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When a deceased’s estate includes real estate, it is important to know the rule regarding automatic vesting (ownership) outlined in relevant legislation.  The rule essentially states that real estate owned by the deceased that is not transferred within three years after death automatically becomes owned by the beneficiary or beneficiaries.  This automatic ownership means the beneficiaries can transfer the property to third parties or put their own names on title to the property.  One should note, however, that the automatic ownership is still subject to any debts of the estate, meaning that creditors of the estate can still take legal action and use the real estate to satisfy their debts.

 Before the automatic ownership takes place, an estate trustee can transfer the real estate to a purchaser free and clear as long as he has the consent of a majority of the beneficiaries that would have a 50% interest in the value of the real estate.  However, the estate trustee may be held liable by a beneficiary who did not consent to the transfer in that the estate trustee curtailed their opportunity to own the property outright by not waiting for the expiry of the three-year period.  Therefore, it is recommended that the estate trustee obtain the consents of all beneficiaries before transferring the property to a third party purchaser, or obtain a court order for sale such that the non-consenting beneficiary`s claim would be extinguished.  If the deceased`s will contains a power of sale clause, the estate trustee does not have to obtain the consents of the beneficiaries before selling the real property.

 It is worthwhile to note that automatic ownership can be postponed by registering a caution on title to the property within the three-year period.  This effectively allows another three years to pass before the beneficiaries become the owners of the property.  Subsequent cautions can also be registered from time to time upon the expiry of the previous three-year period, thereby extending the vesting period.

 If you have a question regarding real estate interests in an estate or the timing for when any beneficiaries are entitled to own the real estate outright, please contact Andrea P. Kelly.


Andrea Kelly, Lawyer, has extensive experience in wills, trusts, powers of attorney and estate administration matters.  She provides clients with a high standard of timely professionalism and expertise, incorporating a very thorough fact finding process.  This is quite often enlightening for her clients and facilitates individually tailored services.  If you would like to know more, feel free to use the easy contact form or read Andrea’s bio.





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