Title Changes
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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.
Should You Update Your Estate Plan in 2023?
Disclaimer: This article on your estate plan 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.
The beginning of a new year is always an exciting time. It’s a time to reflect on the past year and set new goals for the upcoming one. For many people, a new year means thinking about the future. While none of us like to think about our eventual end, it’s important to consider that reality when considering our future.
You may have a will prepared, but your estate plan is not a “one and done” exercise. In this article, we’ll consider whether you should add “update my estate plan” to your 2023 plans (and how we can help if that is the case).
Your Estate Plan is More Than Your Will
First, let’s address a common misconception. Your estate plan is not just your will. While that document is certainly an important part of the larger plan, it’s only one piece. An effective estate plan may also include trusts and durable powers of attorney for personal care and property.
We talked all about powers of attorney here, but to summarize, there are two types of powers of attorney that you would need in Ontario. One relates to your personal care – the person you name your “attorney for personal care” will make decisions about your medical and lifestyle choices in the event you cannot. The other power of attorney is for property – this is the person who will manage your financial matters if you are unable to do so.
You may have trusts, like a resulting trust, that are part of your estate plan. Or you may not have trusts in place but now realize that it would be prudent to do so.
When updating your estate plan, you’ll want to make sure to review all of those documents or create any documents that are not currently in place.
Life Changes to Consider
As we noted above, your estate plan is not something that you do once. Your estate plan should reflect your life. As we know, life changes.
Here are some questions to consider. Since you created or last updated your estate plan, have you:
- Gotten married, divorced or remarried
- Had children
- Purchased or adopted a pet
- Started a business
- Changed the structure of your business (for example, incorporated your business)
- Moved to another province
- Purchased or inherited any property
- Had a material change in your financial situation
- Had second thoughts about who should be the guardians of your minor children?
- Thought about introducing new timelines for when minor children would inherit your estate?
- Had any other significant life change?
If you answered yes to any of those questions, then it’s time to update your estate plan. When updating an existing plan, you’ll want to consider how the changes in your life will impact your estate plan.
If you fail to update your estate plan to reflect your current situation, it could mean that certain assets may not be distributed in the way that you intended. Your executor may have to go to court to obtain direction on how to proceed. This could mean that assets are frozen until the court provides direction, which could delay the distribution of assets and create additional costs.
Therefore, updating your estate plan is important to ensure that it reflects your current situation.
Changes to your executors and attorneys
Speaking of your executor, we have spoken before about how to choose an executor and how important that role is in the estate planning process. We have also written about the role of an alternate executor in case your primary choice is unable or unwilling to serve as executor. If you have powers of attorney, you will have people appointed in those documents to serve as your attorney.
Therefore, it would be prudent for you to review who you have named as executors and alternates in your existing estate plan. You may want to update that list if you are uncertain that your original choices can still operate in that capacity.
For example, perhaps your current executor now suffers from ill health and is unlikely able to take on that responsibility. Perhaps your relationship with that person is not as solid as it once was. Or maybe your estate has become more complex and it may make more sense to appoint a professional executor.
In any event, reviewing those appointments can help you be sure that your executors and attorneys are still the right choices.
Title Changes and Your Property
Many clients are coming to us because they want to transfer their property (like a cottage) to their children while they are still alive.
We have an entire article dedicated to that here but, as it relates to estate planning, transferring a property into joint tenancy or to the children while you are alive will impact your existing Will and other estate planning documents.
You need to make sure your intent is clear, and you may need to put additional documents in place. It’s not as simple as transferring the title – you really need to speak to your lawyer and accountant to ensure the transaction is structured in a way that reflects your wishes and that no additional taxes or probate fees will be due.
What if I don’t have an estate plan?
What if you don’t have an estate plan at all? An estate plan is not just for the wealthy or those who have a lot of property to pass on – it’s actually very important for everyone. An estate plan helps your family understand how you want your affairs handled if something were to happen to you and can save them a lot of time, effort, confusion and money.
If you don’t have an estate plan in place, we encourage you to make it a priority in 2023. If we have learned anything from the past few years, life can change quickly and without warning.
Go into 2023 with peace of mind
While no one wants to think about passing away, it is one reality that we all have to face at some point. What we leave behind is fully within our control. What kind of legacy are you leaving for your family?
The best gift you can give to your family is the peace of mind of knowing what your wishes are and making it easier for them once you pass on. At Beeksma Law, we want to help you do that. Let us know if you need help updating your estate plan and entering the new year with peace of mind.