Oran Hall | Transferring family property without a will
QUESTION: 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?
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, www.nla.gov.jm. 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 attorney-at-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. firstname.lastname@example.org