Dear David,

I am close to paying off my mortgage. Once it is fully discharged, I am looking at making some changes to the ownership of my home. Specifically, I am thinking about adding my common-law partner and my children to the title. I am also considering purchasing title insurance for the property, since I bought the home in 1999 and am not sure whether title insurance was obtained at the time of purchase. What are your thoughts? – LOOKING AHEAD

DEAR LOOKING: Paying off your mortgage is an important milestone, and it’s smart to think carefully before making any changes to the title of your home. In Ontario, adding your common-law partner or your children to the title is not just an administrative update; it’s a legal transfer of ownership that can have long-term legal and tax consequences. 

Putting a common-law partner on title gives them an ownership interest in the property, regardless of who originally paid for the house. This can affect control of the home and how it is treated if the relationship were to end. Adding children to title can be even more complex as it may trigger capital gains tax on the portion transferred to them, can limit your ability to sell or refinance the property without their consent, and may also expose the home to any financial or legal issues that arise in their personal lives.

Title insurance is still available and often advisable to purchase, even if you bought your home many years ago. If you are unsure about whether you obtained title insurance in 1999, a real estate lawyer can usually confirm this by reviewing your purchase file or running a title search. Title insurance is a one-time cost and can protect against issues such as unknown liens, historical registration errors, boundary problems, and fraud – which becomes especially important once your mortgage is paid off and you no longer have a lender protecting the title on your behalf.

Getting proper legal advice and updating your will may ultimately offer the best of both worlds. With a well-structured estate plan, you can direct your assets exactly where you want them to go when you pass, protect your common-law partner, and provide for your children without creating an unnecessarily complicated ownership scenario. By managing your assets at the estate level, you retain full personal control of your property while you are alive, preserve your flexibility, and reduce the risk of unintended tax or legal consequences down the road.

PRO TIP: As life changes, it’s wise to keep your will updated. Relationships evolve, executors may change, and family circumstances can look very different from one period to the next. When reviewing your will, it’s also prudent to ensure that you and your loved ones have up-to-date powers of attorney in place for both property and personal care (health), so trusted people can act on your behalf if needed. #Advice #AskDavid #TheNegotiator 

David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Moving? Get it right. Ask David today! Call or text 519-577-1212.