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Wills

GreyGhost said:
Morals? If the one with issues took their lumps (get inheritance, have it seized by creditors) the others might have been more inclined to help them out as they hadnt wasted a fortune on lawyers (which also creates resentment).
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More accurately, nip the problem in the bud. If your kid comes home with a ton of problems and you cater to them you fertilize the problem, making it grow.

They decide they want to move home because of their problems. OK for a few days or a week and then counselling to set a plan and X months to put things into gear.

More fortunes are made by sweat equity than the roll of the dice. Brain sweat counts as well. Work hard or think hard. Better still, think hard while working hard.
 
Thanks for the recommendations all. Found a guy and seems like a decent bet.

Lots to think about, and lots to dig up to ensure you include all the info.

Although he did let me know that if the parents split their house investments like they want to….my sis gets a primary residence tax free….and I get saddled with a lovely capital gain bill if the cottage comes my way. Fun…
 
mimico_polak said:
Thanks for the recommendations all. Found a guy and seems like a decent bet.

Lots to think about, and lots to dig up to ensure you include all the info.

Although he did let me know that if the parents split their house investments like they want to….my sis gets a primary residence tax free….and I get saddled with a lovely capital gain bill if the cottage comes my way. Fun…
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That's easy enough to deal with assuming it happens post-mortem. Estate pays capital gain on cottage. You and your sister split whatever is left after that bill is paid (or if there is no cash but two properties, your sister is responsible for half the capital gain bill on the cottage in exchange for a free house). Really, it makes sense to try to split money evenly and try to make that work with the properties. Eg if the house is worth 200K more than cottage (after tax paid), you get 200k extra cash (or she throws in 200K and uses the house as a rental to pay off that loan).

My BIL gets the inlaws cottage. The estate pays the capital gains tax. FMV of the cottage is on his side of the balance sheet. Depending on condition of estate, there is a good chance he needs to pay to buy out my wifes share but it will be a hell of a lot less than FMV of cottage (worst case 50%, probably less).
 
GreyGhost said:
That's easy enough to deal with assuming it happens post-mortem. Estate pays capital gain on cottage. You and your sister split whatever is left after that bill is paid (or if there is no cash but two properties, your sister is responsible for half the capital gain bill on the cottage in exchange for a free house). Really, it makes sense to try to split money evenly and try to make that work with the properties. Eg if the house is worth 200K more than cottage (after tax paid), you get 200k extra cash (or she throws in 200K and uses the house as a rental to pay off that loan).
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Ya agreed. That’s a discussion that has to be had with the folks and everyone together nice and relaxed.
 
mimico_polak said:
Ya agreed. That’s a discussion that has to be had with the folks and everyone together nice and relaxed.
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Next time we meet, ask me to let you in on the arrangement that's pending between my sister and i for the house.

You can be so creative in these types of situations, i think you'll get some inspiration from my deal.
 
mimico_polak said:
Thanks for the recommendations all. Found a guy and seems like a decent bet.

Lots to think about, and lots to dig up to ensure you include all the info.

Although he did let me know that if the parents split their house investments like they want to….my sis gets a primary residence tax free….and I get saddled with a lovely capital gain bill if the cottage comes my way. Fun…
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My neighbor got fuxxed like that his sister inherited the house nice 1.1 m tax free. he inherited the farm property and got a 600k tax bill and has to sell the place to pay the taxes.

Sent using a thumb maybe 2
 
Evoex said:
Next time we meet, ask me to let you in on the arrangement that's pending between my sister and i for the house.

You can be so creative in these types of situations, i think you'll get some inspiration from my deal.
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So long as it’s all amicable everyone can end up well enough and still be happy.

One party feels slighted and the whole relationship goes sideways.

For now I’d rather not worry as still (hopefully) my parents have a lot of time left.
 
mimico_polak said:
So long as it’s all amicable everyone can end up well enough and still be happy.

One party feels slighted and the whole relationship goes sideways.

For now I’d rather not worry as still (hopefully) my parents have a lot of time left.
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absolutely
 
mimico_polak said:
Thanks for the recommendations all. Found a guy and seems like a decent bet.

Lots to think about, and lots to dig up to ensure you include all the info.

Although he did let me know that if the parents split their house investments like they want to….my sis gets a primary residence tax free….and I get saddled with a lovely capital gain bill if the cottage comes my way. Fun…
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But still up a cottage! They aint cheap no mo'
 
LePhillou said:
But still up a cottage! They aint cheap no mo'
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The capital gains to be paid will be about 2x of the cottage purchase price.

Need to figure out a way to do it most efficiently...but CRA has got to be paid. Gotta pay for all that free money!
 
mimico_polak said:
The capital gains to be paid will be about 2x of the cottage purchase price.

Need to figure out a way to do it most efficiently...but CRA has got to be paid. Gotta pay for all that free money!
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Like with the six-plex. Paying the CG hurts but it also means you (or your parents) made a crap-ton of money passively.

EDIT:
As I'm still not convinced that JT isn't going to do something with CG and real-estate, I might try to trigger a sale sooner rather than later to get caught up on CG. Use the money that you planned on putting in an investment property to deal with the CG on the cottage (assuming your parents don't have the capital available). Complicates inheritance but the math can be worked out.
 
GreyGhost said:
Like with the six-plex. Paying the CG hurts but it also means you (or your parents) made a crap-ton of money passively.

EDIT:
As I'm still not convinced that JT isn't going to do something with CG and real-estate, I might try to trigger a sale sooner rather than later to get caught up on CG. Use the money that you planned on putting in an investment property to deal with the CG on the cottage (assuming your parents don't have the capital available). Complicates inheritance but the math can be worked out.
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I hear ya. My son's off to Inuvik for a year. "Great we can sell the condo before JT ups the CG".... "we'd like to keep our stuff there pay the rent and have something cheap for when we get back" Frack!

If you inheirit a property why do you have to pay CG? You had no gain. It come from the estate I would think.
 
timtune said:
I hear ya. My son's off to Inuvik for a year. "Great we can sell the condo before JT ups the CG".... "we'd like to keep our stuff there pay the rent and have something cheap for when we get back" Frack!

If you inheirit a property why do you have to pay CG? You had no gain. It come from the estate I would think.
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Cool adventure, wish him luck. You could trigger CG now by selling to your son. His rent then becomes paying back a VTB mortgage (obviously sucks for you short term as CRA isn't interested in installments).
 
timtune said:
I hear ya. My son's off to Inuvik for a year. "Great we can sell the condo before JT ups the CG".... "we'd like to keep our stuff there pay the rent and have something cheap for when we get back" Frack!

If you inheirit a property why do you have to pay CG? You had no gain. It come from the estate I would think.
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Well this is where it gets tricky....the parents can pay the CG, and then give the property free and clear to us (let's say).

Then it means that it removes the CG payment out of their pocket...and the 'gift' to me includes a condition of paying the CG (150-200K)...

These are good problems to have...but need to be addressed.

I'd be cool with taking the cottage now, paying the CG, and then just AirBnB the thing to make the money back...but it needs to be discussed openly that works for everyone. Don't want to force the parents into paying it...but somehow this needs to be paid.

There is also an option that the CG can be paid over 4-5 years. It makes the pill easier to swallow, especially when it can be paid off with AirBnB income.

EDIT: Looks like 5 years.

www.moneysense.ca

4 ways to pay less capital gains tax when passing on the cottage

Want to pass on the family cottage to the next generation? Here are four strategies you can use to pay less capital gains tax.
www.moneysense.ca www.moneysense.ca

EDIT#2: Quick calculator shows a 160k CG tax bill.
 
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timtune said:
Yeah he's not ready to buy. But CG, do you pay that if you inheirit?
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The estate pays the capital gains...and then the new CG starts at the FMV the day of ownership change.

I'll assume there's LTT and all that other fun stuff also included.
 
GreyGhost said:
If he got a tax bill that big, that means he comes out with far more than 1.1 after selling.
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Problem is it is the place he has lived and earned a income from for 30 years and doesn't have the money or anyway to make enough, he has to sell and move out east.
 
Please look up "Ontario Holograph Will".

You will find that Ontario respects a will that is ENTIRELY handwritten by the testator (that is YOU).
The will must be dated and signed, but no witness is needed. You will find out why this apparent laxity is appropriate.

You can do that now, and at the very least you will have a functional will that will be followed if it is consistent.
It is important that you name an executor, who will be responsible for following your instructions.
Ideally this is a trusted friend who has a likelihood of surviving you, so redo the entire will if you have
a falling-out with your executor or if the executor dies.

Please understand "executrix" if the trusted friend is female.

Good luck, both in drawing up a valid will and in not needing it for a long time.
Salos Dafee
 
Scuba Steve said:
Problem is it is the place he has lived and earned a income from for 30 years and doesn't have the money or anyway to make enough, he has to sell and move out east.
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Family farms are a mess. I know a family that left the farm to one son to work and the son was supposed to make dividend payments to the other kids to compensate for the uneven distribution of the estate. The farming son kept all the money for himself. It got to the point the other siblings were going to sue him (and he was going to lose) so he sold the farm to settle the debts with his siblings. Farm closes this summer, hopefully he distributes the money as required (ideally the lawyers do it before he gets the cheque but I don't know what the legal situation looks like).
 
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