Dear David,
My husband passed away last August. It was a second marriage with grown children on both sides. We owned a house as tenants in common and there’s a small mortgage on the property. His lawyer said his will did not have to be probated because he had no assets besides his portion of the house. The bank said I have to take my husband off title to renew the mortgage, since his daughters are the executors and beneficiaries of the estate, and now own half the house. My lawyer says I can’t take my husband off title, and can’t sell my house unless it goes to probate to obtain a “Certificate of Availability”. We’re trying to avoid probate because of the costs. I’ll have to sell if I can’t renew my mortgage. – CONFLICTED
DEAR CONFLICTED: I’m so sorry for your loss. It sounds like you and your husband were thinking ahead when you made this purchase. By registering as “tenants in common” you ensured that if one of you passed away, the departed partner’s portion of the property would transfer to their estate to benefit their own children and family (which is a common practice in second and subsequent marriages), rather than transferring to the surviving spouse and in-laws. I hope your wills also have a provision that allows the remaining spouse to stay in the home, so you continue to have a place to live.
Your biggest challenge right now is the mortgage. It’s likely registered in both your names and qualified on both your incomes, which complicates things at the bank. The bank is correct in saying you can’t simply take your husband off title. His half of the home now belongs to his estate, which in turn is passed down to his daughters.
Probate can seem like a daunting process. It’s the procedure courts use to prove that a testator is the author of a will and has actually passed away. Obtaining the necessary “Certificate of Authority” can take from six to eight weeks, depending on your location. I often hear of people trying to avoid probate because of its tax implications. While probate can be accomplished without a lawyer, the process is cumbersome and merits legal advice at the very least. Without knowing the details of your husband’s will and how it speaks to either the disposal of the property or provisions for continued ownership, my best advice is to speak to a lawyer.
PRO TIP: Seek legal and accounting advice today. If any assets can be transferred now without incurring probate fees, and you can you should make those changes. Tax planning can help avoid unforeseen probate fees and you can save a lot more with a properly planned estate
than if you fail to plan. The goal is to leave as much as you can to your benefactors, while only paying probate fees when absolutely necessary. While Inheritances are generally not taxable, a probate fee of approximately 1.5 percent typically applies in Canada.
BONUS TIP: In estates where there are two separate families, it may be advisable to have an executor from each side. #Advice #AskDavid #TheNegotiator
David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Call or text today for your free home evaluation! 519-577-1212.
