September 25, 2019
A Guide to Estate Planning for New Homeowners
Congratulations on your new home! Buying your first home is one of life’s major adulting milestones. It’s exciting to finally have a place that’s all yours – but it also comes with a list of responsibilities like maintenance and repairs, renovations, mortgage payments, and insurance, as well as one task that many new homeowners often forget about – estate planning. If you’ve recently purchased a home or property, here is everything you need to know about estate planning:
Making a Will
Your home is your most valuable asset, both financially and sentimentally. Many of your fondest memories will take place at your home, and it’s also likely that the market value of your home will increase over time. Making a will allows you to choose a beneficiary/beneficiaries to receive the financial and sentimental value of your home – without one, there’s no guarantee that your home will be passed on the way you want it to. You may also want to leave your home to someone who isn’t a direct heir (a parent, sibling, cousin, friend, etc.) and the only way to do so is through a will.
Getting a Power of Attorney for Property
If you become incapacitated, for example through illness or an accident, you’ll need someone to make decisions about the property you own – to pay the mortgage or bills, or to sell the home. The only way to ensure you have someone you trust who will step up to take make these decisions is by appointing a Power of Attorney in your estate plan. Your POA has to manage your property for your benefit and can be legally required to account for and explain how they’re managing it. With a POA you also have the power to create limitations for the person making decisions about your property – you can outline exactly what you’ll allow your attorney to do and when.
Your attorney is required to be the age of majority and mentally competent, but they should also be someone with
Create these Documents Using a Lawyer or an Online Platform
The decision to create a will and Power of Attorney documents using a lawyer or an online platform depends on the complexity of your estate. An online will platform is ideal for people with simple estates – if you’re not sure whether your estate is simple or not, we have outlined some helpful criteria:
- You own property in one country (if you’re using Willful – in Canada)
- You have assets/investments in one country (again, in Canada)
- You have a child or children
- You have a pet and want to assign a guardian and/or leave a part of your estate to that guardian for their care
- You want to leave specific gifts (for example art or jewelry)
- You want to leave a cash gift or percentage of your estate to charity
- You have a spouse or
- You don’t have any complex “if this then that” scenarios – you have several beneficiaries you will split the estate amongst, but don’t need to create any unique stipulations
On the other hand, if any of the following applies to you, your estate is likely too complex for an online platform and you should seek legal advice from a lawyer:
- You own property in different countries
- You have a business and would like to create a dual will
- You have very complex clauses or scenarios that you would like to include in your will
- You want to set up specific or unique rules around your minor child’s trust
- You have a child with a disability and need to set up a Henson trust
- You want to speak with someone to get legal advice about your specific situation
- You are separated but not divorced and want to ensure your ex doesn’t receive part of your estate
- You want to disinherit a child or family member
Save your Family from Major Costs, Time Delays and Arguments
If you die without a will, you’re considered to have died intestate. This means that while your home isn’t given to the government, the courts get to decide how it is passed on to your heirs based on provincial laws. For example, in Ontario, a spouse would receive the first $200,000 of the estate, or half the net value of the home. There are often major costs, time delays and unfortunately, arguments between family members when there is no will left to instruct how to distribute your assets. If you are the sole owner of your home, your family won’t be able to do anything with it (they can’t even hire a realtor to sell it) without going to court for someone to be appointed as the legal representative of your estate. If you and your spouse are on the title, it automatically passes to them. Regardless of your situation, dealing with the loss of a loved one is difficult and not having an estate plan in place makes this time even harder for surviving family members.
Having an estate plan in place is important for all adults, but it becomes especially important to have once you become a homeowner. Protect your newest and greatest asset by making an estate plan as soon as possible.