If you’ve ever bought or sold a home before, you already know that unforeseen hiccups can arise. Now, imagine selling a property on someone else’s behalf after they have passed away. This can often happen if a loved one names you as the Executor of their Will and you agree to the task.
Without your name on the title, there are legal implications which can further complicate the selling process. Some of the most common questions that come up are, “Will the house need to go through probate first,” and if so, “How long will probate take?” In this post, we’ll take a closer look at how probate works so you can streamline the transaction as much as possible.
Do you need extra support during an estate sale or other sensitive transactions? Our detailed seller’s checklist can help you stay on track. Download your copy right here.
What Probate Means
Probate refers to the legal process of evaluating and settling the estate of a deceased person. The courts confirm the Executor in the Will or appoint an administrator if there is no Will.
In Ontario, probate is generally necessary whenever the deceased owned assets solely in their name, such as real estate, that don’t automatically transfer to the next of kin. Other examples might include bank or investment accounts without a named beneficiary.
Many people might consider this process to be yet another cash grab by the government. While we definitely see their point, probate can serve some important functions.
- It can prevent fraud by unauthorized – but very convincing – individuals. Grief can cloud our decisions during difficult times like this, and probate adds another layer of protection.
- It can streamline any disbursements and help prevent disputes by ensuring every term of the Will is clear and decisive.
Selling a house that isn’t yours is one of the most challenging transactions. Fortunately, we have plenty of resources from our estate sale series to help:
- What Are the Best Practices When Handling an Estate Sale?
- How to Sell a House for Someone Else
- What Are the Implications of Selling an Inherited Home?
How Long Will Probate Take?
How long probate takes is a bit of a loaded question. The answer depends on too many factors to be definitive. For starters, this is the government we’re talking about, and the courts are often backlogged. Even if the Will is valid and uncontestable, it can take several months at least to go through the process.
If any disputes or complications arise, it can take even longer. While you can’t do anything about the backlog, there are several steps you can take on your end to ensure probate is as straightforward and seamless as possible.
- Make sure your Will is up-to-date and clear. This alone can minimize any confusion and prevent any arguments after your passing.
- Choose an Executor who is capable and willing to handle the task. They should be clear-headed and able to cope under pressure.
- Keep meticulous records of all of your assets, including your house title, any bank and investment accounts, as well as any jewellery, high-end electronics, and vehicles you own. Make sure your Executor knows where to find all of these records when the time comes.
The more you plan things out now, the less stressful settling your estate will be later. With that in mind, here’s How to Choose an Executor to Sell Your Home.
Can You Avoid Probate?
Probate may be a necessary evil, but no one wants the government or courts to get more of their estate than necessary. You and your loved one can prevent some assets from going into probate through professional estate planning and, in some cases, by setting up joint ownership of your most valuable assets.
For example, any investment accounts will have an option to name a beneficiary. If you have $100,000 in an RRSP, those funds will transfer directly to the person of your choosing, and no probate will be required.
Probate and Real Estate
Avoiding probate when it comes to real estate can be more complicated. You can’t just designate a beneficiary for your title. The only way to do it is to set up ownership of your house as a Joint Tenant, where ownership automatically transfers to the next survivor. It’s simple if that surviving owner is your spouse. It gets more challenging if you have more than one co-owner.
For example, imagine you want to leave your house to your spouse and your surviving children. Under Joint Tenants, each person on the title has an equal share in the house. A lot of tension can arise if your spouse wants to stay in the home after your passing, but your children need their share of the money. No one can sell the house until all parties agree. In fact, no one can even undertake renovations without a consensus.
Another challenge is that adding names to the title could mean avoiding probate, but trigger capital gains if one person owns property already. These complications are why it’s often best to keep your title clean, even if it means your house must go through probate to settle your estate after you’re gone. It could be a more peaceful process for everyone involved.
Is your title set up in a way that protects your loved ones after you’re gone? Learn more in Joint Tenants Vs Tenants In Common.
Consider A Living Trust
Setting up a living trust may be an alternative if you own substantial property and are determined to avoid probate as much as possible. This option can also be complex and may not be necessary for smaller estates. Here’s an overview of how it would work.
- You set up a trust and designate a trustee to manage your assets.
- Name the beneficiaries of the trust who will ultimately inherit your property.
- After you’re gone, your property transfers to the trust rather than a person. Since this transfer is automatic, no probate is required.
However you decide to manage your estate, it’s always best to consult with a qualified estate lawyer who will help you safeguard your assets. From there, a regular review of your Will and consistent communication about your wishes will help your loved ones navigate their new reality once you are no longer in their lives. The more you can simplify everything now, the easier it will be for your loved ones going forward.
Estate sales are challenging, but our compassionate Peterborough real estate agents can help get you through it. Get in touch at team@jeffandkatie.ca or call 705-243-9797 to learn more about our services.
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