Planning a real estate will.
This article is about making a will. We will talk about wills because, as emotional as it seems, making a will ensures that your loved ones are cared for and your interests are looked after.
When you close on a piece of property, you’re probably thinking about an exciting future in your
new home – not what would happen in the event of a tragedy. And you’re not alone. At least half of all homeowners in Canada still need an up-to-date will that outlines who would inherit their
estate if the unthinkable took place.
Do I need a will?
There are many reasons for having a will, but the main one is deciding who will inherit your home if you pass away. A will is a legally binding document that outlines how your assets would
be divided up in the event of your death – and since your property is possibly your most expensive asset, it’s essential to have this formalized. In a will, you can give anything you own to anyone you wish. It is an opportunity and a privilege. A will can eliminate arguments, legal disputes and even expensive court cases.
Getting married instantly nullifies all previous wills unless you have made a will “in contemplation of marriage.” Those will survive the ceremony intact. If you are considering marriage for a second, third or even fourth time, you should discuss having a marriage agreement. In it, which assets belong to whom should be spelled out; otherwise, various laws can overrule your wills.
What happens if I don’t make a will?
If you don’t have a will, there is a common misconception that the government will seize your assets instead of giving instructions for how your property should be divided. If you die
without a will (otherwise referred to as “intestate”), your property is distributed according to the laws in your province. In Ontario, the Succession Law Reform Act determines how your estate is divided between your surviving relatives. The Wills, Estates and Succession Act provides the same function in British Columbia.
How does the type of ownership affect my will?
Having a will is a good rule of thumb for any homeowner, but certain types of ownership exist.
That can leave you especially susceptible without one.
Sole ownership: If someone owns a home alone and dies without a will, the property will be distributed to the beneficiaries under the Succession Law Reform Act. If you have a spouse, they will inherit everything. If you have a spouse and a child, your spouse takes the preferential share, and the residue (anything left over) is divided between the spouse and children. Only if you have no living next of kin will your estate go to the government.
Joint tenants: (with a right of survivorship): A typical arrangement is when you own a property jointly, for example, with a spouse. If one tenant passes away, it automatically passes to the other person. In legal terms, the first to pass away drops off the title, leaving the previous owner still on the title -now solely.
What happens to my mortgage if I pass away?
Unfortunately, a mortgage does not disappear in the event of a homeowner’s death. Instead, the mortgage stays with the property – not the person. If your home is jointly owned, the mortgage
passes on to the other person who owns the property. If you own the property, your mortgage is paid by the estate when you pass away.
What are the benefits of getting a will?
Even if your province’s act somewhat covers your bases, it may divide things differently than you want them to. To get specific – and to give yourself peace of mind – a will is in everyone’s best interests. With additional fees and paperwork, it can become stressful and expensive for loved ones if you don’t have a will.
How much will it cost?
A lawyer-drafted will may cost you somewhere in the region of $400-$1,400 in Ontario. However, using a lawyer or notary is unnecessary to get one. Online wills can help you quickly create a will and a power of attorney. Elsewhere, will kits provide a one-size-fits-all scenario – a good option if your estate is straightforward and you don’t need to add any additional clauses to your will.
Planning a will is difficult, but it will ensure that your hard work over the years will benefit your loved ones.