Transmission Application for Life Tenancy

[Geoff W]

My mother passed away in January this year and in the last week we have obtained Probate on her will. Her will is quite simple and self explanatory.
In her will she has named myself and my brother as executors of her will.
She owned her house outright but in the will she has given “Life Tenancy” to my brother (one of the Executors). No-one has issues with this.

My 2 part question is:
Do we have to lodge a “TRANSMISSION APPLICATION BY PERSONAL REPRESENTATIVES” to the LTO and if we don’t what are the ramifications down the track?

If we do, do the form and put both my name and my brothers as and executors does this mean the house is then in our names and because I own Investment Properties that by having my name on the deed as a Executor that my Mums house would then be taken into account for my Tax purposes with my other investment properties?

My brother will be living in the house Rent Free

 

[Sophea]

Hi Geoff W,

Yes. Distribution of an asset from a deceased's estate to a beneficiary, will require a grant of probate or a grant of letters of administration (which you have) and the lodgement of a Transfer Application by Personal Representative to the Land Titles Office. The specific requirements vary from state to state so I am not sure which will be applicable to you.

This is something you are required to do because it is your duty as executors of the will to distribute all assets (generally) within 12 months of the deceased's death. Therefore, if you failed to finalise the estate within this time you could be in breach of those duties.

You said:
"If we do, do the form and put both my name and my brothers as and executors does this mean the house is then in our names and because I own Investment Properties that by having my name on the deed as a Executor that my Mums house would then be taken into account for my Tax purposes with my other investment properties?"​

Since a life tenancy is regarded as ‘trust property', I assume you will in effect be trustees - holding the property on trust for the beneficiaries in which case you won't be taxed as you are not the beneficial owners of the property. This is probably something you should get advice on, especially when it comes to eventually selling the property, as the laws regarding the payment and avoidance of capital gains tax are quite complicated.

This is an interesting article on it you might like to read: http://news.domain.com.au/domain/questions/death-and-taxes-20100816-125vd.html

 

[Geoff W]

Thank you Sophea. Your response and that link to the article helps.