PROCEDURES FOR THE TRANSMISSION AND TRANSFER OF ASSETS

Transcription

1 0.0.1 PROCEDURES FOR THE TRANSMISSION AND TRANSFER OF ASSETS This article summarizes the legislation, procedures, and documents required to transmit various assets of the deceased into the name of the surviving joint tenant or the personal representative and, if applicable, to transfer the assets to the beneficiaries of the estate. The list of assets is not exhaustive. For tables summarizing the documents needed for transfer or transmission of certain assets, see (transmission to the surviving joint tenant), (transmission to the personal representative), and (transfer to a beneficiary) of the BC Probate and Estate Administration Practice Manual. I. General Points A. Timing and Preparation of Documents When the grant is issued, the process of transmission and transfer can begin. Transfer to beneficiaries may be delayed, however, until: (1) if there is a will and a qualified applicant under the Wills Variation Act, six months from the initial grant of probate (see WVA, ss. 3(1)(a) and 12, and 19.10); (2) if there is an intestacy and a common-law spouse, and the deceased died before s. 76 of the Estate Administration Act was repealed on November 1, 2000 (see 10.14), six months from the date of the issue of letters of administration; (3) if there is a surplus of the personal estate of an intestate, one year from the date of death (see the Estate Administration Act, s. 74); (4) the personal representative has requested (using Form TX19) and has obtained a clearance certificate from the Canada Revenue Agency (Form TX21) (see 10.8, 13.67, 13.68, and 13.69); and (5) the personal representative has obtained approval of the accounts from all beneficiaries or has passed the accounts before the court. In some cases, the personal representative may wish to obtain approval of interim accounts and proposed distributions from all beneficiaries or have the interim accounts passed before the court, prior to transfer to beneficiaries. When preparing the documents for transmission and transfer, if there is any doubt as to the requirements, the appropriate agency, corporation, or office (e.g., a transfer agent for stocks or bonds, the land title office, banks, etc.) should be contacted. B. Succession Duty, Estate Tax, and Probate Filing Fee Clearances No succession duty, estate tax, or probate filing fee clearances are required to transfer or transmit assets, except for deaths occurring before January 25, 1977, or grants issued before March 11, C. Copies of Court Documents Transmission or transfer of assets frequently requires filing copies of court documents. If copies have not been obtained at the time of application, the procedure for obtaining them is as follows: (1) To obtain a court-certified copy of the grant, submit the original grant to the registry (most registries prefer to make their own photocopies). The fee is $31 for the first 10 pages, and $6 per additional page for grants exceeding 10 pages.

2 0.0.2 Some registries do not require the original grant to be submitted, and will make a copy from their file copy. Some registries may certify photocopies not made by them. (2) To obtain a court-certified copy of the real property portion of the disclosure document known as the Statement of Assets, Liabilities, and Distribution, request an office copy from the probate registry. Similarly, the fee is $31 for the first 10 pages, and $6 per additional page for grants exceeding 10 pages. Before January 1, 2007, the registry provided office copies of the real property portion of the disclosure document, for a fee of $1.00 per page. However, this service is no longer available and courtcertified copies must be obtained. D. Joint Tenants See for a table setting out the documents required for transfer and transmission of various types of assets. II. Fee Simple A. Applicable Legislation 1. General Sections 263 to 270 of the Land Title Act, R.S.B.C. 1996, c. 250, govern the transmission and transfer of interests in real property. There are other sections of the Land Title Act, as well as sections in the Strata Property Act, S.B.C. 1998, c. 43, the Trustee Act, R.S.B.C. 1996, c. 464, and the Estate Administration Act that are relevant to interests in land and will be discussed if applicable. For the practice authorized in land title offices for estate matters, refer to the Land Title Practice Manual, 2nd ed., looseleaf (CLE, 1999). The Land Title and Survey Authority has initiated a filing system that enables authorized lawyers and notaries to submit land title documents for registration by electronic means. The system became operational on April 1, 2004, and is optional. Forms that can be submitted electronically include the Form A Transfer, Form B Mortgage, Form C Charge, Form C Release, Form 17 Charge or Notation, Form 17 Fee Simple, Form 17 Cancel Charge or Notation, and the Property Transfer Tax Return. A good source of information on electronic filing is the Land Title Transfer Forms Guidebook, 3rd ed. (CLE, 2005) (the Green Book ). In addition, a wide variety of information may be accessed through the Land Title and Survey Authority website at including the Land Titles Electronic Filing System (EFS) User s Guide. 2. Property Transfer Tax Act The Property Transfer Tax Act, R.S.B.C. 1996, c. 378, imposes a tax on all land transfers unless the transfer comes within one of the exemptions listed in s. 14. A Property Transfer Tax Return (see FP 107 (General Property Transfer Tax Return) and FP 108 (Special Property Transfer Tax Return)) must be filled out in all cases; an exemption is claimed on the form. Some estate matters attract property transfer tax. The exemptions set out in s. 14 include the following: (1) A transfer by operation of law to the survivor of a joint tenancy of the land consequent on the death of a joint tenant of the land (s. 14(3)(m)) (see Exemption Code 8 of the Instruction Guide for Completion of the General, Special and Electronic Property Transfer Tax Returns (the Instruction Guide ), available on the Ministry of Small Business and Revenue, Property Taxation Branch website at (2) A transfer to a person in that person s capacity as personal representative when the land transferred is part of the deceased s estate (s. 14(3)(q)) (see Exemption Code 9 of the Instruction Guide).

3 0.0.3 (3) A transfer from a transferor who is a trustee to a transferee who is a beneficiary of a deceased s estate or of a trust established pursuant to a deceased s will. The deceased and the beneficiary must be related individuals and the land transferred must be: (a) the principal residence of either the deceased or the related individual for a continuous period of six months immediately prior to the death of the deceased (s. 14(3)(c); see Exemption Code 40 of the Instruction Guide, including the restrictions set out there); (b) the recreational residence of the deceased immediately before the deceased s death (where the market value is no more than $275,000 and the area is five hectares or less) (s. 14(3)(c); see Exemption Code 6 of the Instruction Guide); or (c) a family farm of the deceased immediately before the deceased s death (s. 14(3)(c); see Exemption Code 7 of the Instruction Guide); in this case, the beneficiary, if not a related individual, may be the sibling or spouse of a sibling of the deceased. (4) A transfer of land to the Public Guardian and Trustee from a transferor who is a personal representative, to be held in trust for the sole benefit of a minor. The deceased and the minor must be related individuals and the land transferred must be: (a) the principal residence of either the deceased or the minor; (b) the recreational residence of the deceased; or (c) a family farm in this case, the minor, if not a related individual, may be the sibling or spouse of a sibling of the deceased. Related individual, family farm, principal residence, and recreational residence are all defined terms. Related individual is defined in s. 1(1) and in s. 14(1) (see Exemption Code 5 of the Instruction Guide). Only one recreational residence may be claimed for exemption purposes in respect of the deceased s estate (s. 14(5)). Note that a related individual as defined in s. 14(1) (the exemption section) must be a Canadian citizen or permanent resident. Therefore: (1) No property transfer tax will be payable by: (a) a transferee who is a surviving joint tenant of the deceased s land; or (b) the deceased s personal representative, acting in that capacity. (2) Property transfer tax will be payable by a transferee who is a beneficiary if: (a) the transferee does not come within the definition of related individual (ss. 1(1) and 14(1)) (or sibling or spouse of sibling if the land is a family farm); (b) the property transferred does not qualify as a family farm, principal residence, or recreational residence for the purposes of s. 14(3); (c) more than one recreational residence is claimed for the deceased s estate (s. 14(5)), or if the recreational residence exceeds $275,000 in value or five hectares in size; or (d) the property was not the principal residence of either the transferor or the transferee for six months before the transfer (s. 14(3)(b)), or if the property does not meet all the requirements to be fully exempt. Any tax payable under the Act is payable by the transferee of the land unless there is a specific payment provision in the will. The typical payment of debts clause may not be sufficient, because the tax is not a debt of the estate but a tax payable by the transferee. B. Transmission and Transfer The following sections set out the documents required for various types of transfers of a fee simple.

4 0.0.4 fee is $12.65 (or $9.10 if requested electronically, although many transfer and transmission documents cannot be filed electronically; if the documents can be filed electronically, the fee for transfer is $64.15 rather than $65.65). 1. To the Surviving Joint Tenant It is the responsibility of the surviving joint tenant to arrange for transmission. The legal fees and costs of transmission should be borne by the surviving joint tenant. To transmit the deceased s interest as a joint tenant in real property to the surviving joint tenant, the following must be filed in the appropriate land title office (sign registrable documents in black ink): (1) As evidence of death, either: (a) death certificate, or (b) court-certified copy of the grant issued for the deceased. (2) Form 17 application, which may be completed on the back of (1)(a) or (b) above; see FP 109. However, it is recommended that Form 17 be completed on a separate sheet of paper; on request, the land title office returns the original death certificate to the sender, unless Form 17 appears on the back of the certificate. Form 17 appears in the Land Title Act Regulation, B.C. Reg. 334/79. (3) Property Transfer Tax Return (see FP 107). (4) Duplicate title, if any. (5) If the name of the deceased on the grant or in the death certificate is different from the name on the title, a statutory declaration will be required containing evidence sufficient to establish that the deceased and the registered owner on title are the same person (see FP 112). When the names are significantly different, a simple assertion by the applicant that the two names refer to the same person will not be sufficient. The applicant may need to find a lawyer or notary who can act as an officer under the Land Title Act to provide the declaration (for example, a lawyer who had recently guaranteed the deceased s passport or who had attended the deceased on signing a mortgage on the property). (6) $65.65 fee. In most cases, the joint tenant will want to apply for a state of title certificate. The fee is $ Transmission to the Personal Representative To transmit real property to the personal representative, the following must be filed in the land title office (sign registrable documents in black ink): (1) Court-certified copy of the grant. (2) Court-certified copy of the real property portion of the disclosure statement as was exhibited to the affidavit of executor or administrator on the application for the grant. (3) Form 17 application (which may be completed on the back of the grant; see FP 109) or separate filing form letter (see FP 137). (4) Property Transfer Tax Return (see FP 107 and FP 108). If the will does not specify who is responsible for paying the tax, the transferee (not the estate) is responsible (see 10.29). (5) Duplicate title, if any. (6) If the name of the deceased on the grant is different from, but reasonably close to, the name on the title, the land title office will accept a statutory declaration that the deceased and the registered owner on title are the same person; however, a new wills search for the name that is not on the grant must be attached to the statutory declaration. Another alternative (and the only alternative if the names are

5 0.0.5 significantly different) is to obtain a court order amending the grant to include the name on title. This is required because of a concern that if the grant was not issued in the name on title, a wills search may not have been done in that name. This problem can be avoided by ensuring that real property searches are done before the wills search is requested, so all variations of the deceased s name can be included in the wills search and grant. If you need to obtain an order, a new wills search will be required for the name on title (see FP 113 for a sample requisition, affidavit, and order). The land title office will require a court-certified copy of the order once it is obtained. (7) $65.65 fee. Also, a state of title certificate should be requested. The fee is $12.65 if the property is not immediately transferred to a beneficiary or to a purchaser on a sale. The registrar takes the position that s. 156(1) of the Land Title Act requires, in effect, that all properties disclosed in the Statement of Assets, Liabilities and Distribution be transmitted to the personal representative at the same time. If you transmit one property and not the others (for example, to complete a pending sale), you will need to satisfy the registrar under s. 156(3) that hardship will ensue if the application is not accepted. 3. Transfer to a Beneficiary To transfer real property from the personal representative to a beneficiary, the following must be filed in the land title office (sign registrable documents in black ink): (1) Form A (Freehold Transfer) (see FP 116). (2) Property Transfer Tax Return (see FP 107 and FP 108) (and tax, if applicable), as discussed in (3) When property is transferred from an administrator to an intestate successor, the land title office requires proof of entitlement and the consent of the other intestate successors, including the committee of an incompetent. See FP 105 and FP 106 for sample consents. Similarly, when there is a transfer from an executor to one of a number of beneficiaries, if the real property is part of the residue, the land title office requires the consent of the other beneficiaries. (4) Duplicate title, if any. (5) $65.65 fee. (6) Form F (Certificate of Payment), if it is a strata property. In most cases, a state of title certificate should be requested. The fee is $ To a Non-Resident Corporate Personal Representative Practice is in transition, and the Land Title and Survey Authority should be contacted to confirm the current requirements. Traditionally, to transmit real property into the name of a non-resident corporate personal representative, the following documents had to be filed in the land title office: (1) The same documents and fees as are required for transmission to a personal representative (see 10.32). (2) Certified copy of the business authorization issued under ss. 70 and 160 of the Financial Institutions Act, R.S.B.C. 1996, c. 141 (see 8.6). (3) Certified copy of the certificate of incorporation of the corporate personal representative. (4) Affidavit by a lawyer or notary in the country or province of incorporation showing that, under the law of that country or province, the corporate personal representative has the power to hold land. C. Foreign Personal Representative Appointment of an Attorney

6 0.0.6 Despite the rule that personal representatives cannot delegate their powers, s. 55 of the Land Title Act permits a non-resident personal representative to give a power of attorney to any person to exercise his or her powers in respect to an interest in land, subject to express prohibition by the will or the court order authorizing appointment. This should be considered when it is difficult or impractical for the foreign trustee to execute documents relating to dealings with the interest. A s. 55 power of attorney: (1) should be similar in form and content to powers of attorney given by British Columbia residents for dealing with land; (2) should be executed in compliance with Part 5 of the Land Title Act; and (3) is subject to Part 6 of the Land Title Act (for powers of attorney and representation agreements). Before granting such a power, a personal representative should seek legal advice in his or her own jurisdiction about whether delegation is permitted and the effect of s. 55. III. Mortgages of Real Property The following sections set out the documents required for various types of transfers of mortgages of real property. fee is $ A. To the Surviving Joint Tenant To transmit the deceased s interest as a joint tenant mortgagee to the surviving joint tenant, the following must be filed in the land title office: (1) As evidence of death, either: (a) death certificate; or (b) court-certified copy of the grant issued for the deceased. (2) Form 17 application (which may be completed on the back of (1)(a) or (b) above; see FP 110). (3) If the name of the deceased on the grant or in the death certificate is different from the name on the mortgage, a statutory declaration (FP 112) may be sufficient (see 10.31). (4) $65.65 fee. In most cases, a state of title certificate should be requested. The fee is $ B. To the Personal Representative To transmit the deceased s interest as a mortgagee to the personal representative, the following must be filed in the land title office: (1) Court-certified copy of the grant. (2) Court-certified copy of the real property portion of the disclosure statement as was exhibited to the affidavit of executor or administrator on the application for the grant. (3) Form 17 application (which may be completed on the back of the grant). (4) If the name of the deceased on the grant is different from the name on the mortgage, a court order amending the grant may be required (see comments under 10.32). (5) $65.65 fee. In most cases, a state of title certificate should be requested. The fee is $12.65.

7 0.0.7 C. To a Beneficiary To transfer the mortgagee s interest from the personal representative to a beneficiary, either on a sale or a transfer, the following must be filed in the land title office: (1) Either: (a) Form C (General Instrument) (see FP 118) with an assignment of mortgage instrument attached; or (b) Form 27 (Transfer of Mortgage) (see FP 121). (2) When property is transferred from an administrator to an intestate successor, the land title office will usually demand proof of entitlement (for example, a statutory declaration or the court-certified copy of the distribution statement and the consent of the other intestate successors if the transfer is not to all parties entitled, including the committee of an incompetent). See comments at and related precedents FP 105 and FP 106. (3) $65.65 fee. fee is $ D. Agreements For Sale The following sections set out the documents required for various types of transfers of agreements for sale. fee is $ E. To the Surviving Joint Tenant To transmit the deceased s interest as a joint tenant in an agreement for sale, whether as vendor or purchaser, to the surviving joint tenant, the following must be filed in the land title office: (1) As evidence of death, either: (a) death certificate; or (b) court-certified copy of the grant issued for the deceased. (2) Appropriate Form 17 application either fee simple (vendor) or charge (purchaser) (which may be completed on the back of (1)(a) or (b) above; see FP 111). (3) Property Transfer Tax Return (see FP 107 and FP 108), as discussed at (4) When the name of the deceased on the grant or in the death certificate is different from the name on the agreement for sale, a statutory declaration from an identity prover or a court order may be required (see 10.31). (5) $65.65 fee. F. To the Personal Representative To transmit a vendor s or purchaser s interest in an agreement for sale to the personal representative, the following must be filed in the land title office: (1) Court-certified copy of the grant. (2) Court-certified copy of the real property portion of the disclosure statement as was exhibited to the affidavit of executor or administrator on the application for the grant. (3) Appropriate Form 17 application either fee simple (vendor) or charge (purchaser) (which may be completed on the back of (1)(a) or (b) above). (4) Property Transfer Tax Return (see FP 107 and FP 108).

8 0.0.8 (5) If the name of the deceased on the grant is different from the name on the agreement for sale, a court order amending the grant may be required (see 10.32). (6) $65.65 fee. G. To a Beneficiary To transfer a vendor s or purchaser s interest in an agreement for sale from the personal representative to a beneficiary, the following must be filed in the land title office: (1) Assignment of interest: (a) When the interest is a vendor s interest, Form A (Freehold Transfer) (see FP 116). (b) When the interest is a purchaser s interest: Form C (General Instrument; see note in paragraph (a)(i) above) (see FP 118) with an instrument assigning the purchaser s interest in the agreement for sale attached. (2) Property Transfer Tax Return (see FP 107 and FP 108) (and tax, if applicable). (3) When property is transferred from an administrator to an intestate successor, the land title office will usually demand proof of entitlement and the consent of the other intestate successors, including the committee of an incompetent. The consent of the Public Guardian and Trustee is sufficient if there is an infant intestate successor. (4) $65.65 fee. fee is $ IV. Leases Registered To transmit or transfer a registered lease, the documents required are the same as those required to transmit or transfer a mortgage, with the following exceptions: (1) A Property Transfer Tax Return is required (see FP 107 and FP 108). (2) Instead of an instrument assigning the mortgage being attached to Form C, an assignment of lease should be used to transfer the leasehold interest to the beneficiary or intestate successor. A lease for a term of less than 30 years is exempt from property transfer tax (see s. 14(4)(o) of the Property Transfer Tax Act). For a lease for more than 30 years, valuation for property transfer tax purposes is determined in accordance with Part 2 of the Property Transfer Tax Regulation, B.C. Reg. 74/88. The personal representative has an ongoing obligation to honour covenants of the deceased along with all other terms and conditions, and is liable for non-performance. When the personal representative transfers the asset to a beneficiary, the personal representative should obtain the appropriate consent and release from the lessor.