What Happens To the House When a Common-Law Spouse Dies?

What Happens To the House When a Common-Law Spouse Dies?
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Published By Jennifer Jewell

Question: What Happens To the House When Common-Law Spouse Dies?
Answer: What happens to a house when a common-law spouse dies depends on ownership. If jointly owned, the surviving spouse inherits the deceased’s share. If solely owned by the deceased, inheritance depends on a will or state intestacy laws.

Home Ownership After the Loss of a Common-Law Spouse

The death of a common-law spouse is a deeply emotional experience. Amidst grief, you must also navigate legal and financial matters, particularly regarding jointly owned assets like your home. Understanding your rights and responsibilities is important during this challenging time. This article addresses the key question: What happens to the house when a common-law spouse dies?

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Defining Common-Law Relationships and Home Ownership

In Ontario, a common-law relationship exists when two individuals cohabit in a conjugal relationship for at least three years or have a child together and live together. This definition impacts legal rights and obligations, including property division upon death.

Homeownership in common-law relationships presents various scenarios:

  • Joint Tenancy with Right of Survivorship:

    If the home is under joint tenancy, the surviving partner automatically inherits the deceased partner’s share. This transfer bypasses the will and probate process.
  • Tenancy in Common:

    In a tenancy in common, each partner owns a distinct share of the property. Upon death, the deceased’s share passes according to their will. If there is no will, provincial intestacy laws determine the distribution of assets.
  • Sole Ownership:

    If the deceased partner solely owned the property, their will dictates its distribution. If no will exists, intestacy laws apply.

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Related Article: How Do You Buy a House With a Common Law Partner?

Mortgage Implications

If a mortgage exists on the property, the surviving partner becomes solely responsible for the payments, regardless of the ownership structure. If the surviving partner’s name isn’t on the mortgage, they will need to refinance or assume the existing mortgage.

Insurance policies, including mortgage life insurance, can help alleviate the financial burden. Reviewing existing policies and ensuring adequate coverage is crucial.

Estate Administration and Probate

If the deceased partner had a will, the executor named in the will manages the estate and carries out the deceased’s wishes. This process may involve probate, the legal process of validating the will.

If there is no will, the court appoints an administrator to manage the estate according to intestacy laws.

Regardless of whether a will exists, obtaining a Certificate of Appointment of Estate Trustee with a Will or Certificate of Appointment of Estate Trustee without a Will from the court is usually necessary to deal with real estate held in the deceased’s name.

Seeking Legal Advice

Navigating property ownership issues after the death of a common-law partner can be complex and emotionally taxing. Seeking legal advice from a qualified lawyer specializing in estate law is essential. A lawyer can guide you through the legal processes, clarify your rights and obligations, and assist you in making informed decisions during this challenging period.

Tax Implications

The death of a common-law partner can trigger certain tax implications. The principal residence exemption generally shelters the deceased’s share of any capital gains tax arising from the deemed disposition of their interest in the property. However, it is essential to understand the specific rules and consult with a tax professional for personalized advice.

Furthermore, other taxes, such as probate fees (calculated as a percentage of the value of the estate), may apply. Understanding these tax implications and planning accordingly can help minimize financial burdens during this difficult time.

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Conclusion

Losing a common-law partner is a significant life event with far-reaching consequences, including the future of your shared home. Understanding the complexities of property ownership, wills, intestacy laws, and the related legal procedures is crucial. Don’t hesitate to seek professional advice from a lawyer and a financial advisor to navigate this challenging time and secure your future. This information is for general knowledge purposes and does not constitute legal advice. Always consult with a qualified legal professional for advice specific to your situation. [ 1 ]


References

1. https://www.hummingbirdlaw.com/when-a-common-law-spouse-dies-without-a-will/

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