Trans­fer­ring fam­ily prop­erty without a will

Jamaica Gleaner - - BUSINESS -

IQUESTION: I am won­der­ing how to trans­fer my mother’s house to her daugh­ter’s name. My mother and fa­ther had a joint house ti­tle, but my fa­ther has died. My mother is in her 80s with some form of de­men­tia. My fa­ther did not make a will and she has not made one. There­fore, I would like to know if trans­fer­ring the house is the best so­lu­tion. Can you please ad­vise me?

– Carol FI­NAN­CIAL AD­VISER: From what you have said, it seems that your par­ents owned the house as joint ten­ants. In such a case, it was not nec­es­sary for your fa­ther to make a will if the house was the only as­set he owned. If your par­ents owned the house as joint ten­ants, your mother is the sole owner.

In nor­mal cir­cum­stances, there are sev­eral ways in which your mother could trans­fer the house to your sis­ter. She could pass it to her as an in­ter vivos gift, that is, a gift made to her daugh­ter while she is alive. She could also sell it to her as she would to any other per­son.

To pass it to her as a gift, she would need to com­plete the in­stru­ment of trans­fer which can be found on the web­site of the Na­tional Land Agency, There is no mone­tary con­sid­er­a­tion in a case such as this, but the Statu­tory Dec­la­ra­tion of Value of Prop­erty would have to be com­pleted and sub­mit­ted to the Stamp Duty and Trans­fer Tax Sec­tion of Tax Ad­min­is­tra­tion Ja­maica for them to make their own de­ter­mi­na­tion of the value of the prop­erty.

Once this is done, the fees to be paid would be de­ter­mined. The trans­fer tax payable is 5 per cent of the value of the prop­erty, and the stamp duty payable is $40. Once these are paid, the next step would be to pay the regis­tra­tion fee in per­son at the Land Ti­tles Di­vi­sion of the NLA, and have the ti­tle en­dorsed with the name of the trans­feree.

An­other op­tion would be to give the house as a gift to her daugh­ter, but in this case, she would hold it for life and the re­main­der would pass to her daugh­ter when she dies. This ap­proach would give a life in­ter­est in the prop­erty to your mother, who would re­main its owner, with own­er­ship pass­ing to your sis­ter af­ter the death of your mother. The same pro­ce­dure and fees which ap­ply in the pre­vi­ous case would also ap­ply in this.

A will would not be nec­es­sary in this case. With this com­mit­ment of your mother to your sis­ter, she would not gen­er­ally be able to sell the prop­erty, but, if she did, the sales pro­ceeds would have to be held for the trans­feree, your sis­ter.

There is an­other ap­proach. Your mother could opt to trans­fer a half share of the prop­erty to your sis­ter so that both of them would hold the prop­erty as joint ten­ants. Your sis­ter would be­come the ab­so­lute owner upon the death of your mother, the other joint owner.

Be­cause only one half of the prop­erty would pass in this case, the trans­fer tax payable would be on one half of the value of the prop­erty, a fact which is worth tak­ing note of.

The next avail­able op­tion would be for your mother to trans­fer own­er­ship of the house to your sis­ter by sell­ing it to her. In this case, the stamp duty would be 4 per cent of the value of the prop­erty. Gen­er­ally, it is shared equally by seller and buyer.

In all of these cases, it would be ad­vis­able to en­gage the ser­vices of an at­tor­ney-at-law to give the re­quired ad­vice and carry the trans­ac­tion through the var­i­ous stages. The at­tor­ney’s fees in such cases range from two to three

per cent of the value of the prop­erty.

This is not a nor­mal case due to the state of health of your mother. You may choose to step into her shoes if you are liv­ing in Ja­maica by ap­ply­ing to the court for guardian­ship of your mother. This will give you con­trol over her af­fairs, but you will need the ser­vices of an at­tor­neyat-law to ad­vise you and take the mat­ter through the courts.

You will need your birth cer­tifi­cate to es­tab­lish that she is your mother and her med­i­cal records to es­tab­lish proof of her med­i­cal con­di­tion.

Now seems to be the best time to ad­dress the mat­ter rather than wait­ing un­til af­ter her death, in which case mat­ters can get com­pli­cated if there is not a valid will. How­ever you take it, you will need funds to set­tle the mat­ter. I wish you well.

Oran A. Hall, the prin­ci­pal author of ‘The Hand­book of Per­sonal Fi­nan­cial Plan­ning’, of­fers per­sonal fi­nan­cial plan­ning ad­vice and coun­sel. fin­


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