The death of a loved one is always a challenging experience for the family. In addition to dealing with an overwhelming wave of grief, individuals also face the task of managing various practical matters, such as the sale of their deceased relative’s home.
When creating a will, it is essential for the deceased person to clearly state the names of the individuals they wish to handle their money and property, which is commonly referred to as their estate. The executors are responsible for collecting and valuing the assets, paying off any due debts and inheritance tax, and distributing the estate following the will. If the beneficiaries do not want to have the property transferred to them, it will be necessary to sell it.
Probate fees are applicable.
Although real estate fees are widely known, probate fees may be unfamiliar to many individuals.
Probate is a legal procedure in which a court appoints an executor to handle the estate of a deceased individual. The probate process is necessary for the beneficiaries of a dead person’s estate, regardless of whether or not the deceased had a will if they wish to receive their benefits.
The probate fees vary depending on the province. Manitoba and Quebec do not impose any probate fees. Estates with a low value (typically $50,000 or less) are also exempt from probate. In the meantime, most provinces charge a cost of approximately 1.5 percent of the estate’s value or a fixed price.
To prevent legal complications, it is advisable to select an executor carefully.
Choosing to appoint all of one’s children as executors could be a significant error. Complications may arise when one of the children of the deceased holds differing opinions regarding the future of the home. Having a will in place can provide clarity to adult children regarding their parent’s final wishes in most cases.
The fees charged by real estate agents can reduce your overall return significantly.
Over the past few decades, there has been a significant increase in home prices across Canada. However, it is worth noting that fees for real estate agents have remained unchanged during this period. In Ontario, the standard fee for the seller is five percent, while no fees apply to the buyer.
In February 2023, the average home price in the Greater Toronto Area was $1,095,617. This implies that the average commission paid was $54,780.85. Although the markets have experienced a decline, a loss of $54,000 can still significantly impact a seller facing financial difficulties.
Forsalebyowner.ca can be used by anyone located outside of those areas as well. This online marketplace enables you to sell your home to potential buyers directly. The listing fee is a flat fee that varies depending on the province. The price range for listing options in Ontario and Alberta is between $225 and $549, while in Newfoundland and Labrador, it drops from $149 to $248.
It is important to note that online marketplaces only sometimes guarantee a better deal. A real estate agent can sell your home for a higher price, which could compensate for their commission. However, Del Degan appreciated the simplicity that Bode provided. He also enjoyed the lower fees, which amounted to just one percent for the house sale.
Taxes may still be applicable.
The amount you will pay in taxes when selling a home depends on your situation. It is important to note that the principal residence exemption applies to the home’s value at the time of death. If the house were worth $700,000 at the time of the end and sold a year later for $750,000, capital gains would apply to that extra $50,000. Since most parents would have named a child to inherit the home, that child is responsible for the taxes.
How to minimize taxes for beneficiaries
In an ideal situation, an aging parent will have their will updated and have spoken to their children about their plans. They could then consult a lawyer and accountant to minimize their tax burden. Having all of their affairs in order means the executor will have fewer things to worry about.
