Estate Planning for Real Estate

Mark Demong from 97th Street Law in Edmonton joins in the video adding his opinions with over 30 years’ experience practicing law in Alberta. Visit the following page if you want to find Mark’s details to connect more with him: https://dkeet.ca/guest-speakers.html

Estate planning is an inevitable part of life for people who own property, especially for when they are getting older. Eventually something is going to happen with the real estate you own.

First a will is important.  Get one, if you don’t have one. While you are at it, plan and pay for your funeral and burial. You may have a very different opinion on how much you would spend on a casket, or tomb stone, or even for flowers.  Instead of dropping the burden on someone else and having someone else spend your money on these expenses later make a plan well in advance. 

Mark mentions that there is an opinion on lawyer expenses and how people feel that they paid too much for estate transfer paperwork that seemed quite simple.  A way that someone can avoid needing to transfer their estate later is to add their child onto their land title in advance which some people could see as a simple way to avoid using a lawyer for the estate on their passing.  In the case of joint ownership of a property, when someone passes away, there is a principle called survivorship, so that the person who passes away first can be removed from the title by providing the land title’s office with proof of death. Then, the survivors are the remaining owners of the property.

That sounds simple and, if the person (or people) that you eventually want to own your property are added, you can avoid legal expenses, but Mark warns people to think of the following scenarios as what sounds good today might not sound good in the coming years. 

What if Junior was added to the property, but later the parents decide they want to downsize and move to a place with assisted living? By adding Junior’s name on the title, now they need Junior’s signature to make that sale go ahead.  Now, what if Junior doesn’t sign?

Assuming Junior isn’t a resident of the home, Mom and Dad can sell the house with no tax consequences, but Junior on the other hand may need to pay the taxes on his share of the property. When he receives the gift of a 1/3 interest of the home, he receives a capital value. When Mom and Dad (he) sells that property, if the property value went up, he would need to pay taxes.

What if Junior is married and gets divorced. His ex-wife will likely want half of what Junior had in his parent’s house which she would legally be entitled to. She could likely file a certificate of pending litigation and he may not lose too much but would need to be paying his lawyer to sort that out.

Or what if Junior has trouble with his credit card. The credit card companies can register a judgement against his parent’s house. 

These are example that might have a lower chance of happening but points you might want to consider. 

In real estate, life changes are often the reason for sales.  Whether it is someone moving to a new city, a growing family wanting a bigger house, downsizing, divorce, someone passing away.

Often people don’t think too far ahead when they buy a property and what could possibly change in the future. 

Hopefully this video can make you consider some situations. I hope you can make careful decisions and to look at the angles when it comes to estate planning.