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What You Need to Know About Inheriting Property in Canada

Inheriting Property

Inheriting Property

Inheriting Property – Probate, Wills & Estate in Canada

When dealing with the death of a loved one, the last thing you want to worry about is the hassle of probate court. An experienced Canadian estate lawyer can help you develop a plan to ease the burden on your loved ones after you are gone. If plans have not been put in place, an estate lawyer can help protect your legal rights throughout the probate process. Call Nanda and Associates at (905) 405-0199 to schedule a consultation with one of our experienced Mississauga probate lawyers.

How to Inherit Property When There is a Will

If a person properly executes a will before he or she dies, this document will likely control what happens to their assets after they are gone. There are certain key exceptions. A marriage after writing a will can invalidate a will, and divorce can nullify provisions that relate to the former spouse. A will cannot override property that is subject to other rules of ownership. (For example, a joint bank account that was created under rules of survivorship will not be distributed according to the terms of a will. In this case, the bank account would be fully transferred to the surviving owner without having to go through probate.)

A will might also be invalidated if one of the named beneficiaries does not survive the person who made the will. The law requires a beneficiary to survive the testator (the person who made the will). If he or she does not, the gift will revert to the estate. If the beneficiary survives the testator but is not alive at the time the inheritance is distributed, his or her beneficiaries can still receive the inheritance. These rules can create complicated scenarios, such as an accident that ultimately kills both the testator and his or her beneficiaries. Expensive probate battles have been fought to prove exactly who survived whom.

How to Inherit Property Without a Will

If a person dies without a will, there are default rules of law that determine who inherits his or her property. The Succession Law Reform Act applies to deaths that occur here in Ontario. It sets rules of succession for surviving spouses, children, grandchildren, parents, aunts and uncles, cousins, and so on. The rules continue for many generations. They can apply to distant relatives if no closer relatives have survived, but this presents a far more complex legal situation. A lawyer is usually required to clear up issues of inheritance when only distant relatives remain.

Experienced Mississauga Lawyers for Probate, Estates, and Wills

It is not pleasant to think about the end of your life. Nonetheless, a little bit of planning now can save your loved ones a lot of time and money after you pass away. If you are in the complex situation of dealing with an estate of someone who died without a will, it is important to consult with a probate lawyer about your legal rights.

Call Nanda and Associates today at (905) 405-0199 or contact us online. Our experienced Mississauga probate lawyers have helped many Canadians successfully navigate the complicated probate process. We can assist you with wills, trusts, estates, and related issues. Our staff speaks fifteen different languages, including English, French, Hindi, Punjabi, Gujarati, Bangla, Chinese, Italian, Telugu, and Tamil. We have the legal experience and language support to help serve all your probate needs and estate planning needs.

Helpful Estate Planning Tips

Family Class Sponsorship

Common Law Couple

Estate Planing Tips for Common Law Partners in Ontario, Canada

As per Statistics, the number of Canadians living as common-law partners, divorcing and remarrying is rising much more than before. In such circumstance, second time married or common-law couples have a diverse set of challenges as compared to one-time married couples. Estate planning in this situation can be quite complex.

Recent surveys on Wills show that more than 50% of Canadians do not have a will. Dying and making a will are topics that most people do not like to discuss. But, it is one of the essential things to take care of when your relationships and their dynamics change with time.

Many common-law couples keep their financial assets separate and manage them independently. They may also have a different set of expenses, incomes, and assets that they bring in to the relationship. Their financial setup for a former spouse, child support, expenses for children from an earlier relationship can be different.

Holding Real Estate

Many common-law couples choose to hold in real estate as tenants-in-common. In circumstances when they have children from earlier relationships, this type of real estate holding tends to be more common. As a tenant-in-common, each party has an individual interest in property. They can choose to transfer their vested interest to the person they select.

Let’s consider a situation where a common law couple holds property together as tenants-in-common and one of them expires. As per their will, the expired partner transferred their share to their respective children. Now, the child may become a co-owner with their step-parent leading to an awkward situation.

Such a situation differs from a joint ownership structure. In a joint tenancy, the survivor becomes the sole owner when the other owner expire, by right of survivorship.  There can be many ways to deal with such a situation.

One way is to modify the will’s clause giving permission to the surviving partner to stay in the home for a pre-set time period. In this case, they will be able to mourn their loss properly and not be forced to sell the house.

A clause for managing expenses in this situation should also be built into the will. If the surviving partner wishes to purchase half the home from the deceased partner’s children, that should also be addressed.

To manage this, two independent appraisals can be done to maintain a consistency in valuation. The purchase price can be the middle point of the two appraisals. For clarity, a real estate commission based on the prevailing rate in the province can be included in the calculation.

Benefits to the Survivor

When couples have children from previous relationships, they need to create a perfect mix of inheritance to all parties. This needs to be done according to the minimum inheritances and family law requirements of the province of residence.

Bequeathing all your assets to your surviving partner may not be the best situation when they are a step parent to your children. They may end up gifting assets in their life to people of their choice or may bequeath the assets in their will in a manner you may not prefer. If they get into a new relationship after your death, the new dynamics may change asset distribution.

The perception of your children for your surviving partner may also change if you leave everything to your partner. Another situation may occur if you fail to provide sufficiently for your surviving partner. They may have less than a happy retirement due to insufficient funds. They may also feel the need to work more into their retirement to ensure financial security.

Hence, it is vital to think through all possible situations before actually distributing assets to your family.

Incorrect Assets Distribution to A Survivor

Certain assets are more convenient if transferred to a surviving spouse or common-law partner instead of children. Registered Retirement Income Funds (RRIFs) and Registered Retirement Savings Plan (RRSPs) are easier to transfer to a common-law partner or spouse on a tax-deferred basis upon death.

These assets become fully taxable if they are payable to children, upon death. The only exception here would be a dependent grandchild or child who is dependent upon the expired spouse, had an income under minimum thresholds and was living with them.

Similarly, a Tax-Free Savings Accounts (TFSAs) can be transferred to a surviving partner. It can be done without adversely affecting the existing TFSA room to invest more. When it is transferred to any beneficiary that is not a spouse, it becomes taxable.

Though taxability is just one concern for bequeathing assets, it is an important one in your estate planning exercise.

With second relationships and marriages becoming increasingly common, it is vital to address these issues before they crop up. Acknowledging and providing for these circumstances will help in taking care of those you love the most.

How We Can Help

It is recommended to discuss and understand your options with a knowledgeable and experienced Wills and Estate Lawyer. If you require legal advice for making a will, please call us today. At Nanda & Associate Lawyers, our experienced Wills and Estate lawyers understand your specific circumstances and provide tailored and customized solutions for each of them.

Our Wills and Estate Planing Lawyers are available for a no-obligation free consultation. Feel comfortable interacting with our caring team who speak more than 15 languages like English, French, Spanish, Italian, Portuguese, Albanian, Hindi, Punjabi, Kannada, Telugu, Tamil, Bengali and much more.

The Basics re: a final Will and Testament

The Basics re: a final Will and Testament

Do you have a final Will and Testament? Are you considering getting one? Do you know why having a Will is important, or why not having one can result in serious legal consequences? These are all important questions and we will try to address each one of the below. But first, let us understand what a final Will and Testament is…

What is a Will?

A Will is a written document which specifies your wishes and your expectations with respect to your estate (or everything you leave behind) upon your passing.

Who should have a Will?

A Will is a legal document that every adult should have, no matter their age, stage of life, or future plans. It is crucial to be prepared in the event that something unfortunate happens. It is especially important to have a Will if you are married or cohabiting with your common law partner. If dealing with a separation, it is also important to revisit your previously drafted Will.

Why should you have a Will?

Having a Will is important because it allows you to make the ultimate decisions about what happens to your property, belongings, assets, liabilities, collectibles, etc. Your Will can ensure that your family and loved ones are properly taken care of upon your passing.

What happens if you die without a Will?

Without a valid and legally binding Will, decisions about what happens to your property or estate, upon death, become complicated. Under the Succession Law Reform Act, the governing legislation in Ontario, if you die without a Will only blood relatives (including your spouse and children, or legally adopted children) can inherit your assets. This may leave out other beneficiaries you intended to benefit from your estate.

In addition to limits on who is eligible to share in on your inheritance, the procedure when you die without a Will may result in additional costs and delays for the loved ones you leave behind. Without specific written instructions, your loved ones may become tangled in significant procedural, financial and legal webs.

By contrast, having a Will makes it easier on your loved ones to administer your estate upon your passing, without the additional burdens of having to sort out your property and finances.

Bottom line: there is no right or wrong time to think about preparing a Will.

What happens when you are still alive but incapable of making financial decisions in your best interests? The following section explores this issue in further detail.

Continuing Power of Attorney

A Power of Attorney (POA) is a legal document that gives someone of your choosing the right to make decisions on your behalf, either about your property or personal care.

A continuing (also known as an enduring or durable) Power of Attorney allows the person you have chosen to make decisions about your property or finances in the event that you become incapable of making those decisions yourself. The law that governs powers of attorney in Ontario is the Substitute Decisions Act.

A continuing Power of Attorney” gives you control over who will make these decisions for you, and similar to preparing a Will, it takes away the time and financial burden of having to turn to the law to seek authority to make those decisions.

Unfortunately, there are many uncertainties in our lives that we need to prepare for in advance. This is why it is important to prepare a Continuing Power of Attorney and Will in place sooner rather than later. That way, you can ensure that your loved ones are properly taken care of and do not have to shoulder any undue stress or financial burdens upon your incapacity and/or passing.

The federal government announces revisions to tax plan

The federal government announces revisions to tax planEarlier this month, we covered the Liberal Party of Canada’s new tax plan and outlined how the proposed changes could affect entrepreneurs and Ontario business lawyers. We also noted that Finance Minister Bill Morneau seemed open to revising the plan amid an uproar from business owners who feared their tax burdens would increase.

In the weeks following that post, the Liberals stayed true to Morneau’s word and developed several revisions to the plan. Here’s what you need to know:

Small business tax cut

On Monday, October 16, Trudeau and Morneau appeared at a news conference in Stouffville, Ontario to announce revisions aimed at appeasing doctors, farmers, business associations and other concerned stakeholders. The highlight of the event was a promise to lower the small business tax rate to 10% at the beginning of 2017 and 9% by year 2019. The new rates will apply to businesses with up to $500,000.00 in annual revenue.

“This tax cut will support Canada’s small businesses so that they can keep more of their hard-earned money, money that they can invest back into their businesses, their employees and their communities,” Trudeau said.

Other revisions

The government also announced that it will eliminate proposals targeting businesses’ ability to convert earnings to capital gains, and will simplify regulations on income sprinkling.

Business owners and MPs who had criticized the initial plan seemed generally appeased by this new announcement, with which most Ontario business lawyers are also likely to agree.

“I feel very, very positive,” said New Brunswick MP Wayne Long to the Financial Post. “For the first time in a couple months, I’ve got a bit of a smile on my face. There wasn’t a lot of specifics today, but I’m very, very confident – by certainly the tone and messaging of the minister – that a lot of these concerns … will be addressed.”

The hundreds of millions of dollars that small businesses are expected to save “can be better used by business owners to create jobs, expand their operations, or perhaps just reduce some of the pressure on them than it would if left in the hands of the government,” added Dan Kelly, president of the Canadian Federation of Independent Business.

If you own a business and have questions or concerns about Ottawa’s proposed tax reforms, contact the Ontario business lawyers at Nanda & Associates today. Our experienced team can help you better understand how the government’s tax plan might affect you and your business.