Silence is not golden

If you have a power of attorney for personal care, you have the option of listing specific instructions in it. These can be things like whether to donate your organs, your preference for care in a facility vs. in your home, or even end of life care. The general rule that your attorney has to follow is first to look at any written instructions, then to follow your known wishes, and last to do what they think you would want done.

You don’t have to write everything down, but you should at least be discussing your wishes with the people you have named. If they don’t know, they can’t do what you would have wanted.

Always budget for your property taxes

Final tax bills are starting to come out in Simcoe County. Here’s a little known fact: if you don’t pay your property taxes, your city can sell your house in order to collect them. When I was a law student, I prepared tax deeds for people buying these properties. There were people who lost their properties over a few thousand dollars in back taxes.

In Barrie, as in many municipalities, taxes are due four times a year. You can choose to pay in those quarterly instalments, or you can (usually) set up a payment plan and pay each month as a direct withdrawal. Some banks will also let you pay your taxes alongside your mortgage, and they will take care of sending the money over to the municipality, and some banks require that you pay your taxes through your mortgage.

However you pay your taxes, just be sure that you pay them.

Don’t want your estate to be sued? It helps to use a lawyer

Over the coming years, there is going to be a massive transfer in wealth between generations. While the majority of people don’t have wills and their estates will therefore be transferred in accordance with the default rules, a large minority do have wills and expect those wills to be honoured. The problem? DIY wills are vastly more likely to lead to will challenges.

If there is anything unusual about your will, you run the risk of having someone sue over it. Left an unequal amount to each child? Left out a spouse? Left nothing to your kids in favour of your new partner? Are there concerns about your capacity? Did you change your will to cut out someone who was in it before in favour of someone else? Anything the slightest bit out of the ordinary leaves wiggle room for someone who would be interested in challenging the will; having done a DIY will (a kit, or an online preparation service, or even a handwritten will) makes it far easier. A lawyer who does wills on a regular basis will have taken careful notes about your reasons, and if someone sues, this can help defend against them. Even if no one sues, losing out on valuable advice can cost your estate far more than you would have saved by not going to a lawyer.

I’ve said it before, and I’ll keep saying it: Get a will, and get it from a professional.

Don’t forget about other costs when shopping for a house

Short and sweet today: When thinking about the cost of a home, remember to be aware of more than just mortgage payments. You will need to pay taxes, house insurance, and utilities, and you should always budget for repairs and emergencies. When calculating whether you can afford to buy, don’t forget all of the little costs that add up.

Anthony Bourdain: No reservations, and no updated planning

Anthony Bourdain tragically died by suicide recently. Also tragic: he did not update his estate plan after his separation, which means that his estranged wife will be managing his estate. Perhaps this is what he wanted, trusting that she would manage things appropriately; more likely, he got busy and forgot, or didn’t realize that he had left her in charge.

In Ontario, as in many places, neither divorce nor separation revokes a will. Unless you make an effort to do a new will, for the most part, everything will stay the same.

If you are going through a change in relationship – entering or exiting – you need to change your will, too.

Happy Canada Day!

We wish you all a very happy Canada Day and hope you are able to enjoy a relaxing long weekend.

As far as your estate goes, stepchildren are not, legally speaking, children

I have had many clients over the years who have spoken about their children, and only after digging down do I discover that they are the client’s stepchildren, never formally adopted though often raised by the stepparent from a young age. The problem? Legally speaking, without a will, stepchildren cannot inherit from their stepparent.

Ontario has very strict rules about who can inherit if you don’t have a will. Children count, whether born in or outside marriage or legally adopted. Stepchildren do not. Further, if you simply say in your will “my children” without naming them, the presumption is that you only mean your legal or biological children.

If you’re raising children you aren’t legally related to, and you want them to inherit, you NEED a will, and it needs to be done properly.

Co-signed

With the mortgage rules changing almost daily these days, it is becoming increasingly difficult to qualify for financing. As a result, many young and first-time buyers are turning to parents or other relatives to co-sign the mortgage in order to get that approval.

As a co-signer, you do have to be very careful. You are now on the mortgage, so if the true owner stops paying, you’re on the hook – and your credit will take a beating. Also, you are likely going to be on the house too, so that could affect your ability to qualify for additional loans for yourself, whether a new credit card or credit line or refinancing your own mortgage.

Ultimately, you’re the only one who can decide whether it makes sense to co-sign a mortgage, but you should definitely be getting legal advice before you sign everything to be sure that you really want to do it.

Avoiding an estate planning disaster

Here are some tips to minimize the pain to your finances and your loved ones if something happens to you:

  1. Have powers of attorney. Do you know what would happen if you were seriously injured in a car accident, had a stroke, or had to suddenly leave the country in an emergency? Without a valid power of attorney for both health care and finances, it becomes very difficult for anyone to act on your behalf. Getting appointed as a guardian through the courts is expensive and time-consuming, and is also permanent. Powers of attorney let someone make decisions on your behalf, and then can take that right away when you get better. They are incredibly important.
  2. Have a will. It bears repeating: what you don’t know can, in fact, hurt you. The law is very particular to where you live. Don’t assume you know what will happen to your estate, because if you’re wrong, someone else will suffer.
  3. Don’t DIY. I’ve said it many times before. Homemade wills are frequently done wrong. You’ll save a few dollars, and cost your family thousands. It’s not worth it.
  4. Keep beneficiary designations up-to-date. If you marry, separate, have children, or lose a spouse, it is critical to update your life insurance, RSP, TFSA and RIF designations to send that money straight to the beneficiary.
  5. Keep it updated. Life changes. So does the law. A will, powers of attorney and beneficiary designations all need to be updated on a regular basis to ensure that you are properly protected.

Severing ties

What happens when you own a property jointly with someone, and don’t want to share any more?

Your kindergarten teacher probably wouldn’t be happy, but technically, you can sever a joint tenancy without any notice to the other parties. Basically, you do a transfer from yourself to yourself, with a statement that it is being done to sever the joint tenancy. The other person won’t find out unless they decide to look. Possibly not the best surprise to leave someone, but sometimes it is important to make sure that your share goes where you want it to go.