When an individual who owns property in Alberta dies, the executor of their estate is responsible for dealing with that property in accordance with the wishes of the deceased. Usually these wishes are contained in the will, and could involve liquidating the property for cash, or giving it to a specific beneficiary. The process for dealing with this property depends on how the deceased held title..
There are three common ways in which title to a property is held in Alberta:
- Joint Tenants – ownership is held in the names of two or more individuals, usually spouses, as to a joint interest, meaning they own the property together;
- Tenants In Common – ownership is held in the names of two or more individuals, each as to a certain share. For example, owner A could own a 75% interest in the property, and owner B 25%, or whatever proportion they determine at the time the property is acquired; and
- Sole Ownership – only one individual is on title to the property.
If a property is held by two or more people as joint tenants, on the death of one of those owners, the ownership of the full property interest automatically transfers to the surviving joint tenant(s). Properties held in joint tenancy are therefore deemed to pass outside of the will and the estate of the deceased, and are not dealt with in the will. It is very common for couples in Alberta to own their residences in this fashion, as joint tenancy helps avoid complications on death with transferring the home to the surviving spouse and can help avoid the costs of having to complete a probate application.
If title is held as a tenant in common or sole ownership, it is mandatory for the executor of the estate of the deceased individual to apply for probate. This is generally accomplished with the assistance of a lawyer, and involves filing various documents as well as a copy of the will with the Court of King’s Bench. These documents generally outline the beneficiaries and other parties who may have an interest in the estate, contains an inventory of the assets and debts of the deceased, and outlines the plan for distributing those assets in accordance with the will. If a judge reviewing the probate application is satisfied, they will issue a Probate Order which allows the executor of the estate to proceed with administering the property of the deceased, including their real estate.
Once the Probate Order is granted, it can be submitted to the Alberta Land Titles Office to transfer title from the name of the deceased to that of the executor. Until the Probate Order is granted and has been filed with land titles, the property cannot be transferred. This is especially important to note if the executor intends to sell the property. Continuing to hold property generally has various expenses, such as taxes and utilities, which the executor would prefer not to have the estate pay. Also, during a hot real estate market, there may be a lot of pressure on an executor to get the property sold as soon as possible. However, executors should note that acquiring a Probate Order is a time consuming process, and the Judge could easily find a flaw or issue with the original application which they require to be corrected. While you may wish to market the property of the deceased while waiting for the Probate Order, an executor should definitely not sign a contract for the sale of that property unless there is a clear condition which states that the deal is not firm until the Probate Order has been received. Otherwise, the executor runs the risk of signing a contract which they cannot fulfil, which could lead to loss and damages for the buyer and a lawsuit against the estate.
FIND US ON SOCIAL
Get a Top Producing Team Working For You
Contact Smith & Griffith Real Estate Team for a free home evaluation.
An Associate Lawyer at Beaumont Church LLP in Calgary, Dan Hawkwood comes from a long line of farmers and ranchers in the Calgary area and brings the experience of his rural upbringing to his practice.