I have of­ten com­ment­ed on the choice be­tween gift­ing prop­er­ty to rel­a­tives while alive as op­posed to leav­ing a Last Will and Tes­ta­ment. The pros and cons of both op­tions should al­ways be prop­er­ly weighed and con­sid­ered. The ex­pens­es as­so­ci­at­ed with the dif­fer­ent op­tions are most of­ten the de­ter­min­ing fac­tor on which op­tion should be se­lect­ed. While I have strong­ly ad­vo­cat­ed against con­sid­er­ing cost alone, per­haps, it would be more help­ful to ex­plore the costs as­so­ci­at­ed with dif­fer­ent op­tions.

In our coun­try there are two types of sys­tems by which land is held and con­veyed. The old law sys­tem is re­ferred to as the com­mon law and the deeds are usu­al­ly re­ferred to as com­mon law deeds. Trans­ac­tions in­volv­ing these forms of deeds are pur­suant to the Con­veyanc­ing and Law of Prop­er­ty Act. The oth­er is the new­er forms of deeds re­ferred to as Cer­tifi­cate of Ti­tles and gov­erned by the Re­al Prop­er­ty Act.

The At­tor­neys-at-Law (Re­mu­ner­a­tion) (Non-Con­tentious Busi­ness) Rules of 1997 sets out the man­ner in which fees should be cal­cu­lat­ed for the pur­pos­es of con­veyance of mort­gage (com­mon law) as fol­lows-:

Con­sid­er­a­tion or Amount

Se­cured Scale of Charges

• Not ex­ceed­ing $100,000

One and one-half per cent of the con­sid­er­a­tion with a min­i­mum fee of $400.

• Ex­ceed­ing $100,000 and not ex­ceed­ing $500,0000

One and one-half per cent of the first $100,000 and three-fourths per cent of the con­sid­er­a­tion in ex­cess of $100,000

• Ex­ceed­ing $500,000 but not ex­ceed­ing $20,000,000

The same charge as on a con­sid­er­a­tion of $500,000.00 plus one-half per cent on the ex­cess be­yond $500,000.00.

• Ex­ceed­ing $20,000,000.00 The fee charged shall be cal­cu­lat­ed by ref­er­ence to the mat­ters set out in Sched­ule 3.

I ap­pre­ci­ate that the ta­ble can be some­what con­fus­ing for some­one who sim­ply wants to know the costs of the con­veyance with­out the ad­di­tion­al has­sle of hav­ing to do the math­e­mat­ics them­selves. I have done some sim­ple cal­cu­la­tions to as­sist the process.

Should you have house and land val­ued at $850,000, the flat cost of con­veyance may be ap­prox­i­mate­ly $6,250. How­ev­er, some at­tor­neys at law are VAT reg­is­tered and these costs may at­tract a VAT charge. Aside from VAT, a dis­burse­ment fee may be added to in­clude the costs as­so­ci­at­ed with hav­ing the deed ac­cessed and reg­is­tered, to­geth­er reg­is­tra­tion fees etc. The cost of dis­burse­ment varies from at­tor­ney to at­tor­ney. The charge of VAT and dis­burse­ment is what usu­al­ly re­sults in dif­fer­ent at­tor­neys quot­ing dif­fer­ent fig­ures for the costs of prepa­ra­tion of deeds. A val­ue of $850,000 for house and land will be ex­empt­ed from Stamp Du­ty so that there would be no stamp du­ty to be added on the trans­fer.

Let us con­sid­er a prop­er­ty that may be val­ued a lit­tle high­er. A prop­er­ty val­ued at $1,500,000, would be ap­prox­i­mate­ly $9,500. Once more this fee will vary based on VAT and dis­burse­ment.

The val­ue of $1,500,000 will at­tract a Stamp Du­ty ex­emp­tion up un­til $850,000 and tax­es will be paid on the re­main­der. It should be con­sid­ered that first time home own­ers now ben­e­fit from an ex­emp­tion in tax­es up un­til the val­ue of $1,000,000. Your at­tor­neys at law can ap­ply for the ex­emp­tion which in­cludes a de­c­la­ra­tion that you own no oth­er lands.

Now, to ful­ly con­sid­er the choic­es avail­able, let us con­sid­er Pro­bate. For per­sons who do not wish to con­vey prop­er­ty dur­ing their life­time, the op­tion on leav­ing a Will is avail­able. I can­not eas­i­ly give the cost of prepar­ing a Will as this is not guid­ed by law and is usu­al­ly de­ter­mined by the time spent in prepar­ing the Will. Some at­tor­neys at law may charge $1,000, while oth­ers may charge a fee that far ex­ceeds that.

The cost of pro­bat­ing a Will is guid­ed by leg­is­la­tion and the ta­ble is as fol­lows-:

Val­ue of Es­tate Scale of Charges

• Not ex­ceed­ing $10,000 Five per cent of such val­ue with a min­i­mum fee of $500.

• Ex­ceed­ing $10,000 and not ex­ceed­ing $250,000

Five per cent on the first $10,000 of such val­ue and three per cent on the ex­cess be­yond $10,000.

• Ex­ceed­ing $250,000

The same fee charge­able if the val­ue of the Es­tate were $250,000 plus one per cent on the ex­cess be­yond $250,000

I will do a com­par­i­son.

Let us con­sid­er that the prop­er­ty val­ued at $850,000 was not gift­ed through con­veyance, but, was the sub­ject of a Will. If, there were no oth­er items list­ed in the Will, and, the de­ceased had no monies in the bank or any oth­er as­set, the val­ue of the es­tate to be pro­bat­ed would re­main at $850,000.

Us­ing the above ta­ble, the costs of pro­bat­ing the es­tate would be ap­prox­i­mate­ly $13,700.00 which again does not in­clude VAT or dis­burse­ments.

Should the de­ceased’s es­tate be val­ued at $1,500,000 then the cost of pro­bate would be $20,200 again this does not in­clude VAT or dis­burse­ments. It should al­so be con­sid­ered that the cost of pro­bate does not in­clude the costs of the nec­es­sary deeds of con­veyance. These costs are on­ly to­wards se­cur­ing ei­ther a Grant of Pro­bate or Let­ters of Ad­min­is­tra­tion, there­after, the ad­di­tion­al feels will be set for prepar­ing deeds.

In con­sid­er­ing the op­tion be­tween gift­ing land dur­ing your life­time as op­posed to prepar­ing a Will, the cost should not be the on­ly mo­ti­vat­ing fac­tor.

One should al­so con­sid­er the time and ef­fort of both process­es. Fur­ther, whether the per­sons who are left to pro­bate will be able to af­ford the nec­es­sary fees and/or be will­ing to fa­cil­i­tate the de­mands of the process. It is dif­fi­cult to dis­cuss all the fac­tors to be con­sid­ered and this is I strong­ly ad­vo­cate get­ting your le­gal ad­vi­sors in­volved in the dis­cus­sion and seek the nec­es­sary ad­vice.

Pavi­t­ra Ramharack is Head of Cham­bers at Pavi­t­ra Ramharack At­tor­neys at Law and can be reached at ramharack_pavi­t­ra@out­look.com.