How is title of real estate transferred or vested in beneficiaries?

Again, it is a question to me not to most of you, but I need to understand it any way for my own research.

In my own research on how Chinese courts deal with testamentary trusts in Will made outside of China, I noticed in one of the judgments by a China court it is said that “under Hong Kong laws, the estate property (real estate) is first inherited by the Executor and then distribute the same to the beneficiaries”. I think the understanding is not correct.

So the question is how under HK laws (patterned against UK laws) an executor transfers the title of real estate property to the heirs (intestate) or beneficiaries (will)? In the case of sale to others, how will the title then be processed? How does assent operate to title transfer of real estate in probate and administration proceeding?

My reading of HK Probate and Administration Ordinance found that the title, in either case, doesn’t need to be vested in the executor first and then the executor will transfer the same to heirs or beneficiaries. With the grant of probate or letters of administration, the executor will be empowered to transfer the title to the beneficiaries or purchaser.

However I also located an article written by NZ lawyer talking about “transmission” in regard of title to real estate before the property can be sold to purchaser (not heirs or beneficiaries).

So what does the executor really need to do with title at the land registry in order to transfer title of real estate to heirs/beneficiaries or purchaser?

Thanks for shedding any light on this.

Jason Tian
Shanghai Landing Law Office

In the UK, the Land Registry is not the final arbiter of ownership, although a buyer can usually buy from the registered owner with a guarantee. There are still some properties (fewer every year) which are not registered at all and title is proved by the historical deeds.

Legal title to property passes automatically to an executor (if one is appointed) on the death although they would apply for a grant of probate as evidence of their title. If no executor has been validly appointed the legal title vests in any administrator appointed by the Court.

The executor/administrator (collectively known as personal representative / PR) can then:

  1. Register the title in their own name in their capacity as PRs (usually unnecessary);
  2. Sell directly to a third party, in which case they would provide the grant of probate as evidence of title, transfer the title to the buyer and the property would be registered in the name of the buyer at the Land Registry; or
  3. Assent the property to the heirs, by transferring title to them. The heirs would then submit the transfer to the Land Registry to register their title.

In the quote you have given, we would not say that the PR’s “inherit” the property, but the legal title does vest in them to enable them to manage the property. They do not own the beneficial interest, as they are under an obligation to administer the estate, pay creditors and distribute in accordance with the will or intestacy rules.

Andrew Goodman
Osborne Clarke LLP

Thanks, Andrew.

I guess my problem lies in being not familiar with the concrete documents involved in the probate and administration proceeding.

  1. Legal title of property passes automatically to an executor or administrator in the conceptual sense only as there is no need to deed the title in their names.

  2. your saying “register the title in the their own name in their capacity as PR (usually unnecessary”, should refer to the “transmission” process as applicable in both Canada and New Zealand which appears like “Jason Tian as executor/administrator”; apparently, not every common law country follows the same suit of “transmission”.

  3. when selling the estate property to a buyer, the executor or administration simply act on the strength of the Grant of Probate and signs the sale contract in the capacity as PR.

  4. the word “vesting” here does not really mean “registration” but “actual control and management” to the exclusion of others.

I believe my understanding above should be in line with the orthodox views. Thanks.

Jason Tian
Shanghai Landing Law Office

I would like to hear your comments on my understanding of the role of executor during probate:

an executor appointed in a will and granted the probate is in nature a trustee for the beneficiaries of the estate in question, he or she holds the estates on trust for the beneficiaries, despite that there is no express intention of setting up a trust by the deceased. It can be considered as a statutory trust.

Is that correct?

Please help. I am begging your comments. :grinning:

Jason Tian
Shanghai Landing Law Office

Similar to New Zealand, Jamaica operates under the Torrens Title system. There are still lands which have not yet been brought under the Torrens system and as such, the old way of proving good root of title still operates. The process is the same as explained above. The Executor or Administrator once in possession of the relevant court Grant be it Probate or Grant of Administration must do the following:

  1. Advertise for Creditors and pay all debts and liabilities
  2. Obtain estate TRN (tax registration number)
  3. pay Transfer tax on death- so that he/she can be registered on Transmission on the Title
  4. Once registered on Transmission- the executor or administrator can transfer the properties to the beneficiaries or sell said property (depending the circumstances)

The legal Title in vested in the Executor or Administrator. Once all liabilities are settled they become trustees for the net estate to be transfer to the beneficiaries.

If the beneficiaries wish to sell the executor/ administrator being registered on transmission can proceed to sell to a third party and his production of a copy of the title with him/her registered on transmission plus copy of the Court Grant is accepted as good proof of authority to sell in Jamaica even where purchaser in using a mortgage company.

Kedia Delahaye

It is more accurate to say that the personal representative holds the assets subject to the beneficiaries’ right to due administration of the testator’s estate. A beneficiary does not have a beneficial interest in any asset until it has been assented to him or her.

Clifford Payton
Alpha Court Chambers

In the case I am reviewing, the Hong Kong executors under a will were finally allowed by China court to be registered as shareholders of the shares in a China company, which shares are the estate in question.

Now once the executors are registered as shareholders (owners, one of which is an attorney, not legal heir), those executors are holding the shares on trust for the beneficiaries of the will, and the executors are supposed to sell to cash in on the shares and distribute the sale proceeds to beneficiaries. This shall be correct. In other words, the executors are now trustees of the trust whose corpus is the estate shares, and beneficiaries are those under the will. The relationships among the parties are now governed by trust law.

Jason Tian
Shanghai Landing Law Office

The Executor becomes trustee to transfer to the beneficiaries, subject to the terms of the will, once all estate liabilities are settled.

Kedia Delahaye

thanks for reply.

i have recently noticed a case " Commissioner of Stamp Duties v Livingston* [1965]", in which the court discussed the roles of an executor/administrator as compared to the trustee of a trust.

i am not sure whether the opinions therein have changed over time but it does sound reasonable to me.

It says that before settlement of all debts and liabilities of the estate, the corpus of the estate is not fixed, and due to that uncertainty, no trust can created, since there has to be specific properties (certainty of subject matter).

Jason Tian
Shanghai Landing Law Office