- On death, a person's real and personal property vests in the estate trustee, who holds it as trustee for the people entitled to it.
- An estate trustee can generally sell estate real property without the beneficiaries agreeing, but a sale made only to distribute the estate needs majority approval.
- Whether you can live in the home, and for how long, depends mainly on the wording of the will.
If a parent or spouse left a home in trust for you, you may wonder who is in charge, whether you can live there, and when it can be sold. The trustee holds legal title, but the beneficiaries have real rights to the property or its value.
This article explains the general rules in Ontario and points out where the will's wording changes the answer. It is general information, and a lawyer can review the actual will.
What it means when a home is held in trust
On death, a person's real and personal property passes to and vests in the personal representative (the estate trustee), who holds it as trustee for the people entitled to it. The trustee does not own the home for their own benefit. They manage it for the beneficiaries.
The home is also available to pay estate debts, because real property is administered like personal property and is liable in the same way for the deceased's debts, costs and expenses. If the estate cannot pay everyone, debts are paid proportionately with no preference between ranks of debt, without affecting any lien that existed during the debtor's lifetime. A mortgage lender keeps its security against the property.
What the trustee can do, and when the home can be sold
An estate trustee can sell estate real property without the beneficiaries agreeing, except where the sale is only for the purpose of distribution. A sale made only for distribution needs the approval of a majority of the beneficiaries. Where minors or persons under disability are involved, approval of the Children's Lawyer or the Public Guardian and Trustee is needed as applicable, and without that approval the sale is not valid.
Ontario guidance says probate (a Certificate of Appointment of Estate Trustee) is normally required where the deceased owned real property. If the property must be sold, the certificate should be obtained before anyone enters into an agreement of purchase and sale.
The will may add its own limits or directions, such as telling the trustee to keep the home for a period. Those terms can change what the trustee is free to do, so the will's wording matters.
A good-faith purchaser of estate real property takes it free of claims by the deceased's creditors, except claims the purchaser knew about at the time of purchase. That is one reason buyers are generally comfortable buying from an estate trustee.
Can you live in the home?
Occupancy is usually set by the will. A will may give one person the right to live in the home for a time, or it may leave the home to be sold. Whether a beneficiary can move in without that kind of wording depends on the will and the facts, so it is worth confirming with a lawyer before you do.
One statutory right applies to married spouses only. A spouse who has no interest in the matrimonial home but is living in it when the other spouse dies may stay in it against the estate, rent-free, for 60 days after the death. Common-law partners do not get this particular right under the Family Law Act, so their position depends on other facts and on the will.
If several beneficiaries co-own the home, a disagreement about occupying or selling can end up in court. Joint tenants and tenants in common may be compelled to partition or sell the land, and any person interested in land in Ontario may apply for partition or sale.
Tax points for homes held in trust
On death, a taxpayer is deemed to have disposed of each capital property immediately before death at fair market value, which can trigger capital gains on the final return. A principal residence may be fully or partly exempt, but the legal representative must still designate it on the final return.
| Trust situation | General tax result |
|---|---|
| Property left to a spouse or common-law partner, or a qualifying spousal trust | Rolls over at cost if it vests within 36 months after death; the legal representative may elect out |
| Alter ego, joint partner or spousal trust | The trust, not the estate, has the deemed disposition on the settlor's death; for a joint partner trust, on the later death |
| Other trusts | A deemed disposition every 21 years |
When the trustee transfers the home to a beneficiary in satisfaction of that person's beneficial interest, land transfer tax is not charged, and consideration is shown as nil. If a mortgage is assumed or a beneficiary pays to buy out other heirs, tax may be payable.
Real property that the estate trustee has not dealt with within three years after death vests in the people beneficially entitled to it, unless a caution has been registered.
What to do next
- Ask the trustee for a copy of the will and any trust terms.
- Ask whether a certificate of appointment has been issued.
- Find out whether there is a mortgage and who is paying it.
- Ask what the trustee plans to do with the home and the timeline.
- Speak to a lawyer before agreeing to a sale or buyout.
What information you are entitled to receive from the trustee depends on the will and your situation, so it is worth confirming with a lawyer. If answers are slow or unclear, a lawyer can explain your options.
Frequently asked questions
Can the trustee sell the house without my agreement?
Generally yes. An estate trustee can sell estate real property without the beneficiaries agreeing, except where the sale is only for the purpose of distribution. A distribution-only sale needs majority approval, and the Children's Lawyer or the Public Guardian and Trustee must approve where minors or persons under disability are involved.
Can I stay in the home after the owner dies?
It depends on the will. A married spouse with no ownership interest who was living in the matrimonial home may stay rent-free for 60 days after the death. That right does not extend to common-law partners.
Do I pay land transfer tax if the house is transferred to me?
A transfer from the estate trustee to a beneficiary in satisfaction of their beneficial interest is not taxed. Tax can arise if a mortgage is assumed or you pay to buy out other heirs.
What if co-beneficiaries disagree about the house?
Joint tenants and tenants in common may be compelled to partition or sell the land, and any person interested in land in Ontario may apply. A lawyer can explain the options before things reach court.
Sources
- Estates Administration Act, R.S.O. 1990, c. E.22, s. 2(1) — Ontario e-Laws
- Trustee Act, R.S.O. 1990, c. T.23, s. 50(1) — Ontario e-Laws
- Family Law Act, s. 26(2) — Ontario e-Laws
- CRA – Taxable capital gains on property, investments, and belongings (deceased) — canada.ca
- Income Tax Act, s. 104(4) — Justice Laws (federal)
- Partition Act, R.S.O. 1990, c. P.4, ss. 2-3 — Ontario e-Laws
- Ontario.ca – Apply for probate of an estate — ontario.ca
- Ontario.ca – Land Transfer Tax: Transactions with nominal consideration — ontario.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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