The number of Albertans looking to purchase a vacation property is growing every year... and that’s not surprising! There is nothing better than owning a chalet for weekend ski trips, or a house in Palm Springs, or a place on the golf course in Phoenix. However, if you own a vacation home, you need to ensure that you have taken it into consideration when you are making your Will and planning your estate.
Something that many families fail to consider is how the location of a vacation property can impact their estate planning. This is an important consideration because the way that you protect and pass on your vacation property will depend on the applicable laws in the country or province where the property is located.
For example, by owning property in the USA, your estate will be liable for both US and Canadian estate taxes. Further, by owning property in the USA, you will have two estates that will need to be settled, adding considerably to the amount of time and money required to do so. Often, the best solution is to put the property into a trust. Trusts do not go through probate and they can’t be challenged under estate legislation.
Even if your vacation property is located in Canada, you will still need to consider how the laws of other provinces may impact on your estate plan. For example, in Alberta you may treat your children in an “unequal” manner. However, in BC legislation prohibits this. As a result, if your intention were to leave your BC vacation property to just one of your children who has helped with the upkeep and spent time there over the years, the law in BC could create unforeseen difficulty.
If you are looking for guidance about how the location of your vacation property could impact on your estate plan, contact our office today. Remember, we are here to help!