Scary changes to the ' Will ' Act
Some of these new changes are pretty brutal if you don't have your affairs in order.
For example:
1) In the past, if you died without a will, the title to the home would automatically pass to the surviving spouse - or other person on title (joint tenants). NOW if there is no will, the surviving spouse/ partner MUST buy the property from the estate at Fair Market Value ! So if your home is worth $600,000 (lets say you have no mortgage) and your partner dies - you now must take out a mortgage for $600,000 and pay it to the estate. IF you are the sole beneficiary of the estate then you get that $600,000, so you can pay off the mortgage BUT in the meantime you may have incurred Property Transfer Tax (1% on the first $200,000 + 2 % on the balance of the sale price), Plus probate costs etc. Sound like a tax grab?
What if a bank won't lend you the money to buy it back from yourself? Or what if you don't agree with the Executor of the estate as to what the fair market value is?
To avoid this - get your Will finalized.
2) Re-Marriage now does not automatically revoke a previous Will. So if you made out a Will with your first spouse and then re-married, you should make out another Will - unless you want that first Will to rule.
3) If you buy a person a property (or a car) - a gift to your son or daughter for example - and you had to take out a loan to do so, when you die that debt is automatically transferred to the child that has that asset.
4) Somewhat of a saving grace in light of the foregoing, is that the courts now have discretionary powers to rule on the intentions you may have had despite the fact that they were never formalized. So if you were planning on making changes to your will and wrote it down somewhere but just never signed or formalized them, the courts may decide that your intention was to make these changes and rule accordingly. Start writing now.
Forewarned is forearmed. Protect your assets.
For example:
1) In the past, if you died without a will, the title to the home would automatically pass to the surviving spouse - or other person on title (joint tenants). NOW if there is no will, the surviving spouse/ partner MUST buy the property from the estate at Fair Market Value ! So if your home is worth $600,000 (lets say you have no mortgage) and your partner dies - you now must take out a mortgage for $600,000 and pay it to the estate. IF you are the sole beneficiary of the estate then you get that $600,000, so you can pay off the mortgage BUT in the meantime you may have incurred Property Transfer Tax (1% on the first $200,000 + 2 % on the balance of the sale price), Plus probate costs etc. Sound like a tax grab?
What if a bank won't lend you the money to buy it back from yourself? Or what if you don't agree with the Executor of the estate as to what the fair market value is?
To avoid this - get your Will finalized.
2) Re-Marriage now does not automatically revoke a previous Will. So if you made out a Will with your first spouse and then re-married, you should make out another Will - unless you want that first Will to rule.
3) If you buy a person a property (or a car) - a gift to your son or daughter for example - and you had to take out a loan to do so, when you die that debt is automatically transferred to the child that has that asset.
4) Somewhat of a saving grace in light of the foregoing, is that the courts now have discretionary powers to rule on the intentions you may have had despite the fact that they were never formalized. So if you were planning on making changes to your will and wrote it down somewhere but just never signed or formalized them, the courts may decide that your intention was to make these changes and rule accordingly. Start writing now.
Forewarned is forearmed. Protect your assets.