Estate Planning Before and After Listing
The recent case of Hunter v. Atwal provides an excellent example of proactive estate and transaction management for elderly property owners.
In this case, Esther Hunter, age 99, owned a home in Brampton, Ontario. Because of her declining health, her children, William and Catherine Hunter, were acting under a valid Power of Attorney. In April 2022, they listed the property and entered into an Agreement of Purchase and Sale for $1,120,000, with a $40,000 deposit and a June 30, 2022 closing date.
Shortly after the Agreement was signed, title to the property was transferred from Esther to her two children. This was done strictly for estate planning purposes, to ensure that the sale could proceed smoothly even if Esther passed away before closing. Sadly, Esther did pass away on May 17, 2022, but because of the title transfer, there were no complications or delays with the transaction.
This approach is an excellent example of good practice in both real estate and estate administration. Such planning can be done before listing a property or, as in this case, even after a sale has been arranged, provided proper legal advice and documentation are in place.
Estate Planning Considerations
The major concern was Esther’s health. If the property was transferred to the Attorneys to be held in trust for Esther, then there are no tax implications. Neither capital gains taxes nor Land Transfer Taxes would apply.
If the same property were transfer to the two children in their personal capacities, then we have both capital gains (if applicable) and Land Transfer Taxes. So, considering that the property is possibly sold, by going the Attorney in trust route, Land Transfer Taxes can be avoided.
The next step is the estate. If it goes out by reason of the Will, then we have those funds in trust but probate will be required, and probate fees (Estate Administration Tax) will be imposed. That’s roughly, $15,000.00 per million. If it were left in a simple inter vivos trust, then it can be paid out free of any probate fees.
The Hunter case (Hunter v. Atwal Superior Court of Justice, 2025) demonstrates the value of advance preparation and clear title arrangements when dealing with elderly owners or situations involving powers of attorney. By taking these steps, families can prevent legal uncertainty and ensure that transactions close as intended.
Brian Madigan LL.B., Broker
www.OntarioRealEstateSource.com