The issue we have is that the house was registered solely in my father’s name. The property tax bills are in the name “estate of….” I realized the ownership problem only recently when my mother asked me to take over the management of her finances and gave me power of attorney.
Apparently, Mom did make one attempt to have the house changed to her name by visiting Service New Brunswick, but nothing seemed to become of this. She said she gave them Dad’s will so now we don’t have a copy of it.
My question is whether we should try to straighten this out now, and get the house registered in Mom’s name, or just wait and deal with this upon her passing?
A. When real estate is not held jointly, and someone dies, it must generally pass through their estate. If the deceased had a will, the will would dictate the distribution of their estate to beneficiaries (presumably your mother, in your father’s case). If someone dies without a will—also known as dying intestate—each province has rules about which family members receive which percentage of the estate.
Each province also has probate, estate administration tax, or other administrative fees payable as part of the estate distribution process. In New Brunswick, an estate valued at over $20,000 has probate fees payable at a rate of 0.5% ($5 per $1,000, or $500 per $100,000).
From an income tax perspective, a capital asset like real estate can generally pass on a tax-deferred basis to a surviving spouse if the asset is held jointly or is left to the spouse in the will of the deceased. That said, it sounds like there were likely no tax implications on your father’s death in 2010. If your parents did not own another home, the house would have likely qualified as your father’s tax-free principal residence on his final tax return. It will likely qualify as your mother’s principal residence on her death as well, with no tax payable.
It complicates your situation that your mother no longer has a copy of your father’s will, Barb. In New Brunswick, if someone dies intestate, the Devolution of Estates Act determines the succession. In a case where someone leaves a surviving spouse and children, all marital property goes to the surviving spouse, with any remaining property divided two-thirds to the widow and one-third to the children.
Marital property generally includes property acquired before or after marriage, and owned by one or both spouses, and ordinarily used or enjoyed for shelter, transportation, household, educational, recreational, social or aesthetic purposes by both spouses or one or more of their children while the spouses were cohabiting.