Passing the torch to the next generation

There's a good article in www.globeadvisor.com that talks about several issues relating to passing your estate on to your children. It covers a bit of everything, from choice of executor to life insurance, but the main topic is saving on taxes when passing on property. I wish more people would read articles like this one before going ahead with steps like putting their children's names on the cottage.  Click here to read the article.

Realtor features my article in her blog

Ontario realtor Joanne Cross has featured one of my articles in her latest blog post. The article is entitled "Can I sell an estate property before getting probate?" and I know it will be of interest to executors who aren't sure in which order things are done in an estate. Click here to check out Joanne's blog, articles and new listings.

Executor's discretion when to sell land

This blog post from Rule of Law talks about a recent case from the Supreme Court of BC in which the court looked at how long an executor could wait before selling land from the estate. In this case, it was 11 years, which the court thought was fine based on the facts. One very important fact here is that all of the beneficiaries agreed to hang on to the land for that long, except for one who eventually changed her mind and demanded the land be sold so that she could have her inheritance. I agree with Rule of Law's conclusion that it would have been a much different outcome if the beneficiaries had not agreed to the delay. Click here to read the post.

Can the executor sell an estate property to a family member?

An executor who is looking after the estate of someone who has just passed away has the obligation to gather in all of the assets of the deceased, pay the bills and distribute the remaining property to the beneficiaries. Usually the executor must deal with the house or condo owned by the deceased. Most likely he will sell the house and divide the net proceeds among the beneficiaries. But what if one of those beneficiaries, a family member of the deceased, wants to buy the house rather than having it sold outside the family? Can the executor do that?

The executor must first look to the will to see whether there is anything in the will that would prevent this. For example, the house might be left to one of the beneficiaries as their inheritance, either outright or in a trust. Or the will might state that a certain beneficiary has a specific amount of time to come forward with an offer to purchase, during which time nobody else can buy it. This might happen if the deceased had felt that more than one of the children might be interested in the family home, or if there is something unique about the property, such as a farm or family cottage.

Another option, although a rare one, is that the deceased might have specifically directed that the estate be liquidated, possibly to prevent any of the beneficiaries from owning any particular property.

If the will doesn't specifically prevent the executor from selling to a family member, the executor can go ahead and arrange to sell the property to the family member. It must be sold at fair market value, in other words, the price it would fetch if it were sold on the open market. (Executors would be well advised to protect themselves by gettiung two or three appraisals before agreeing on a price).

The executor must always remember that the beneficiaries can't receive anything from the estate until the deceased's debts have been paid, so it's possible that the house is needed for paying debts. In that case, the family member who wants the house is out of luck.

If the family member who wants to buy the house is a beneficiary, and the house is worth less than the beneficiary's total inheritance, the beneficiary can simply choose to take the house instead of cash. For example, the beneficiary's share of the estate might be worth $500,000, while the house is worth $400,000. Instead of taking $500,000 cash, the beneficiary might want to take the house plus $100,000.

If the beneficiary's share is less than the value of the house, the beneficiary may still use his or her inheritance to buy the house. For example, if the beneficiary's share is going to be $200,000, and the house is worth $400,000, obviously the beneficiary can't simply take the house. But he or she would only have to pay $200,000 for the house, as the other $200,000 is coming out of the estate.

Don't try this without the help of an estate lawyer!

One last thing that might cause a problem for the executor is a lack of powers and authorities in the will. This is a section of the will in which your estate planning lawyer examines your goals as stated in the will, and the assets you own, and includes the legal wording that will make sure your wishes are carried out in the most effective way possible. This is almost always missing from home-made wills, and frankly, sometimes even in the wills drawn up by non-specialist lawyer.

For example, in many jurisdictions, the law says that if an executor needs to sell the house from an estate to pay the bills, he doesn't need anyone's permission. However, if the executor is going to sell the house for any other reason - such as to sell to the beneficiary discussed in this post - he does need permission. He needs the written ok of all residuary beneficiaries. If one of those beneficiaries is a minor, the permission needs to come from the Office of the Public Trustee.

Having said that, the lawyer drawing the will should have included a clause that dispensed with the otherwise needed permission.

Links to real estate lawyers

I get a ton of questions on this blog that are about real estate. While some aspects of real estate law are applicable to my area of practice, which is estate planning, I don't claim expertise in the ins and outs of real estate law. However, I don't like your questions to go unanswered (feels kind of rude not to answer people!). So I've searched around for blogs of Canadian real estate lawyers who I hope will be better suited than I to help you out. Here are a couple of links:

BC Real Estate Law

Ontario Real Estate

My husband owns the house - what happens if he dies?

This is a question recently asked by a reader, that I'd like to answer here. I'm glad this question is being asked while both parties are still living and there is time to make changes, if necessary.

The facts seem simple, but there are many more facts that I would want to know in this situation. First I would check the title to see exactly who owns the house. Is the wife correct in her belief that her name is not on the title? Is the husband the only owner or is there someone else on title as well? This sometimes happens when a property is handed down through a family; the husband's siblings might well be on title too.

Assuming that the husband is the sole owner of the property, I would then want to know whether the parties were legally married or common-law partners, and I'd want to know which province or territory they live in. A couple of provinces, including Alberta, still have Dower rights which give a surviving spouse a life interest in the home when the spouse dies. Dower rights don't apply to common-law couples.

I would also want to know whether the husband has a valid Will, and if so, what he has said about the property in his Will. If he is the only owner of the house and he leaves his entire estate to his wife, then the house will simply be transferred to her. It could be, however, that if the husband is in a second marriage, he might plan to leave the house to his children of the first marriage. Or he might have created a trust for his wife, which would allow her to live in the house but not sell it.

Tied in with the issue of the Will are any beneficiary designations the husband might have made, such as RRSPs and life insurance, that might impact the wife's case if she were to bring a lawsuit claiming a larger part of the estate. Spouses are always included in the group of people with an automatic right to contest an estate if he or she is not adequately provided for. Her application would also be affected by rival claims to the estate such as those of minor or handicapped children.

Another fact that might impact the fate of the house is the husband's debt situation. Does he have a mortgage, and if so, is it life insured? Does the house secure a line of credit or a business loan? Is there enough money in the estate to pay all debts he leaves behind?

A simple question, perhaps. But a simple answer? That's not so easy.

Joint tenancy may not be the best option

I know that joint tenancy of property as an estate planning move is a topic of huge interest on this blog, so I'm sharing with you a post from All About Estates. Click here to read it. It talks about the consequences of joint tenancy that you may not have intended.

Put it in writing

This story is sad, but not unusual. A woman says that her father promised her that when he passed away, she would inherit his house. For ten years she paid the mortgage and other expenses for the house, because her father couldn't afford it, all the while thinking that one day she'd own it. But her father left the house to his wife. The woman has no way to prove that her father wanted to leave it to her.

Even if she had witnesses who knew of the father's intentions, this would likely  not help her because she would have nothing in writing. She is probably not ever going to have the house.

Those of you who have informal or verbal agreements like the one outlined here, please take note. A verbal agreement isn't enough. Put it in writing. Protect each other by setting out your agreement and signing any documentation needed to support it. You'll also be saving your estate from a potential dispute or claim.

Can I sell estate property before getting probate?

Because it can take weeks to receive a Grant of Probate from the courts, and because executors are usually under pressure from beneficiaries to wrap up the estate quickly, executors are often in a hurry to sell the house or other property in the estate. This is particularly true if the market is in the seller's favour at the time. They don't always want to wait until they've received the paperwork from the court.

Unfortunately, the executor does have to wait for the actual court order. It's not just a technicality or insignificant piece of paper. Think about what it actually does. It allows someone else to sell a person's house and look after the money. If a Probate order wasn't needed, then what would stop pretty much anyone from trying to sell that house and keep the money? The probate order is proof that the person selling the house, who after all is not the owner of it, has the legal right to sell it and accept the money.

An executor who goes ahead without the probate and tries to sell a property will find that the Land Titles Office or registry will not allow this to happen. They must have a court certified copy of the probate before they will register a new owner.

This doesn't mean that the house can't be listed for sale while the probate documents are being processed at the court. The executor who is selling the house just needs to make sure that he or she is clear on the sales agreement that the sale is subject to a probate order being granted.

Beneficiaries who are pressuring for the sale of the house need to realize that once the executor has filed the documents and is waiting for the probate order to be issued, there is little the executor can do to speed up the process.

Joint tenancy and tenants-in-common

The most widely read post of all time on my blog, which still gets hundreds of hits per month, is a post I made back in January of this year about joint names on title vs. tenants-in-common. I notice that a lot of people read several of my posts on this topic. So, just to save you some search time, I've pulled together all of my major entries on joint ownership below. Click on each title to read the article. If you still have questions, please feel free to post a comment for me below.

Joint or not - that is the question

Answering more questions about joint property

Should I put my home in joint names with my kids?

Don't forget to transfer title to joint property to surviving owner when one passes away

Joint tenants vs. tenants-in-common

What happens when a tenant-in-common dies?

Joint property with parents

The "avoiding probate at all costs" issue

The mythical will that doesn't need probate

Tips for an executor on completing an estate inventory

An executor or administrator almost always has to prepare an inventory of assets and debts of the estate, whether he or she is applying for Letters Probate or Letters of Administration. There are other good reasons for preparing an inventory too, such as accounting to the beneficiaries, filing tax returns, and calculating the probate fee, lawyer's fee and executor's compensation.

Though the forms themselves vary from province to province, the principles behind the inventory are the same everywhere. The following are 16 tips to keep in mind as you gather information and fill in the paperwork:

1. All values should be as of the date the deceased died.

2. Use fair market value as a general rule.

3. "Real" property includes land, buildings of all kinds, life estates and mines and minerals titles. All other property is considered "personal" property.

4. When listing real property, include both the civic (street) address and the legal description. The legal description can be found on the title or on the tax notice for the property.

5. Use appraisers to set values on large assets.

6. When listing debts, include a breakdown of funeral expenses.

7. Under debts, include not just current debts but also future tax liability and other future debts.

8. Do not include any real or personal property that the deceased owned jointly with another person.

9. Do not include life insurance that names a beneficiary unless the beneficiary has already passed away, or the policy names the estate as the beneficiary.

10. Do not include financial assets that name a beneficiary, such as RRSP, RRIF, or pension.

11. Do not include anything that comes to an end with the death of the deceased, such as an annuity.

12. List and apply for all government and private death benefits.

13. Household items such as clothing and furniture may be grouped together and described on the inventory as "household and personal items" and given a nominal value such as $200. Assets of higher resale value such as artwork or antiques may be listed and valued separately.

14. Include the deceased's business interests, whether that interest takes the form of shares in a private corporation or a share in a partnership.

15. If your inventory is all ready to be filed except for one value that seems to be taking forever to get, you may give your best guess as to the value SO LONG AS you describe it on the inventory as an estimate, and later file a supplementary document to give the court the missing value.

16. Remember that the inventory is part of sworn evidence, so you will have to swear it in front of a commissioner for oaths. Swearing a false document is perjury.

Hopefully these tips help answer some of your questions.

Don't forget to transfer joint title to surviving owner when one passes away

Most people realize that when one joint owner passes away, the other one - the surviving joint tenant - automatically owns the property. This right of survivorship is the main reason that people own property in joint ownership in the first place. However, many surviving joint tenants don't realize that the Land Titles Office isn't going to change the title to the property automatically. The surviving joint tenant has to ask them to do that.

In order to change the title from joint owners to the surviving owner, that surviving owner will have to fill in a brief document at the Land Titles Office (or lawyer's office). Along with the document, the Land Titles Office will require an original Death Certificate. It must be the government-issued Death Certificate and not the Funeral Director's Statement of Death. In the document, the surviving owner will say that the other owner has passed away, offering the Death Certificate as proof, and ask that the title be amended to show only one name.

I've heard a number of surviving owners and a few executors ask why they should bother. Here's why. Say Jack and Janet are married and they put their home into joint names. Janet passes away and her Will doesn't need to be probated because everything is in joint names with Jack. He doesn't bother taking Janet's name off the title. Years later, Jack dies and his executor tries to sell the house. Jack's executor can sign on his behalf because Jack's Will was probated. But who can sign for Janet? Her name is still on the title. Jack's executor would then have to get Janet's Will probated too because there is no longer a surviving owner.

That is assuming her Will can still be found and hasn't been destroyed. And assuming that she named an executor other than the deceased Jack. You can see how a simple transaction all of a sudden becomes REALLY complicated.

The best idea is to file the necessary document at the Land Titles Office as soon as may be practical after the death of the first joint owner.

Snowbirds beware! Canadians and the American IRS

Attached is a very good article for Canadians who own property in the US and spend considerable time there to escape our snowy winters. Ever think about whether using that property will get you into trouble with American tax authorities? Read this article from Moodys LLP Tax Advisors for some very good information.

The basics of capital gains tax and the principal residence

As I've mentioned several times in previous blog posts, Canada doesn't currently have any direct death or inheritance federal taxes. But when a person passes away, his or her estate must pay income tax outstanding as well as capital gains tax.

Capital gains tax is the tax paid on the increase in value of certain assets known as capital property. The type of capital property dealt with by executors most often is real estate, though other assets such as the shares of a privately-owned corporation are also capital property.

Capital gains tax works like this. On the day you first acquire an asset, it has a value (called the adjusted cost base). If we are dealing with real estate, the value is normally the price you paid for the property. Over the time that you own that property, it gains in value. The longer you own it, the more likely that the value will increase. On the day you get rid of the asset - by selling it or transferring it under your Will when you die - it therefore has a greater value than it did when you got it. The difference between the value on the day you got it and the value on the day you dispose of it is known as the capital gain. You have to pay tax on one-half of that increase in value.

As an example, let's say Leia buys a house for $150,000. She owns it for many years and when she dies, her executor is going to sell the house. Now it's worth $550,000. The capital gain on the property is $400,000. Leia's estate has to pay tax on half, or $200,000. This doesn't mean that there is $200,000 in tax owing. It means that $200,000 is added to income for that year on the tax return, and the executor will use as many tax deductions, exemptions etc as he or she can to reduce how much tax must be paid.

If the property was worth less at the date of her death than it was when Leia acquired it, she would instead have a capital loss that she could apply to her return.

This is triggered by Leia's death because in law you are deemed to have sold everything you own one minute before you died. This means that even if your executor is not selling the house but is transferring it to a beneficiary, you are still deemed in law to have sold it at fair market value.

There are some exemptions to the rule about capital gains. The one that is important to most executors is that a person does not have to pay capital gains tax when he or she disposes of his or her principal residence. So if the house Leia owned was her principal residence, the $200,000 would not have to be added to her income.

On the other hand, if the house Leia owned was a summer cottage or a rental property, the tax would be owing.

Your principal residence doesn't necessarily have to be the house you live in most of the time. If you happen to own another house that is worth more, you could designate that more expensive one as your principal residence (don't do this without talking it over with your accountant first!).

A married couple only gets one principal residence between them.

Before taking any steps to avoid capital gains tax by setting up trusts or joint ownership or other ideas, you absolutely must speak with an accountant or estate planning specialist about your specific situation. Often people set up schemes to avoid one thing but they haven't looked at the whole tax picture, such as potential tax hits when a property is transferred from an individual to a trust or to joint owners. There may also be other tax solutions available that you hadn't thought of.

Should I put my home in joint names with my kids?

I am always surprised at the large number of people who put their homes in joint names with their adult children. If only they could see that transaction from a lawyer's perspective! When I ask people who advised them to do this, the majority reply that they did not use professional advice.

Before you decide to add your children's names to the title to your home, consider this: the child whose name you put on the title will own your house just as much as you do. It won't matter in most circumstances that it's "really" your home or that you're the one who paid for it. Think about what that could mean to you.

Risk #1: You put your son Frank on the title to your home. A few years later, Frank gets divorced. He and his wife divide their property between them as fairly as possible. She claims half the value of your house. Because Frank is the owner of the house too, she actually has a viable claim. Does Frank have enough assets to give his wife an amount equal to half the value of your house? If so, what will that do to Frank's financial picture? What happens if he doesn't have enough to pay her out? You risk at worst losing your home, and at best leaving Frank a couple of hundred thousand dollars poorer.

Risk #2: Frank opens a business of his own. He gets bank financing, and as is usually the case, he signs a personal guarantee for the loan. After a while he realizes that his business is not working out, and he closes up shop, owing the lender much more than his business is worth. The lender has the legal documentation that allows it to realize on Frank's personal assets, which includes your home. If Frank can't pay off his business debt, are you in a financial position to bail him out to save your home?

Risk #3: Frank is driving too fast and causes a motor vehicle accident in which someone is severely injured or killed. The settlement amount is in the millions of dollars. Frank has only $1,000,000 in public liability insurance. He is sued for the rest. It's going to take everything he owns, and more, to satisfy this judgment. Since he owns your house, it could well be seized and sold to help pay off the judgment.

Risk #4: You and your spouse decide that the old family home is too big and that it's time to downsize to a condo. You're ready to put the house on the market, but Frank won't sign the Transfer of Land. He believes that the housing market is too low right now and just might recover if you hang on for a year or two. You and your spouse won't be able to sell your home because the other owner, Frank, isn't co-operating.

I could go on, but I'm sure you get the point.

The bottom line is that it's risky to put names other than your spouse on the title to your home. It is usually one of the most significant assets on anyone's financial sheet and not something that most people can afford to have taken away.

So why do so many people take this risk? Usually it's because they have been advised to avoid probate fees by putting everything in joint names. It seems like a good idea as long as you're willing to avoid thinking about the potential downside. In my view, people take this step knowing too little about the process itself, and too little about how it actually applies to them.

For example, in Ontario and BC, probate fees are quite high and it's understandably tempting to find ways to reduce those fees. But why would anyone in Alberta, where probate fees cannot exceed $400 no matter how large the estate, want to reduce probate? Who would risk a $500,000 asset to save $400? It's often because they don't know the fees are that low and added names to the title without ever finding out how it applies to them.

If you are considering putting your child's name on the title to your home, you need to get professional advice that is geared towards you personally by someone who has all the facts about you, your children, your assets and your liabilities. This could be an estate planning lawyer or a certified financial planner. While it is certainly legitimate to consider this step as part of estate planning, make sure it's also kept within the larger context of your risk.

What happens when a tenant-in-common dies?

In this blog, I've mentioned a few times (and will mention many more times, I'm sure) what happens when a joint owner of property dies. However, I was recently asked what happens when a tenant-in-common dies.

A major difference between joint owners and tenants-in-common is that joint owners automatically have a right of survivorship to the entire property. Even though there are two or more joint owners, they are all considered owners of the entire property, as opposed to a half or a third. There are no halves or thirds with joint owners.

With tenants-in-common there ARE halves and thirds (and other portions). Each person owns only a portion of the property, according to the Transfer of Land document that was filed with the Land Titles Office when they acquired the property. There is no right of survivorship with tenants-in-common because each owner owns his or her section only.

It's possible for two people to be joint tenants of one portion of a tenancy-in-common.

When a tenant-in-common dies, his or her portion of the land is dealt with like any other asset that is in that person's name alone. Hopefully the person has a Will which sets out who will get his or her property. If not, there will be an administrator appointed by the court. Whoever is the beneficiary of the estate will become the new owner of the deceased's portion of the property. The portions of the property owned by the other tenants-in-common are not directly affected.

When deciding whether you want to own property as joint owners or tenants-in-common, or whether you want to own real estate together with other people at all, you really do have to think through the likely scenarios you might encounter. For example, if you own 1/3 of a house as a tenant-in-common and you want to sell your share, how do you get out of the arrangement? How do you sell 1/3 of a house? Are the other tenants-in-common in a position to buy you out?

If a new owner does join the tenancy-in-common because he or she has inherited someone's portion, how will the other owners interact with that person? Will they be able to agree on issues such as whether it should be sold, who should live in the house, etc?

There are pluses and minuses for different possible arrangements, and each comes with its own set of owner's rights. When I ask clients about their ownership arrangements, the vast majority say that they don't know whether they are joint owners or tenants-in-common. You should make sure that you thoroughly understand your own situation.

Dealing with household goods when your aging parent is moving to long term care

I've recently found this book, "De-Stuff" by Jan Robbins Durr, which might be extremely helpful for anyone who is trying to figure out what to do with 40 or 50 years worth of possessions in the family home before it can be sold. It could be very applicable to the family of a senior who is moving into long-term care or in with one of his or her children. Find out more about the book by clicking here.

Answering more questions about joint property

I really do try to answer readers' questions as quickly as possible but I'm the first to admit that sometimes it takes me a while to get to them all.

I continue to get tons of questions about joint tenancy of homes, and about tenancy-in-common. I'll answer a few of them briefly here (let me know if you need more expanded answers):

Q: My spouse, who is also the joint tenant of our home, has died. How do I change the title into my name only?
A: Take an original Death Certificate (not Funeral Director's Statement of Death) to the Land Titles Office. You will fill in a document called a Declaration of Surviving Joint Tenant, or variations on that in other provinces. You then hand in the document to the Land Titles Clerk, who will amend the title for you. You do not need probate for this.

Q: Two people own a house as joint tenants. What happens if one dies and the surviving joint tenant has Alzheimer's disease?
A: The surviving joint tenant still gets to own the house, with or without Alzheimer's disease, as that is the legal right given by joint tenancy. The question may really be about the logistics of the paperwork, since a person with advanced dementia is not able to understand and sign legal documents. Who can act for this person? If the person with Alzheimer's disease has an Enduring (Continuing) Power of Attorney, it may be used to deal with the land. If there is no Power of Attorney, it may be necessary for someone to be appointed as a trustee by the court.

Q: What happens if both joint tenants die at the same time and there is no Will?
A: If it is impossible to tell which of the joint tenants died first, the law says that the one who is younger is deemed to have outlived the older one. This means the joint title first transfers to that joint tenant, leaving the land in his or her name only. If there is no Will, all of the assets of that person, including the land that used to be in joint tenancy, will be distributed according to the provincial intestacy laws. In Alberta, that would mean children of the second joint tenant first. If there are no children, then his or her parents. If there are no surviving parents, then siblings. Nothing will go to the family of the older joint tenant who died first. See my earlier post here about survivorship of the younger person.

Q: Does a joint title change to tenancy-in-common if one of the joint owners remarries?
A: Nothing is going to happen automatically if one remarries. The title will stay the same until the joint owners both sign documents to bring about a change. One can't do it on his or her own. Remarriage on its own won't change anything. If this question refers to a house that was the matrimonial home and now the couple is splitting up, I assume that the house will be dealt with in the subsequent property division. In other words, you'll divide everything up and one of you will get the house. As part of that agreement, you'll both sign a Transfer of Land document that transfers the house to one owner only.

Two steps to transferring real estate from an estate

I'm often asked about the mechanics of certain transactions under an estate. Probably real estate gets more questions than any other type of asset. In this post I want to describe the two basic steps that are involved in taking a piece of real property from an estate and selling it or transferring it.

Let's say that when Amelia dies she owns a house. Nobody else's name is on the title. Her executor, Sam, reads the Will and finds that he needs to transfer the house to Amelia's nephew. The first step Sam takes to deal with the house is called transmission. The property is being transmitted from Amelia to Sam as executor (NOT Sam personally). The Grant of Probate needs to be obtained first to take this step.

Sam completes a document called a Declaration of Transmission and files it at the Land Titles Office with some supporting items. Once the Land Titles Office processes it, they give Sam a new title, which shows that the house no longer belongs to Amelia, it belongs to the estate. The title will actually show as "Sam, executor for estate of Amelia". While the property is in the name of the estate, the executor is responsible for keeping it insured and secure, and paying the property taxes.

Now Sam can take the second step, which is called transfer. Sam will prepare a document called a Transfer of Land, again with supporting information and fees, and file that at the Land Titles Office. Once this is processed, the title will be in the name of Amelia's nephew and Sam will no longer have any control over the property.

The transfer could, in other situations, involve selling the property to someone outside of the estate. In this case, there is still a Transfer of Land used.

Do I just get the house, or the contents of it as well?

Smooth administration of an estate starts with a good Will, but that doesn't help much if you're the beneficiary or executor of an estate with a Will that doesn't give you enough information. And to be frank, many executors and beneficiaries include all kinds of erroneous assumptions and leaps of logic that muddy the waters even when there is a pretty decent Will.

For example, I see assumptions come into play when a testator makes a Will which leaves a house to a beneficiary. Some people reading the Will assume that a house comes with everything in it so the testator must have intended that to happen. Others assume just the opposite and conclude that if the testator had wanted the contents of the house to be given to someone, he or she would have come right out and said it. Another completely false (in law) assumption that I see come into play pretty regularly is the idea that when a testator passes away, each item that he or she owns will be returned to the person who gave him or her that item in the first place.

Keep in mind that when dealing with the personal and household belongings of someone who has passed away, it's not always the monetary value that concerns the beneficiaries. Sometimes it's the sentimental value, because a beneficiary wants some kind of keepsake of the person who died.

So when a Will leaves a beneficiary a house, does the beneficiary get the household contents as well? First of all, look at whether that testator has a spouse (legally married or otherwise) who lives in the house with him or her. If so, assume that with very few exceptions, all of the household contents are jointly owned between the testator and his or her spouse, and that the spouse will own all of the contents. (For the sake of concentrating on personal items, I'm not going to go into the obvious Dower Act issue that is staring me in the face here.)

Then look at the wording in the Will.

First of all, a properly drafted Will will say "contents" if the contents are to be included in the gift. However, if that word is missing, you have to look further.

Does the Will say that the testator is transferring "the title to the property"? To me, that indicates that the household contents are not intended to be included.

Does the Will deal with household contents and personal items in a separate clause of the Will? In many Wills, there is a paragraph that says how the testator wants to divide up the items. This is usually not a list of individual items, but a general statement that says something like "my household and personal goods are to be divided among my children as they agree". If that kind of clause is included, it would suggest that household contents are not to be included in the gift of the property.

Has the testator made a Memorandum of Personal Effects, or other informal list of certain items to be left to specific people?

If the Will doesn't say anything helpful about this issue and no Memorandum has been found, it is possible for the residuary beneficiaries of the estate to agree that the items in the house can be given to the beneficiary who is getting the house. (If I were the executor in that case, I'd get that agreement in writing).

Keep this in mind when you are having your own Wills prepared. Many people think that the shorter and simpler a Will is, the better. However, if you include just a few more sentences such as instructions as to what to do with the personal belongings, things will run smoothly and properly after you've passed away.