Prepared by Willful for Deeded
Owning a home is so exciting! You’ve likely been preparing for this purchase for a long time. You’ve just closed and you just can’t wait to move in and settle down.
We’re not here to bring down the mood, but have you thought about what happens to your home if you were to die unexpectedly?
A recent study commissioned by online estate planning platform, Willful, shows that 49% of Canadian homeowners don’t have an up-to-date will, and 1 in 4 Canadians don’t know what happens to their home if they pass away. For many individuals, property is one of the biggest assets they own. So while no one wants to think about their own death, it’s important to make plans to protect your property in the event of your death.
What is a Will?
Your last will and testament is a legal document that outlines how you wish to distribute your assets such as property and money when you pass away. Your will is also where you name guardians for any minor children and an executor who will be in charge of settling your affairs on your behalf.
In the context of a home, you can think about it like home insurance. In the event of an emergency, having a will makes sure that your home will be left to the beneficiary or beneficiaries of your choice if you were to pass away.
What Happens To my Home if I Die Without a Will?
When a person dies without a will, they are considered to have died “intestate”. No, this does not mean the government will get your house. But it does mean a provincial formula will decide how your home will be distributed. The rules vary from province to province, and in many cases, it means your home and other assets will not be distributed to the individuals you would have liked.
It’s important to note that most provincial formulas don’t account for common law spouses, so it’s even more important to plan in a will if you’re in a common law relationship.
Does The Type of Ownership Affect if the Property in My Will?
How you own your home can significantly affect how your property is distributed in your will. Depending on how you own your home, there are a few ways the home can be distributed upon your death.
Owning Property on Your Own
This is when you own property solely under your name. In this situation, your property is covered by your will when you pass away. Like any other assets you may own, you can leave it as a specific gift or it can be distributed to your beneficiaries as part of your residual estate.
Property Owned Jointly With Rights of Survivorship
This is when you own a property jointly with rights of survivorship with a spouse or someone else. In this situation, property passes directly to the other person who co-owns the home, along with any associated mortgages/debt. As a result, this property does not become part of your estate and what happens to it is not governed by your will.
Property Owned Jointly With Tenancy in Common
If you own property as joint tenants in common, you and the co-owner each own a share of the property. In this situation, the property will not automatically be passed to the other owner. As a result, your share is included in your estate and can be gifted through your will.
Depending on how the home is owned, this may also affect taxes at the time of your passing.
Do I Need to Update My Will Every Time I Move?
It’s important to review your estate plan regularly to ensure that it is up to date, and moving is a great time to do that! Any time to sell or acquire an asset, you will want to make changes to any specific gifts in your will. For example, If you’ve left a property at a specific address to someone, you’ll need to update it to the new address. Having the correct information is crucial to ensure your gifts are honoured.
If you’ve moved to a different province (or country!), you will also be subject to local wills and estates laws in that market. While most Canadian provinces recognize wills made in other provinces, it’s always best practice to update your will to adhere to provincial legislation. It’s also important to ensure your selected executors and guardians still make sense in your new location.
The Important Takeaway?
If you own a home, you need a will. While it may sound like a lot of work - creating your will is actually one of the easiest things you can do to protect your home and loved-ones. There are many ways to make a will, but online estate planning platforms, like Willful, make it easy for you to make your will in 20 minutes, all from the comfort of your home!
Willful is an online estate planning platform that makes it affordable, easy, and convenient to create your will and power of attorney documents online in less than 20 minutes. Learn more about Willful here.
Important note: This article is not Legal Advice. No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.