Survivorship and Full Estate Administration
What is Survivorship?
Survivorship occurs where two or more persons own an asset in their ‘joint names.’ When one of them dies the deceased interests in the assets held jointly will automatically pass to the surviving person(s).
Joint tenancy
Joint tenancy is a form of property co-ownership. With a joint tenancy, each joint owner’s interest must be:
- Created at the same time and by the same document or instrument
- Each interest is the same (identical)
- Each owner has the same rights and obligations relating to the property
The most compelling feature of a joint tenancy is the “right of survivorship.” This means that property passes to the surviving owner(s) without the need for a Grant of Representation or full estate administration.
There are a number of assets that can be jointly owned including:
- Property
- Bank accounts
- Shares
- Death benefits from pension funds
- Proceeds of life insurance policies
Where these assets are jointly owned, they will not form part of the estate of the first person who dies but will pass automatically to the surviving person.
It is important to understand that tenancy-in-common is different to a joint tenancy. In a joint tenancy, the deceased’s interest in the asset automatically pass to the surviving owner, while in a tenancy-in-common, each person owns a share of the assets and they can choose to whom or to which beneficiary their interest in the title will be passed to.
What is Full Estate Administration?
All estates are not alike and can differ for a number of reasons. An estate may be administered and distributed according to a Will or, if there is no Will (Intestate), then according to a legal formula which specifies who will benefit from the estate.
Estate administration is the process of administering and finalising the distribution of a deceased person’s assets owned by them in their own name, i.e. not joint ownership or a life interest in a Trust.
The nature, and ownership of assets can vary and so too does the procedure for transferring those assets. Sometimes the Executor must address issues of legal claims against the estate or issues of insolvency where the estate's debts exceed the estate's assets.
Because of these differences each estate is treated differently and you should seek expert advice to help finalise an estate.
Differences between Survivorship and Full Estate Administration
| Survivorship | Full Estate Administration | |
|---|---|---|
| Shares | Jointly held shares become the property of the survivor, all dividends are payable to the survivor. | Transfer of shares requires a Grant of Representation and evidence of ownership. Dividends will be paid to the deceased’s bank account or may become ‘unclaimed money’ if the account is closed but dividends are still paid. |
| Banking | Joint accounts remain open and the survivor can transact as normal. | Redeeming bank accounts requires a Grant of Representation (which can take three months to obtain). Until then the costs – e.g. paying for funerals – may be at the Executor’s own expense. |
| Property | Jointly held property becomes 100% the property of the survivor by law – requiring just a small application to the Land Titles Office to reflect the change on the title. Cars can be transferred to surviving partner simply. | If a Will exists or even if there is no Will, the transfer of property requires a Grant of Representation and application to the Land Title Office. If the family wants to deviate from the Will or distribution as required by law then depending on circumstances additional affidavits, applications for relief from stamp duty, and Deeds of Arrangement will be required. The estate will be responsible for cleaning costs, real estate agent costs, repair costs, or surveying costs. |
| Legal challenges | Where most of the deceased’s assets are jointly owned and automatically transfer to the survivor, there will either be little or nothing in the estate for other people to make a legal claim upon. | If a deceased owned assets in their own right the estate may be subject to legal claims from people who feel the deceased should have provided more for them. These claims may involve solicitors to be employed, a Grant of Representation, the preparation of affidavits to defend the claim, participate in mediation and potentially court costs. Often, the estate bears all expenses of the challenger and the costs involved in defending the estate. |
| Administrative work | Where assets of the deceased are jointly owned, minimal administrative work is required. | Generally, a Grant of Representation is required – to get this the Executor needs to locate the original Wills, advertise intention to administer, lodge applications and affidavits with Supreme Court (Probate Office), advertise notice to creditors, prove legal ownership of assets, complete all the estate’s taxation returns, and attend to many other small administrative duties requiring technical knowledge. |
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