Adding a partner on title to your house

May 2, 2013 | Cohabitation Agreements,Real Estate Issues

I represented a young man buying his first home in Calgary.  His girlfriend was moving here from Eastern Europe in a few months and he said that he wanted to put her name on title when she came to town.  I told him that this could be done by way of a Transfer of Land from him alone to the two of them but:

  • He alone would be responsible for the mortgage unless the bank agreed to let her assume responsibility for it along with him; and
  • He should consider having an Agreement in place outlining how the equity in the house would be divided if the relationship failed.  Otherwise, his girlfriend might one day make a claim to a considerable share of the equity in the house even if she had not contributed to the payments.

The Agreement would be a Cohabitation/Adult Interdependent Relationship (common-law) Agreement covering such things as:

  • Was she buying into the property and, if so, what were her payments going to be?
  • If things soured, would he get all his equity back or more?
  • Could he offer to buy her out?

Considering Special Needs Children In Your Will.

April 2, 2013 | Assured Income for the Severely Handicapped,Wills and Special Needs Beneficiaries

I recently had a couple come into my office who wanted to review their Wills with a view to updating them if need be. When I looked at their completed Questionnaires I noticed they had a 19 year old child who had special needs. Their previous Wills divided everything equally amongst this son and his two siblings, stating that they were to get their respective shares when each was 21. The problem that I saw was that the special needs son was to get his share “in his hands” when he turned 21. The share was a significant amount of cash in hand because of the couple’s life insurance policies. The special needs son was also receiving government benefits (Assured income for the Severely Handicapped or AISH) which could have been negatively affected had the Wills not addressed this properly. I recommended working it out such that this child’s share would be held in a discretionary trust. This would allow the Executor and Trustee to manage the funds in a way that maximizes government benefits while allowing the inheritance to be used for his needs at the same time (AISH or an inheritance on its own does not guarantee quality of life). I also discussed AISH exemptions and Registered Disability Savings Plans (RDSP’s) with them.

If you have a special needs child or beneficiary that you want to consider in your Will you need to consider how an inheritance will affect the ongoing eligibility for benefits or programs they currently enjoy. There are often ways of using trusts or other arrangements to make sure that an inheritance provides the additional benefits that are intended. I’m always happy to help clients make those arrangements.

The Kids Will Be All Right. When Senior Parents Remarry.

April 2, 2013 | Cohabitation Agreements,Enduring Powers of Attorney,Personal Directives,Wills and Adult Children

I  frequently deal with seniors who are embarking on a new relationship after the death of a partner. Often there are adult children of a previous union and the parents are concerned about how to handle any inheritance issues. These are good questions to address before any irrevocable changes are made that might affect assets or real property.

Recently I dealt with a senior couple whose respective first spouses had died and they decided they would move into his house together. Both had worked hard and raised families during their prior marriages. They each wanted to ensure that their respective adult children shared in what they had accumulated over the years with their former spouses. They were also concerned to provide for each other.

After reviewing their completed Will Questionaires and meeting with them I recommended they not only do their Wills but also do:

  1. EPOA/PD- to ensure that in case of incapacity they were each looked after by someone they knew and trusted; and
  2. A Cohabitation Agreement or Estate Property Agreement outlining their understanding. In this instance each owned a home but they chose to live in his. When she died, hers was to be sold and the money given to her children. If he died and she was alive, she could live in the house so long as she wanted, and was able, or died, at which time the house reverted to his adult children to sell and divide the proceeds.

This happened to be the strategy that met the needs of this particular couple but there are many different options that you can and should discuss with your legal counsel if you are in this situation. It never hurts to ask lots of questions and knowing your wishes will be respected and your children protected can bring tremendous peace of mind. 

Handling Probate When the Executor is an Ex-wife “Deemed” to Have Died Before the Deceased!

April 1, 2013 | Executors,Probate,Wills and Ex-spouses

Divorce complicates all kinds of things including how probate operates when you have named an ex-spouse as executor. Recently, I met with a mom and her adult children…the ex-husband and father had just passed away. The man’s Will predated the divorce. The Will named the mom (now the ex-wife) as the Executor and sole beneficiary with the children inheriting if she predeceased them. The family’s plan was to have mom, as Executor, obtain probate of the Will, then divide the net proceeds equally amongst her and the children. However there was a problem. Under Alberta law when people divorce, for the purpose of the Will the ex-spouse is “deemed” to have predeceased the Will maker and so cannot be the Executor (nor a beneficiary) unless a Will done post divorce says otherwise. There was no Will done after the divorce so it was as if the man had died without a Will (intestate is the legal jargon). His kids could not apply for probate but could apply for Administration of the Estate (under Alberta law they’d have a right to apply in order of birth, oldest to youngest). Each would eventually receive an equal share of their dad’s estate. That’s not what they wanted so we came up with a plan to work around this. Each child renounced in writing his or her right to be the Administrator and appointed their mom in their place. All the kids agreed that when it came time to distribute assets they would be split evenly among mom and kids.

This situation is a reminder that it’s important to revise your Will after a divorce. It’s also an example of how a bit of creativity can resolve a problem caused by external operation of the law to the mutual satisfaction of the parties involved.