Ontario is not Alberta (or California, or Oregon, or New York…)

If you’re planning your estate, be sure that you’re looking at the right laws. Each province, state, and country is a little (or a lot) different. If you’re looking at rules from somewhere else, you could be completely harming your heirs. Don’t assume. Ask someone who knows.

Are you common law? Then your spouse doesn’t need your consent

In Ontario, the law is very clear: common law and legally married are two separate things. In the context of real estate, that means that, if the house is only in your spouse’s name and you aren’t legally married, your spouse can mortgage or sell the property without you even knowing, let alone consenting. Get married, get on title, or be very aware of the limits of your rights.

Passing on your RESP

I have two young children, and my husband and I started a family RESP when our first child was only a few months old. Education is much more expensive these days than when we went to university, and will likely be even more so by the time my kids go, so saving and taking advantage of government grants is very important.

RESPs are a different kind of vehicle from a registered investment like a TFSA or RSP. While those can have beneficiaries, the RESP cannot. What you need to do is have a specific clause in your will that states that the RESP is to pass to the child’s guardian, provided they set up a new RESP for the child’s benefit. If you do not have this, the RESP is collapsed and all of the grants are returned to the government.

If you have been saving in an RESP, you should make sure you have a will set up. You’ve worked hard to get those grants; don’t lose them.

Are you a first-time buyer?

It seems like it should be a simple question: if you’ve never personally bought a house, you should qualify, right? Unfortunately, it’s not so simple.

If you live in a home that your legally married spouse owns, you no longer qualify. Same if you are common law (in Ontario, that’s after three years of living together or any time of living together if you have a biological child together). If your spouse owns property, even if you don’t live there and never did, you no longer qualify. Even if you or your spouse got put on title to a property for some other purpose but didn’t truly buy the property, you don’t qualify – this happened once to a client of mine who got put on title to his parents’ Florida condo, and therefore no longer qualified as a first-time buyer.

This can have a significant for a first-time buyer. There’s the land transfer tax rebate – up to $4,000, plus more if you’re buying in Toronto. There’s the RRSP Home Buyers Plan, which allows you to withdraw from your savings, tax-free, as long as you repay yourself within 15 years. And there’s the tax refund available on expenses related to buying your first home that you can claim through CRA when you file your taxes for the following year.

If you’re planning to buy, and you’re counting on using a program available to first-time buyers, be absolutely sure that you qualify before you get started.

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.