Question
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12 February 2016

Where there’s a will, there’s a way

Wills, Powers, Estates & Family Provision Claims
Federal

Asked

I am looking for a clause for a will that gives one beneficiary the option of purchasing from another beneficiary his share of real property which is otherwise to be left to them both equally. Is this possible?

Thanks.

Answered

This could be done by giving a half share to A and an option for A to acquire the other half share. If option is exercised then B receives an amount out of the estate equal to the value of the half share. If not exercised within x days then B receives half share of the property.

There is an option creation clause in the library of clauses in our Wills publication which could be adapted.

However consider the commentary in our publication reproduced below:

If a property passes to a beneficiary by agreement of all beneficiaries then any capital gains
tax liability is effectively rolled over. However, if a beneficiary is given an option in the will to
acquire a property then capital gains tax applies to the sale. The testamentary option works
to give the property to the beneficiary on its exercise free of debt but with the price coming
into the estate for distribution and subject to capital gains tax.

Regards

Mentor