Estate Planning is a process that involves work by both the lawyer and the client. I recently met with Carl and Sue at my law office in Stittsville (Ottawa). During our meeting, they said how surprised they were at the amount of paperwork they were asked to bring to the first meeting.
I explained to Carl and Sue that there are very important reasons for thoroughly reviewing what they own and how they own it. I commented that clients often feel the way Carl and Sue do but after hearing just one example, they’re usually convinced that it is important to do. Here is one example.
If clients own real property, it can be owned as ‘joint tenants with rights of survivorship’ (JTWROS) or as ‘tenants in common’ (TIC). If owned as JTWROS, when one owner dies, title to the property passes to the surviving joint owner without going through the estate of the deceased owner. In other words, probate fees are not payable on that real property.
If owned as TIC, the deceased owner’s share of the property falls into the deceased’s estate and probate fees must be paid before ownership can be transferred.
As I explained to Carl and Sue, if we did not check the title to their property, it could cost them thousands of dollars in unnecessary probate fees if they did not own as JTWROS. The problem is that the default type of ownership (what happens if you don’t specify) is TIC. For the property to be held as JTWROS, the deed must specifically state “as joint tenants”.
We find that about 1 in 20 real property deeds are unintentionally registered with default ownership as TIC. Catching these errors while the owners are alive can save $1,000’s in probate fees and lets us ensure that estate planning goals are met.
If you have been thinking about updating your Will (or doing one for the first time), now is the time. Make an appointment to meet with one of our lawyers today. The effort you put into your estate planning now will be well worth the peace of mind that results. It will feel great to know that your affairs are in order and that your loved ones will benefit as you’d intended.
Reproduction of this blog is permitted if the author is credited. If you have questions or if you would like more information, please call us at 613 836-9915. This blog is not intended to be legal advice but contains general information. Please consult a lawyer or other professional to determine how the information in this blog might apply to you.
Blog posts pre-dated December 1, 2015 were originally published under Neff Law Office Professional Corporation.
