From a real property law standpoint, many important aspects of conveyancing need to be addressed following the death of a registered owner, Toronto real estate lawyer Lisa Laredowrites in Lawyers Weekly.
The first, explains Laredo, principal of Laredo Law, is joint tenancy.
“In general, where two individuals hold title to real property as joint tenants, and one joint tenant dies, the interest of the deceased joint tenant vests in the survivor, by operation of law,” she says, with the only requirement to formalize the transfer of title being the registration of a survivorship application.
However, says Laredo, if a spouse dies while owning an interest in a matrimonial home with a third party other than his or her spouse, the joint tenancy is deemed to be severed upon the death of that spouse and the interest of the deceased spouse devolves upon the estate of the deceased.
In addition, if the net family property of the deceased spouse is greater than the net family property of the surviving spouse, that spouse has the option to elect to receive an equalization payment from the estate, writes Laredo.
“The election must be made within six months of the date of death of the deceased spouse. In this six-month period, the personal representative is prohibited from distributing the assets of the estate, except with the consent of the surviving spouse,” she explains.
In the case of an intestacy, the surviving spouse may elect to take an equalization payment under the Succession Law Reform Act, says Laredo.
Also, she explains, the land registrar will permit the conveyance of real property by a personal representative of the deceased owner, without the requirement of a certificate of appointment of estate trustee, in cases where the value of the deceased’s estate is less than $50,000 and where proof of a valid will is provided.
“The land registrar will also accept a conveyance by a personal representative without a certificate of appointment of estate trustee where the proposed transfer is the first dealing with the parcel since its conversion from the registry system into qualified land titles,” adds Laredo.
Situations where a will either has no power of sale or the wording concerning power of sale is unclear will rely on the provisions of the Estates Administration Act, writes Laredo.
Pursuant to the Act, she explains, real property not disposed of, conveyed to, divided or distributed among the persons beneficially entitled within three years after the death of the deceased is then vested in those persons.
“Where land of the deceased has vested in the beneficiaries pursuant to the provisions of the Estates Administration Act, the land registrar will accept a transfer by the beneficiary to a third party without the requirement of a certificate of appointment of estate trustee, regardless of the value of the estate,” writes Laredo.
Except for these circumstances, Laredo explains that any transfer of real property by a personal representative requires them to first obtain a certificate of appointment of estate trustee with a will.
As Laredo explains, in most properly drafted wills, the personal representative is granted an express general power of sale.
“This express power supersedes the sale power and vesting provisions contained in the Estates Administration Act. The personal representative can convey title free and clear of estate debts when the conveyance is to a purchaser for value without notice of any debts.”
When the conveyance is to a beneficiary named in the will, however, Laredo explains that the transfer will be subject to the debts of the estate, if any.
Ultimately, given the complexities of the Estates Administration Act, Laredo recommends that individuals have properly drafted wills in place.