MDAO Forum

Support for People with Mood Disorders => General Discussion => Topic started by: Peace on October 29, 2015, 10:57:11 am

Title: Probate Fees and Estate Taxation
Post by: Peace on October 29, 2015, 10:57:11 am
Hi everyone  :)

I started to look online myself, but with my OCD I spent a number of hours and wasn't able to find an actual answer. I don't want to take up anyone's time if you don't have the time to help, but here is the information I'm looking for:

What happens to the following asset when it's left to a child over 18 years of age, and when it's left to a spouse, as far as being subject to probate and taxation:

1. RSP money. I know for a child over 18 the money would be taxed. For a spouse it would not be taxed. I'm not certain
    about probate fees.

2. A home where the home passes along to the spouse due to the name on the title (tenants in common). Subject to
    probate and taxation? Included in the calculation of probate fees (making proceeds of RSP money left to children over
   18 less)?

3. Money held in a joint bank account with a spouse. Subject to probate and taxation? Included in the calculation of
    probate fees or taxed in any way (making proceeds of RSP money left to children over 18 less)?

4. Money held in a non-joint bank account. Included in the calculation of probate fees (making proceeds of RSP money left
    to children over 18 less)?

Those are the questions I'm looking for answers to. I'm planning once the separation is finalized to re-do my will, but it doesn't make sense to see a lawyer for a formal will right now, and I need answers to those questions to make some decisions now.  I don't expect anyone to have the answers, but if you have links to the answers that would help me SO much.

Thanks again for being here for me. I'm really struggling.

Title: Re: Probate Fees and Estate Taxation
Post by: paulm on October 31, 2015, 12:36:11 am
hello Peace. I can provide you with some links, but if you are getting a lawyer for a separation agreement you may as well have them do the will at the same time (or sooner) as they may offer to do the the will at a reduced rate. Many lawyers do this do solicit business (not all).

 Probate and leaving items to your children or spouse are very tricky items. In general a basic house that is in joint ownership goes to the surviving owner without any fees or taxes, the same with an ordinary bank account(not an rrsp or investment accounts of certain types). Having said that, the problem a lot of people get into trouble with is when they try to add a name to title of the house (say a child's name) and then die. Very messy, complex and often costly.  Misinterpret something or get it a little wrong and big problems are created. 

 Below are several websites that give pretty good advice, but they also say that one mistake and everything that you planned for can go out the door. Good Luck and Take Care. paul m

P.S. to everyone. When drawing up a will one mistake that I know a lot of people make is that they try and leave something that isn't feasible.  Such as "my youngest child will be allowed to live in the house as long as they attend school"  That's a nice sentiment, but who pays for the taxes, heat etc until that child is done school. Lawyers will usually draw up a will any way that you want it, so be sure to ask a lot of questions and get their opinion on each and every item. I've seen a parents leave 25acres of a 100 acre farm to their 4 children in an area where sub dividing a farm is not allowed. Massive problems. As the lawyer drawing up the will is not going to ck out the zoning regulations (unless you pay him too) be sure an ask them what problems they may fore see in drawing up that kind of clause.

 Just because a lawyer prepared the will doesn't mean that everything will go smoothly, so ask questions and a lot of them.
Title: Re: Probate Fees and Estate Taxation
Post by: Peace on October 31, 2015, 11:04:30 am
Thank you, Paul. Much appreciated!

OCD makes me overthink everything and research everything extensively. I've gained a lot of knowledge as a result, but I'm also completely exhausted. There are a number of what ifs right now. If I proceed with the formal separation, I'm then committed to living on my own by a certain date, and I'm not ready for that yet. I am working on getting ready.

A lawyer advised me to process the separation first then draft a will for a variety of reasons. I purchased a store bought will to use until the will could be drafted with a lawyer after the separation is finalized. I sat down to write the will and found the only things I can leave to my daughters at this time are my RSP money and what is in my bank account. Everything else is either in my husbands name (vehicles) or joint (joint bank account and home). I can not leave my portion of the joint bank account and my portion of my home to my daughters until the separation is finalized.

The one thing keeping me from proceeding with completing the will is the clause that I authorize my executor to pay all funeral and estate expenses from the proceeds of my estate. Currently if I proceed the bulk of my estate (vehicles, joint bank account, and home) go to my husband, but it's what I leave my children that would be reduced to have my name taken off the deed and line of credit secured against the home, as well as all other costs to settle my estate and to pay for my funeral.

I sincerely hope it does not come across that I am trying to deny my husband what he's entitled to. That is not my intent at all. What I'm trying to do is to ensure my children are taken care of and provided for. If everything is left to my husband there will be nothing left for them.

3 different houses owned in the 25 years we've been married. I was very happy in our previous home, but my husband did not like the lack of storage, so we moved into this house and added $100,000 to our mortgage. My husband then put at least $120,000 worth of changes into our current house (not including what he bought for the outside of the home and the furniture and toys he bought for the inside of the home) without consulting me about anything, then started to talk about wanting to move again into a brand new home because this house is not working for him. A huge amount of money spent within that time on vacations, sports cards, vehicles, restaurant meals out, etc. A brand new $25,000 trailer he put a $5,000 deck and $7,000 awning on then sold for one third of that 5 years after it was purchased. The purchase and sale of a timeshare unit in Florida.

Within the past 3 years: thousands of dollars spent on buying and selling sports cards. The purchase of a brand new motorcycle the year before last as well as boots, jacket, gloves, 3 helmuts, a side saddle bag, visors. That motorcycle is not working for him. He stated "the Harley riders do not wave to him". He wants a different motorcycle. Golf and sporting event vacations with a friend, as well as money spent on golf accessories. This year alone: 3 vacations (1 with the children), along with golfing several times close to where we live, many restaurant meals out, professional and amateur baseball, basketball, soccer games, and theater concerts. There are 7 television sets in my house. My youngest daughter and I do not watch T.V. at all, and my oldest daughter watches netflix on her laptop and movies rented from the library. The cost of our cable so he can watch his sports channels is astronomical. I asked him if I could renegotiate with our cable provider while ensuring he still has his sports channels to watch and he said no. He has a cell phone provided by his work, but wanted his own phone to play games on, so I gave up my cell phone.

I was the higher wage earner for numerous years and am reduced to living in poverty (the clothes I own, the ripped up slippers I wear, the mattress on my bed that is a danger to my health, the used chair taken out of the garbage I sit on at the desk my father gave me that can not be height adjusted resulting in body pain, the hutch I use in my bedroom left on the curb by a neighbour, my need for a haircut and new eyeglasses, the bike that is a danger to ride because the brakes don't work, the cardboard I use on my windows to keep the sun out) because we would be bankrupt otherwise.

I've made the sacrifices I've made so we could have some savings, so we could pay for our children's education, and so our children could have something in the way of an estate left to them. When we still had nothing in the way of savings after 24 years of marriage I opened a separate bank account, then was called a disgusting monster for doing so. I was yelled at the entire way home in the car because our marital counselor suggested we do a budget. When I have spent some money, such as a $10.99 gingerbread house kit to do with our daughters, I was told I spent too much money on it. You could say some of the purchases I had to sign for, and this is true, but I initially said no then gave in because I was nagged to death until I did.

In addition to other things, my husband is fighting me on wanting the dishes my father bought us as a wedding gift. I'm more than willing to give him every last item his friends and family gave us as gifts, I'm just having a hard time with the thought of him and the woman he wants to go out to dinner with (his words) eating off the dishes bought by my father.

I'm so sorry for the book. I basically needed to justify that I am not trying to take anything away from my husband, I'm trying to ensure that my wish to provide financially for my children is met, which is what I have been sacrificing to do all these years.

Thank you for listening.


Title: Re: Probate Fees and Estate Taxation
Post by: paulm on November 01, 2015, 01:54:38 am
Hello Peace. I don't think any one here thinks that you are trying to take money from your husband. I certainly don't and I hope that you get what you are entitled to. Most times the courts are pretty fair or at least lawyers are pretty good at advising people of their rights and when that advise is followed the courts usually make fair decisions.

 In regards to store bought wills, that is your decision. However they usually don't cover things that a lawyer would normally include (or should include, but don't always) like "continuing power of attorney"  in case you become mentally disabled due to an accident or ill health(stroke etc)or at you are ruled to be mentally incompetent.   Someone who has a continuing power of attorney cannot change your will and must follow whatever guidelines that you set out for the handling of yourself and your money(within reason). Take Care. paul m

 Hello Everyone. Before anybody jumps all over me and sez that they or someone they know got hosed by the system. I never said that the system was fair, I just said that the judges will follow what the provincial or federal gov'ts have ordained and that good lawyers know pretty much how judges will rule. One of the biggest obstacles that I have seen to a lawyer getting the best deal that they can out of the system is that people wait until the are already separated to hire a lawyer. Sometimes it has to happen this way as a person doesn't see a separation coming, but ideally if the marriage has broken down the person will see a lawyer before they separate. Then the lawyer can advise them on what to document, how to go about changing beneficiaries RRSP's, insurance policies and so on etc.

 One thing that I haven't included in the past but that has worked for many people is mediation. In Ontario couples who can mutually agree to allow a mediator to help them separate this can be the cheapest way to go.  However if warring, then it's not.  Some examples:                                   Take Care. paul m

Title: Re: Probate Fees and Estate Taxation
Post by: momfellinglost on November 02, 2015, 10:49:51 am
I would write all the things down for when you see the lawyer so you don't miss any. I know that a house held in common with anyone is not taxed. If you are separated your will that you have now is not valid (if you are living separate and apart). The laws have had some changes recently things like filing income tax etc. There are rules around rsp and such if you have a designet for the rsp it will be treated different than if you do. You can write a will out by hand and have it be legal but it must be in your own hand nothing written on the computer will work unless it is witnessed. But be aware these wills are the most contested and found wanting so not followed. So going to a lawyer is the best way forward if you have any concerns that someone will cause problems then a lawyer will be the best one to deal with those things. I have seen first hand what can happen when a will isn't properly done and what can happen when people don't bother doing one just assuming people will do the right thing. Death brings out the worst in some. And even when there is a will if the estate isn't big enough the cost of a lawyer which the person who is contesting it has to pay for now can be too high. I know there are estates that are still in the courts for 10 years because the person left in charge can't handle it but courts are normally not willing to go against your wishes.  They have also changed for taxing purposes regarding things like jewelry if it is valued over a certain amount. If you also give things that have been in the family for years I would make a note of it somewhere so that one person doesn't get the you took it.  I would also remember your husband won't win everything he has to split it with you. Just listen to your lawyer and you need one don't sign anything he gives you without a lawyer seeing it.  Sometimes people think that if they can get someone to sign it before a lawyer sees it they can rely on it they can't and you really don't know if he has seen one. After all these years it isn't his and yours so he can't claim his assets are his beause they are in his name and wanting things like the dishes are ment to hurt you because he knows it will try not to let him do that to you.
Title: Re: Probate Fees and Estate Taxation
Post by: Dragonfly on November 02, 2015, 06:55:19 pm
I emphazise with you Peace. I can't say much about your situation. I do not have the knowledge.

Thinking of you though.

Title: Re: Probate Fees and Estate Taxation
Post by: Peace on November 03, 2015, 11:28:03 am
Thanks, everyone :) It means a great deal to me to get your feedback and support.

I just now got off the phone with a local women's centre and was given the name of 5 lawyers. My original plan was to rent a 2 bedroom apartment, then my husband told me I'll have to pay him $780 per month child support on Sunday and he'd like it up front to help with the bills should he choose to buy me out of this house. It set my OCD in motion, and I started researching to find out if that's true, and also looking at places I can rent, feeling I would only be able to get a 1 bedroom place. I wanted the 2nd bedroom so my daughters would have the option to stay with me if they needed.

Next step, go through the list of lawyers and choose one. I'm so tired.
Title: Re: Probate Fees and Estate Taxation
Post by: momfellinglost on November 06, 2015, 10:45:49 pm
 So glad you have some names but don't be afraid to check out more than one lawyer you need one that is a good fit for you. He knows what things will set off your OCD so take anything he says with a grain of salt. I don't know your financial situation so the dollar amount he is quoting you is more than likely something he pulled out of a hat unless he has been to a lawyer or something he is just hoping for. The age of your youngest will be a factor but there are way to many things to consider before any number could be reached and however that ends up no one has the right to ask for the money up front. You would need to have a lot of documents and both sides have to disclose all of their stuff so try not to let it bother you too much and at this stage it isn't whats his is his and what yours is yours you are married so all assets and all debts are looked at. Just take your time you didn't get here in a month it took years and it will take a while to come to an agreement. Most likely neither party will be completely happy with the outcome.