There are a lot of unknowns in life. This is something that most of us accept as truth and try to handle to the best of our abilities. We soldier on, knowing all the while that there are a great many things beyond our control. We simply have no way of predicting. After all, life is a gamble. We inevitably have to play the hand we are dealt the best way we know how.
What if you could help to protect yourself against the greatest unknown that all of us face, our eventual mortality? Would you be willing to take the steps necessary to protect your assets and more importantly those left behind once you are no longer here. Most of us would say yes to this hypothetical question.
However, how many of us actually have taken those necessary steps to protect our loved ones and arguably our biggest asset- your own home?. The answer might be alarming. One recent poll found that only 51% of us actually have an up to date will that specifies to whom our house will pass to in the event of our death.
Don’t let the Government decide for you
A recent Ipsos Reid poll has found that out of the respondents surveyed, a whopping 79% were under the impression that their real estate will automatically pass on to their spouse or dependents. This would be very handy and make things very straightforward. But then again, what of true importance is ever that straight forward. It must be written down! An up to date will must be in place specifying to whom your property is to be passed to.
Perhaps you have been putting off updating your will. Maybe you have shuddered at the thought of visiting a lawyer to draw up a legal document that essentially is dealing with issues pertaining to things after you are no longer here. Whatever your reason, do not assume that your house will automatically be passed to your offspring. Without a will in place, the Government will be stepping in, like it or not, to determine the fate of your property after your passing.
Willfully list your biggest asset and make sure that you determine who executes your final wishes
If you were to pass away suddenly without a will in place, each Province has their own structure in place to step in and take over the role of distributing assets, including your biggest asset- your house! An administrator will be appointed, playing the same role as an executor would play if appointed by you for your will.
That is right. Not only should you list your property in your will, and to whom it passes to. It is also advisable to make sure that you appoint an executor for your will to ensure that your wishes are carried out according to what you have indicated in your will. This will make things much more straightforward, while transferring your house to your beneficiaries. Most importantly, taking this step avoids the need for a court appointed administrator that the government would dictate in lieu of a named executor for your will.
“Insure” that your asset will be covered
Listing your house in your up to date will, while also ensuring that an executor is named to distribute your assets, are essential measures to take to protect your real estate. There is another thing that can be done as soon as you take out your mortgage on your home, or upon mortgage renewal. Talk to your mortgage broker about including default insurance in your mortgage terms.
There are recognised companies that will provide property default insurance in case of illness, job changes or death. See Genworth.ca for more details on default insurance. You can never take enough steps to protect your biggest asset. Insurance coverage should definitely be a step to consider.
Death can be “taxing” and costly for those left behind
On a final earthly note. Another thing that is beyond our control is of course those dreaded taxes. In particular, be mindful of the Capital Gains Tax that the Government will charge on your assets. There are ways to legally deal with this necessary evil. One route is to ensure that the property is jointly owned by your spouse for example.
Have your ducks in a row to face this hurdle. In addition, it is important to also keep in mind that any outstanding mortgage owing on the property still needs to be paid upon your death. The payments will now be the responsibility of the beneficiaries. You may have disappeared, but any money owed on your property unfortunately does not.
What you know will definitely not hurt you
Knowledge is power. Being proactive is essential. Understanding the legalities surrounding death and real estate is in your best interest. You have worked long and hard to acquire property that you can proudly pass on to your offspring. This is both reassuring and can fill you with a real sense of accomplishment.
Don’t let something as simple as not having an up to date will stand in your way of passing on your hard earned assets, without Government interference. Taking the steps necessary to ensure an easy transition once you are gone will give both you and your family peace of mind and free up energy to focus on living for right now.
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