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!

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.

Congratulations to the Patio Set Winner!

Mr. & Mrs. J. McNaughton are the winners of this years Cornwall Chamber of Commerce Spring Home  & Leisure show prize for Exit Realty Seaway. The patio set was donated byAllinotte Law Office. In the photo, starting from back left, Luc Poirier, Hilary Beaty, both of Exit Realty Seaway, Michele Allinotte of Allinotte Law Office and Penny Rudderham of Exit Realty Seaway. Enjoy!