Question:
If someone has 3 children and he wants to give equal share to all three of them and he doesn’t believe in drafting his Will . Can you please address these questions came in my mind.
1) Does it cost more in taxes on his property to transfer into his children’s names?
2) Does it take longer to transfer his property to his children’s names than having a Will?
3) How do probate and taxes work with or without Will?
Answer:
- If he owns his own property and it is his principal residence, he just pays municipal taxes. That won’t change. But, if he adds his three children to title, then only his 25% will be exempt. Capital gains taxes will apply to the other 75%. Also, they will no longer qualify for first time homeowner grants or incentives.
All in all, this would usually be very unwise.
2. It will take about 1 hour to prepare and sign the new Transfer/Deed. Usually, instructions with respect to Will preparation are given one day and could be signed the next day.
3. There is now an Estate Administration Tax that represents about 1.5% of the value of the estate. It is payable in advance. It’s the same, with or without a Will. Depending upon ownership income taxes and capital gains taxes will be payable forthwith and should be paid in full within 12 months.
There are may misconceptions here. Best to consult an Estate Planning lawyer. One of the least expensive legal matters, is often a Will. The most costly estates, in terms of extra taxes and extra legal fees are those without Wills or the ones with do-it-yourself Wills.
Brian Madigan LL.B., Broker