Your family may have changed. Has your will?

Two weeks ago, I wrote about updating your will for your own benefit. Today, I want to talk about updating your will for the benefit of others.

Last month, Elizabeth O’Brien wrote this article on MarketWatch. She mentions a vast number of reasons why it can be disastrous to your family if you don’t keep things up-to-date, such as:

  • Stepchildren being disinherited
  • Former spouses inheriting instead of children
  • Spouses of your children inheriting instead of grandchildren
  • Beneficiaries who are spendthrifts or have addiction problems inheriting outright instead of through a trust

You owe it to yourself to keep your documents updated. You also owe it to your family.

Do you have to disclose if someone died in your home?

Generally, you are not required to share information about the house as long as you don’t hide anything or deliberately lie about anything. You do not have to offer information that your spouse or parent died at home, or that there was a suicide or even a murder in the home.

Keep in mind, however, that some buyers are more sensitive than others. If you sell to a sensitive buyer who might not have bought if she or he had known about the death, you could run the risk of a lawsuit after closing. In this case, the wiser choice might be to let the buyer know and let them make that decision with full knowledge – and sell to someone who doesn’t mind.

Changing it up

Many people know that, on marriage, in Ontario, your will is automatically revoked. There is a good public policy reason for this: your spouse should not be disinherited simply because you forgot to update your will. (I touched on the issue of predatory marriages a while back.)

What many people don’t understand, however, is that separation and divorce do not automatically revoke a will. If you are divorced, your estate is treated as if your spouse died before you; he or she will not be able to be your executor or inherit, but you might want to rethink your ex-brother-in-law as your alternate executor and beneficiary from the will you did just after you got married 20 years ago.

If you are separated, it is much murkier. If you have a formal separation agreement in place, your former spouse likely won’t be able to inherit, though you still have the same problem of your alternates. If you don’t have a separation agreement, though, there are no bans on your former spouse inheriting your entire estate.

This is likely not the solution you want. If you separate, you should have your will redone as soon as possible.

Are you a non-resident?

Many people are now aware of the new tax that applies to non-resident buyers looking to purchase property in Ontario. However, there still seems to be a lot of confusion when it comes to non-resident sellers.

If you are not a resident of Canada and you are selling a property, your lawyer may need to hold back 25% of the sale price to protect the buyer against non-resident withholding taxes until you can get a clearance certificate from CRA. Wait times vary, but it can take up to several months from the time you apply  to the time you get that certificate, and the money cannot be released until then.

If you are not a resident of Canada and are selling a property here, you should speak to an accountant early in the process to get the application started so that your money is tied up for as short a period as possible.

Top 5 Mistakes Made by Executors

Being an executor is hard work. It’s a thankless job that most people take on because they love the person who left them in charge. That being said, it’s still important to do the job right, and there can be some fairly serious consequences if you don’t. Here are some areas where many executors get tripped up:

  1. Ignoring parts of the will that the beneficiaries don’t like. It’s not up to you, and it’s not up to the beneficiaries. If it’s in the will, you have to do it. The only way to get around it is to get a court order permitting you to do something else.
  2. Failure to communicate. This really is a mistake in just about every area of life, but gets particularly fraught in the area of estates. People want to know what’s going on. Even if nothing is happening for long stretches of time, tell the beneficiaries. There will be fewer fights if they know that you’re doing your job. Keeping secrets won’t help anyone, and could lead to a beneficiary suing simply because they don’t know what’s happening and have become suspicious.
  3. Treating the estate as your own bank account. Tip: it’s not. It has to be kept separate. Ultimately, beneficiaries can require a formal accounting that is approved by the courts, and if you have taken estate money, even if you have paid it back, you could be in trouble. You’ll be in even more trouble if you don’t pay it back. People have gone to jail for this. Don’t let that happen to you. If you’re not sure if it’s a proper estate expense, ask your lawyer. That’s what you’re paying (a proper estate expense) for.
  4. Paying beneficiaries before paying debts. Debts have to be paid first. This includes the funeral, and any debts that arose before death. Beneficiaries get whatever is left. If that’s nothing, then so be it. If you pay beneficiaries before paying debts, you will be personally liable for those debts.
  5. Trying to do everything too cheaply. Keeping costs low is one thing; trying to do everything without any help is another. Estate accounting is complicated; an accountant is an appropriate expense. So is a lawyer. So is a realtor, if there is a house to sell, especially if it’s in a city that you don’t live in. Professional expenses are almost always appropriate to pay out of the estate. Don’t skimp there.


I thought these were dead, but then I saw one on a deal the other day.

A Seller Property Information Sheet is a form designed to give buyers additional information about the house. It asks sellers to list any known defects, pending work orders or tax increases, oversight by any regulatory body such as conservation authorities, etc. The idea is that, if you disclose everything up front, you reduce your liability. Here’s the problem: it doesn’t reduce liability, primarily because they are often filled out wrong.

If you don’t say anything about the sprinkler system, believing it to be fine, the buyers have the responsibility of making sure that they do an inspection before closing. If it fails after closing, you are better protected as long as you didn’t hide any defects.

If, however, you say on the SPIS that there are no issues with the sprinkler system, and it turns out that there are, you have now been untruthful. This will cause a much bigger problem down the line, even if you honestly believed that there were no problems.

If you are selling and are asked to sign a SPIS, be very careful.

Are you an artist? Then you definitely need a will.

When Sylvia Plath died, her executor was her ex-husband’s sister. This sister was, effectively, given full authority to determine Ms. Plath’s writing legacy. Ms. Plath likely listed her as her executor at a time when she was still married; we may never know if she wanted her to remain as her executor, or if she simply forgot that it was set up this way, and we will never know if her literary estate was managed in the way that Ms. Plath wanted.

Artists have unique considerations when it comes to estate planning. There is not simply money; there are also copyright and trademarks, and the ability to licence or sell artworks for years or decades to come. It is particularly important to choose not only the executor of your financial estate, but who will manage your artistic legacy.

Should you rent or buy?

A lawyer’s favourite answer: it depends.

Because it really does. It depends on how frequently you move; any less than a few years in a house and you will likely lose money on closing costs alone. It depends on how stable your income is; if you frequently would have to borrow from a credit line to make ends meet just to own a house, you’ll be paying far more for that house than you should be. It depends on where you live; in very hot housing markets like Toronto, it can make more sense to find an affordable rental than stretch beyond your means just to say that you own a home.

There are a lot of considerations that go into whether you should buy or rent. Don’t jump into a decision – always get as much professional advice as you can. And don’t be afraid to go with a choice that makes sense for you, even if it’s not what you’re “supposed” to do.

What happens if there is an error on the will?

I recently helped a client get probate for her mother’s estate. The will had been done years earlier, and unknown to everyone involved, the pages were accidentally misnumbered to be missing one number – so while there were no pages missing, it appeared that page 5 was not there. Thankfully, we were able to get the lawyer who drafted it to sign an affidavit that there was no page 5 and it was simply a typo, and were able to get probate for the estate.

We all make mistakes; none of us is immune. For minor errors like this, it is often possible to explain the situation to the court and have probate approved. If there are more serious errors, it may require a formal hearing to address the issue. Either way, just because there is an error is not fatal to a will.

Can you break your mortgage?

Short and sweet this week. The answer: usually. Before you sign to refinance, check your existing mortgage – some banks only allow you to pay out your current mortgage if you are selling. It’s in the fine print, and they’ll hold you to it.

The better question is, should you break your mortgage.