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!
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.
Do you want to deal with this now or let your family deal with it later?
The title of this article came from my childhood clumsiness. I was known for spilling my drink when my family went out for supper. It got to the point that my father would ask me at the start of a meal, “Do you want to spill your drink now, or wait until later on?” He knew I would spill it at some point, so why not get it over with, he joked.
I was reminded of this when someone emailed me recently and asked me how they could convince a loved one that they need to do a Will. I explained to the person what my normal process is for estate planning clients. When I meet with clients, I go through what the law provides for in the absence of a Will. Most people will choose to do something other than what the government has chosen for them.
But the more I thought about the request, the more I realized that the legal reasons why people need to do an estate plan are not the reasons that are going to make them “just do it”. Doing an estate plan is admitting that you might actually die, and for some people, this is hard to deal with. Death and dying are difficult things to talk about, especially with a stranger, and especially a stranger who happens to be a lawyer. Although I feel that I am pretty approachable and accessible, I do understand that going to see a lawyer for many people can be intimidating.
So, we’ve established that talking about death and dying with a stranger, who is a lawyer, is intimidating. Now, let’s look at how an individual’s family would feel dealing with this situation after the passing of a loved one
The family will be shaken by the death of a loved one. In the immediate after math, and possibly even before death, there would be decisions that would have to be made.
If the situation called for the possibility of organ donations or required someone to make financial or personal care decisions for their family member, without an estate plan the family would not know what to do.
After the death, one of the first things that needs to be done is to make the funeral arrangements. In the absence of an estate plan, the family would not know what to do. How would they know what their loved ones wishes were? All these decisions would need to be made by the family without the benefit of knowing what their family member would have wanted.
The next step is to look at how the family is going to deal with the loved ones assets. The family would speak with the bank and any professional advisors that the deceased might have had. One of the first calls is often to a lawyer. If the deceased did not have an estate plan, the family will call a lawyer that someone knows perhaps or they could just pick a name out of a phone book.
So, a family in shock and reeling from the death of a loved one must also be put in the position of talking about death and dying with a stranger.
But it doesn’t have to be this way.
We all could give a gift to our family members by having an estate plan. Only you can do this for your family, because once you are gone, the decisions become theirs to make.
When doing an estate plan at Allinotte Law Office, I make the process as painless as possible. I deal with clients in a caring and compassionate manner and help make the decisions that are best for them and their family and, if applicable, for their business. I invite my clients to bring in their family members to meet me so they know who I am and who to contact in the event that their loved one passes. Because it is not possible to meet everyone in person, I do provide letters to the possible executors of an individual’s estate as well as the possible guardians letting them know what their duties are and how to contact me. Although they have not met me in person, I am no longer a stranger.
But no matter what my process is, I cannot force someone to come in to my office. You need to choose to make that first step. The only thing I can tell you with certainty is that at some point, the issues surrounding your death or incapacity will need to be dealt with.
So I ask you this: Do you want to deal with this now or let your family deal with it later?
The baby that came with instructions
A couple of weekends ago, I had the pleasure of babysitting my little 5 1/2 month old nephew. My parents are away and my sister-in-law’s family does not live in the area, so I was on duty so my brother and his partner could go to a comedy act in Ottawa.
My kids and I were excited to have the chance to spend some time with him, but I was a bit late getting home due to a work issue. When I got home, my nephew had already been there with my husband for about 45 minutes. He was getting a bit fussy, so I scooped him up and tried to soothe him and I ultimately ended up putting him down for what I thought was a quick nap. I was wrong – he slept the entire night! There was no play time at all!
Because I had come home in such a rush, it wasn’t until after he was asleep that I saw the instructions. My sister-in-law is very organized, and had a full sheet of printed instructions about his routine, eating habits, how to change his diaper – it was all there. At the end of the instructions, she let me know where all their important documents were stored in their house, presumably if something were to happen to her and my brother. She wrote “you’ve prepared me well!”.
But there was just one problem. I had no legal authority to keep and care for my nephew in the event that my brother and his partner didn’t come home from the comedy show. If that little guy’s parents had never showed up, I would have had to call the police. Without any documentation appointing me as his guardian, I would not have the legal authority to take care of him until his custody had been decided. There is a very real possibility that he would have to be placed in foster care, even if only temporarily. I don’t know about you, but I wouldn’t want a child I love to spend one minute in foster care when he could be with people who love him.
Unless they have seen another lawyer recently, I know my brother and his partner don’t have an up to date estate plan to deal with their blended family situation. I think my brother might have a will, but I’m pretty sure what is in there no longer applies. I don’t know if my sister-in-law has a will. Yes, just like the cobbler’s children have no shoes, my family members do not have their estate planning documents in order.
I asked my sister-in-law for her permission to write this blog about her. She will read this, so I know she will be taking steps in the very near future to make sure that her family is protected by updating her estate plan and doing a Kid’s Protection Plan to appoint long term and short term guardians.
Do you know what would happen to your children if you and your spouse or partner didn’t come home from “date night”? If you are like my sister-in-law and haven’t appointed long term and short term guardians for your children, call my Client Services Director, Erin McEvoy at 613-933-7720 or click here to set up an appointment for a Family Wealth Planning Session with me.
As a special advance bonus to my blog readers, if you are a parent who owns a home in the Cornwall area and you make an appointment for a Family Wealth Planning Session between now and the end of February, I will give you a $75.00 gift certificate to a local restaurant of your choice. But you have to mention this blog post to get the gift certificate!
I only have a limited amount of spots available and I will soon be opening up this offer to the general public. Once my appointments are all filled, the gift certificate offer will end, so act now to secure your appointment (and your gift certificate!).
What is in your glove compartment?
Last Wednesday night, my husband had picked up our children so I was enjoying a rare quiet drive home by myself when I noticed a police cruiser following me. I made a mental note not to pull anything out of my purse, lest the officer think I was violating Ontario’s new anti-cellphone law. Other than that, I checked my speed and distance and, knowing that I wasn’t doing anything wrong, I settled in to my seat.
And then the lights went on. I pulled over and looked for my license and ownership, wondering why the heck I was pulled over. The officer’s introduction was “Your sticker is expired. It says December 2009.”. I explained that would be my husband’s job and that I was sure he had renewed the sticker, but maybe just hadn’t put the new one on. He asked for my ownership and insurance so he could run the vehicle.
And this is where it gets embarrassing. Do you think I could find the documents I needed? I rifled through the glove compartment, throwing Tim Horton’s napkins and ketchup packets all over the place. When the contents had all been dumped in the front seat and on the floor, I found the ownership for the vehicle. Then the officer asked for a current insurance certificate, since the one I gave him was from 2006. I didn’t even own the car in 2006, how did that get in there? I rifled through all the stuff I had emptied out of the glove compartment, looking at all the little pink insurance slips that my husband must have shoved in there as we received each policy renewal. I finally found the current one and gave it to the officer.
When all was said and done, the officer found that yes, the plates had been renewed. He cautioned me to put on the current sticker and I was on my way.
You are probably asking right now what is the point of this whole story, right? Well, the point is that although I have no burning desire to organize the contents of my glove compartment, it is something that needs to be done. If I wouldn’t have been able to find the documents the officer needed, I would have gotten a ticket (or two), for no other reason than not being organized and not being prepared.
It is the same thing with doing an estate plan. No one really wants to come and see me to talk about what will happen after they die, but it is something that needs to be done. Part of the process I bring clients through is a review of their financial picture which requires them to gather and organize their information. I do this using our Legal Needs Questionnaire and by providing clients with the Peace of Mind Personal Inventory, which I have previously discussed here.
But now I’m going even further. I will soon be offering a Whole Family Wealth Audit, where you can meet with me to get your legal and financial affairs and documents organized once and for all. You will walk away from the meeting with a FREE Family Financial Freedom Notebook with all of your important documents and information stored inside.
Watch for more information, but if you are interested in attending a complimentary Whole Family Wealth Audit, or if you would like a copy of our Peace of Mind Personal Inventory, call our office at 613-933-7720 to speak with Erin, the Client Services Director for Allinotte Law Office.
What’s in Your Wallet?
What’s in Your Wallet?
By Alexis Martin Neely
Take a quick inventory of your wallet. How much of your “wealth” is in there?
If you’re like most people, you have a few credit cards, a small amount of cash and your driver’s license.
But what about wealth as it relates to your kids, your pets and keeping everyone in your family safe and secure if you are in an accident? Is that covered in your wallet? It should be.
This isn’t a trick question and the solution to protecting your “wealth” as it relates to your loved ones is so much easier than you think.
Essentially, you must carry a card in your wallet that gives medical or emergency personnel instructions about the children, pets or other dependents waiting for you at home and who to call in the event of an emergency in which you cannot communicate.
Let me give you an example so this is crystal clear.
You go out to run errands and leave your children at home with their teenage babysitter. On the way home, there’s a car accident and you cannot communicate. Based on your wallet, the police have just enough information to ID you, but they have no idea you left your little ones at home with a babysitter and their father is out-of-town on business.
After a few hours, the babysitter begins to worry. She calls her own mother for advice—who suggests calling the police because you haven’t come home yet. The police arrive and confirm that yes, you’ve been in an accident and asks the babysitter if she knows anyone in your family who could come be with the children.
But, your babysitter only knows your neighbors. And the authorities won’t leave your children with the neighbors because there isn’t any written authorization from you to do so. Instead, they call in social services to figure out what to do.
By now your kids are very scared, upset and have been put through hours of unnecessary worry because there weren’t proper directions left for them to be cared for by someone you know and trust in the event of an emergency. Is this what would happen if you were in an accident?
Or maybe you don’t have children at home, but you do have pets that you consider your babies. If you’re in an accident, are there clear instructions in your wallet that describe your pets and who should care for them in case of an emergency? If not and you are in an accident, your pets could remain alone and uncared for because no one knows they are there waiting for you. All of this is so easy to prevent.
Take a few minutes and put a card in your wallet that tells emergency personnel how to care for your family members should something happen to you. It doesn’t need to be fancy—but it should be just enough to protect your most important and valuable “wealth” in the event of an unexpected emergency so strangers are not making decisions on your behalf.
And don’t forget that we have a great and affordable resource if you need help putting a “legal bubble” around your loved ones. For more information or to order the kit, go to http://www.kidsprotectionplan.com.
Written by Alexis Martin Neely, author, speaker, Personal Family Lawyer, Family Financial & Legal Expert for Better TV and MOM. Alexis makes it super easy for your family to talk about and plan for sticky subjects like money, death and taxes. Subscribe to Alexis’ free online magazine “Family Wealth Secrets” at FamilyWealthMatters.com.
How much does a will cost?
One of the most common questions asked in phone calls to law offices is how much the average will costs. This is the #1 question I field and also one of the most challenging to answer. A Will is not (or at least should not be!) a commodity, and the process of creating an estate plan should not be akin to purchasing a television off a store shelf.
There are very inexpensive Will-drafting software packages for sale in office supply and box stores (about $30-50), there are relatively inexpensive online Will drafting services (about $100), there are are other fresh out-of-law-school newbies and many general practice lawyers who will be happy to fill in some form documents and churn out a run-of-the-mill, bare bones, basic will for around anywhere from $200 to $500 for a couple.
The trouble with all of these is that if you have any special circumstances in your life whatsoever or need any professional guidance, these will not serve your interests. There are other legal instruments that are often more critically important to people than Wills, but if all they think they need is a simple will and they don’t get proper guidance, they never learn that. Furthermore, if you go through the trouble and don’t properly execute the legal instruments, they aren’t worth the paper on which you print them. With these options there is also little to no legal counseling to help you make the best decisions to accomplish your individual goals and objectives and spare you and your loved ones the headaches and hassles of a failed plan.
An estate plan needs to be a living breathing thing that gets reevaluated periodically and regularly as your life’s circumstances change to ensure that it is still accomplishing what you want, protecting what’s most important to you, and doesn’t become a worthless pile of paper. I practice estate planning very differently from most of the other attorneys around here. I enjoy developing meaningful, lifetime relationships with my clients and provide them an exceptional level of personalized service and professional counseling, all in a very relaxed and friendly way.
I charge neither the least nor the most expensive rates for my estate planning legal services. The temptation for all of us is strong to try to save money by shopping around for the best deal. It is of critical importance, however, to be able to compare apples to apples. I only charge within a set range of flat rate fees from which my clients select once we’ve looked at what they have, what they want to accomplish, and what is most important to them. I can accept credit card payments, set up payment plans, and help make it as affordable as possible. What I do not want to be is, as someone recently put it, the Walmart of Wills. “I don’t want to sell anything bought or processed, or buy anything sold or processed.” (John Cusack/Say Anything, anyone? Clearly I’m dating myself here.) But seriously, I have no desire to mass-produce shoddy documents at discounted prices without caring about whether that is really what my clients need.
I do want to provide a much higher level of personal service in an ongoing working relationship as my clients’ trusted family advisor. I’ve developed a great professional network of financial advisors and insurance professionals to be able to work as a team to ensure that my clients are taken care of in the best way possible. I have relationships with local real estate agents, bankers, mortgage professionals, and lawyers who practice in other areas of the law, including family and criminal law. It is my pleasure to refer my clients to those other professionals whom I personally know, trust, and to whom I have and would turn again for my family’s needs.
If this sounds like the sort of legal service you want, please call Allinotte Law Office at (613) 933-7720.
Adapted from an article by Danielle G. Van Ess, see the original at http://dgvelaw.blogspot.com/2009/08/how-much-does-will-cost.html.
If You Really Can’t Decide on Who to Name as Guardians, Here’s What to Do
There are a lot of parents out there who have not named
guardians for their kids because they really can’t decide.
You might be one of them.
But, here’s the thing. If you don’t decide and something happens to you, the decision gets made by a Judge.
You don’t want that, do you?
Here’s a few things that may help you decide:
1. Think through on a practical, realistic and non-emotional (to the extent you can) level who would come forward to raise your kids if you were in an accident.
2. Is that who you would want to raise your kids?
3. If not, who would be better than that person or those people?
4. If more than one person would come forward, who
would a Judge pick if the Judge had to decide between all
the people who would come forward?
Bottom line?
If you don’t decide, a Judge will. Even your worst choice would be better than that, right?
The free KidsProtectionPlan.com website will walk you through the entire process of choosing the right guardians for your kids and then legally document your decisions.
If not knowing who you want to name has been holding you back, don’t let it hold you back a second longer.
Do it now. It’s Free. It’s Easy. No Excuses.
By Alexis Martin Neely. Reprinted with permission from www.familywealthmatters.com
