Tag: real estate
A recent Globe and Mail Article, published on June 4, 2021, suggests that the booming real estate market in Vancouver has come with a rise in family legal disputes.
A Vancouver estate dispute arose in November of 2020 when a testator (with modest assets at the time), who had bequeathed the remaining assets of her estate to the British Columbia Society for the Prevention of Cruelty to Animals, passed away. When the will was prepared in 2003, the testator never contemplated that the value of her estate would increase so dramatically as a result of a rise in the real estate market. The testator’s remaining assets, left to charity, amounted to more than $1.5 million on her death. It is safe to say that the testator’s heirs were not pleased with this outcome.
A poorly drafted will that fails to consider the volatile real estate market could result in unhappy heirs/beneficiaries and leave an estate vulnerable to litigation. It is also important for testators who reside in British Columbia in particular, to consider the Wills Variation section of their legislation when drafting a will. If a testator has multiple children and chooses to gift one child real property, and that real property increases in value, the remaining children could argue that they were treated unfairly and have a claim against the estate. As litigation lawyer, Josh Woods, states, “… we are not talking about a $100,000.00 lake cabin … we are talking about properties … all of which are skyrocketing in value.”
In order to best protect against estate litigation, it would be prudent to retain an estates lawyer to prepare your will.
Thanks for reading and enjoy your day!
Ian Hull and Tori Joseph
On March 30, 2020, Noah Weisberg blogged about the estate trustee’s duty to invest during COVID-19, a time when market fluctuations have become the norm. Today, I consider how pandemic-induced changes in the housing market may impact an estate trustee’s management of real property held by an estate.
Real properties – including primary residences, cottages, and vacation properties – are often some of the largest assets an estate trustee will deal with during the course of their administration of an estate. Unless otherwise stated in the deceased’s will, the estate trustee has a fiduciary duty to sell the estate’s real property for its fair market value and is expected to do so in a timely manner.
However, the exact timing for the market and sale of real property can depend on many factors. It is common for a will to grant an estate trustee the discretion to choose whether to sell or retain assets. As it pertains to real property, this power allows the estate trustee to hold onto a property until such time as they can achieve the best possible sale price on behalf of the beneficiaries. At the same time, the estate trustee needs to be mindful of the costs incurred by the estate in having to maintain the property. Beneficiaries of the estate may also put pressure on an estate trustee to sell the property and convert it to money sooner rather than later.
Like most industries, the real estate market has been impacted by COVID-19. An estate trustee should be attentive to whether recent changes in the housing market make it an ideal or inopportune time to market a particular property for sale, while also bearing in mind the factors described above.
If an estate trustee decides to list a property for sale in today’s uncertain housing market, there are a few things they can do to help protect themselves against future claims from beneficiaries. First, the estate trustee should have the property appraised for its fair market value by a professional appraiser who is an independent third party. For added protection, the estate trustee may want to have the beneficiaries sign off on the property’s price. The estate trustee should also make an effort to keep the beneficiaries apprised of each step of the sale process. Lastly, the estate trustee should take care to keep detailed records of all advice received and steps taken in the event that they need to justify their actions at a later date.
Thanks for reading!
Today on Hull on Estates, Jonathon Kappy and Umair Abdul Qadir discuss vacant possession of real property belonging to an estate and the recent decision in Filippelli Estate v Filippelli, 2017 ONSC 4923.
You can read more about this decision on our blog here.
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