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!

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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.

We all have items on our to-do list that are less than exciting, such as getting the furnace inspected, winter tires put on, or that overdue visit to the dentist. When we neglect these things, they can become larger time-consuming and costly headaches down the road. Not having an estate plan is very much the same. You want to know that your rights and wishes are followed and your assets are protected if the unthinkable were to happen. Let’s look at why you need a will and what’s involved in the process:

If you already have a will but it was drafted up a long time ago

If you drafted up your will some time ago, but things have changed within your personal, financial or family life, then you need to re-visit it and update it. For example, your trustee and/or a beneficiary or two named in your will may have passed away or become estranged, so a new will is needed in those instances. Any new additions to your family (especially children or a new spouse) will need to be included in your will as well. Don’t forget too that you may have accumulated or lost assets since the last time your will was drafted, so accounting for those would be a wise move. The bottom line is to update your will after any major life changes.

What happens if you die without a will?

When you die without a will in Ontario, things become complicated. The division of your estate falls under Ontario’s Succession Law Reform Act which has very specific rules. For example, if you are legally married, the first $200,000 of your estate (after all taxes, debts, fees, etc. have been paid) will go to your spouse (unless a dependent makes a claim). After that amount, the remaining estate is shared between the spouse and dependants. There are several other rules that can cause confusion and difficulty for families, such as in cases where there is a common-law spouse who would inherit nothing under this Act. The process for the courts to assign an executor for your estate and to distribute your assets can be time-consuming, costly and an overall harrowing experience for your loved ones.

What’s involved with getting a will?

Getting a will drafted is surprisingly simple. Book an appointment with a reputable law firm that specializes in wills and estates. They will thoroughly explain the process which includes how to go about choosing an executor, trustee, and/or guardian for your children. They will also tell you about Living Wills and Power of Attorney and how to outline your wishes for your care if you become ill, disabled, or become unable to communicate your wishes regarding your treatment. From there, you can take some time to make those decisions carefully, then come back to get it legally drafted, witnessed and signed. File your will somewhere safe, and tell your executor where you keep it.

Make this year the year that you finally get your will drafted or updated. Planning your estate is an essential step to properly protect your family and your hard-earned assets and to make sure that your wishes will be fulfilled upon your passing. Here at Ares Law, our experienced legal team specializes in working with families in Muskoka to plan their estate. Connect with us today at (705) 645-8743 to see how we can help…and best wishes for a happy, healthy new year!

The post The Number 1 New Year’s Resolution to Make In 2020: A Will appeared first on Ares Law.

Marital status and the law

Are you currently married, living common-law, separated or divorced? These different marital statuses matter more than you may think. With regards to your estate when you pass away, it can have a significant impact that may, or may not, benefit your loved ones.

• Married

As soon as someone is legally married, it instantly revokes or cancels their current will; it’s as if it never existed. A new will should be drawn up whenever someone marries. If there is no will, the current, legal spouse is entitled to the estate. However, there are instances where a previous spouse can claim support or maintenance either with or without a will (also called ‘dying intestate’).

• Divorced

In Ontario, your will isn’t canceled or revoked when you get divorced. However, any mentions or references in your will to your now ‘ex-spouse’ will be removed and they will not have access to your assets or estate. Further, if they were previously named executor or trustee, this too will be withdrawn. Everything else outlined in your will remains the same.  

• Separated

If you’ve been separated from your legal spouse for 10 days or 10 years, it still does not impact your will if you haven’t updated it since the separation. The courts still consider you legally married, and as a result, your spouse is entitled to your estate unless otherwise stated in your will, even if you now live with someone else.

Don’t have a will?

There are a couple of different scenarios if you pass without a will. An executor will be appointed by the courts to help manage your estate distribution, and in some cases, a trustee will be assigned as well. Dying intestate is naturally a complicated, time-consuming, legal affair, which can also be quite costly and eat away at your estate in legal and other fees. Here’s what can happen:

1. If you’re divorced (or never married) and have a common-law spouse

Here is a surprising legal fact for many: A common-law partner has NO legal claim to your estate if there is no will, plain and simple. While they may seek support for dependant children or themselves, they won’t inherit your estate the same way as a legal spouse would. Another Ontario law to be aware of is that if your common-law partner is not on the title or deed to the property you shared, they can be legally locked out and the home will be considered one of your estate assets to be distributed, even in cases where the common-law partner contributed regularly to payments and upkeep of the home.

• If you are separated but have a new common-law spouse

If you have a current common-law spouse but did not obtain a divorce from a previous marriage, your ex-spouse can claim your estate. Some people think this is not the case if they filed a legal separation, but in the eyes of the law, you remain legally married and your legal spouse has the rights to your estate if you don’t have an updated will to reflect otherwise. There’s no denying that your marital status matters when it comes to your estate. That’s why it’s imperative to have your last will and testament drafted immediately whenever your marital status changes. Otherwise, your estate can go into the hands of the wrong people, and/or get tied up in a lengthy legal battle. Protect your loved ones and ensure your hard-earned assets go to the people you intend them to go to. The solution is simple; come and see us to draft up your will! It’s easier than you may think, and well worth the effort. At Ares Law, we’re wills and estates specialists and it’s our job to walk you through the process and let you know your options. Connect with us today by calling 705-645-8743; we look forward to meeting you!

The post Your Marital Status & Your Will: What You Need to Know 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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1. Remote security & cottage monitoring systems

An empty cottage with no one around is tempting for would-be thieves. There are a few ways to deter them as well as monitor your property without having to be anywhere near there. Some home security or monitoring systems may need to be professionally installed, but many are easy to DIY depending on your level of expertise. The best part? You can control everything from your desktop or smart phone, anywhere, any time of day. Some things that can successfully go high-tech include:

• Lights – Indoor or outdoor floodlights can be set on timers or turned on and off at your whim. For outdoor lights, you can look for solar-powered ones too.
• Cameras – exterior, interior, hidden, night vision, motion-detecting, etc. You can monitor it all from your phone and get push alerts for emergencies.
• Thermostats – control your heat, humidity and even air quality from your smartphone.
• Alarms – set it to scary barking dogs, loud sirens, or other sounds to scare off uninvited guests and alert neighbours. You can have your system link in with local police or fire departments too.

2. Pest deterrents

Plug in an environmentally safe device that repels rodents by emitting strong sound pressures that are unpleasant enough that they’ll pack up and move on. They use very little energy, just be sure to unplug it when you return for the warmer months.

3. Plumbing and sump pump systems

Don’t let your cottage flood during the spring thaw. Even with a power outage, you can buy a sump-pump water alarm that detects water levels and sends a message to your cell phone in case of higher-than-usual levels. You can also buy an automatic water main shutoff system which involves installing sensor pads on the water main to detect moisture.

4. Staying connected

You can set up a group chat of neighbouring cottagers or your cottage association through a variety of social media channels to stay connected or update one another on any goings-on that need attention.

Even if you have someone who checks on your cottage during the winter or you head up there on occasion yourself, it’s good to know you have terrific technological options at your disposal to protect it more thoroughly. If you’re interested in purchasing a cottage or vacation property here in the Muskoka region, call on the team at Ares Law today at 705-645-8743 to set up an appointment. We specialize in real estate law in Bracebridge and the Muskoka region, and it’s our job to ensure your investment and your legal rights are properly safeguarded.

The post Winter Tech Tips to Protect Your Muskoka Cottage appeared first on Ares Law.