HHG Legal Group Managing Director Murray Thornhill talks to The West Australian's Hana Humbolt about the process of inheriting property and what you need to know.
While bereavement is not how most people might see themselves coming into equity, the last thing you want to be unsure about when processing the loss of a loved one is how inheriting property works.
"It all starts with whether there is a Will or not, because if there is, then everything has to be done in accordance with it," HHG Legal Group Managing Director Murray Thornhill said. "If there is no Will, then there's a piece of legislation called the Administration Act 1903, which governs how estates are to be dealt with.
"Ideally, you want to make sure you have a Will because you might not like the way the Administration Act 1903 carves up the estate."
A person's Will must nominate an executor to manage their estate a er their passing; the executor also plays a key role in the transference of properties.
"The executor or administrator has the legal duty to be objective, impartial and follow the Will, rather than favouring any one beneficiary," Mr Thornhill said.
Following the appointment of an executor or an administrator, the next step to inheriting property is that the said property must be released by the state.
Mr Thornhill said this would be done via a transmission application lodged at Landgate.
" The property is then transmitted into the name of the executor or the appointed administrator," he said. " This then gives them the legal right to sign the transfer documents for the property to be transferred to the beneficiary."
There are few ways a person might want to bequeath their property, especially in the case of multiple beneficiaries.
"It's probably more common for Wills to say the estate
be sold, including any property, and then the proceeds be divided
amongst the beneficiaries," Mr Thornhill said. " There
can
be issues if a particular person doesn't want the home sold,
which can create tension in the family.
"However, a single person doesn't have the right to insist they get the property."
According to Mr Thornhill, deviations from a Will, or in the case where a Will is unclear, can only be made if all beneficiaries properly document their unanimous agreement or by application to the court in a suitable case.
In the event a person does not want a property sold, negotiations become an option.
" They might approach the other beneficiaries and ask if they can buy it," Mr Thornhill said. " The orderly way to do this would be to get a formal evaluation report and for everyone to agree the price paid is what the valuer says it's worth."
If there is a mortgage registered on the property, it is important for executors to contact the bank as early as possible.
"Banks are usually quite patient when it comes to deceased estates, as long as they know there's an executor in charge who's dealing with it," Mr Thornhill said.
Beneficiaries may also want to consider whether they are prepared to accept a property as a gift subject to any outstanding mortgage.
Mr Thornhill said they were not obligated to take on a liability and could decline it, in which case it became part of the residue of the estate and handled accordingly.
However, in the case where they wish to retain the property, he said the mortgage would need to be discharged before the property was transferred in the same way it would be if it was being sold.
"If a person agreed to take the mortgage on, they would have to get the bank to also agree, as the bank would be entitled to a new loan agreement," Mr Thornhill said.
According to Mr Thornhill, any additional legal fees payable by the beneficiaries will depend on the circumstance but the costs of dealing with property comes out of the estate.
"Whatever cash the estate has is first used to pay its administration costs, which includes selling the property, so beneficiaries shouldn't have to pay those," he said. "In situations where there is no cash, someone may have to fund the process until the property is sold or transmitted.
"There also might be tax implications for beneficiaries if they're receiving the property as a gift, stamp duty or other taxes applicable depending on the circumstances.
"In those cases, beneficiaries should seek advice to understand what their position is".
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