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Key Estate Planning To-Dos for First-Time Homebuyers


Sep 28, 2021 7 min read

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3 Key Estate Planning To-Dos for First-Time Homebuyers
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    This blog post is sponsored by Willful. Read our advertiser disclosure.

    Becoming a homeowner for the first time is incredibly exciting. For the first time, you can proudly call a home your own. It’s also a long and complicated process that leaves many new homeowners feeling overwhelmed. The good news is that there are plenty of experts who can help you make sure that you have all of your bases covered. At Willful, we’re here to help you tackle 3 important estate planning to-dos as a first-time home buyer (and explain what might happen if you don’t). 

    Make a Will

    It might be obvious but buying a home isn’t an impulse buy — it takes a lot of sacrifice and saving. Your home is likely your most expensive asset and it will soon become your asset with the most sentimental value too. Yet, an Angus Reid survey commissioned by Willful found that 1 in 4 homeowners don’t know what would happen to their home if they were to pass away. Having a will in place ensures your home would be passed on to the person or people you would want to receive it. Without a will, there’s no guarantee that your home will be passed on the way you would want it to be. While it’s not as exciting as things like choosing paint colours or picking out new furniture, it’s one of the most important to-dos you’ll cross off your list (and it takes less than 20 minutes).

    Name a Power of Attorney for Property 

    If you were to become incapacitated due to illness or injury and couldn’t take care of important financial to-dos related to your home, do you know who would? You might have an idea or hope that a loved one would step up, but that doesn’t always happen and it’s not always possible without officially appointing someone as your power of attorney (POA) for property. A POA is the only way to make sure someone you trust will be there to pay your bills and mortgage on your behalf, sell your home if necessary, and make other important decisions for your benefit. 

    If giving someone else control over your home frightens you, that’s even more reason to make a power of attorney for property — to ensure it’s someone you trust who takes on the role. Rest assured that your attorney has to manage your property for your benefit and can be legally required to account for and explain how they’re managing it. 

    An attorney has to be the age of majority and mentally competent, but you should also choose someone who is responsible and has good judgment. They should also live nearby so that they can begin taking care of things immediately if an emergency arises. You may choose your spouse, sibling, parent, or close friend — someone that will keep your best interest their number one priority. It’s important to ask this person if they’re both willing and able to take on the responsibility that comes with being your attorney before appointing them in your estate plan. It’s also a good idea to choose backups in case this person isn’t able to fulfill the role down the road.

    Collect Key Home Info and Share with Your Attorney and Executor

    A will and POA documents are important parts of your estate plan, but they’re only the tip of the iceberg. They don’t include all of the important information that your executor (the person responsible for following the instructions left in your will) or your Attorney need in order to do their jobs. When you create your will, you should also create a folder of information (it can be a hard copy or digital folder) that includes:

    • Your mortgage provider and contact info for your mortgage broker (if applicable)

    • Which bank account your mortgage payments come out of, and the payment frequency and deadlines

    • Who you have home insurance with

    • A list of service providers related to your home (cable, internet, gas, hydro, water, property tax) and the account numbers so your executor can close down those accounts 

    • Any other relevant information related to the upkeep of your home 

    As a reminder, while you can store this related information digitally, it’s required by law that you print and sign your actual will and store a hard copy. If you’re considering making a handwritten will, which is also called a holographic will, it’s important to know that in some provinces like BC, holographic wills cannot be used to distribute or deal with real property (like your home or land), and they aren’t recognized at all in PEI.

    How To Make Estate Planning Documents

    There are a few options available to you, depending on how complex your estate is. An online will platform is ideal for people with simple estates, which is about 90% of Canadians. If you’re not sure whether you have a simple estate or not, here is some helpful criteria:

    • You own property in one country 

    • You have assets/investments in one country (again, in Canada)

    • You have a child or children

    • You have a pet and want to assign a guardian and/or leave a part of your estate to that guardian for their care

    • You want to leave specific gifts (for example art or jewelry)

    • You want to leave a cash gift or percentage of your estate to charity

    • You have a spouse or common law partner

    • You don’t have any complex “if this then that” scenarios - you have several beneficiaries you will split the estate amongst, but don’t need to create any unique stipulations

    On the other hand, if any of the following applies to you, your estate is most likely too complex for an online platform and you should seek legal advice from a lawyer: 

    • You own property in different countries 

    • You have a business and would like to create a dual will

    • You have very complex clauses or scenarios that you would like to include in your will

    • You want to set up specific or unique rules around your minor child’s trust 

    • You have a child with a disability and need to set up a Henson trust

    • You want to speak with someone to get legal advice about your specific situation

    • You are separated but not divorced and want to ensure your ex doesn’t receive part of your estate

    • You want to disinherit a child or family member

    What Might Happen if I Don’t Make an Estate Plan?

    If you’re still not convinced whether you really need an estate plan, here’s a breakdown of what happens if you die without one. Dying without a will means that you’ve died “intestate”, so while your home won’t be handed over to the government, the courts get to decide how it’s passed on to your heirs based on provincial laws. If you own the home with your spouse or someone else, your home will automatically pass to your spouse. However, if you are the sole owner of your home, your family won’t be able to do anything with it (like hiring a realtor to sell it) until the court appoints someone to act as the legal representative of your estate. 

    Whether you’re a first-time homebuyer on your own or with your spouse, dying without a will involves major costs, time delays and sadly, disagreements between family members who all think they know how you would have wanted your assets to be distributed. It’s important for all adults to have an estate plan in place, but it becomes an especially important document to have once you’ve purchased your first home. We know that illness and death aren’t the most fun topics to think about, but making an estate plan is necessary to protect your home and the people in it. Plus, it’s easier and quicker than you might think. It takes less than 20 minutes to do with Willful so you can get right back to celebrating the major milestone that is homeownership! 

    Willful is a platform that makes it easy, affordable, and convenient to create a legal will online in less than 20 minutes, from the comfort of your home. Borrowell members can get 10% off any Willful plan by following this link and entering code BORROWELL10

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    Willful is alternative to traditional estate planning, allowing Canadians to make end-of-life arrangements quickly and easily. Willful's self-serve online platform breaks down the estate planning process into simple steps, allowing Canadians to create essential estate planning documents in 20 minutes or less.

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