How Canadian Citizens Should Own Florida Property
Note from Michele: This is a guest post by my colleague, Maura S. Curran of The Curran Law Firm, P.A. in Jupiter, Florida (www.TheCurranLawFirm.com), which originally appeared on her blog at: http://thecurranlawfirm.com/blawg/?p=37. This issue is an important one for those of you who own or are thinking of buying a vacation home outside of Canada.
By Maura S. Curran
Are you a Canadian and own real property south of the border? Far south, say in Florida?
If you are like many Canadians, you own a second home in the US, and in particular, the Sunshine State, Florida. Why not? Florida has beautiful winters – no need for parkas and galoshes here, nope, just sunscreen and sunglasses. But do you understand what happens if you die leaving property in the US? What about if you become incapacitated?
There are many questions to consider if you become incapacitated or die while owning real property in Florida when you are not an American citizen. Will there be US federal estate taxes? Do you have to probate? Who is allowed to be the personal representative? Does my estate need an attorney?
Florida law requires anyone dying and owning Florida real property in their own name to file a probate in a Florida Circuit Court so the property can legally transfer to your beneficiary. The probate process can take several months, cost thousands of dollars in fees and costs, and is public record plus it can create unnecessary stress on everyone involved with an international probate.
But did you know that probate is voluntary? You can legally avoid the cost and time and public nature associated with probate. One common way is to have a revocable living trust own your property. When a trust owns the property you avoid probate and your beneficiaries can avoid the hassle, delays, costs and stress of having not only a probate, but an international probate.
Do not be confused however, a trust alone will not avoid federal US estate taxes. Depending on the size of your assets, your estate may be subject to federal estate taxes. Currently there are no federal estate taxes, however, starting in 2011 depending on the size of your estate, your estate could be taxed at 55% ! So if you own property exceeding $1 million you need advanced estate planning in order to minimize, if not avoid, federal estate taxes.
Want yet another reason to have the property held in a trust? Should you become incapacitated, there is no need to have a Florida probate court approve the guardianship of the owner – another time consuming, stressful court procedure. Rather, if you are the Trustee, the successor trustee will assume your duties – much quicker and easier process to change a trustee than to get court approval for a guardianship.
If you are a Canadian citizen and own or are considering purchasing property in Florida, call my office and ask to have a consultation regarding your Florida home or visit my online virtual office at www.AbacoaVLO.com – serving all of Florida!
The Dirty Little Secret About Laundry
Yes, that pun was intended.
We all do it. You wash the laundry. You dry the laundry. You fold the laundry. You put the laundry in baskets. But many, many times, that is where the laundry stays. In the baskets. It never gets put away.
Apparently, laundry baskets are not meant for storage. The baskets are merely to be used to transport the folded laundry from the laundry room (or wherever you fold) to the room of the owner of the clothes and then the clothes are supposed to be put away.
It’s the putting away that becomes the problem.
Why?
Well, because you can get away with not putting it away. The clothes are clean and if someone needs them, they are right there in the basket.
Time management gurus would tell you not to put off anything that takes less than a few minutes to do.
They are right.
What happens with the laundry? You do a load and then fold it and say “oh, I will wait until the next load is done to put it all away”. And then the next, and the next, and then there is a ton of laundry to put away and it just never seems to get done.
So yes, it would be easier and more time efficient to put away the laundry as it is folded.
But I’m not going to tell you to do that. Do whatever works for you.
I’m no time management guru. I understand that some times, we have to let things slide.
Like this blog. Oops. It has been a while since I posted something. What have I been doing this whole time? Well, not putting away my laundry for one.
I’ve been on holidays a couple of weeks and trying to enjoy as much of the summer as I can. So I let some things slide.
But now I feel like my batteries are recharged and I’m ready to take on the world (ok, not really the world, but you get the idea). I’m actually looking forward to the routine that September will bring, but I’m not quite wishing away the summer yet.
So you can once again look forward to my regular posts each week. If you have any topics you would like me to address, please send me a message and let me know what you are interested in hearing.
Enjoy the rest of your summer and “see” you next week (or sooner!).
Starting A Business? To Incorporate or Not …
Opening your own business can be a dream come true for many people. You are excited, you are passionate, you want to just dive right in and make it happen.
But let’s put on the brakes for a minute …
First, you need to consider how you should structure your business from a legal standpoint. While starting out as a sole proprietorship and postponing any formal corporate structure may save initial start up costs, if you have a business that could be sued for any reason (and who doesn’t?), you may want to spend a little up front to save yourself from financial ruin in the event of a problem.
Incorporating your business can provide some protection to you personally in the event of a lawsuit against your business.
Here are just a few reasons you should consider incorporating:
1. Limitation of liability: A corporation is a separate legal entity from you personally. Any debts incurred or lawsuits brought are against the company, not the owner (unless you have personally guaranteed the business debts). Forming a business entity separate from you adds a layer of protection between your personal assets and potential lawsuits.
2. Attracting investment: Trying to get financing for a small business as a sole proprietorship or partnership is difficult. If you are going to seek out a line of credit or a business loan of any type, you may need to have a separate business entity established. If you are incorporated, you can offer non-voting shares to investors so they can share in the profits but you still maintain control over the corporation.
3. Taxes: Another considerable benefit to establishing a separate business entity is the taxation of the company. Depending on the volume of your business, incorporation may offer you some tax savings opportunities. Also, incorporated businesses tend to be audited less than unincorporated businesses.
4. Business Growth: Are you treating your business like a business? If not, you are very likely not growing the business as well as you could – less clients, less income, less impact. When you treat your business like a real business (and incorporating it is the first step), you will see your income grow.
5. Begin With The End In Mind: If or when you decide to sell your business, it will have to be valued in order to arrive at a selling price. You can’t just pull a number out of thin air. If the business is not separate from you, it will be extremely difficult to sell. While starting your own business entity may be a bit more costly and time consuming in the beginning than just putting up a sign and opening up shop, it’s the key first step to having a real business instead of just creating another job for yourself -one that doesn’t provide any vacation days or sick time.
Buying A Home: Why Do I Need A Lawyer And What Does My Lawyer Do?
In Ontario, a lawyer is needed to register any transfer of land, and two separate lawyers are needed to represent the buyer and seller.
First, I speak with clients about title insurance, which is a great product, but isn’t for every home buyer, so I conduct an overview of whether it’s right for your property at the outset.
I also speak with clients about how they will “take” title to their property. Althought most couples take title together as joint tenants, meaning on the death of one the survivor becomes the owner, there may be reasons in your situation why that isn’t a good idea. We can review that together.
When you’re getting a mortgage, I am the lawyer for you and the bank. The bank will send specific instructions on searches they need and how they want the mortgage registered, which we’ll complete before closing.
As the lawyer for both you and the bank, I’ll give an opinion to both of you after closing. I’ll conduct searches relating to the property you’re buying to ensure there’s nothing affecting the property that will cloud your interest. If an issue comes up, we ask the seller to fix it. If they refuse, I’ll speak with you about the situation, outlining the problem and its impact on you, giving you both the legal and practical sides of the problem so you can decide how to proceed.
The seller must tell us the exact purchase price for the property. Costs such as taxes, water and fuel oil are adjusted on the Statement of Adjustments. You’re also credited for any deposit that you made. So, the amount you have to pay for your home will vary a bit depending on what expenses the seller has pre-paid. We adjust everything on the day of closing.
Once we know the amount you’ll give the seller and what we’re getting from your bank, I’ll let you know how much you’ll need to complete the transaction. This amount is usually what you’d budgeted as your down payment when you obtained your mortgage approval.
On closing day, I exchange documents with the seller, and give them the funds to purchase the property and then register the documents (i.e. the Deed and the Mortgage). Once things are registered, I do the best part of my job – give you the keys to your new home!
Cornwall lawyer Michele R.J. Allinotte, founder of Allinotte Law Office focuses on guiding families and small business owners to make the best legal and financial decisions over their lifetime. For more information, please visit www.yourcornwalllawyer.com.
This post originally appeared on the Seaway News online: http://www.cornwallseawaynews.com/Business/Personal-finance/2010-05-18/article-1118151/Buying-a-Home:-Why-Do-I-Need-a-Lawyer-and-What-Does-My-Lawyer-Do%3F/1.
Are You Planning On Getting Hit By A Bus?
As you know, I do estate planning, which means I talk to clients about what might happen should they die or become incapacitated.
For some reason, the phrase “So, if I get hit by a bus tomorrow …” tends to come up quite often during my conversations with clients. Realistically speaking, many of my clients will have no need for their estate planning documents until they are well into their old age, so some of the things we plan for will never actually happen.
But we do plan for them because, you never know, you just might get hit by a bus some day. And if you did, what would happen?
I’ve been thinking about this for a few days from a few different angles.
The first is that my husband was at a work meeting and one of the topics was planning for succession at his place of work. The complaint was that there was not formal training to mentor those employees who might eventually move up the ladder, so to speak.
When my husband and I talked about that, I said that yes, there needs to be a plan for when people retire, but also, you need to think about people getting hit by a bus (see, it comes up often!). What would happen if an employee/supervisor/manager didn’t show up for work one day? Would people know what he was working on? Could things be picked up where they were left off? Is there essential information about the work place that only that individual knows? These are all things that every work place needs to consider.
See, the thing is, I actually know someone who got hit by a bus. When I worked in Ottawa, it happened. One of the IT employees was walking to work and was struck. He was conscious and so he was able to make a phone call. His first phone call was not to his family, but to his supervisor at work! Thankfully he was ok, but what would have happened if he wasn’t?
Another reason I have been thinking about this is because I knew I was attending a meeting last week and the presentation topic was succession planning for business owners.
It was a great presentation on a topic so many business owners tend to ignore or delay their decision making (sometimes until it is too late). The statistics back me up on this one – according to an October 2006 study by the Canadian Federation of Independent Businesses, over 65% of small and medium sized business owners were intending to retire within 10 years. Of all business owners surveyed, only 10% had a formal plan to exit the business. Some had an informal plan, but over 50% of business owners had no plan at all!
Thinking about your death isn’t exactly fun. But we all have a 100% chance of dying. Hopefully, we won’t get hit by a bus tomorrow (or any day) but it is much easier to plan for it now than to leave our families, our work places and our businesses to pick up the pieces if we don’t have a plan.
The #1 Way To Get Your Wills Done – Fast!
Life is busy and getting your affairs in order by completing Wills, Powers of Attorney, and other estate planning documents (if necessary) can be one of those items on the eternal “to do” list that often never gets done.
But I have the secret to getting your Will done – fast!
What’s my secret?
Plan a vacation.
Nothing makes people more inclined to get things in order than a far away vacation looming in the not so distant future.
Summer time brings endless opportunities for travel – camping, family visits, dream vacations, second honeymoons – many vacations will be had in the next few months.
So we prepare and make lists and get things done and then worry that we left the stove on or the garage door open even after we make our departure.
But what about it something happens to you while you are away? What would happen to your children, to your spouse, to your assets?
Statistics on who does and does not have a Will are hard to come by, but it is estimated that less than half of all adults have a Will or any estate planning documents.
I often get calls from people who want to come in and get their documents completed before their vacation. That is great and I’m glad to help, but if your vacation starts in a couple of days, it may be too late.
So, in addition to getting your passport renewed or buying a new suitcase, here are a couple of other things you need to do before going on vacation this summer:
- Complete your Will. This is essential for parents, as a Will is the only way in Ontario you can legally name who will care for your children in the event you and their other parent pass away;
- Complete your Powers of Attorney for Property and for Personal Care so your family knows who is to make decisions if you can’t make them yourself; and,
- Make sure that you have the proper financial support in place so that your family and/or your business will be taken care of if something happens to you. Most of the time this comes in the form of life insurance, but this may not be the case, depending on your personal situation.
Get all these things done BEFORE heading out on your vacation so you can have peace of mind that, no matter what happens, things are taken care of.
And believe me, you actually DO feel better once you get this planning done. I know because I ask my clients after they sign their documents (which hopefully is not on the same day they leave for a vacation – although that has happened!).
I must credit a colleague of mine for the inspiration for this article. The original article by Michael Licterman appears here http://www.lichtermanlaw.com/index.php/vacation-estate-planning/.
If I Don’t Own Anything, Why Do I Need A Will?
One of the most frequent questions people as me is “Do I need a will?”. When I say yes, everyone over the age of 18 who is competent to make a will should do so, the reply is often, “Well, I don’t own anything.”
Firstly, if you have children, even if you think you don’t own anything, you absolutely need to make a will. A will is the only way in Ontario that you can appoint who should take care of your children in the event that both you and their other parent were to die. I could go on about more reasons why parents need to make a will, but that is the most basic and essential reason.
Secondly, are you sure you don’t actually own anything? Do you have a bank account? Are you entitled to receive recurring income from employment or other sources? Do you own life insurance? Do you have any sort of pension, RRSPs, RESPs, no matter how small? Do you own any investments, GICs, mutual funds, Savings Bonds, etc? Do you own a car, a motorcycle or other personal property? Do you rent an apartment? Is there furniture, a TV, stereo equipment, et cetera in your apartment or your residence? If you answered yes to even one of these questions, you own something.
When you own something, that “stuff” needs to go somewhere if you die. Your will can say who gets your property and who deals with distributing your property (and dealing with your burial and other matters) after you die.
Also, if you rent an apartment or a house, someone will need to clear that out and terminate your lease with the landlord.
If you don’t have anything in place when you die, do you know who would step forward to make arrangements and deal with the items you left behind? Do you know if they would be able to deal with your items without a will? Do you know if they would have enough money to make funeral arrangements? Do you know if they would need to apply to the court to administer your estate (which could end up costing more than the value of your estate’s assets)?
These are all things that a lawyer can talk to you about so you can figure out what it is that you want to happen after your death and make a plan so your loved ones know what to do.
What is it that inspires me to get things done?
I do really enjoy writing this blog every week. It gives me a chance to share information and sometimes to be creative and a little more “outside of the box” than I can, say, writing a legal opinion.
It is Monday night as I sit down to write this and I have to say, when I sat down, I thought “I got nothin’.” I was in training all day and I’m feeling a little drained.
So what do I do? It would be really easy for me not to send anything out this week.
But I thought about it, and I have made a commitment to myself that I would write and send this note/blog post EVERY WEEK. Not just when I had something inspiring (or at least something interesting) to say. That meant no getting out of it just because I didn’t feel like it.
‘Cause let’s face it. We are all friends here. There are a lot of things that we all do every day that we don’t like. Things that bore us, tick us off, things that are scary and hard and that would be really easy to not do if we didn’t just do them for whatever reason it is that we have to do them. Some times the reason we do them is out of obligation. Other times it is because we have set goals for ourselves.
And aside from the Nike slogan, what is it that makes us get things done?
Well for me, how I feel about a lot of things I do is explained partly by Elizabeth Gilbert, author of Eat, Pray, Love in her TED talk about nurturing creativity. You can see the whole talk herehttp://www.ted.com/talks/lang/eng/elizabeth_gilbert_on_genius.html.
It takes a while for her to get to the point that speaks to me, but stay with it – it is worth the wait.
Elizabeth Gilbert talks about artists and how throughout history the way artists have been treated has changed. At one time, an artist was viewed as having a “genius” that was separate from themselves. If their genius helped them create a work of art, then it was the work of their genius. If their genius didn’t work it’s “magic”, well, that wasn’t entirely the artists fault. This notion of creativity helped prevent artists from becoming too narcissistic and self involved and also kept them from being tormented by the creative process.
Now, an artist’s creativity is viewed as being in them and if their work is great, they are great. If their work is not so great well, …. you get the picture.
The argument is that this change is a mistake. We should still think that one’s genius is outside of us, and that all of us “have” a genius who may or may not decide to show up and help us create something magical and special.
And what does this have to do with a thirty-something lawyer?
Towards the end of her speech, Elizabeth talks about just showing up and doing your job, whatever that may be.
While I’m not a dancer or an artist, the message did move me, and I do feel that way. There are lots of things we don’t want to do, or are afraid to do, or might be hard, but these things are important to us, or to others, or to our success. When you set goals for yourself, it is sometimes hard to get there. But if you do nothing, you will never achieve what you want. You may not reach your goals, depending on how things happen, but you have to try.
So, don’t be afraid, don’t freak out. Just show up. Do your job. Make the effort. Do what it is that you have to do. Push through the hard parts. The worst that will actually happen is not as bad as you think. The best that can happen is that you do something or be a part of something great. But to do nothing, well, then you don’t even have the chance at greatness.
Happy Mother’s Day!
“A mother is someone who dreams great dreams for you, but then she lets you chase the dreams you have for yourself and loves you just the same.” Author Unknown
Happy Mother’s Day to all mothers and all women who take care of children and families.
I hope you take some time to celebrate all the moms in your life this weekend.
If you are a mom, my wish for you is some time with your family.
4 Simple Steps For Dealing With Any Emergency
Imagine your child or spouse is injured accidentally at home – would you know what to do?
This past weekend, clients of mine (who are also my Facebook friends) posted about their son being injured in an accident. He will be ok, but my heart was instantly in my throat, thinking about the family and about the times I have had to rush my children to the hospital or call an ambulance (for my child or someone else). I can count the number of times this has happened on one hand, but I remember each situation vividly.
Just so we are all clear, I am horrible in a crisis when it involves my own family. I am a bumbling mess of tears. If it were your crisis, I would be calm, cool and collected and I would know exactly what to do. I’m going to need to take some of my own advice here.
So, do you know what you need to do in an emergency?
First of all, if you are calling 911 and emergency personnel needs to get to your house, can you give directions? What side of the street is your house on? Are the numbers visible? I have lived in rural areas for most of my adult life and it is not necessarily easy to get to where I have lived.
I remember saying one time when I called an ambulance because my daughter had a febrile seizure and had turned blue, “well, I think there is a tree in front of the sign where you turn onto our street, but it is the first right.” Um, not necessarily helpful but at least I had it together enough to remember that. Being able to give detailed directions on how to locate your house can save valuable time when emergency personnel are trying to get to you.
Think about how to get to your house and how to give accurate instructions, and make sure you know the answers. Also, if you ever have a baby sitter or house sitter, make sure they know your address and, ideally, proper instructions on how to get there.
Also, if you call 911 and are giving first aid to someone, make sure the door is unlocked so emergency personnel can get in. If extra people are around, have them wait at the end of the driveway (or road) to signal emergency vehicles.
If your spouse, partner or child had to go to the hospital, would you be able to tell medical personnel what medications they are on and in what dosage, who their family doctor is, what medical conditions they have, any allergies, and what surgeries they have had? Sounds easy enough, but I have been asked all of those questions and have not known the exact answer for all of them.
And what if you were injured? Do the people who would be caring for you know the answers to those questions about you? What about the people who might care for your children if something happens to you? Would they know the answers? At Allinotte Law Office, as part of my process when doing estate planning for parents, we prepare a document with parents that contains all this important information for the potential caregivers of their child(ren).
This isn’t just about people either. If your pet had an emergency, you would need to know when they were born, what shots they have had and when, and the date of any surgeries they have had.
Some things in general to remember in an emergency:
1. Take deep breaths to calm down and make sure you are getting enough oxygen. If you can’t calm down, get help immediately.
2. 2. Figure out what you need to do and do it. Take a moment to look at the options and make a plan and then do it.
3. 3. Call 911 or your local emergency as soon as you have done what you can do. If you are not alone, someone should call the emergency number immediately, before you go through items 1 and 2.
4. 4. Relax. There is not much else you can do after you have called 911. Keep breathing deeply so you don’t freak out.
Of course, emergency first aid training will always be helpful in an emergency situation. Consider getting some basic first aid and CPR training to help be more prepared.
