherit your biological parent’s share of the joint assets, but your stepparent’s interest may go for example, to their cousin, who may be the next closest blood relative, but according to their Will, not the intended beneficiary.
In these circumstances your only recourse might be to bring a family provision claim.
The future?
From 1 January 2025 the Succession Act 2023 comes into force and provides that in circumstances where all owners of jointly-owned property die simultaneously or in an order that is uncertain, the property devolves as if the joint owners had, at the time of their deaths, held the property as tenants in common in equal shares. If passed, this provision will have the effect of allowing each person’s Will to deal with their presumptive share of the jointly owned property.
An additional provision has been included in the Act to codify the presumption of survivorship. Where 2 or more persons have died in circumstances where it is not possible to determine the order of death, the deaths will, for all purposes affecting title to property, be taken to have occurred in order of seniority, with the eldest having died first.
How can we help?
We can assist you to bring a family provision claim if you have been left inadequately provided for as a result of the death of a family member. If you are in the process of doing your estate planning and you foresee that your joint ownership of property may give rise to some issues around inheritance we can help you re-structure how you own your assets and circumvent future issues.
Call the experienced team at us today on 1300 654 590.
[1] In cases of simultaneous death in WA and the NT the law deems the property is to be held as tenants in common in equal shares. This type of ownership means the deceased’s interests can be disposed of in their respective Wills. NSW, VIC, QLD, TAS have a statutory presumption that in cases of simultaneous death, the deaths will be deemed to have occurred in order of seniority. Therefore, the Will of the younger of the deceased couple will prevail. In ACT where two or more persons die at the same time the property of the benefactor devolves as if the benefactor had survived the beneficiary and had died immediately after the beneficiary.
[2] Public Trustee v Taylor & Ors [2020] SASC 122
