All About Estates

Make it a habit: Searching title for real property when doing estate planning

Today’s blog was written by Kelsey Buchmayer, associate with the Ottawa office of Gowling WLG (Canada) LLP

There are several benefits to searching title for your client’s real property when initiating their estate planning. For instance, you can confirm title is held as your client understands it to be and you can also assess whether planning opportunities such as probate strategies are available to your client in relation to their real property holdings. In the Province of Ontario, the benefits often outweigh the relatively minor costs for pulling a parcel register (approximately $50 per property).

  1. Confirming owners and their capacity

Most client couples hold their real property together as joint tenants, which is beneficial in most cases due to the right of survivorship, meaning that the deceased owner’s former interest in the real property disappears upon their death and never becomes part of their estate. As such, the real property only needs to be transferred by the executor upon the death of the survivor.

Spouses may, however, and at times unknowingly and even erroneously, hold title as tenants in common or even in one of their sole capacities. Without the right of survivorship inherent in joint tenancy, upon the death of a tenant in common or sole owner, the real property will need to be dealt with and probate will usually need to be sought to do so (attracting the costs associated with probate fees and a court application). This may be intentional for some individuals/couples, such as in the case of second marriages or gifting strategies that do not have the residue going to the other spouse or creditor protection.

Confirming who is on title and in what capacity (e.g. joint tenant, tenant in common or sole owner) allows you as their solicitor to advise the client of the impact of such holding of real property on their estates, and if need be, to prepare and register the appropriate transfer documentation to have title to their real property more appropriately reflect their intentions.

  1. Cleaning up title

Sometimes in pulling a parcel register, it becomes evident that there are errors or lingering registrations or charges that were never dealt with. This can include discovering, for example:

  • a deceased former joint owner’s name is still on title, necessitating its removal (by Survivorship Application),
  • discharged mortgages, charges or other encumbrances that have not yet been removed from title (including private mortgages which can cause an executor great difficulty in having these removed so many years later, at which point the private mortgagee is often deceased and a court order needs to be sought), and
  • a fraudulent lien or notice of security interest on title that needs to be dealt with.

In addressing these as soon as possible, your client’s future executor is saved from having to do so at a later time when it may be more difficult, and your clients will also not face any surprises when they go to sell or transfer the real property in the future.

  1. Eligibility for a “first dealing”

Another benefit of obtaining a parcel register is to determine whether the client’s property qualifies for the “first dealing” exemption.

If a property is eligible for a “first dealing” exemption it does not require a Certificate of Appointment for its transfer, which also means the Dual Will strategy should be used to shelter the eligible real property in a Secondary Will. In addition to not requiring being probated, the value of such property is not included in the probate fee calculation. Without pulling a parcel register, you would have no way of knowing this.

Even if nothing substantial is discovered, confirming a client’s title to real property is in order as they understand it to be can offer peace of mind for a client who normally has no ability to make (or would think to make) such inquiries on their own.

About Gowling WLG LLP

1 Comment

  1. Heather

    June 26, 2024 - 2:46 am

    Great advice

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