Mom's in a nursing home; can we sell her house and divide the money?

Do you believe that other people should be allowed to take your money away from you - and I'm talking hundreds of thousands of dollars - because you are old and they think you don't need it? Of course not! So why do so many people think they can help themselves to their parents' estates without permission before the parents even pass away?

Here is a note I recently received from a reader:

"My mother has just been panelled to a Nursing Home. We are 5 children and one is her POA, and executor. Her will says that the house is to be sold and divided between the 5 children. Is it not best to sell the house right away and divide the money between the children, rather than keep it in a seperate account till she passes?"

Would it be best to sell the house and divide the money right away? Best for whom? And why are you following the will of someone who isn't dead?

This is a subject that I've been asked about many times over the years, and I have to confess that it irritates me no end. Your mother's will says that the five of you are to inherit the proceeds of the sale of the house after she passes away.  That's what wills do; they talk about what happens to an estate after a person dies. She hasn't passed away. Therefore, no, you can't have the money.

The executor has zero power to do anything at all while your mother is alive. The will has no effect while your mother is alive. So nobody gets to act as her executor yet. Forget the executor and the will while your mother is still alive. I hope I've made this point clearly enough, not just for you but for all of the other readers who ask me this question repeatedly.

Now let's look at the attorney acting under the Power of Attorney (POA). Has the POA been brought into effect? Don't assume that because your mother is going to a nursing home that the POA is automatically in effect. Going into a home likely has no effect on it at all. The person named in the document should read it carefully to see what has to happen to spring it into effect. In many provinces that means having a doctor sign a declaration of incapacity.

Once the attorney under the POA has properly sprung the document into effect, the attorney has to do what is in the best interest of your mother. Maybe this means selling the house. If your mother is never going to be able to live there again, then perhaps that's the best thing to do financially. However - and this point is NOT to be overlooked - the sale proceeds of the house must be invested for your mother. The attorney under the POA does not have the legal right to distribute the funds to you five. He or she risks financial penalties, removal from the job of POA and perhaps even jail time for that, depending on the circumstances.

Rarely do posts move me to use quite as much underlining as I've used in this one, but this topic is so important. Over and over again, I see children with an over-inflated sense of entitlement taking money that doesn't belong to them on the philosophy that "one day it will be theirs". That day hasn't arrived yet.

Should home seller disclose if someone died in the house?

This could be the next controversy to make the job of executors even harder: should the seller of a house have to disclose to potential buyers that someone died in the house? The issue is that some buyers consider having a death in the house to be a "defect".

Currently Canada has no laws specifically on this that I know of, but that doesn't stop it from being a serious point of contention. Click here to read an article from www.moneyville.ca that talks about the issue and mentions the outcome of some cases where buyers have refused to go through with the deal. Other situations are explored too, such as things that occur around the neighbourhood though not necessarily in the house in question. It's really interesting reading.

I found the comments added by readers to be almost as interesting as the article itself. I tend to agree with those who said that sellers should not be required to disclose a death that occurred in the house as it doesn't affect the structure or function of the house. I guess I'm just not superstitious. Would you feel that the fact that a death occurred in the house was a reason for you not to buy a house? Let me know what you think.

Can a house be sold when one joint owner has lost capacity?

What happens when a husband and wife own a house jointly and one of them has lost mental and physical capacity? Can the house be sold? I'd like to share this reader's question with all of you because it asks about a very common situation that many of you will recognize.

"My dad was diagnosed with Alzheimer's disease and recently suffered a stroke.  He does not have a POA set up.  My parents have joint tenancy of their house in Ontario.  Is it true that we cannot sell the house to fund his nursing home expenses?"

 

The fact that you're asking whether "it's true" tells me that someone has already advised you that the house can't be sold. I have no idea whether that information came from a lawyer, realtor or just a friend, but I agree with them. The house can't be sold based on today's facts, but this can be fixed.

 

The fact that the house is held in joint tenancy by your father and mother means that the house can't be sold without signatures by both of them. It sounds as if your mother is capable of signing documents and is willing to do so, but she is only one half of the owners.

 

The question is what to do about getting your father's signature. From what you've said, he is not capable of understanding legal documents. This is not surprising given that he has Alzheimer's disease as well as the after-effects of a stroke. He cannot and should not be asked to sign anything. If he isn't capable himself, we have to look at whether anyone has the legal right to sign on his behalf.

 

Many people seem to think that a spouse can automatically sign things on behalf of the other spouse in difficult situations like this, but they are completely wrong.

 

The best solution at this point would be to use a Power of Attorney. If properly drafted, your father's chosen representative could use that document to give your father's consent for him, and to sign for him. However, you've already said that your father didn't set up a Power of Attorney, so that option is out.

 

There is another option. Someone can apply to the court to be appointed as your father's trustee. This would give someone the right to act on behalf of your father, with similar rights and responsibilities as that person would have under a Power of Attorney. Obviously going through this procedure is going to take longer and be more costly than simply using a Power of Attorney but in the absence of your father's planning, it's likely the best option.

 

It's essential that when you or your mother make this application to the court that you ensure that the power to sell real estate is included. It's not automatic in all jurisdictions.

 

If you need help getting started, any lawyer who does estate planning should be able to work with you. If you want to look into doing it yourself, you could always check out my book called Protect Your Elderly Parents: Become Your Parent's Guardian or Trustee.

 

 

 

 

 

 

 

 

 

Passing the title to the family home to the kids

A reader and his siblings recently inherited the family home from their mother, and asked me the following question about the title. As so many parents are going to pass their homes to you readers together with your siblings (despite my constantly suggesting that they don't), I thought the question would be of interest to many of you.

Here is the question:

"Our mother left the family home to my 3 siblings and myself. Each of us is listed "as to an undivided 1/4 interest". Can I conclude that this is "tenants in common", as the title certificate does not specifically say that? If this is correct, am I able to "give up" my share as I see fit? ie: sell to an outside party, give to another already on title, etc.?"

This reader is correct that the four of them are tenants in common. Whenever a title specifically says that each person on the title owns an "undivided interest" such as in this case, each owner is a tenant in common. In this case the four shares are equal, but that is not always the case with tenants in common.

Each of them owns 1/4 of the property to do with as he or she wishes.

The type of ownership is significant, as it determines an owner's ability to deal with his or her share. As the reader has correctly mentioned, a tenant in common can sell his share (assuming someone wants to buy 1/4 of a house) or pass it to another title holder. Tenancies in common are usually mentioned in wills, as any ownership of this type would fall into the estate on the death of the owner.

By way of contrast, if these four people were joint tenants rather than tenants in common, they would not be able to do any of these things. A joint tenant cannot sell or transfer a part of the joint title, and cannot leave the title to anyone in his will. The surviving joint tenants will still own the title should one of them die, which is why I always refer to joint tenancy as "last man standing".

As regular readers of this blog know, I'm not at all in favour of a parent leaving one house to four people who each have their own wishes, finances, families, and agendas. However if a parent is determined to punish the children by doing this, it's better to do as this reader's mother did and leave it to them in the will, rather than put it in joint names during the parent's lifetime.

What if my Mom's name isn't on the house when Dad dies?

Do you ever wonder whether the legal documents and arrangements you've had in place for years need to be updated to suit your current situation? If so, you're not alone. Here's a question I recently received on this blog that is similar to many reader questions:

"My father has the house in his name only. My parents have been together for 60 years (and in the same house). Should my mother push to have her name added to the deed or is it assumed that after 60 years of being in the house it's considered hers too? My father's health is starting to fail and I just want to make sure everything is in place. He did leave her the property in his will, but not sure if that would cause tax issues?"

As your father makes these decisions about his property, here are some of the things he should consider:

If only one name is on a land deed, it will not be assumed that anyone else owns it. Not even a spouse of 60 years.

The contents of the house, on the other hand, will be assumed to belong to your mother if she outlives your father, and vice versa.

Depending on where in Canada your parents live, your mother might have a dower right to the property. That right only exists in a couple of provinces today. It gives a married person the right to live in the matrimonial property for the rest of his or her life, but it does not convey ownership. The spouse with the dower right could not sell or mortgage the property, which would eventually pass to the beneficiaries of the first spouse's will.

The fact that your father has left your mother the house in his will is good, as on the face of it this means that she will not lose her home should her husband pass away. She needs that peace of mind, as any of us would.

I don't believe that any tax issues would arise from this transfer, assuming that the house is your father's principal residence. From the information you gave me, I'm prepared to assume that it is his principal residence until I hear otherwise. Each of us is allowed to own and eventually sell/give away a principal residence without having to pay any tax on the transfer. So that means no tax to the estate because of transferring the house.

Your mother should not experience tax issues because of the house either, as Canadians do not pay tax on property we inherit from Canadian estates. This is not to say there will be no tax payable on anything in the estate; my answer is restricted to the tax situation on the house.

Please understand that I'm giving this answer with only a few words of facts. There could be other facts that affect the situation (for example, why is it in your father's name only anyway?). It never hurts to discuss tax questions with an accountant.

For the sake of completeness, I'll point out the downside of having the house only in your father's name and his leaving it to your mother in his will. First of all, debts and expenses of an estate must be paid before a beneficiary gets anything. If there are a lot of debts in the estate, it's possible the house would have to be sold to pay them. Secondly, the probate fee you pay at the court is based on the value of the estate. Some provinces, especially Ontario and BC, have high probate percentages, and if the house is in the estate (which it will be if it's in your father's name alone) it will increase the cost of probate.

These are all factors for your father to contemplate before making a decision about what is best for himself and for your mother.

You said your father's health is failing. If this means that his mental health has begun to deteriorate, it may soon be too late for him to make legal documents dealing with his property. He doesn't need perfect mental abilities of course, but he does have to be able to understand what he is doing, and the effect his actions will have on his family. If he is going to make changes, it will have to be done soon.

I'm really glad that you're helping your parents by openly discussing these issues with them and finding the information they need. I hope my answer helps with the decision-making process.

Should I deed my home to my kids before I die?

It seems that people ask the same questions of estate-planning lawyers no matter where they live. We all have the same concerns - an efficient transfer to our kids, tax savings, preservation of family harmony, and a minimum of paperwork and delay.

Today I'm sharing with you an article written by Rania Combs, an estate lawyer in Texas. She is answering a question I'm often asked as well, that is, should I give my house to my kids before I pass away? If you're considering doing just that, please take the time to click here and read this post first. It will make you think twice!

(P.S. keep in mind that because Ms. Combs writes in America, she mentions Medicaid, which of course we don't have in Canada).

My neighbour is moving - how kids pay for the parents' lack of planning

One of my favourite Canadian blogs is http://www.allaboutestates.ca/ . Today they have a post by Paul Fensom that illustrates what can happen when someone fails to do any estate planning at all. It's a sad story but not at all uncommon. The daughter is paying dearly for her Dad's lack of planning. My guess is that the father felt his affairs were so simple, he didn't need to plan. In any event, click here to read the article. I hope you'll take away from it a realization that all of us need to protect our families by planning ahead.

Can a creditor of my Dad's estate force Mom to sell the house?

This reader sent in a question that I think will look familiar to many of you. It has to do with debts in one parent's estate and how they affect the surviving parent.

Hi my dad is very ill and wont likely be with us much longer I am afraid. Our problem is he owes a lot in credit card debt, solely his debt. The only asset in his estate is the house he and my mom share. It is fully paid for, mortgage free, and her principal residence. Both names are on the title. We are afraid the credit card company can take the house as she cant make the payments on the balance owing to them. Any idea what our options may be?

I'm very sorry to hear about your Dad. It's too bad that financial worries have to make this time, which is already hard enough on people, even harder, but of course you are worried about your Mom.

First of all, even if your Mom was in a position to pay your Dad's credit card debts, she wouldn't have to, as you've said it was his credit account only. At the risk of annoying readers who might work at credit card companies, I'll tell you straight up that some - not all - credit card companies tell widows that they are responsible for their deceased husbands' debts even when they are not. I've personally seen it time and time again. They do it because the widows pay often enough to make the misrepresentation worthwhile for the credit card company.

Your father's estate is responsible for his debts. Your Mom is not responsible for your Dad's debts when they are his alone, as opposed to joint debts. If there isn't enough in the estate to pay all the debts, then unfortunately they don't get paid. Not the best for the creditor, but that's the way it is. When there is not enough money to pay both debts and beneficiaries, the debts have to be paid first and the beneficiaries lose out.

This leads us to the question of whether the credit card company can force the sale of the house.

The answer lies in whether the title to the house is in joint names between your Mom and Dad, that is, joint tenants with a right of survivorship. The other possibility is that they are tenants in common, with each owning half. You say that "both names are on the title", but that alone is not definitive, as both names would be on it whether they were joint tenants or tenants in common.

I haven't seen the title of course, but it is extremely rare that husbands and wives are tenants in common. They are almost always joint tenants and I suspect that your parents are too. If your parents don't have a copy of the title handy, you can find out for sure by going to the local Land Titles Office and asking for a title search. You should have the legal description of the property for this. You can find that on the latest property tax assessment notice. If you are reading the title and are still not sure, ask the staff at the Land Titles Office, or call a lawyer and ask.

If the house is held as joint tenants, the house will not be in your father's estate and will not be available to creditors. When one joint tenant dies, the other automatically owns the house by right of survivorship and the house never passes through the estate. The title is changed by going to the Land Titles Office with a death certificate (no probate needed as the house isn't in the estate).

Everything is different if they are tenants in common. In that case, half the title to the house would fall into your Dad's estate and be available to pay his debts. This would more than likely mean that your Mom would have to sell the house.

I hope you and your Mom can gain some peace of mind at this very difficult time by checking the title. At least your Mom won't have to worry about losing her home. My thoughts are with you.

How to make an intergenerational joint tenancy work

It's great that people are reading my warnings about using joint tenancy as an estate-planning tool without legal advice. This question from a reader gives me a reason to go a little deeper into the issue of intergenerational joint tenancy.

"I live with my mom in her principal residence. It is paid for and she has no debt. She intends to pass on the house to me after her passing, and her remaining assets divided up equally amongst the other siblings. Having read some of your other articles regarding inter-generational joint tenancy not working as true joint tenancy, what is the best and most definitive way for her to pass on her house to me without having to incur probate cost and deal with unwanted conflicts from other siblings ?"

A parent who wants to leave his or her home to one of the children has a couple of options. There is never one right answer or arrangement that suits everyone.

You are right that if your Mom doesn't add you as a joint tenant on the property, and the property is in her name alone when she passes away, it will be necessary to probate her will in order to transfer the house. Adding you as a joint tenant might or might not keep the house out of probate - more on that in a moment - but even if it did keep the house out, the chances are good that your Mom's will would have to be probated anyway if there are other assets.

If your Mom wants to add you as a joint tenant on her house so that you inherit the house on her death, it can be done. Yes, you are right that intergenerational joint tenancies don't automatically operate as true joint tenancies any more, but there is more to that general rule. If there is evidence provided by the parent at the time the property was made joint, this may well serve to create a joint tenancy that will properly hold up. This is why I always tell people not to put the house in joint names without legal advice, because the lawyer will help the parent document those intentions in the right way.

So, your Mom can add you as a joint tenant on the house and document her intentions. To make that even stronger, your Mom can make a new will close to the time she changes the title on the house and confirm her intentions in the will. As mentioned, this might not avoid probate for the other assets of the estate but it would keep the house out of probate. That would keep probate fees lower.

Conflict from other siblings is an issue that causes untold damage and I think you and your Mom are smart to think about the optics of leaving the house to you. The way I read your question, I concluded that you get the house and your siblings divide the rest, without you getting a share of "the rest". I don't know what the monetary value is, but given your concern over conflict, I assume they'll be getting less than you will in terms of value. Is there a reason why your Mom wants to give you more? Have you been the one who has always helped her, or do you already live in the house? Has your Mom already given financial help to the others? Even a brief statement in the will that explains her actions can have a calming effect. I am talking about a statement that starts off with "I love all of my children equally but I am leaving a bit larger share to Child X because...", followed by one or two lines explaining her reason.

Also, your Mom needs to clarify whether getting the house means also getting the contents of the house along with the title. Personal items cause more fights than money does, so she needs to be VERY clear on whether your siblings can take anything out of the house.

This is not a will that your Mom should be making on her own. She should talk to a lawyer who specializes in wills and estate planning to discuss the wording of the will and the implications of an intergenerational joint tenancy.

Selling Mom's estate? Know the tax rules

This question-and-answer article about capital gains tax was found on http://www.capitalmagazine.ca/ and was originally published at http://www.montrealgazette.com/. This is exactly the kind of question I'm frequently asked by readers on this blog, so I'm sure many of you will be interested in the article. Click here to read it.

Dad passed away but the house was never transferred to Mom, now what?

Another reader has asked me a great question that should interest many of you. This particular situation arises more often than you might think. Here is the question:

I'm 30 years old and my father passed away when I was 13. My parents were married during this time. When my dad passed the house went to her and we have resided there since. Recently my mom was notified that her mortgage was paid off. Attached to this notice is what appears to be a summary of land title info. I noticed that the title still states his name, but I don't see hers anywhere. Is this a problem? Can we simply go down to the land titles offices and have this info updated?

It isn't a problem, since your Mom is still alive, but neither will it be as simple as "updating" the information.

I suggest you begin by clarifying the information you have. You said that it "appears to be" a summary of the title and that you don't see your Mom's name on it. Go to the Land Titles Office and find out for sure what is on the title. Take the summary with you to provide the legal land description. A search costs only a few dollars and it's essential that you know what you're dealing with.

If your Mom's name is not on the title, then she did not inherit it as a joint owner by right of survivorship. If your parents had been joint owners and the title had not been updated after your father passed, then both names would still appear. If she had been a joint owner then actually it would be just a matter of updating information. Your Mom could sign and swear (or declare) a very brief form, back it up with a copy of your Dad's death certificate, and that would be it.

As your Mom was not a joint owner and you said that the house went to her on your Dad's death, it sounds as if your Dad left a Will. Hopefully this is the case. My opinion is that the executor named in your Dad's Will will have to apply for probate in order to transfer the house to your Mom. This is not a matter of simply updating information; this is an entirely new transfer of title and I do not believe that it can be done without a grant or order of probate.

If your Dad did not leave a Will, your Mom will have to apply to the court to be named as administrator of the estate in order to get a grant from the court to transfer the property. If your Mom passes away while the house is still in your Dad's name, you'll still have to have a grant of probate or administration to deal with the house.

You might also take some time to check that other assets owned by your Dad were properly dealt with. Was there any other real estate, like a cottage or rental property? Were any RRSPs rolled over to your Mom? Are there investments or accounts still in your Dad's name? Was any life insurance naming your Mom collected?

Usually estates are set up so that when a husband or wife dies, the surviving spouse doesn't have to apply to the court for probate. Unfortunately, this leads many people to think that nothing needs to be done. As you can see, sometimes there certainly is something important to be done.

Can my minor kids still live in the family home after I pass away?

Parents of minor children should name a guardian for the kids who would step in to look after the children if both parents passed away. They should also make arrangements in the will to look after the children's inheritance. 

But what about the family home? Some parents believe that to minimize the amount of trauma and upset the kids will experience should both parents die, the children should continue to live in the house where they currently live with their parents. Of course the children's guardian would live there too. Can the will direct that the home be kept for the children? Yes, it can, but as minor children cannot own title to real estate, another solution must be found.

That solution is a residence trust. Should both parents pass away while the children were minors, the executor would transfer the family home into the name of the parents’ estate. 

To bring this about, both parents would make Wills which contain the same provisions regarding the house. These provisions would be instructions that the house be held in trust on behalf of the children until a certain date. That date is usually when the youngest child reaches age 18 or 21, but can be another date that the parents choose.

If parents are considering setting up a residence trust, there is much more that needs to be thought about, talked about and included in the Will. Simply saying that the home is to be held for the children is not enough. This is one of those cases in which keeping things too simple can and will only cause problems.

Firstly, consider whether this plan is actually workable for everyone involved. If you are appointing a guardian who already has a spouse, children and home of his or her own, is it reasonable to ask the guardian to change his or her living arrangement to move in with your children? Would they have to leave a job in another city to carry out your request? Can your home accommodate everyone?

Secondly, consider the costs associated with a home. There is the annual payment of property tax and insurance. There is the cost of regular maintenance. There is the need to respond to unscheduled repairs due to weather conditions, fire or burglary. Finally, there is the cost of “consumables” such as electricity, heat, water, cable, internet and telephone.

In the Wills, the parents would have to make this money available. The costs of maintaining the house should not be borne by the guardians, since the guardians don't own the house. Even the cost of the guardian's consumables is shared with your children.

There are a couple of choices for making the money available, depending on what assets the parents own. Some parents set aside a lump sum in the trust itself, a dedicated amount of money that has no purpose other than to look after the house. Others might direct that the costs should be taken directly, as needed, from the money that the children will one day inherit. The second solution sounds the easiest, but what happens when the oldest child or children have already moved out, but the younger one still lives in the house, and costs are being taken equally from the children? Is that fair to the older ones?

Also consider what is to happen to the house once the trust ends. This has to be covered in the will if a residence trust is set up. Many parents want to transfer title to the children equally once they are all old enough and the guardian isn’t needed anymore. Experience has shown us a thousand times over that putting a home into the name of all the children almost never goes as well as the parents hoped it would. There might be a better solution in some cases. The children could be given an option to buy each other out using their inheritance. Or the will might give them the option to simply sell the house and split the money.

A final question to think about is what should happen to the house if all of the children move out before they are 21. Does the trust end early?

A residence trust can be a useful, workable option for some families, but it needs to be discussed in detail with an experienced lawyer.

Proceed with caution when planning to avoid probate fees

We've talked about the pros and cons of putting parents' assets in joint names with the children a number of times on this blog (and we will again). This new blog post from http://www.allaboutestates.ca/ discusses the fact that when property is put into joint names, the tax imposed on a beneficiary in the long run can actually be more than the amount saved on probate fees. Click here to read the article.

Inheritance up in flames

As a follow-up to the article I posted right before this one (tax on inheritance) I'm attaching a link to an article in http://www.capitalmagazine.ca/. It's the true story of a family in BC who didn't get tax advice before giving the parent's home to the children as an estate-planning move. After the parents died, this ended up costing the children $700,000 in tax. Whew, not at all what the parents had hoped for. Click here to read the article, especially if you think you don't need legal or accounting advice for estate planning.

In estate planning, know the hazards of joint ownership

This new article from today's Globe and Mail is essential reading for any of you out there considering putting your home or bank account in joint names with anyone other than your spouse. In this article, the possible outcomes are presented as things that could happen, but I would like to reinforce that they DO happen on a regular basis. Please read this if you've put your home, cottage, investments or any other property in joint names with your children or other people. I strongly recommend that you don't make this kind of title change without discussing it with an estate planning lawyer first. Click here to read the article from Tim Cestnick of the Globe and Mail.

Talk to the kids before leaving them your cottage

I sometimes wonder whether my constant warnings to parents not to leave their cottage to ALL of their children are falling on deaf ears. I worry about the families who have taken that step. I was pleased to see a new article by Tim Cestnick of the Globe and Mail that gives some excellent, practical advice to parents who are considering dealing with their cottage this way. Click here to read the article.

Capital gains tax on homes passing to the next generation

Capital gains tax continues to be something that requires a lot of attention in estate planning. This is another excellent question from a reader that deals with capital gains tax. I'd like to share it with you.


Hi Lynne, You mention that houses passing to children are not taxable. What about houses which pass to a niece and nephew? Is there any difference. I am referring to adults when I say niece and nephew.Both have their own principal residences and would probably rent or sell the houses in question.There are 2 houses in question. One is the decedents principal residence and 1 is a rental property.Appreciate your help. Thanks


The statement "houses passing to children are not taxable" is an over-simplification of what I've said, and isn't accurate. Let me clarify that. There is no capital gains tax on a transfer of a deceased person's home to someone else if that home was the deceased's principal residence. It doesn't matter whether the person receiving the home is a child, niece or nephew, as the key element in the transaction is the fact that it's the deceased's principal residence.


If the house being transferred was not the principal residence but was a cottage or rental property, it is subject to capital gains tax, even if it's being given to the deceased's own children. So  you'll find that the two houses in this reader's question will be treated differently by Canada Revenue Agency no matter who they are given or sold to.


The reader mentions that the niece and nephew each already has a principal residence of his or her own and will probably rent or sell the house they receive, which seems likely. When the niece or nephew sells the house they receive from the estate - whether that is done within months or not until years later - that niece or nephew is going to have to deal with capital gains tax as the extra house is not his or her principal residence. The capital gains tax will apply to any increase or loss in the value of the house from the time the niece or nephew received it until the time it is sold.


These are the general rules of capital gains tax. The reader would probably benefit from a one-on-one discussion with an estate planning lawyer or tax accountant to learn more about how the capital gains tax will affect the situation.

Wondering what that stuff in the attic is worth?

This could be a very useful tool for executors who have to valuate household items for the inventory of an estate. Not everyone lives in a city full of experts, or has the time to take items around to those experts. This article from The Globe and Mail talks about a website called Value My Stuff and gives some really great examples of the items they've dealt with, the specific costs, etc. Click here to read the article.

Do household items belong to the surviving second wife or the step-kids?

This question from a reader addresses something that I think many families and executors have to deal with. My hope is that by reading these posts, you will become more aware of the need for your own wills to be thoughtfully prepared.

Here's the question:

"My husband recently passed away and his youngest son thinks all of his fathers belongings now belong to the estate. He wants to take furnishings and other stuff out of our matrimonial home. Is my stepson entitled to take whatever was his fathers?"

Always start first with the will itself. Many wills have a section that deals specifically with household and specific items (and for those of you reading this post, you can now see from this reader's question what can happen if your will doesn't touch on it). Because the reader is asking this specific question and I of course haven't seen the will, I'll have to assume that it doesn't cover it.

The title to the home can also affect this issue. Was the home jointly owned with a right of survivorship? Generally speaking the items in a home that are jointly used - furniture, linens, dishes, decorative items - are considered jointly owned. This means these items should stay with the surviving wife.

If the title was in the reader's husband's name only, I would check the will for any clause dealing with the home. Ideally, it would deal with the "house and contents" and not just the title to the home. As this is a second marriage, it's quite possible that the house was in one name only. That's not unusual in blended families. As the step-son is lobbying for all items to be in the estate, I'm making a leap of logic to assume that some assets are being left to the surviving wife and the residue of the estate is being left to the step-children.

Items that were personal to your husband such as jewelry and clothing are not considered jointly owned no matter what the title to the house, and would fall into the estate.

To clear up one common misconception, I'd like to point out that the fact that someone gave a gift to the deceased in no way means that the person gets that item back when the deceased dies. I don't know where that idea came from but I've heard it many times. Once you give something away, you have absolutely no right to get it back.

Also take any pre-nuptial agreement into consideration. Though an agreement is unlikely to specifically deal with furniture etc, it might make clarifying statements about items that belonged to the deceased before he was re-married.

The reader doesn't say who the executor is, but it sounds like it might be the step-son, as he is so actively involved in the estate.

My best advice to this reader is to consult an experienced wills and estates lawyer who can look at the will, ask questions and interpret the situation for the reader. I always feel very sorry for the second wife who is left stuck in the middle in these family situations, and I've seen the situation spiral into nasty confrontations. A lawyer can be someone to be on the wife's (or in other cases, the husband's) side.

Be aware that hiring a lawyer in an estate situation can be seen as an act of hostility as there is, sadly, some portion of the population who equates "lawyer" with "hired pit bull". But my feeling is that this reader is going to need some help, much beyond what I could offer in this blog.

Alberta's new Wills and Succession Act - part 1

There are big changes coming to wills and estates law in Alberta. Our new Wills and Succession Act (WSA)is expected to take effect in January 2012. Over the next few weeks I'll write a series of blog posts to let you know what's coming. When you read the posts, think about whether the changes could affect you, and perhaps talk to your wills lawyer to find out for sure.

The first change that I'll tell you about has to do with a spouse having possession of a deceased person's home. In Alberta we have the Dower Act, which talks about the situation where a man and woman are legally married and the house is only in the name of one of them. If the one who owns the house dies, the other spouse has a right to live in the house for the rest of his or her life. That hasn't changed. But what about common law couples? The Dower Act doesn't apply to them.

The new WSA talks about that, which is completely new to Alberta law. It says that the spouse can stay in the house for at least 90 days after the death of the spouse who owned the house. The situation must be that:
- the deceased spouse is the one who owned the house
- it can be a house, condo, apartment, mobile home, etc
- the couple must have been Adult Interdependent Partners (Alberta's equivalent of common law spouses, and usually means they must have lived together for at least 3 years)
- the couple must have lived in the home as their family home

This isn't likely to be a problem if the deceased spouse made a will and left the house to his or her surviving spouse. But it's important if there isn't a will.

It's also important if the spouse who owned the house was in a second marriage. Often, in second marriages the spouse wants to leave his or her estate (including the house) to the children of the first marriage. If there was no right to stay in the house for a period of time, which until the new law comes into force is the case, then the surviving spouse has to pack up and get out ASAP so that the children can inherit.

Having observed first hand through my work how cold the children of a first marriage can be towards a step-parent, I'm in favour of this change. It will give a least a short breather for the surviving spouse to make plans to live elsewhere.