Mcgregor
One reader recently asked whether she was entitled to use property which was left to her under a will as collateral for a loan, and I advised her that until that gift has been transferred to her, she is not legally entitled to treat it as her own. It is unlikely that the lender will accept the entitlement of the gift under the will as being adequate security for the loan.
Even when a person dies testate (leaving a will), there are certain basic things which must be done before the assets in that estate can be distributed to the beneficiaries. Assuming that an executor was appointed under the will, he must take the necessary steps to administer the estate in order for the beneficiary to become legally entitled to the property.
The executor would be well advised to consult an attorney-at-law to commence proceedings to wind up the deceased person's estate. This will involve:
the collection of all the deceased's assets.
the making of an application to the court for a grant of probate.
the payment of debts.
After those steps have been taken, the executor will be able to distribute the gifts to the beneficiaries in accordance with the terms of the will.
Once the gifts have been transferred to the beneficiaries, they will then be able to treat them as their own. In short, the statement that a gift has been given under a will does not mean that the beneficiary has an automatic right or entitlement to the gift.
There is a logical reason for this. For example, there may be a challenge to the validity of the will. Even after the will has been admitted to probate, a gift of real property (i.e. land and building) under a will requires the executor to incur legal expenses, transfer tax, stamp duty and registration fees in order to transfer that gift to the beneficiary. In many cases, beneficiaries are unable to enjoy gifts which are intended for them, because there is no money to these expenses. Sometimes an executor has to sell some assets belonging to the estate, including gifts to some bene-ficiaries, in order to meet expenses.
It could safely be said that there may be 'many a slip between the cup and the lip', so the gift under the will should not be treated as the property of the beneficiary until it has been transferred.
Sherry-Ann McGregor is a partner and mediator with the firm Nunes, Scholefield, DeLeon & Co. Send feedback and questions to lawsofeve@yahoo.com or lifestyle@gleanerjm.com.
