Inheriting a property in any neighborhood of Canada sounds pleasant until you come across the liabilities that come with it. Whether it’s the unpleasant memories or outstanding mortgages, inherited properties can put you in a legal and financial whirlpool that might easily drown you if you don’t have any idea about what you need to do. Thankfully you can hire legal experts who will guide you through the intricate legal procedures of mortgage, selling the property, as well as filing inheritance tax.
The procedure of filing inheritance tax Canada can be very complicated if you don’t have the proper guidance and knowledge. Due to the stress involved in owning and maintaining an inherited property, selling it to the right buyer makes more sense.
Tips to sell inherited property
To simplify your whole experience, here are four crucial tips to sell inherited property in Canada. Take a look;
Know the status of the mortgage
Mortgage lenders expect you to make all of your monthly mortgage payments on time. It’s crucial to know the mortgage status as quickly as possible or if the mortgage holder was late on payments.
Contact the mortgage company and any unpaid creditors as soon as you get the required documentation proving you are in charge of the property. It’s best to have all the critical knowledge about where the mortgage stands so that you can avoid any penalties that may occur due to late or failed payments.
Connect with all the heirs
It’s essential to get in touch with all the heirs before you plan on selling the property. It will help you identify whether there are any named executors or personal representatives who have the legal right to decide about selling the property. Get in touch with all the heirs and mutually decide who will be the executor if the name isn’t mentioned in the will. Make sure the chosen person can make sound and rational decisions about the property. The person should be able to follow the orders of the law and be unbiased while distributing the funds after the sale of the property.
Create an estate account
It may not be a good idea to keep the property on hold for a long time. It affects the value of the property and increases the chances of legal complications. To avoid that, you should create an estate account by the deceased’s name to temporarily hold the property income and the funds. These funds can help you clear any outstanding debts, penalties, and mortgages, so you won’t have to worry about them later.
Once all the dues are cleared, you can distribute the funds among the beneficiaries equally or as mentioned in the will. Creating an estate account will ensure you don’t face any legal problems in the coming future.
Know the taxes
Though you may not have to pay the inheritance tax in Canada, you still have to deal with different taxes like probates or estate taxes. The probate taxes in Canada are capped at $525, which means the properties worth more than $250,000 would have to pay only the capped amount as an estate tax. Find a tax attorney or estate planner who will help file the necessary taxes so that you won’t face any problems.
Dealing with inherited properties can be painstaking, especially when you don’t have legal assistance. It’s best to take some legal advice before you plan to sell the property.