Being an estate executor is usually a thankless job – and it’s definitely a job. If you have taken on the mantle of executor for a family member, there are a few things you should know about dealing with real estate.
New rules went into effect in 2015
If you’re trying to manage being an executor on your own, you may be getting advice from all sides – some of it based on old rules. Registering for probate in Ontario got a little more difficult in 2015, but the new rules do bring some good news for estates with real estate outside Ontario – any real estate listed outside Ontario does not need to be listed, meaning you are only paying Ontario probate fees on Ontario property.
The bad news is that you used to be able to put in the total value of the estate to register for probate – now you need to list assets separately. Specifically for real estate, you need to list the value of each real estate holding less encumbrances (e.g. liens) and any vehicles on that property such as ATVs or boats. These are two different categories, so the assets need to be listed separately. You can’t roll the cost of the boat into the value of the real estate, for example.
Joint assets and right of survivorship
Those planning wills and estates involving real estate – or any other asset – should pay attention to what is known as the “right of survivorship.” This is very important as it could exclude any jointly owned assets from needing to be registered for probate in Ontario. It means that the surviving owner automatically absorbs the deceased owner’s share of the property or asset.
While this usually happens automatically with spouses who both have their names on the title, it can’t hurt to check with a lawyer to see how to make sure all bases are covered with other assets. Common-law spouses will definitely want to ensure that a right of survivorship exists on jointly held property and assets, and there are some situations where it may make sense for married couples – if only to keep bases covered.
Any joint assets held with a right of survivorship do not have to be registered for probate, while those without the right of survivorship do. If you are the executor, it is up to you to determine if a right of survivorship exists – if you leave off assets, you could be undervaluing the estate.
Always make a will – always
If you die “intestate”, or without a will, the courts decide who the beneficiaries are of your estate. If your spouse has their own bank account, it will be held in probate. The simple solution to this is to state that all solely held property is to be left to the surviving spouse, or to make all of your holdings joint ones. Don’t use “will kits” to make up your will, take the time and spend the money to have it properly done with a lawyer. A will generally takes about half a day to complete and costs around $500, unless you are dealing with more complex assets than the average case, such as commercial real estate or multiple properties. If you have the money to invest in such ventures, you have the means to protect them for your loved ones.