I recently met with Jim and Phyllis (not their real names) at my law office in Ottawa. As many other Canadians who have been investing in property, they had recently purchased a vacation property south of the border. They had signed Wills about two years ago but wanted to know if there was anything special that needed to done as a result of their newly-acquired vacation property. They were considering gifting the property to their oldest son as they felt their other children would not be interested.
I told Jim and Phyllis they had done the right thing in coming to see me. I explained to them that although many jurisdictions will recognize a Will drafted and signed in Canada, some will not. Even if the Will is recognized, the legal system of another jurisdiction may differ from Canada’s and could result in an unexpected distribution.
To minimize problems, I suggested that Jim and Phyllis either have their Canadian Wills reviewed by a lawyer licensed to practice in the jurisdiction where the real property is located or have a Will drafted in that jurisdiction to deal only with their vacation property.
I advised Jim and Phyllis that if they have two Wills (one dealing with their vacation property and one dealing with everything else they own including Canadian real property), it is absolutely critical that neither Will revoke the other. I asked them to provide me with a copy of their foreign Will for review and suggested that they ask the foreign lawyer to review their Canadian Wills to ensure that there is no conflict between the two Wills or the respective legal systems and that neither Will revokes the other.
I also advised Jim and Phyllis to ask their foreign lawyer to explain what would be required to transfer the property to their son upon their deaths. In particular, they should ask:
- the approximate cost for legal fees, probate fees, taxes and other amounts related to the transfer?
- will the process and associated costs differ if the transfer occurs under the Canadian Will or under the foreign Will?
- if there are additional steps that can be taken in advance to ensure that the transfer can be completed as smoothly as possible?
With answers to these questions, they would be in the best position to decide how to proceed. I also suggested that they discuss their plans with their children.
If you own a vacation or investment property outside Canada, make an appointment to meet with one of our lawyers so we can review how best to ensure that costs and complications to your estate are minimized.
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.