A person who wishes to protect their assets from bankruptcy by placing their home in the name of their spouse is likely to be unsuccessful in doing so.

When a husband and wife purchase a property as joint tenants, each spouse will hold 50% of the equity in the home irrespective of each party’s initial contributions. It is also irrelevant whether the title to the property is held in both names or one name only.  The asset will also not be protected if one party at a later date transfers their share of the asset to their spouse or if one spouse’s share has been transferred to the other. In all of these situations, the Courts will find that the spouse holding the interest is doing so “in trust” for them both.

This means that the trustee in bankruptcy would be entitled to a one half share in the event of one spouse filing for bankruptcy, regardless of how the property is held. In some circumstances, the other spouse may be forced to sell the property to realize the bankrupt’s share.

In the case of a deceased spouse having severed joint tenancy prior to their death and their spouse filing bankruptcy, the trustee will have difficulty to recovering more than half of the net proceeds of sale.

At Hatzis Lawyers we offer consultations in which we can tailor advice to your specific needs. Should you require any further information on this topic or wish to enquire about a consultation please do not hesitate to call our office on 1300 HATZIS.