Although we try to pre-plan as much as possible in life, it’s easy to miss a few things here and there so, to help you cover all the bases, these are a few key areas you’ll want to take a look at.

Plan early and regularly update your will

It’s important to start planning your will and estate well in advance. But don’t just set it and forget it. A will need to be updated every few years or when big changes occur in the family in order to keep the information relevant.

If you’re not already aware there are numerous factors that can affect the nature of your will and you’ll want to make sure you have a contingency plan in place in case…

• someone who is named in your will or is the appointed executor of your will passes away.
• any asset of yours is sold.
• you get divorced or remarry someone.
• your children are now 18 years+ of age or if you have any new children/grandchildren you want to add to the will.
• you purchase a large asset.

Any of these factors and more can affect the timeliness of your beneficiaries receiving their inheritances. It’s critical to keep this information up to date in order to keep the probate process at bay. Also, be sure to be as clear as possible when naming people in your will. Any unclarities will again slow down the probate process for your beneficiaries.

Also, keep in mind these 2 important points…

1. Liquid assets are easier and quicker to manage with inheritances

When you are creating your will and planning your estate, it’s important to remember the value of your liquid assets. If you are likely to owe anything on your estate upon passing, the debt must be paid before any of the estate assets are distributed to your beneficiaries. If you don’t realize that you don’t have enough in liquid assets to cover the debt, it creates more work for your executor. If there is sufficient debt, the executor of your will might have to sell non-liquid assets to cover the debt – assets you may not have intended to be sold at all.

It’s also important to note that there are specific types of assets that don’t have to go through the probate process. These assets provide your beneficiaries with immediate access to the funds you leave behind for them. This is especially important if your family is dependant on the money you leave behind in order to pay bills. If that is the case, you’ll want to have non-probate liquid assets such as life insurance for example as part of your assets left to your beneficiaries.

2. Work with a will and estate planning professional

Will and estate planning shouldn’t be a DIY project. It’s extremely vital to work with someone who effectively knows how to plan a will and estate. If you want to feel 100% confident that your beneficiaries will receive their inheritance in a timely manner, work with our team at Ares Law. We are experts in will and estate planning and we know how to formulate a will and plan your estate so there are limited delays in the inheritance process. We also recommend you meet with your financial advisors and any other advisors you depend on for advice when making major decisions such as this. Don’t leave your family with the stress of settling your estate, call us today at (705) 645–8743 to set a up meeting so we can review your current plan and make sure you have all your bases covered.

The post Making the Inheritance Process Easier for your Beneficiaries appeared first on Ares Law.

When would you need a co-signer?

You only really need a co-signer when you have tried to get approved for a mortgage on your own and you were unable to get approved or weren’t permitted for the limit you wanted to get approved for. Basically, a co-signer is someone who signs a mortgage application with you, so you can get approved for a mortgage (or get approved for a higher mortgage). When someone co-signs for you, they are essentially promising responsibility for the loan but have no rights to the property.

What impacts your ability to get approved for a mortgage?

When a bank is evaluating your loan application, they are trying to determine whether you will be able to pay back that loan. There are a few factors that can impact your chances of getting a mortgage such as poor financial history or any debt or other loans you are currently paying off (for example car payments or tuition loans). However, the two big ones are credit and income. If you have a poor credit score or your income isn’t steady, it will be less likely that you will be approved for a mortgage. If this is your current situation, then having a co-signer on your mortgage application will help. When someone co-signs for you, their income and credit is taken into consideration with yours and allows you to hit the requirements to get approved.

Remember there are risks to co-signing.

Co-signing is a big responsibility and requires a great deal of trust from both parties. It is a large financial and legal obligation that should not be taken lightly. Again, when a co-signer agrees to sign a mortgage application, they are agreeing to the responsibility of the loan if payments are not made. In other words, if you miss a payment, the lender will then go to your co-signer in order to pay off your debt. If that’s the case, both your credit as well as your co-signers credit will be impacted negatively. So before co-signing, be certain you can make the payments on your own. If you’re not comfortable with co-signing for the possible legal and financial repercussions, there are other ways you can get approved for a mortgage. Waiting for the housing market and economy to improve is one route, although a little unpredictable. The other is to work on improving your credit score/ building a credit history and finding a steady source of income.

If you’ve been turned down for a mortgage, there is no need to stress. If you would like to learn more about co-signing and if it’s the right option for you to get a mortgage, at Ares Law we can help. We have the knowledge and expertise to help you make the right decision. We are professionals on wills and estate planning and want to help you find a house without jeopardizing your financial future. You can contact us at our Bracebridge location at (705) 645–8743. Call us today and let’s get started!

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With that, more and more people have been opting to aid their family members or friends by providing them with either a financial loan or gift. Last year in Canada, 37% of homebuyers received financial help from someone in order to buy a house – a rather large 6% jump within the last 4 years. It’s important that when you consider helping someone purchase a house, you review all the risks first. Can you afford to help your child buy a house? Will you be jeopardizing your own finances in any way if you decide to help? Can your child keep up their end of the bargain be able to pay you back if you choose to loan them money?

Once you carefully evaluate the possibilities, it is best to review with a lawyer or financial advisor. You can then take a look at the options available when helping someone financially with purchasing a house.

You can gift money

When you gift someone money, there is no intention of having any of that money paid back to you. It’s simply just a gift. Well, maybe not completely simple. If you decide to gift your child money, you’ll usually need to sign a declaration stating that the money you plan on giving is not to be returned or paid back. One of the great perks of gifting money in Canada is that the money is not taxed.

The other way of gifting money is also viewing it as a “living inheritance”. Instead of passing down money as part of your will, you can gift it to your child. That way, they can use that money as part of their down payment on their home and use it while they are young. It is very important to look into legal repercussions or financial risks when considering this option though.

You can loan money

If gifting money isn’t an option, you can loan your child the money. What this means for you is that the money you lend will be returned to you and as an added bonus, the interest rate on the money loaned from you will more than likely be less than what your child’s mortgage rate would be. You get your money back and your child pays less interest so it’s a win-win situation.

It’s very critical that you are clear with your child about your financial expectations though. How much of an interest rate with there be on the loan? How much will you be loaning? How and when will your child repay you? You’re not a bank but remember this is your money and your financial future at stake here. You love your child, but don’t jeopardize your money if you aren’t 100% confident there will be no issues. With a loan as well, it could impact the down payment on the house. In some cases, a loan is not considered a down payment from your child. This could possibly mean paying a surcharge from the Canada Mortgage and Housing Corporation. There is a lot of trust involved when it comes to loaning or gifting your child money for their first home and that is the most important thing to remember. You love your child and want the best for them, but you also want the best for yourself and you don’t need to endanger one to make the other happen. That’s why it’s important to get the right legal advice on a decision this big -and at Ares Law, we can do just that for you. With our expertise and professional advice, we can help you navigate all your options and help you land on a decision that won’t compromise anyone’s financial future. We specialize in wills and estate planning and want the best for you and your family’s future. You can reach us at our Bracebridge office at (705) 645–8743 and let us start helping you today!

The post So, you want to help your kid buy a house. appeared first on Ares Law.

1. Your estate distribution

Your estate consists of all your assets (including property, business assets, money, investments, vehicles, jewelry, heirlooms, furnishings etc.) as well as your debts. If you have a life insurance policy, that money is counted in your estate as well. Talk to your family about your vision to distribute your assets and ask for their input or suggestions if you feel you need it. Remember, your assets are your assets, and you can bequeath whatever you want to whomever you want, in amounts that are your choosing. You don’t have to disclose the monetary value of anything at this time if you aren’t comfortable, but do discuss at least the basics about your estate so there are no unwelcome surprises for them such as the fact that you’re leaving your money to charity, you have a massive debt load or you have very complicated finances that they’ll need to hire an accountant for.

• Your will executor

It’s important to name a will executor to manage your estate after you pass and to make sure your last wishes are followed and your assets are distributed accordingly. This person doesn’t have to be a family member – but it does need to be someone who is organized and capable of managing this important job. Before appointing anyone, be sure to ask them if they are OK with the responsibility. Talk to your family about this and who you want to select (or who you’ve selected); there may be some questions and concerns that they will bring up that you need to be prepared for. They may also have some helpful insights, so be sure to have a lengthy, open-minded conversation about this important topic.

• Power of Attorney

Most people choose their spouse to act as their ‘attorney’ in the event that they fall ill or become incapable of making decisions about their care (including end-of-life care), health or finances. This is called ‘power of attorney’. If you don’t have a spouse, or you don’t wish to name them, you can choose your child(ren) or other close family member or friend. Again, just as you would in choosing an executor, it’s important to ask first if they are interested in this responsibility and if they understand what’s involved.

• What’s most fair?

This is a difficult question, and very subjective. The issue of ‘fairness’ comes up a lot when talking about wills and estates. Some people will distribute their assets equally between all children (and/or grandkids and other loved ones), even if some are more financially well off than others, or if some don’t pitch in and help out in the family or make efforts to call, visit and so on. This can cause all kinds of resentment, which is why it’s important to have a discussion sooner than later. Doing so will help manage expectations, and give everyone an opportunity to air any concerns and suggestions. Your family is the most precious asset, so be sure to remind everyone that your goal is to leave a legacy of love first and foremost.

If your family isn’t up for a discussion or they aren’t on board with your decisions after you’ve had a conversation with them don’t forget that it’s still your right to create a will that reflects your personal wishes. Here at Ares Law, we specialize in wills and estates, and it’s our job to give you sound, legal advice. We’ll help you every step of the way so that you feel confident about your choices. Be sure to connect with our experienced legal team; we’ll make sure your final rights and wishes are documented and protected. Call us today at (705) 645–8743.

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Make sure everyone’s onboard

This may come as a surprise, but there’s a chance your kids or grandkids won’t be interested in the family cottage. If it’s too long a drive, if it needs a lot of work, or if they just aren’t able to manage the bills or the upkeep it’s better you learn now than after taking steps to sign it over to them. The best advice is to hold a family meeting and find out who’s in and who’s not and discuss options for the cottage succession and your estate plan. You may find that instead of passing it down to them, you’ll rent it out or put it on the market.

The taxman cometh

There’s no avoiding paying capital gains taxes in Canada when you transfer or sell an asset such as a second (or subsequent) property unless it’s decreased in value since you bought it. When it’s transferred, the government views it as being sold at ‘fair market value’, and you’ll have to pay capital gains taxes. For example, if you and your spouse bought your cottage for $300,000, didn’t put much work into it, and it’s now worth $800,000, that’s a capital gain of $500,000, of which you will be taxed approximately $130,000 – $150,000, depending on your income and other tax considerations. That’s a lot of money to pay for a gift you want to give someone!

If you don’t transfer ownership and keep the cottage in your name, your children will still be on the hook to pay the capital gains tax when you pass away.

Knowing your options

If you know you want to transfer ownership of the cottage sooner than later, there are a few options for you to ponder:

One is that you work out a payment plan with your children to help pay down the cost of the capital gains taxes. Another is to make the cottage your principal residence, which means you’d be eligible for the principal residence exemption, but be sure you understand the implication and reporting processes if taking this step. A third option is to consider the benefits of the ‘capital gains reserve’, which essentially allows Canadians to stretch out their reporting of the capital gain for up to five years, but only if the cottage is reported as being sold and not gifted (or transferred). In other words, you would not have to pay the full tax amount at once, and it would be more manageable to pay over a longer period. All of these options naturally have strict tax rules and legal implications, so be sure to work closely with your real estate lawyer and/or accountant before making your decision.

Finally, whatever your decisions about your beloved cottage make sure you have a legal will. Don’t let your hard-earned and cherished assets like a family cottage go into the wrong hands, or get tied up in legal battles. Have that family discussion, research your options from a financial, legal and personal standpoint, then make a plan of action and put it in your will. The best way to tackle your cottage succession plan is to work with a legal team that specializes in real estate law. At Ares Law, we’re here to help you every step of the way; make an appointment by calling (705) 645–8743 and let’s get started.

The post Keep It in the Family: Transferring Ownership of your Muskoka Cottage appeared first on Ares Law.

Be prepared to compromise

Some people don’t like change, especially when it comes to family traditions. For this reason, you may get a bit of resistance at first if you’ve never spent the holidays away from home. If so, remind them of all the things that will stay the same in terms of the holiday food, decorations, music, and so on. Give everyone in the family a chance to have some input and make suggestions about how they envision it personally. If you have teenagers or grown kids, expect to do some shuffling between their plans with friends, sweethearts or spouses and their work schedules in order to really make it work.

What to pack

There’s always a jam-packed vehicle when heading to the cottage, but be prepared to haul even more to your holiday festivities. You’ll need to bring decorations and gifts, as well as wrapping paper, baking supplies, extra bedding or blankets, and warm winter outerwear and gear. Don’t forget to pack extra games, supplies for making fun Christmas crafts, cherished holiday movies or books, and don’t forget you’ll need copious amounts of hot chocolate! If you’re not used to being in Muskoka in the winter, you’ll definitely need snow tires, a shovel or two, and a charger for your car battery…just in case.

Keeping active

Your cottage is a fresh-air oasis during the summer, but in the colder winter months, it may take a bit more prodding to get people outdoors. Why not decorate an outdoor evergreen tree, build a winter fort or have a snowman-building contest? An outdoor bonfire is always beautiful, as is star-gazing and crisp winter hikes – and don’t forget to bring your cameras to capture those stunning winter sights. You can also go snowmobiling, snowshoeing, cross-country skiing or ice skating. If it’s rainy or grey, you can head into town for a movie, a game of pool or darts, or maybe just to grab a bite!

Making new memories

The holidays are hectic enough for most busy families, which is why slowing things down a bit at the family cottage can be just what everyone needs in order to regroup and refocus. With fewer distractions, you’ll all be able to enjoy each other and the scenery that much more. While it may look and feel different from your usual celebrations at home, your cottage getaway over the holidays might just end up being even more festive and fun than you had ever imagined! While your cottage is all about the enjoyment, be sure to keep safety top of mind and help protect your family and guests from accidents and mishaps.

If you’ll be enjoying your holidays at the cottage this year, we hope it’s magical! If you’ve got questions as a cottage owner or want to buy one but aren’t sure what’s involved, be sure to talk to the experienced real estate legal team at Ares Law. Not only are we your local experts, we’re the knowledgeable team you want on your side. Call us at 705-646-8743; we look forward to working with you!

The post Making Festive Memories: Tips for Celebrating the Holidays at the Cottage appeared first on Ares Law.

It’s important to talk with a few different sales representatives before making your decision. While there may be pressure from a friend, family member or neighbour to use their services, don’t forget that it’s your decision! You need someone who you genuinely connect with and who you’re confident will do the job right. To help you along in your search, we’ve outlined the top 5 things to consider before you sign on with your next sales agent.

1. Availability

Many real estate sales reps have other jobs, especially during times when the markets slow down. This can mean they are less available for you and may not be able to work around your schedule. If they are highly motivated and good at answering your calls, text messages and emails, that’s a good sign. Further, many real estate sales agents employ teams of other reps, and you may never actually get to work with the person whose picture you saw on the billboard or whom you initially called, so make sure you understand the ‘team’ dynamics and know who you’ll be working with.

• Local knowledge

Buying or selling a cottage, commercial property, or rural home for example in the Muskoka region is very different from other markets. Your real estate agent should be familiar with our local by-laws, properties, prices, other agents, local industry professionals, and so on. They need a solid understanding of your area to best do their job.

• Real estate expertise

Your real estate agent should have a decent number of successful closings under their belt, or at least be training with someone who does. You want someone who specializes in your type of sale or purchase, whether it’s residential, commercial, cottages, condos, farms, and so on. Each step of the process should be carefully explained to you, including the various paperwork and the legalities. Every home sale or purchase is different from the last, so the more experience they have, the fewer unexpected surprises you should expect. The more they understand real estate markets, trends, forecasts and related technology, the better they can serve you.

• Strategy

When you first meet with your sales agent, ask him or her about their actual plan to sell your property; you don’t want to hire someone who’s happy to ‘wing it’. Their plan should include a marketing strategy, staging tips, your listing options and so on.

• Negotiating skills

You need a go-getter who isn’t afraid of tough negotiations. If you want to get the best price or are committed to getting your dream home, don’t work with a Realtor who will shy away from doing their best to get you what you want.

If you’re on the hunt for a reputable, hardworking real estate sales rep in Muskoka, be sure to call Ares Law in Bracebridge at (705) 645–8743. We work with real estate agents every day, and we have compiled a list of the ones we highly recommend. We’re also here for all of your real estate concerns, questions, contracts and closings; we look forward to hearing from you!

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You can appoint the same person to be both your executor and trustee, but be sure both you and they understand the different roles. Direct family members or close friends are often chosen to be executors, but if you are selecting a different person to be your estate trustee, it is not uncommon to choose a finance or legal professional.

Let’s look at the top-recommended traits for an executor or trustee so you can make an informed decision and choose the best person for the job. This is an important, legal role with hefty responsibilities and time commitments, so you need to be sure.

Tops traits needed in an estate trustee or executor:

1. Trust

Naturally, you want to select someone who is trustworthy, has integrity, and who will make strong, impartial decisions not based on emotions or intimidation.

• Able to handle the pressure

The person who does best in this role should be organized, calm under pressure and able to deal with any problems or conflicts that arise. If an executor makes a mistake when administrating the estate that results in a loss for the beneficiaries, they could be held liable for these losses. It’s important to note that when a will is carefully drafted and the deceased’s assets/finances are well-organized, the process is more likely to run smoothly.

• Time

At least for a short time, the job of the executor can be demanding. They may need to have visits and/or calls with the deceased’s family members and other beneficiaries, and likely need to spend time working with funeral homes, lawyers, bank or investment advisors, accountants, the courts and so on. If they live out of town and need to make several trips to finalize the estate or manage your home/property sale, that can also add extra pressure and expense for them.

• Health

When choosing your executor or trustee, don’t forget to take their age, health and overall ability to manage this job into account. For example, some people want to choose their parents as their executors, but forget to consider their lifespan or future physical/cognitive abilities when making that choice.

Finally, when you ask someone to become your executor and/or trustee, be sure to explain what the job entails. They may in fact, say ‘no’ if they don’t feel they have the time, ability or commitment. You can then go on to ask another trusted person, or you can hire a corporate executor or law office to manage this important job.

To help make your decision easier, connect with us. We specialize in helping Muskoka families with planning and executing their wills and estates. Call today to make an appointment at 705-645-8743. We’ll walk you through every step of the process so that you are clear and confident about your will and your choice in choosing someone to manage your estate.

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1. Do the research before you buy

When buying any home, it’s important to know the real estate market in your preferred neighbourhood, as well as any future developments in the works, by-laws, community news, and so on. Is the neighbourhood school or shopping mall closing? Is a condo being built down the road? With a fixer-upper, it’s even more important to look to the future because you’ll want to get a return on your investment after spending so much time and money on renovations.

• Pay attention to the home inspection

A thorough home inspection is never more important than when buying a fixer-upper! If there are serious structural or other costly renovations that you didn’t bargain for (such as electrical or plumbing overhauls), you can back out of the deal before it’s too late.

An inspection report will not only reveal big-ticket repairs needed, but you’ll also gain great insights into all the issues with the property so you can prioritize accordingly.

• Learn the local laws

You could come across unexpected surprises if you aren’t aware of local by-laws. For example, your home could have a ‘historical’ designation that limits certain renovations, or it could be zoned so that you can’t rent out the basement, expand the driveway, have an inground pool, and so on. You also need to know the legalities around construction permits and other municipal by-laws that could impact your investment. To get started, work with an experienced, local realtor and real estate lawyer who knows the area, as well as talk to the appropriate municipal staff.  

• Understand the finances

The odds of any home renovation coming in under budget or even on budget are pretty slim! The more that’s needed, the more that can go wrong and throw even the most financially prepared off course. You don’t want to be drowning in debt or dealing with high-interest credit cards for years after your purchase; your goal is to come out ahead, not behind. Have a financial plan in place that allows for at least 10% more wiggle room for emergencies. Further, shop around for contractors, materials and supplies, and keep track of all estimates, purchases, transactions and contracts. Think of your project as a small business and leave no stone unturned.

• Choose your projects wisely

When prioritizing your fixer-upper jobs, keep in mind that you want to choose jobs that will see a solid return on your investment when it comes time to sell, such as updated kitchens, bathrooms, flooring, windows and roofs. These cosmetic changes are less costly than big structural changes such as foundation repairs or adding another storey. Additionally, extravagant or elaborate renovations may not increase the home’s value if they aren’t appealing to potential buyers or aren’t in line with what’s going on in your neighbourhood.

It’s also important to remember that real estate markets can be volatile, and what you thought you could get for your fixer-upper after renovating might not be the case in months or years from now. This is where your careful planning and research comes in when deciding what type of repairs and renovations you want to take on. If the fixer-upper needs too much fixing for your budget and time-frame, you can continue your search until you find the best match.

When choosing a fixer-upper, make sure you’re clear on your short term and long term goals, and plan for the unexpected – financial, legal, and structural! The best way to protect yourself and your investment is to work with a real estate lawyer who knows the ropes. At Ares Law, it’s our job to guide you through the entire process, from the initial offer and purchase agreement to surveys, closing details and even drafting contracts with your contracting team. Connect with us today at 705-645-8743 and let’s get started on turning your fixer-upper into a dream home!

The post Before You Buy a Fixer-Upper – 5 Things You Need to Know appeared first on Ares Law.

1. Examine documents

All home or cottage sales and purchases involve a lot of paperwork, and not just any paperwork…legal, technical paperwork. Documents such as your Purchase Agreement, conditions, waivers and so on will be carefully examined and edited according to your wishes, rights, and responsibilities. What many buyers and sellers aren’t aware of is that sometimes the Purchase Agreement is prepared by a realtor or clerk who may not have the expertise to draft such a unique, legal document, or they’ve “repurposed” old agreements without detailing your specific circumstances.

• Research & investigate

A real estate legal team knows exactly what to look for regarding property sales or purchases. It’s their job to research all and any issues; some of the most popular investigations surrounding:

• Liens or title concerns/fraud
• Environmental or protected lands liens on the home or property
• Past and present surveys
• Access, property boundaries, shore road allowances, and encroachment concerns
• Water and sewage requirements
• Property taxes and arrears

•  Behind the scenes

There is so much more that your attorney does for you that often goes under the radar. For example, they will work with your lender to sort out and finalize the finances, they connect with the other party’s legal team, and of course work with the real estate agent(s). They know exactly what to inquire about, what inspections, forms, and documents are needed, and who to speak to in order to get the job done.

• Closing time

There is so much more to a real estate close than just signing documents and getting – or handing over –the keys. In the days leading up to the closing date, your real estate legal team is busy making sure all documents and finances are prepared and that legal issues are addressed – and on schedule. They will explain your closing expenses, as well as secure your mortgage funds for you – saving you a trip to the bank and valuable time! Once the finances are looked after and documents are signed, they will transfer the title to the new owners, and finalize any other concerns, and then hand over those keys.

• Looking after you

It’s also important to note that a real estate lawyer has your best interests at heart and is there to represent you. They don’t have a financial stake in your property purchase or sale; whether it’s valued at $150,000 or $15 million, their sole job is to protect you and your investment without bias and ensure the process is legal and runs smoothly. It’s very comforting knowing that your rights and interests are protected when you hire a real estate lawyer. If you’re thinking of buying or selling your home, condo or cottage here in Muskoka, be sure to connect with Ares Law. As a highly trained, full-service real estate team with over 22 years’ experience, we’ve got you covered. Your real estate transaction is a big deal…financially, personally and legally, which is why you need to ensure you’re in good hands throughout the process. When you’re looking to hire a real estate lawyer, find out more about us and how we can be of service to you! Call us today at 705-645-8743 – we look forward to meeting you!

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