MANY people attend my law office for advice on the best way to go about transferring property from themselves to a loved one, especially when the property owner is in their senior years. With the main differences explained below, I hope making your decision will be easier!
It’s a legal document used by a person (called a “testator”) to specify how his or her assets/estate is to be managed or distributed upon their death. There are legal technicalities to be followed for the Will to be valid, e.g. the testator must be of sound mind and memory and two witnesses are necessary to see the testator sign the Will. While the services of a lawyer to draft the Will is recommended, they are not necessary.
A deed of gift
Deeds of Gift on the other hand must be prepared by a lawyer in order to be valid. It operates to transfer the legal title in the property, but without any compensation being given to the property owner (it’s a gift). There are two systems of land registration in Trinidad and Tobago, the “Old Law” or unregistered land system and a registered land system under the Real Property Ordinance, Chapter 27 No. 11 known as the RPO system. Why is this important? Deeds under the Old Law system transfer the owner’s legal title immediately upon execution (signing), but Deeds under the RPO system are only effective when they are registered in the State’s Land Registry, which could be a lengthy process (several months).
The main differences between those two methods of transferring property is that of time, cost, and flexibility to make changes.
A Deed of gift would transfer the property immediately (for unregistered lands) or a few months later upon registration (for RPO. lands). But a Will only takes effect upon your death. With a Will, the person who you left your property (called the “beneficiary”) will have to wait until the following are done: (1) you pass away; (2) your estate is probated in the Probate Division of the High Court by the person you left in charge of doing so (called the “Executor” or “Executrix” if female); and (3) the Executor/Executrix transfers the legal title in the property to the beneficiary by way of a Deed of Assent after receiving the grant of Probate.
There is no fixed cost to prepare a Will if you choose to use the services of a lawyer. Price would vary depending on the experience of your Attorney, the content of your Will and the attorney’s discretion on how much they wish to charge you. Wills are capable of being complex, involving complicated trusts etc., which may cause the cost to be above the norm. Most Wills however are inexpensive, usually under $1,500.00.
Conversely, a Deed of Gift may be quite costlier. Apart from paying your lawyer’s fees and expenses (which are partially dictated by law), you may have to pay a government tax called “stamp duty” in order to register your Deed. In order to get that stamp duty tax assessed by the Board of Inland Revenue, you may have to provide them with a valuation report from a land appraiser as evidence of the value of the land. Both the cost of a valuation report and the stamp duty tax are tied to the value of your property. For a residential property comprising of land and building valued at $1.5 million, don’t be surprised if your overall costs exceed $10,000.
Flexibility to make changes
Deeds are more or less permanent, in the sense that once you transfer your property to another person, you cannot change your mind and take it back. Only a judge of the High Court can overturn a Deed of Gift, however, you would need to show grounds such as fraud or a mutual mistake by both parties in order to succeed.
The beauty of a Will however, is that you do have the flexibility to destroy your Will and make a new one anytime you want! You retain the power to decide who gets your property.
Copyright © 2020 Neela Ramsundar, LL.B (HONS), L.E.C is a Civil Litigation Attorney at Law & Certified Mediator.
Disclaimer: The contents of this article are for general informative purposes only. It does not provide legal advice and does not create an attorney-client relationship with any reader. For legal advice on your specific situation, please contact an Attorney-at-Law of your choosing directly. Liability for any loss or damage of any kind whatsoever allegedly incurred a consequence of using content in this article is thus hereby excluded to the fullest extent permitted by law.