While a Will can often control the final disposition of a person’s assets, depending on the form of real property is registered, it may transfer some assets outside of a Will, which will save both time and probate fees. The estate depends on identifying in terms of owned, the lease deed, Will land grant and/or bill of sale through which they received the estate. The real estate plays a significant role in entails the right of use, control, and disposition of the land and its attached objects can be transferred outside of a Will. If it conforms, this guides best to suggest changes to individual ownership interests to simplify the disposition of assets upon death or to minimize probate fees. The forms of property interest include:
Life Tenancy: A life tenant has an interest that permits the use of the property during individuals’ life.
Sole Ownership: The property owner has ownership and control of the property, both during life and upon death. When an individual has sole ownership of an asset, is responsible for all liabilities—legal debts a company owes to third-party creditors and has control of the property, both during life and upon death through the designation of a beneficiary or a Will. In sole-ownership, an individual has an unqualified right to sell the asset while still alive and in contrast, an individual should plan for its disposition in a Will after death or distributed to the heirs according to provincial intestacy laws. That disposition can be controlled (i.e., one chooses who gets the property) through a Will, within the constraints of family law.
Tenancy-In-Common: Joint ownership arrangement whereby all co-owners have an equal right to possess and use the whole property, along with the right to dispose of their interest in that property, however they see fit during life and after death. In a tenancy-in-common, all co-owners have an equal right to possess an equal right to dispose of their interest in that property while during life and thereafter death. In this co-owners has the rights to sell their share while they are alive, or name your share to someone else without the consent of the other co-owners, and you may bequeath your interest in the property to whoever you choose in your will.
Retaining a Life Interest: A sole owner can transfer his or her ownership in the property to a proposed beneficiary, then keep a life interest in the property, in result to the deemed disposition at fair market value at the time of the transfer, which can cause a capital gain or loss for the transferor. Upon the death of the original owner, the life estate ends, and the title continues in the beneficiary’s name unhindered and they will be is no disposition for tax because all that occurred was an extinguishment of the life estate.
Property with a Named Beneficiary and Business Interests: A designated beneficiary or named beneficiary is the person specified by the property owner to be given ownership of the property upon the original property owner’s death. Property that has a designated beneficiary is classified as a non-estate asset and held by a trustee which includes the death benefits of life insurance policies, pension benefits, annuities, registered retirement savings plans (RRSPs), and registered retirement income funds (RRIFs) and assets the second person as the property owner to be given ownership of the property upon the original property owner’s death. Ownership in various business entities including sole proprietorships, partnerships, or corporations.
Tenancy form of ownership whereby all co-owners have identical proportions and durations of interest in a piece of property, along with identical rights of possession. It treats joint tenants as a single owner for legal, and one tenant may not dispose of his or her share without the consent of the other joint tenants. If over one person has an ownership interest in a particular asset, that ownership interest can take one of two forms: joint tenancy with rights of survivorship or tenancy-in-common. In both forms, all owners have an equal right to possess and use the whole property such that no co-owner may exclude another of the owners from possessing that property. For estate planning, the important difference between a joint tenancy and tenancy-in-common relates to how the co-owner can dispose of the property after death. The most common assets that are held in joint tenancy include principal residences and bank accounts. The form of joint ownership becomes a critical issue in estate planning, particularly if of intestacy. The intention to create a joint tenancy is best recorded in the deed to the property, by registering both co-owners as “joint tenants”. The courts have become strict and have interpreted many other phrases, including “in equal shares”, “equally”, or “distributed in joint and equal shares” to result in a tenancy-in-common.
- Joint Tenancy With Rights Of Survivorship: In a joint tenancy with rights of survivorship, all co-owners have an equal right to possess and use the whole property but no one tenant may not dispose of his or her share without the consent of the other joint tenants. When a joint tenant dies, his or her interest in the property automatically passes to the surviving co-tenants in equal shares, under the right of survivorship. Joint tenancy with rights of survivorship is not applicable in Québec.
- Joint Tenancy and Estate Planning: The automatic right of survivorship associated with a joint tenancy is very important for estate planning purposes. Since surviving joint tenants automatically receive a share of the decedent’s interest in the jointly held property, it does not control the disposition of the property through a will or provincial intestacy laws, making it a non-estate asset. A non-estate asset is an asset that does not fall within the control of the estate, cannot be controlled through a will and is not subject to probate.
- Tenancies-in-Common: If a joint ownership situation does not satisfy the four unities, it is a tenancy-in-common. Even if the four unities are present, the owner may still be registered as a tenancy-in-common if this is the wish of the co-tenants. Ownership interests in a tenancy-in-common can be disproportionate, according to the contributions of the co-tenants.
- Tenancy in Common and Estate Planning: A tenant-in-common may transfer his or her respective share of the property to anyone as he or she sees fit without the consent of the other tenants. The remaining tenants have no control over how he or she disposes of the property, either during life or after death. Survivorship rights are not attached to tenancies in common, so the co-tenants have no rights to the interest of a deceased tenant. To bequeath means to make a gift of personal property or real estate.