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The Importance of Estate Planning in Separation & Divorce
Disclaimer: This article on estate planning after divorce is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
We have talked before about how you want to regularly consider updating your will, especially after a major life event. One that we want to dive into in more detail is during a separation and divorce.
People are usually mired in other legal matters relating to their divorce and estate planning becomes an after-thought, something to handle after the dust settles. In this article, we will talk about why you should look at your estate planning sooner rather than later and what you should consider.
If you are currently separated or divorcing your spouse, we encourage you to book a complimentary consultation with our team to discuss your estate planning needs.
Changes to the Succession Law Reform Act
As of January 1, 2022, the law surrounding divorced and separated spouses was changed. A “separated spouse” means you have been separated for over three months.
For example, suppose you pass away and haven’t updated your will. Your ex is still listed as an estate trustee or beneficiary. Now, they are treated as if they had died before you and those particular sections of the will are revoked.
If you do not have a will (or die intestate), the Act now provides that a separated spouse will not benefit from the estate. Prior to this change, any legally married spouse, whether separated or non-separated, would benefit from the preferential share (the first $350,000) plus either the balance of the estate or an equal share if there are children. The Act no longer extends this entitlement to separated spouses, and they will not be entitled to this preferential share or any other portion of the estate.
When to see an estate lawyer
The law now provides protection for your estate after you have been separated for three months. However, the reality is that something could happen within those first three months. We advise seeing an estate lawyer as soon as you know that reconciliation is no longer an option.
In some separation agreements, there may be provisions that limit your ability to do certain things. You may be limited in making changes to the title to properties you own or change your powers of attorney. Therefore, it would be wise to update or create your estate documents before attending mediation or finalizing a separation agreement.
Property owned with your spouse
There are two ways to own property with someone else: as joint tenants and as tenants in common. Most times, when spouses own property, they own it as joint tenants. If one joint tenant were to pass away, the surviving spouse would take complete ownership of the property.
You may not want to have that kind of ownership with your estranged spouse, so what are your options? The good news is that you can sever your joint tenancy unilaterally (meaning you do not need their permission). This will move the ownership to what we call tenants in common.
The difference is that if you were to pass away before your property is dissolved, your estranged spouse does not take sole ownership of the property. That property becomes part of your estate and will be bequeathed to your beneficiaries.
Working with other agreements
In family law, there are agreements that must be considered, such as separation agreements or domestic agreements. You must make sure that your will and powers of attorney do not contradict those other agreements. If they do not align, you are opening your estate up to litigation. The courts will have to decide which document takes precedence.
Remember, if you have to get the courts involved, your estate will be spending up to tens of thousands of dollars. However, this situation is easily avoided by having documents drafted by an experienced attorney.
Reviewing your existing estate planning documents
You may have a will and powers of attorney already but are unsure how they hold up now that your family’s circumstances have changed. If that is the case, it is worthwhile to have your documents reviewed by an experienced estate lawyer, like the team at Beeksma Law. We will be able to tell you if your current documents still stand or if it is time to have them updated.
Estate planning after a divorce
As your family continues to change, you will need to consider how this affects your estate planning. We discussed this earlier, but you will want to consider how to protect the interests of all family members.
For example, say you remarry or enter into a common law relationship with a new partner. You will want to consider your children from your previous relationships and make specific arrangements in your will to ensure their financial security. On the other hand, you’ll want to provide for your spouse using vehicles like RRSPs and life insurance.
Expert guidance from the estate law experts at Beeksma Law
Our team of estate law experts at Beeksma Law recognizes that wills and powers of attorney are not static documents. They must be adapted to reflect the evolving circumstances of your family. We understand the importance of staying informed about changes in your life that may impact your estate plan.
Whether you are entering a new marriage, forming a blended family, or experiencing other significant life changes, our experienced professionals can provide the guidance you need. We will work closely with you to understand your unique situation. Our team can help you create an estate plan that protects the interests of all family members.
Contact us today to discuss your estate planning needs. We are here to support you and ensure that your estate plan remains relevant and effective as your family evolves.
Preventing Title Fraud In Real Estate Transactions
Disclaimer: This article on title fraud is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
Recently, a couple in Etobicoke came home from an extended business trip to a nasty surprise. Their home had been sold while they were away. Two individuals posed as the owners, hired a real estate agent and were able to sell the home.
Police discovered a similar situation in Toronto; however, in that instance the sale did not actually close.
Whether it is in the news or anecdotally, we are hearing increasing reports of title fraud. Additionally, it seems that these criminals are becoming more sophisticated. Experts say they have fake identification that is almost indistinguishable from the real deal.
In this article, we will talk about ways that you can protect yourself and your property.
What is title fraud?
Title fraud occurs when someone illegally obtains your title deed. They then use it to try to sell or mortgage your property without your permission. Fraudsters do this through forged documents, identity theft, or by taking advantage of those who may not understand the implications.
Who is most at risk?
Cases of title fraud are more common when:
the owner is elderly, disabled, or vulnerable;
the owner has no family members to help manage the property; or
the owners’ estate is not properly set up.
Other potential targets of title fraud are those who own multiple properties, such as real-estate investors and landlords.
Typically, fraudulent homeowners will target houses with “clean title”, meaning that there are no mortgages or other liens on the property. If a house has a mortgage on title, for example, the bank or lender is involved and the sale becomes more complicated. The higher risk for the criminal may motivate them to look elsewhere.
They will often target homes that are vacant or newly purchased, as these have less likelihood of raising suspicion.
How can you prevent title fraud from happening to you or your family?
There are a couple of ways to prevent title fraud. (In a separate article, we will discuss protecting your relatives who might be elderly or otherwise vulnerable.)
Protect Your Identity
The first step is to protect your identity. Make sure that you keep all important documents such as drivers licenses, birth certificates and passports in a secure place. Additionally, if possible, sign up for an identity monitoring service that will detect any changes to your credit or personal information.
There are a few resources that can be helpful in protecting your identity below:
Purchase Title Insurance
The best way to combat the negative impact of title fraud is to purchase title insurance.
Title insurance is a type of insurance policy that protects the owner’s right to their property. If a title fraud issue arises, the title insurance covers all costs associated with rectifying it, including legal fees and other expenses.
Lenders typically require title insurance when you apply for a mortgage. However, even if it is not required, we strongly recommend that you purchase it. The relatively small payment for title insurance is far less than what you would incur if your property were stolen.
Have a mortgage or line of credit registered on title
Given that properties with clean title are generally more likely to be targeted, consider registering a mortgage or a Home Equity Line of Credit (HELOC) on your property. Even if it is for a small amount, it will make it more difficult for a criminal to sell or mortgage the home without your knowledge.
Expert Legal Advice With Beeksma Law
We know that your house is more than a house. It’s your home, and we understand how important it is to you to keep your home safe.
At Beeksma Law, we stay up to date on the market so that we can provide our clients with the best advice. Our real estate team can help ensure that you are protected from potential risks. Contact us today to learn more about how we can help you protect your property rights.
Real Estate Update: Foreign Buyers Banned From Buying Real Estate Property
Disclaimer: This article on the foreign buyer ban in Canada is intended for the purposes of providing information only and is to be used only for the purposes of guidance. Please note this article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
Update: March 2023
The regulations to this Act were amended as of March 27, 2023. The following amendments were made:
- Those who hold a work permit or are authorized to work in Canada under the Immigration and Refugee Protection Regulations can purchase a residential property if:
- they have 183 days or more of validity remaining on their work permit or work authorization at the time of purchase; and
- do not purchase more than one residential property.
- This no longer applies to mixed-use or vacant land.
- Private corporations can buy residential property so long as they are controlled by less than 10% by a non-Canadian.
On January 1, 2023, a new law will come into effect stating that non-Canadians cannot buy residential property for two years. This law aims to prevent foreign investors from unduly impacting the Canadian real estate market. You likely have already seen something to this effect on the news. However, it’s important to understand the more nuanced detail of this law.
This article outlines who this law does and does not apply to and what it means for real estate professionals. Of course, we welcome you to contact our office if you need any clarification.
Coming into effect – what does that mean?
Simply put, non-Canadians cannot enter into or assume purchase and sale agreements as of January 1, 2023. An agreement entered into or assumed before January 1 is valid even if the transaction closes after January 1, 2023.
What is a Non-Canadian?
The Prohibition on the Purchase of Residential Property by Non-Canadians Act identifies a non-Canadian as someone who is:
- not a Canadian citizen
- not a person registered as an Indian under the Indian Act
- not a permanent resident
- a corporation incorporated in a jurisdiction outside of Canada
- a Canadian corporation that is not publicly traded and whose shares are owned by someone who falls under 1-3 above.
Let’s explain that last point a bit further. To illustrate, imagine a holding corporation that wants to buy an investment property. Four shareholders own shares in the corporation. Three of the shareholders are Canadian citizens; however, the fourth is not a Canadian citizen, registered under the Indian Act, or a permanent resident.
As of January 1, 2023, that corporation would be prohibited from purchasing residential property in Canada. This would remain true as long as the non-Canadian shareholder directly or indirectly owns shares in the corporation.
Who does this law not apply to?
However, the Act sets out some instances where non-Canadians may purchase residential property, namely where the purchaser is:
a. a temporary resident (as defined by the Immigration and Refugee Protection Act);
b. a protected person within the meaning of subsection 95(2) of that Act;
c. an individual who is a non-Canadian, but purchases residential property in Canada with their spouse or common-law partner. That spouse or common-law partner must be a Canadian citizen, permanent resident, person registered under the Indian Act or someone who falls under point a) or b) above.
Simply put, this allows people with strong ties to Canada to purchase a home, even if they are a non-Canadian.
Purchases by Non-Canadians
It’s worth noting that while a purchase made by a non-Canadian would be legally binding, the court can order the purchaser to sell the property at a price no higher than the purchase price.
What does this mean for real estate professionals?
Subsequently, real estate professionals, including realtors, mortgage brokers, notaries, and lawyers, must be vigilant to ensure that their transactions do not contravene the Prohibition on the Purchase of Residential Property by Non-Canadians Act. If you are a real estate professional, you may need to add some new processes, including:
- verifying that your clients are not non-Canadians;
- completing all necessary due diligence to ensure that a corporation’s shareholders comply with the requirements of the law; and
- understanding how the law applies to temporary residents and protected persons.
The Act outlines severe consequences for professionals involved in a non-compliant transaction, such as fines of up to $10,000. Real estate professionals should take the time to familiarize themselves with their legal obligations and ensure they are meeting them.
Beeksma Law and Understanding Real Estate Law
At Beeksma Law, we want to help you understand and comply with the foreign buyer ban in Canada. We provide comprehensive legal services to assist clients with all aspects of real estate transactions, including buyer representation, purchase and sale agreements, documentation review, and more.
As well we enjoy working with other professionals to make sure that everyone involved in a transaction understands their legal obligations. We provide free consultations so that you can learn more about our services and how we can help you comply with the foreign buyer ban in Canada. Contact us today to book an appointment!
Frequently Asked Questions About Buying Your First Home
Disclaimer: This article is intended for the purpose of only providing information about buying a home for the first time and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
This article was updated as of April 2023.
Congratulations! This is a big step, so let’s take a moment to celebrate it! Finally, after all the saving and planning, the offers, and discussions with your realtor, you are buying your first home.
However, now you may have many questions about the next steps that are ahead of you. For example, how can you ensure a smooth closing?
Let’s go through some of the questions that our clients frequently ask so you can feel confident and prepared between now and when you move into your new home.
Do I need title insurance?
Our clients ask this question all the time, and the answer is an unequivocal yes!
Title insurance is technically not a requirement for homeownership, but we cannot recommend it strongly enough. In fact, many lenders require title insurance before funding a mortgage.
What is title insurance? It guarantees that the person selling your home has clear legal ownership and will transfer this to you. In addition, if there is a problem with the title that ends up as a registration on title after closing, such as a lien for unpaid property taxes or unpaid utilities, then the policy protects you against any financial loss.
Title insurance will also protect you in most cases if there are disputes with your neighbour as to the property line.
What is title fraud (or title theft)?
Title insurance will also protect you against title fraud. As we move further into digitalization, title fraud is an ever-growing threat. You need to be prepared and protected. The costs are, quite literally, too high to take such a risk.
Title fraud, or title theft, is where criminals can steal the title or apply for a mortgage against your home without your knowledge. In fact, you may not discover title theft until you try to refinance or sell your home.
In the absence of title insurance, you will be responsible for the legal fees and other costs to remove a fraudulent mortgage from your title. The cost to resolve these problems can easily total hundreds of thousands of dollars.
A prudent homeowner will invest in title insurance. It is a relatively low-cost, one-time payment that will protect you against many problems and give you peace of mind. In addition, your homeowner policy will cover you for the entire period that you own that property, whereas your lender policy will change if your lender changes, or it could change if you refinance with the same lender.
When should I get a lawyer involved before buying a home?
You should contact a lawyer as soon as you have an offer prepared and before it is firmed up (i.e. conditions are waived or fulfilled). The sooner a lawyer is involved, the more smoothly your purchase process will be.
When you work with a lawyer from early on in the process, your lawyer can deal with problems as they arise and avoid unpleasant surprises later on. Working with an experienced lawyer is one of the best decisions you can make when buying your home.
If you are purchasing a condominium, your lawyer will need time to review the status certificate and make sure your transaction is in line with the Condominium Act, 1998.
At the bare minimum, you will need a lawyer in place two weeks before the closing date. This is often, though not always, the deadline for completing a title search. This is why it is critical that you involve your lawyer as soon as your realtor prepares the offer.
What should I budget for closing costs?
You want to make sure that you are prepared for the costs of buying your home. These costs will include:
- your down payment
- legal fees and reimbursements, including:
- regulatory fees
- title search fees
- title insurance
- Land Transfer Tax
I’m buying a home for the first time, so the Land Transfer Tax is refunded, right?
This is not as simple as you may have been led to believe, so let’s outline the qualifications for the first-time homeowner refund.
You must have never owned a home anywhere in the world. You must have never appeared on the title for any property. It does not matter if you how you acquired the home, whether it was given to you, purchased, or as an inheritance.
Secondly, your spouse must not have owned any property anywhere in the world during the time that they were your spouse. Again, it does not matter if your spouse was gifted or inherited property.
If you are unsure whether you would qualify, feel free to reach out. Our team would be happy to clarify this issue for you.
What about my realtor costs?
You do not have to pay your agent if you are only purchasing a home. However, if you are selling a property and buying another one simultaneously, there may be a commission. Therefore, you should ask your agent what that split is for both selling and buying from them. As well, if you are selling your home, then there is normally a commission payable to your realtor in accordance with your contract with that realtor.
How does a virtual closing work?
We can do everything virtually, including transferring funds. We will even make sure that the realtor leaves the keys at the property in a secure location (such as a lockbox). At Beeksma Law, we complete your entire transaction remotely, from start to finish.
Who will connect me to the utilities for this property?
It is your responsibility to set up your accounts with the utilities for the property. However, as part of our closing process, we ensure that you have the information that you need to handle that process.
How do I find a great real estate lawyer?
You talk to the team at Beeksma Law, of course! Our team works together to ensure that buying a home for the first time is a smooth process. As well, we understand that you may have a lot of questions about this process. Therefore, we will take the time to explain each step clearly so that you can be confident as we move forward.
Just note what one of our recent clients had to say: “Thank you for all your work in helping me to buy my first home. There were a lot of unknowns about it for me, so your patience with me, your willingness to explain things in simpler ways and your shared excitement were a huge blessing. Thanks again.”
When you work with Beeksma Law to buy your first home, you can expect excellence, prompt communication and advice that you can rely on.
If you would like to talk to our team, book a call here: [link]. We would be more than happy to answer any of your questions.