Estate Planning Q and A – What is it, How you choose an Executor, and More
By Helen Rees
What is Estate Planning?
Estate Planning is the thoughtful plan you make to pass on your assets after you die. Your ‘Estate’ is everything you own. The key document is your Will. It also includes other documents that will control your affairs during your lifetime – often called your ‘living Will’. These documents take effect IF you lose the ability to make decisions for yourself (i.e. brain damage due to accidents, a stroke, or old age issues like dementia).
How do I Choose an Executor?
Your Executor does not have to be a family member or beneficiary but usually is. Ideally this person is not easily bullied or influenced by family members, is organized and comfortable dealing with paperwork and institutions like banks and insurance companies. Your spouse is not always the best choice as they will be grieving or may be elderly or infirm. At Masuch Albert, an alternate executor is always recommended to deal with this possibility. Another option is to make a joint appointment of a spouse with an adult child or sibling.
Will the person who inherits a home be responsible for the mortgage?
If a house is ‘inherited’ by a surviving co-owner then the co-owner is responsible for the entire mortgage.
However, if a house is inherited through a Will, then this will generally depend on how the Will is worded. During probate or administration, the deceased’s Estate pays all government taxes and debts (including any mortgage) before transferring any assets or money to the beneficiaries. If the Estate is financially unable to payout the mortgage this will lead to the house being sold. If a beneficiary is anxious to keep the family home it may be possible for a beneficiary to make voluntary, private arrangement to achieve this with the benefit of legal advise. A smooth transition of items like the family cottage or family home is one of the primary reasons that people decide to engage a lawyer to draft their Will.
This article is for information purposes only, and should not be construed as legal advice. If you have any questions with respect to this article, we encourage you to consult with one of our lawyers.