Looking for advice on selling mother-in-laws house.

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rfis61
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Looking for advice on selling mother-in-laws house.

Post by rfis61 »

My wife and I are in the process of getting information prior to seeing a tax accountant with regards to the sale of my MIL's house.

Background info:
- Father in law passed away from brain cancer a month ago. Mother-in-law has onset dementia and will require living in a care home in the near future.
- My wife has been on leave from work for the last 9 months to take care of her parents
- Mom and Dad's house is in Vancouver and is their primary residence.
- My wife and I are also in Vancouver and have our own house\primary residence.

Reading a bit about transfering a house to a child it is not the way to go due to tax issues so if I understand correctly it is best to keep in it MIL's name.

We'd like proceeds of the house to be invested and have the interest\dividends cover the cost of the care home for Mom. Any advice or recommendations for a financial planner in the Vancouver area would be appreciated.

My wife is an only child so for last 9 months has been been the primary care giver to both parents and it's taking a toll on her. We just want to keep things as simple as possible and make sure Mom gets the care she needs.

Thanks for listening.
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AltaRed
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Re: Looking for advice on selling mother-in-laws house.

Post by AltaRed »

Welcome to FWF and you have my empathy. I've seen the toll caregiving of parents takes on a child (children) a number of times. I agree with keeping things simple. Besides the placement of MIL in a care facility, you have 2 separate but linked issues (files) to deal with and you have not provided much info to go on.

Firstly is your father's FIL's estate and you don't say who is executor but I will presume you or your wife is. Nor do you say who the beneficiary is, but I will presume your wife's mother. If you/wife are not 'up' to taking point on the processing of FIL's will, then hire a lawyer to pursue probate, and a tax accountant to take care of FIL's final T1 and T3 (if any) tax returns for next April.

Talk to the lawyer first about title of the house being changed to MIL alone and get that done. It may not be possible to do that before probate has been processed (real property in BC may have twists in it that JTWROS capital property does not). Once title is MIL's name alone, then it can listed for sale via presumably you (or your wife's) POA authority. Again talk to a lawyer sooner rather than later about the sequence.

Secondly, take care of existing investments. If there are any bank and investment accounts (you have not said), keep them no more than 50/50 equity/fixed income for the time being. Perhaps more FI than equity.

It is way too early to talk about what to do with the house proceeds, but they should be kept quite simple to manage, either self-manage, or with the help of a fee for service planner, or a % of AUM manager such as Mawer or Steadyhand. A TD e-series index mutual fund acount (of 2-3 mutual funds) may be all that is required to generate the income necessary.

Note: One should not get hung up on just using the income from investments to pay for MIL's care. Look up on our own finiki for Variable Percentage Method type of withdrawals. It would help to know MIL's age to estimate how much life she might have left.

Edited: Corrected relationship error
Last edited by AltaRed on 20 Jun 2017 18:40, edited 1 time in total.
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twa2w
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Re: Looking for advice on selling mother-in-laws house.

Post by twa2w »

Good advice from AR. in regards to the property you need a lawyer more than an accountant. Although for the rest of the estate and for tax returns an accountant is likely needed. Let these people do the work they do best to take stress off of yourself and spouse.

Also check with lawyer re POA being registered at land titles office. I don't recall the rules for BC, but in some provinces a POA must be registered at land titles office to be used in real estate transactions.

If property is joint with right of survivorship, it should be able to be transferred to the survivor separate from probate. The property can be listed for sale now if you wish, but it will have to include a caveat in the listing that closing is subject to estate being settled.

Ensure house insurance is in place and being paid. Often overlooked/ forgotten by seniors in their last years.
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Re: Looking for advice on selling mother-in-laws house.

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twa2w wrote: 20 Jun 2017 18:33 Also check with lawyer re POA being registered at land titles office. I don't recall the rules for BC, but in some provinces a POA must be registered at land titles office to be used in real estate transactions.

If property is joint with right of survivorship, it should be able to be transferred to the survivor separate from probate. The property can be listed for sale now if you wish, but it will have to include a caveat in the listing that closing is subject to estate being settled.
Re: POA part above. this link http://www.rew.ca/news/buying-and-selli ... -1.1341968 says the POA must be registered and in a form acceptable to Land Titles Office. The link is 2014 so things may have changed. Talk to your lawyer.

Per joint tenancy on real property, this link http://beaconlaw.ca/joint-tenancy-as-an ... -and-cons/ says a property with joint tenancy (not tenants in common) does not have to go through probate. If that is still correct, I'd still do what I suggest. Have the executor get the title trnansfered to the surviving owner first before putting it for sale. It is best to avoid last minute complications in the closing of a sale.

Added: There was no mention of POAs or Executors in the original post. The type of POA can/will matter. Check with the lawyer.
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Re: Looking for advice on selling mother-in-laws house.

Post by kcowan »

Good advice given already. I have been in that situation and I would get your mom on a wait list right away if you have not already done so. This will take longer than you would like. You should also get some help for your wife to take care of her in her home. Just to spell DW off for say one/two shifts a day. And get Mom used to third parties looking after her. This will not be easy but it has to be faced.

It will also help to maintain DWs sanity after she gets over the guilt. We had MIL in her home for 6 weeks under care after FIL died suddenly and she got admitted to a facility. We were very lucky because the average wait time was 6 months. It takes a toll on everybody.

Good luck and my sympathy for the double hit to you and your family.
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rfis61
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Re: Looking for advice on selling mother-in-laws house.

Post by rfis61 »

Thank you all for the kind thoughts and words of advice.

A few months back when FIL was ill we did see a lawyer to get my wife to have POA for him. I believe we share executor duties ..I'll check on that and about the land title being in MIL's name only. MIL is the beneficiary in FIL's will. MIL's age is 82

FIL had numerous GIC's over 4 different banks so we've tracked them down and they were all set to just roll over on maturity. We've changed that so now when they mature we take the funds and put it into Mawer 104. Again just trying to keep things simple so it's one less thing to worry about for now.

There is a care nurse that comes in daily to give MIL her meds and my wife has hired a few other ladies to drop by to do cooking, light cleaning and keeping MIL company.

Thank you all again.
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Re: Looking for advice on selling mother-in-laws house.

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You didn't mention it but I assume someone has POA for MIL (the POA for FIL is now gone). Given she is into dementia, presumably your wife has POA for her.

Good on you to consolidate funds into MAW104, but one caution. It may have too high of an equity allocation for MIL at age 82. You might want to supplement that with more FI allocation (a separate Mawer bond fund for example) to keep the FI component up.

If and when the house is sold, and depending on net proceeds which I assume will be 'high' based in Vancouver, it will be time to re-visit a financial plan to fund MIL's expenses. How you construct the investment portfolio depends a lot on the capital available vis-a-vis cash flow needs (expenses). At a minimum, some (maybe significant) drawdown of capital can be factored in for someone aged 82. Plan to 95 for example, but the liklihood of someone with dementia making it another 13 years is highly improbable.

Added: When my bro and I put our mother into an independent facility (she still had much of her mental faculties), the house proceeds by themselves (never mind investment income) was enough to fund many of her last years. We didn't use the VPW methodology discussed in Finiki, but a 110-age factor for equity allocation. It served her well. Many methodologies work just fine when one is already aged 82.
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Re: Looking for advice on selling mother-in-laws house.

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FIL had numerous GIC's over 4 different banks so we've tracked them down and they were all set to just roll over on maturity. We've changed that so now when they mature we take the funds and put it into Mawer 104.
On death of a GIC holder they sometimes become cashable if funds are required this may be useful. If they were invested in "good rates" holding to maturity may be best.
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
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Re: Looking for advice on selling mother-in-laws house.

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BRIAN5000 wrote: 21 Jun 2017 13:35 On death of a GIC holder they sometimes become cashable if funds are required this may be useful. If they were invested in "good rates" holding to maturity may be best.
Agreed, but it depends on where they are held. Brokerages charge to 'mature' a GIC. Those specifically bought directly with an institution, e.g. Scotia GICs at Scotiabank may not have 'maturation' charges. I agree the decision is a GIC by GIC matter in terms of its coupon rate. I assume the OP's MIL has (or FIL had) a brokerage account since he already mentioned buying MAW104.
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