Farm Succession / Inheritance Question

[chado613]

Hello All,

My wife and I currently live with my mother in law in our farm house. My mother in laws name is on the mortgage, deed , etc. My question is does anyone know if the house/farm is left to my wife and I in the will, what taxes, fees etc. will have to be paid.

I live in Ontario Canada and it is our primary residence.

Thanks

 

[davesl708]

I strongly recommend you talk with your MIL. She is the only one who can let you see the will. Unless in Canada such things are public knowledge but I don't think so.

 

[chado613]

Sorry Dave maybe I wasnt clear in the orig post.

She is leaving it to us in the will. Im questioning on what fees, taxes, etc, (if any) will be required

 

[quicksandfarmer]

With the caveat that legal advice you get for free on the Internet is worth less than you paid for it...

Canada has no federal estate tax. Ontario has a provincial estate tax. You can read about it here:
Estate Administration Tax

The tax is 0.5% of the first $50,000 of value and 1.5% on the rest. For real estate it is the "unencumbered value," which means net of any mortgage. So you would have to get the property appraised and then pay taxes on the appraised amount.

You are going to want to get professional legal advice. Even without the estate tax, it is very much in your interest to ensure that the title to the property is transferred properly. It's worth having someone who does it all the time handle it.

Your estate tax is very low, around here you'd pay more than that in title and recordation fees to transfer ownership of a property.

 

[chado613]

thanks quciksand

 

[bigtiller]

I know nothing of Canadian law. But in general, if your MIL agrees that her daughter and you will inherit the house, make the transfer now. It will be faster, easier and probably cheaper to do while she is still alive and of sound mind.

 

[rswyan]

I know nothing of Canadian law. But in general, if your MIL agrees that her daughter and you will inherit the house, make the transfer now. It will be faster, easier and probably cheaper to do while she is still alive and of sound mind.

2x

If she owned it free and clear (sans mortgage) she could sell it to you for a pittance ($1) ... this avoids estate taxes, but creates an issue in terms of your cost basis in the property should you elect to sell it at some future point.

 

[chado613]

Thanks for the feedback guys

 

[oosik]

My property was "gifted" to myself & my wife by my mother. We paid no taxes, fees, etc what-so-ever. The only fee was recording the deed transfer in the district recorders office - - $15. However - this was done in 1981 and in WA state.

 

[dmccarty]

Estate tax issues can be complicated in the US and I don't know what they are like in CA. I would go talk to lawyers that handle estate issues. It won't cost much , if anything for an initial talk, and that conversation will tell you what you need to do and might very well save you a bunch of money, time and headache.

Later,
Dan