Ontario home prices can boom or crash. Axess Law advises you when you cash in an estate property.
A homeowner you agree to represent as estate trustee can have most of their cash tied up in real estate. The day may come when you will be forced to decide whether to sell, rent or gift land and property investments to beneficiaries.
Axess Law’s probate lawyers, Toronto area and Ottawa, file court documents you need to make estate sales legal.
What is Probate?
When you probate an estate, you go to Ontario court for a certificate of appointment of estate trustee, with or without a Will. You bring proof of death and the deceased’s original last Will and testament, with any changes. The court verifies Wills are valid and appoints you to collect and value assets, pay debts and distribute any balance to beneficiaries.
When the Will is Invalid
Courts rarely overturn Wills, but can if:
- dependents were left out
- it’s a fake or fraud
- the Will maker suffered undue influence or coercion
- they were mentally incapable or didn’t realize the effect or consequences of what they signed.
Axess Law’s Wills and estates lawyers can give you a legal opinion on questions like when are Wills enforceable? Ask us if you have concerns that a Will may not hold up in court.
Sell, Rent or Secede
Depending on the deceased’s final wishes, you can now sell or rent property or land.
Get spousal consent before listing. Rights of survivorship can give a spouse the automatic right to shared or matrimonial property. Even if the deceased was single, divorced or widowed, you need a court’s “licence to sell”. A certificate of appointment ensures a sale transfers successfully to a new owner by clearing the title of liens, mortgages or legal claims.
When Spouses Are Rightful Owners
Legally married or common law spouses become sole owners of joint tenancy properties like matrimonial homes if they were on title to the property. A simple survivorship application in Ontario is all that is required to take possession, removing the property from the estate assets.
Surviving spouses who were legally married can also opt for a net equalization payment (50% of the estate, less exclusions like gifts or pre-marital assets), instead of what’s in the Will. They may be willing to consent to a property’s sale and take cash instead.
Approach surviving spouses before you take any steps to dispose of real property. Axess Law probate lawyers can refer you to our trusted legal partners if you reach an impasse. We’re quick and affordable.
Making Dependent Claims
Be aware your hands may be tied if spouses, minors or adults with disabilities — even if disinherited — who relied on the deceased for financial support make dependent claims against an estate. If that’s the case, rent the property until the dispute is settled and add any income to the estate assets.
No Will, Now What?
If the deceased died intestate without a Will, the property will likely be sold and proceeds split between legally married spouses, dependents and other relatives. Ontario’s Succession Reform Law has rules for property distribution.
Who Owns Shares?
Ask Axess Law’s probate lawyers if adult children, business partners or corporations claim shared property rights. If the court deems their shares an estate asset, you may not owe them anything.
Who Pays Expenses
You pay property taxes and upkeep costs from the estate’s assets, including rental income, while a home or land is for sale or rent. Realtor’s commissions, legal fees and extra charges are paid by the estate, along with reasonable expenses for you to administer the estate until distributed. The Will maker can specify an amount to pay you or the court can decide.
Estate Taxes on Home Sales
Property owners pay taxes two ways when they die. The estimated value of Ontario land or homes not inherited by spouses (See Survivorship Applications) is included in the estate administration tax (exclude property outside Ontario). Capital gains are taxed by Canada Revenue Agency (CRA).
Estimating Value for Estate Administration Tax
Use the appraised value of homes or land at death, minus mortgages, collateral mortgages or liens, to calculate and pay estate taxes. Include proof, such a real estate appraiser’s written opinion, especially if a property sells for less than expected.
You pay $15 for every $1,000 of value. No tax is due on estates under $50,000. Deduct this amount before calculating taxes. For example, for a $350,000 estate, deduct $50,000, divide the balance ($300,000) by 1,000 and multiply by $15 ($4,500).
Axess Law witnesses and signs statutory declarations, written undertakings and sworn statements if the estate is worth more than you estimated. Ask us for a notary public near you in Toronto area or Ottawa.
Reporting Capital Gains
Capital gains made after death on land or investment properties are taxed on the fair market value or difference between what the owner paid and its value immediately before they died. Report this amount as estate income when you file the final income tax return with CRA.
Find Ontario Estate Lawyers
Axess Law has probate advice and real estate lawyers near you. We make remote online video calls anywhere in Ontario, day or evening 7 days a week, at times convenient for you. Use our easy online booking form to make virtual lawyer appointments or call us toll free at 1-877-402-4207. Phone Axess Law’s 1-647-479-0118 lawyer line in Toronto area for virtual or in person appointments. We have open Axess Law locations nearby, with onsite parking and easy bus access.