As Benjamin Franklin once said, ““Only 2 sure things in life – death and taxes!” Death is not an easy subject for many, but it is very important to talk about with your family or your executor so your wishes can be carried out. As we know in real estate, if it is not written, it is not legal. This is why it is imperative to have a will. It is highly recommended to use a professional lawyer to draw up your last will and testament. You may feel that doing one online may save you money, but not knowing what you are doing, may cost much more in the long run. There is much legal jargon with wills and estates and one that we hear about but don’t completely understand is probate. What is probate?
As realtors here in Orangeville, we have come across this term probate many times in selling properties. I have also heard probate is basically where death and taxes meet. Probate is the court procedure to say for sure this is the deceased’s last will and who exactly the executor will be. People say that not every will needs to go through probate. This is true when there is no real estate or significant financial assets. I have also read that if the deceased did own a property longer than 30 years, probate could be avoided. I would definitely want to check that out with a lawyer.
When one spouse dies before the other, typically the home transfers directly to the remaining spouse because the property was held as joint tenancy with survivorship. Sometimes family thinks it may be a good idea to go on title with an older parent as joint tenants to avoid probate. Be careful with this as joint tenants the child then is a full owner so to speak on the property. Things to consider that if the child were to divorce, the spouse would be entitled to half the value of the parent’s home. Same applies to investments and bank accounts. Have a child on the account could leave the parent open to the child spending all the money. Taking these risks may not be worth avoiding probate down the road.
The procedure to file probate can be done without a lawyer, but I would highly discourage that. There are complex forms that need to be filled out 100% correctly and in the event you miss something, you need to start over. The time to take to grant application varies from court to court. Here in Orangeville, it can take up to 8 weeks. In Toronto, the wait is at least 5 months! It would be very unfortunate to wait the 5 months to be told you did not file the correct paperwork!
People think if the estate is small, all beneficiaries agree, only 1 beneficiary or only asset is bank or investment that they do not need to go through probate. This is not correct. Banks do have the authority to waive probate, but it is highly improbable as they do not want to be held accountable if contested down the road.
Here in Ontario, the terms are a little different. We always say “executor” of the will but the proper term is estate trustee. So in reality the process is called the appointment of the estate trustee but everyone still says probate the will.
As realtors, when we list a property that is being sold through the executor or estate trustee, we definitely need documentation proving this person or persons have the right to do so. As well we should discuss with the lawyer how and who they want the listing name to be and how they wish to see the signing done. We have had several properties sold through estates and powers of attorney and each time, each different lawyer has wanted paperwork a different way than the last transaction we did.
This brings me to the point that there is no one guide fits all. People spend their whole careers trying to navigate the complexities of wills and estates and the process of probate so I highly recommend having a professional lawyer work with you on this difficult task. Trying to do it alone may only cost you more in money and time down the road.