In my capacity as a real estate agent I have witnessed multiple legal nightmares due to senior homeowners not being properly legally prepared when normal life events like death or incapacitation occur.
In one situation a retired man owned a home and his new wife had moved in. Unexpectedly he passed away. The house was only in his name and he didn’t have a will. The wife was left in a very difficult situation where she couldn’t afford to pay the existing mortgage due to losing his pensions upon his death. She needed to sell the house but was unable to as the house wasn’t passed to her upon his death. Expensive and unneeded legal work was required to resolve the situation and sell the house.
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There are three key things you should look at to be sure that in the case of death or incapacity your house won’t create a legal nightmare for your family.
1. Who is on title for the house? Years ago it was somewhat common for the house to only be in the name of the husband. Also in the case of second marriages only one spouse may be the owner. In both cases the title of the house doesn’t automatically pass to surviving spouse upon death. Although there are exceptions, it is generally advisable to have both spouses on title. Additionally in some situations you may also want an adult child to be on title as well.
2. Do you and your spouse both have a current up to date will? Dying without a will is always a problem. Not only does it require legal fees to resolve but the will cause delays. Plus your house and other assets will be divided among your survivors according to the probate act and not your wishes. I recall a situation where the mother died without a will and her 7 children had to go to court to obtain the authority to sell her house. And all 7 of them (who lived in multiple provinces) had to sign every legal document.
3. Do you and your spouse have a current up to date Power of Attorney (POA)? A POA is a document that gives your spouse or adult child the ability to act on your behalf in the case you become incapacitated. It can be either broad or specific in what they are allowed to do on your behalf. Suppose due to a health issue you suddenly became incapacitated and unable to live in your home. After you have moved to a continuing care facility, your family may need to sell your home or handle other affairs. Without a valid POA they will be required to go to court and pay legal fees to obtain the authority to handle your affairs.
If you are not certain of your situation it would be a good time to meet with your lawyer and review your affairs to ensure they are all set to accurately reflect your wishes. It is much easier and less costly to have this dealt with now rather than wait until something has happened.
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Roy Thomas SRES® (Senior’s Real Estate Specialist) is a REALTOR® with Sutton Group Professional Realty. Since 1991, Roy specializes in helping retirees with their later in life real estate transactions. Call Roy at 902-497-3031 or contact Roy here