Did you know that fewer than half of Canadians have a will?1 Having an estate plan in place is the best way to make sure your assets are distributed according to your wishes. But another important thing to factor into that plan is what protection those inherited assets will have.
If you’re planning to pass down your property to a beneficiary, don’t forget that it’s not just the property they’ll be inheriting—they’ll be taking on its risks as well.
It’s important to consider factors that might affect your beneficiaries in the long term, like capital gains tax, maintenance and property taxes. But the financial losses a title defect can cause are almost impossible to predict and budget for.
Example: a future survey reveals that one of the structures on your property encroaches on a utility easement and must be removed at your expense. The contractor bill ends up coming in over $12,000. Would you be able to bear that sudden, large expense? If the survey from the example wasn’t conducted until after you passed the property down, it will be your heir who will have to answer that question.
The good news is, you can protect yourself from large sudden financial losses like in the example above by purchasing title insurance. The better news is, doing that can also protect your beneficiaries at the same time.
A title insurance policy’s coverage can continue, even after the property transfers to a new owner. The policy outlines the different circumstances that apply, and if the title is transferred according to the policy’s continuation of coverage each time, that policy can keep protecting successive generations.
Title risks can take years, even decades, to arise after you buy a property. When they do, they’re sudden and often expensive. That’s why many legal professionals choose to use title insurance for every transaction. It’s the best way to protect homeowners and their beneficiaries from dozens of risks, including title fraud.
In short, yes. Title fraud is a risk that can affect any property, but homes that are free and clear can be especially at risk. One reason for this is that, with a paid-off mortgage, there’s more available equity for a fraudster to steal. The longer you’ve owned the home and the more of its mortgage you’ve paid off, the greater the potential payoff for identity thieves.
Having title insurance in place means peace of mind for you, as well as your beneficiaries. If the property you pass down ends up having its equity or even title stolen, your heirs can count on the duty to defend included in the policy. You can ensure that your beneficiaries won’t have to go through the process of restoring title on their own—FCT will be there to look after their interests, even retaining counsel and going to court on their behalf if it becomes necessary.
If your home isn’t title insured, it’s not too late, even if you’ve owned it for years. Talk to your legal professional about existing homeowner’s coverage for your property. You can also Get started here . Make sure your beneficiaries can enjoy your gift to them in peace—get protected today.
1 source: angusreid.org
Insurance by FCT Insurance Company Ltd. Services by First Canadian Title Company Limited. The services company does not provide insurance products. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.
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