Reasons Why You Need A Will, When You Own Real Estate

Dated: September 18 2023

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Preparing a will isn’t something most Canadians look forward to and tend to procrastinate for years. There are several good reasons why you shouldn’t, considering how little it costs and the benefits that come with it.

Having a will helps simplify the administration of your estate and can save taxes. Your last will and testament is a legal document that lets you determine how you would like to divide your estate and includes assets of financial & sentimental value and speaks to your wishes after you pass away.

If you happen to die without a will, Ontario laws will dictate how your belongings are distributed and this means your assets may end up in the hands of people you didn’t intend to or in proportions you didn’t intend. If you die ‘intestate’, meaning you’ve died without a will, the courts will use Ontario’s default laws to distribute your estate. Unfortunately, the provincial formulas often do not account for your important relationships and can be very different from what you would have actually wanted. It’s important to understand that when it comes to intestacy, common-law spouses are not treated the same as legally-married spouses. In many cases common-law partners and any other relationships may be left vulnerable if you die intestate, making a will is essential if you want your financial assets and any other belongings left to these individuals.

It is said that death and taxes are two certainties in life. While there is no inheritance tax in Canada, your beneficiaries will not pay taxes on the gifts you leave to them – there are two main types of tax that your estate will incur after you pass away: your final income tax return, and probate fees, which are otherwise known as estate administration taxes. Your estate most likely will require probate if you own Real Estate and there is a tax on the estate assets as part of this process. Your executor will be responsible for paying your final tax bill and paying any probate fees associated with the estate. If there is no will, they may have to front this cost until probate obtained.

In addition to making a will, you can add an additional layer of protection with a power of attorney. By making a power of attorney document, you will designate someone to make decisions about your property, finances, personal life, and medical care in the event of an emergency if you are unable to do so yourself. This can include taking care of your finances like paying your bills and maintaining your property.     

 

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Chrissy Walker

Buying and selling a home represents the most significant financial decision you will make in your lifetime. Backed with the expertise, cutting edge-tools and exceptional technology that Remax Escarpm....

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