What happens if real property owned by a deceased person is not transferred to the entitled beneficiaries upon the owner's death?
In Ontario, the Estates Administration Act provides that real property that is not disposed of, conveyed to, divided or distributed among the persons beneficially entitled to it within three years after the death of the deceased shall vest in the persons beneficially entitled to the property. Once property vests, the individual has a legal claim of ownership. As such, that individual becomes the owner, despite the fact that registration remains in the name of the deceased.
In the Estates context, if an Estate Trustee fails to deal with the real property through the administration of the estate, the property will vest in the beneficiaries of the estate, or in the individual(s) who were specifically gifted the property in the Will. Vesting may be automatic or it may require a court application. If the deceased died without a Will, the vesting will occur automatically. If the deceased died leaving a Will, the terms of the Will must be reviewed to determine whether the provisions of the Estate Administration Act apply. Since many Wills contain clauses that override the provisions of the Estate Administration Act, a court application to obtain a Vesting Order may be required.
A Vesting Order is an equitable remedy. As such, the court will have to be satisfied that it should exercise its discretion to make the Order, and that to do otherwise would be an unfair or unjust result. Once a Vesting Order is granted, the party who obtained it can take steps to register the Order on title to the property.
Whatever the circumstance, Vesting Orders can be a complex and costly process to navigate. From property transfers during estate administration, to a court application to obtain a vesting order, Lerners lawyers are experienced in these areas and can help you navigate all potential stages of the process.