The Star: September 28, 2017
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Law/puzzLes | 9<br />
Property ownership issues<br />
EXERCISE THE MIND<br />
For many New Zealanders, their home is<br />
their biggest asset so it’s worth taking some<br />
time to think about the way you own your<br />
home.<br />
<strong>The</strong>re are two common legal forms of<br />
property ownership in New Zealand. A<br />
majority of couples own their properties as<br />
joint tenants. <strong>The</strong> significant feature of this<br />
form of ownership is that on the death of<br />
the first spouse, the property automatically<br />
passes to the survivor by way of a rule of<br />
law known as Survivorship. It doesn’t matter<br />
what’s in your Will, your surviving partner<br />
will take the entire property in his or her<br />
own name.<br />
<strong>The</strong> second common form of legal<br />
ownership where two (or more) people<br />
own property together is as tenants<br />
in common. Quite simply, this form of<br />
ownership allows for property to be<br />
owned in distinct shares – most commonly<br />
as tenants in common in equal shares.<br />
Significantly, the rule of survivorship does<br />
not apply and as a consequence what<br />
happens to your share of the property on<br />
your death depends entirely on what you<br />
state in your Will.<br />
Life Interest Will<br />
If property is as tenants in common, you<br />
are free to leave your share of the property<br />
as you choose in your Will. Often, a couple<br />
will leave a Life Interest in their share of the<br />
property to their spouse or partner. This is<br />
called a Life Interest Will.<br />
A Life Interest Will leaves your share<br />
of the property to your Executor(s) /<br />
Trustee(s) with instructions that they<br />
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allow your spouse or partner to live in the<br />
property for the remainder of his or her<br />
lifetime. Upon the ultimate death of the<br />
survivor, your share of the property then<br />
goes to the final or residuary beneficiaries<br />
of your Will.<br />
Residential Care Subsidies<br />
As discussed above, if property is<br />
owned as joint tenants, on the death of<br />
the first spouse or partner, the whole<br />
property passes to the survivor. Should the<br />
surviving spouse or partner require longterm<br />
residential care at a later date, they<br />
will have to meet the Ministry of Social<br />
Development’s (the ‘Ministry’s’) criteria<br />
before qualifying for a Residential Care<br />
Subsidy.<br />
Under current Ministry policy, only the<br />
income from a life interest is assessed in an<br />
application for a Residential Care Subsidy.<br />
<strong>The</strong>re are strong anti-deprivation clauses<br />
in the Social Security Act 1964. Any decision<br />
to place your home into a tenants in<br />
common structure must be for legitimate<br />
estate planning purposes and not as a device<br />
to qualify for a Residential Care Subsidy.<br />
Changing the way you own your home must<br />
also be done in conjunction with the rules<br />
and regulations set in place by the Ministry.<br />
As with all areas of law, it is important<br />
that you seek good advice from a team who<br />
understand how this area may impact on<br />
you. At Harmans we have experience dealing<br />
with estate planning strategies. Give Fleur<br />
McDonald a call on 03 352 2293 to arrange<br />
an appointment to discuss your situation.<br />
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AcRoSS<br />
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SUdoKU - MEdIUM<br />
QUIcK cRoSSWoRd SoLUtIonS PAgE 12<br />
doWn<br />
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