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How To Talk to Your Parents About Their Will
Life can change in an instant. A sudden health incident, a new diagnosis, or changes to family structure are all common reasons why you would need to update your Will. In recent months, the uncertainty of living through a pandemic has caused many to start thinking about and activating an estate plan. However, not everyone attends to making a Will with the same zest and vigour.
Approaching this topic with parents can seem a little bit daunting. A Will can be a sensitive subject because our parents may have difficulty facing their own mortality. Alternately, the kids struggle to face the thought of their mom or dad dying, which brings out uncomfortable feelings as well. Yet the cost of putting off making a Will does mean that no one is in charge when someone dies. There is no executor to keep safe assets and pay bills and just deal with the day to day personal business needs of a deceased person. And, the inheritance goes to the people designated in the law based on the calculations pre-defined. The inheritance will not necessarily go to the loved ones or charities a deceased person would have chosen.
As a Notary Public I have special insight into people’s lives. Almost daily clients see me whether for a notarized document or getting a Will made because they have just been through a family event where someone did not have a Will — or there are a lot of family dynamics. Plainly spoken, not having a Will or an up-to-date Will adds grief on top of grief.
To understand how to talk to your parents helps to look at the common reasons people avoid starting or updating their Will:
You might be surprised at the real reasons Wills are avoided. Yes, some of the above are very true factors, but often people don’t know who to trust to talk about their Will or how to get started. For adult children who want to approach the topic with aging parents I recommend to ease into it. Often I’ll suggest that they start of by talking about updating their own documents and this gives a perfect opportunity to bring up the subject of parents Wills.
Some basic questions you want to have answered are:
The single best reason to encourage parents to make a Will is to avoid leaving a big mess for family and loved ones. The second-best reason is that you can make the Will you want and leave assets to the people you want.
Some guidelines to follow when talking to your parents about making their Will:
As a Notary Public, I know that this can be an intimidating process for some people. My goal is to ensure people are comfortable creating a Will that they want. We have created a Will Questionnaire as a starting point for my clients in an effort to streamline and simplify the Will-making process.
Click HERE to view our September 2020 Newsletter
THE FINE PRINT OF STRATA INSURANCE & STRATA CONTENTS AND IMPROVEMENTS –
During Spring 2020 various issues around strata insurance such as gross increases in deductibles surfaced to the forefront of the media. If you didn’t understand insurance policies much before, it is my hope to help you to understand why this strata insurance issue really matters, and that you can reduce your anxiety and risk with a little education and action. Let me start that education by stating emphatically that the fine print matters!!
There are two types of insurance policies that relate to the strata. The first is strata building insurance – in which payment is covered in monthly strata fees. I call this the ‘bricks and mortar’ insurance policy. This policy is already held by the strata corporation and covers the overall structure of the building, common and limited common areas. Selection of the broker and underwriter is the responsibility of the strata corporation on behalf of all the individual strata unit owners and is only updated from time to time. These bricks and mortar policies include a specific level of finishing, including the general finishing of specific units. In practical terms – there is no specific control over this bricks and mortar policy by an individual person or strata unit owner, except through involvement, awareness and voting rights. And, as it’s impossible or impractical to update a bricks and mortar policy every time one strata unit owner upgrades a refrigerator, the complementary insurance to that bricks and mortar insurance is the second type of strata insurance — strata contents and improvements insurance (“SCII”). This SCII is the whole responsibility of the strata owner to purchase and maintain annually.
Some people will equate SCII to renter’s insurance, but it is not that simple. Not only does SCII cover contents such as furniture, appliances, clothing, computer equipment and such – it covers improvements and upgrades (renovations) to the unit. For example, your unit might have been improved with 24 carat gold-flecked hardwood flooring, gold plated faucets and gold-plated toilet seats (to emphasize the point!). These improvements would be reflected in either the price you are paying or the increased value to the property after upgrades and improvements. It is these improvements that are important to accurately assess for financial value in consultation with your insurance broker when obtaining SCII or increasing policy coverage. The strata building insurance, which payment is covered in monthly strata fees, will not cover your personal property in your unit or the value of the improvements that have been made to the unit. The building coverage will ONLY cover to the basic standard defined in the strata building insurance policy, whereas SCII takes you to the ‘gold’ standard.
While the financial compensation of a payout of a SCII policy makes sense, it is important for borrowers to remember this improvements insurance is mandated by mortgage lenders in the fine print to have and keep in place for the length a mortgage exists. A borrower cannot let the policy lapse. From the lender perspective, when a catastrophic or big dollar insurance claim occurs, the unit will be put back to the same quality of finishing as prior the triggering event (i.e. flood, fire, etc.) using compensation via the insurance policy in place. To some extent, current strata owners with SCII in place are covered in getting their home back to the same standard, however strata owners who choose to disregard SCII are definitely not. In the evolving new insurance culture with shifts to ‘who pays what’ in a strata insurance claim, the root of new problems for strata owners begins.
The biggest issue in the strata insurance coverages lays in interplay between the strata building insurance coverage and the SCII. Strata corporations are now seeing increased dollar value to bricks and mortars deductibles in the fine print of insurance policies (ie. for a water sewage back up). This deductible is the responsibility of the strata corporation to pay out first, and then the strata building insurance (or a combination with SCII) coverage kicks in. Essentially, for a policy with deductible of $100,000, insurance coverage will only apply to the dollar value above the $100,000. The real kicker here is that strata corporations are now starting to place the burden of the strata building insurance coverage deductible or repairs onto the individual strata homeowner for the unit damage. Reviewing strata meeting minutes (for new purchasers) or keeping abreast of changes to strata by-laws (current owners) becomes essential to assess personal risk exposure.
A client of mine recently experienced the strata owner’s nightmare:
A strata unit was sold in Greater Victoria with a set completion date in August. Five days before the sale was to go through, damage from a water back up was discovered in the unit. The unit had been vacant for two months and it is not known when the water had backed up into the unit. It is likely damage was made worse due to the lapse of time with water sitting on hardwood floor and seeping into the kitchen cabinetry. Cost of repairing the damage was estimated at up to $80,000. The owner asserted that the blockage of the pipes couldn’t have come from her unit because no one had been living in it for 2 months prior, however the Strata Corporation asserted that the first $100,000 deductible was the responsibility of the strata owner, and not that of the Strata Corporation. After that it was uncertain who or which insurance would pay. If any.
In this scenario, the client did not hold any SCII. Like many, she expected that the strata building insurance would cover the cost of repairs for pipe blockages in the building. Even if the SCII was in place, it is not a guarantee that the SCII policy owner (strata owner) would receive adequate compensation in a claim. In reference to my earlier point, it really depends on the fine print of the SCII policy.
From my own experience, I know the value of having the improvements insurance in place because I once had a $40,000 flood in my duplex strata. Damages were in part covered by the strata bricks and mortar insurance, but mostly through the contents and improvements insurance. However, my client’s scenario illustrates the real risk to strata homeowners when none or inadequate insurance is in place. From this we should all be taking action to avoid the unexpected financial consequences of an insurance claim. Understanding the foundational aspects of strata insurances and the potential issues means it can be corrected.
Key Takeaways for Strata Owners:
1. The financial burden of fixing property damage may be placed on specific strata owners, even if the damage (or some of the damage) may be covered under an insurance policy.
2. You may be responsible for some or all deductible/damage costs even if you did not cause the damage in your unit (i.e. your neighbours three floors higher are throwing sanitary wipes or hypodermic needles down their toilets).
3. You may be responsible for costs to repair any and all damages in your unit.
4. If not responsible for all costs associated with fixing damages, you may be responsible for some.
5. You may not have the financial resources to correct the damages or return the unit to its previous finished quality.
6. You may be placed in a position to litigate to recover your costs.
7. You may have a legal obligation in your mortgage contract to make sure you have correct level of coverage.
However, let’s be clear here – THERE IS A FIX! You should consult with your insurance broker about your unique scenario.
Existing SCII policy holders:
1. Check your current policy for adequate coverage on any owner deductibles to limit that you may bear in the event the strata unit or building has an insurance claim.
2. Check to make sure your current policy has adequate improvements financial coverage to return your strata to the ‘gold’ standard.
3. Review the bricks and mortars policy coverages.
New SCII policy holders:
1. Get a SCII policy with correct coverages and deductibles.
2. Ask for these coverages – in writing
3. Upon receipt review your policy to make sure you see the coverages requested.
4. You should also satisfy yourself regarding the correct insurance for strata contents and improvements with respect to your specific strata unit
5. Updating in the future for potential improvements.
6. If buying, review the bricks and mortars policy coverages to understand what is covered, what are the deductibles, and if there any gaps in coverage.
Although BC Notaries do about 75% of all real estate deals in the province, we are in no way involved in the negotiation and understanding of the specific terms of your insurance coverage – we never see your property or review insurance policies. However, as a representative of the lender we are required to provide an insurance binder with proof that each of the two types of strata insurance are in place. The burden of getting the strata contents and improvements insurance in place with correct coverage, and understanding the implications for financial consequences of both insurances in the event of a claim is the sole responsibility of purchaser or homeowner.
You should satisfy yourself regarding the strata’s insurance policy, including the strata’s ability to obtain renewals for future policies for the building. You should also review the strata policy deductible amounts or any matters relevant to the coverage of the overall structure and property. Generally insurance investigations should be done as a subject condition before the contract becomes binding – or, in other words, make it a condition, and properly review it before you remove the conditions. Notaries Public in B.C. represent for legal real estate conveyance work and we are not involved in pre-binding contract terms, conditions or negotiations. Our involvement relates to the contract after it is in binding (firm).
Click here to view our August 2020 Notary Newsletter.
As a Canadian Notary practicing in Victoria BC, Canada, Beverly Carter Notary Public is registered with the USA Consulate in Vancouver and is the go-to person for all USA documents in the Greater Victoria area. California documents for real estate that need to be signed in British Columbia have additional authentication measures required by the USA Consulate. This means that California requires the documents signed with Beverly to then be sent to the USA Consulate for them to put their stamp of approval before the Title Company and land registry will accept it for use. Additionally, real estate law involving real estate sales or purchases or transfers, including timeshare transfers, have processes which are unique to each state. We treat each state as a ‘mini’ country because what applies in one state is not true of another state. We are incredibly thorough in our approach to handling any foreign documents, but we know California has unique requirements. We have developed an expertise with certain USA documents that helps us to inform, educate, and assist our clients to get the documents done expertly, efficiently, and correctly. Timelines matter and our knowledge of the complicated processes helps us to help our clients. Following area list of various notarizations for USA documents that are frequently seen in our notary office:
NOTE: For documents requiring further authentication at the US Consulate please see the Vancouver USA consulate website for the most recent transactions. As of June 24, 2020 they announced they in addition to mail-in services (started during Covid) they are offering limited in-person appointments booking into late August and September 2020. For detailed instructions on dealing with mail-in USA consular services please click the button below. Documents requiring authentication from the USA Consulate still need to be signed in office with Beverly Carter Notary Public prior to being sent to the Consulate.
If you missed our Zoom & Learn session with guest realtor Jane Johnston, you can watch the session below:
Click here to view our July 2020 Notary Newsletter.
If you missed our Zoom & Learn session on Pets in Wills, you can watch the session below:
The USA Consulate in Vancouver has just announced to us on June 24th, 2020 that they are now open via mail-in services only. Documents requiring Consulate approval still require to be signed in office with Beverly Carter Notary Public before being sent to the Consulate.
Prior to signing any documents with us, we ask that you email them to us to preview if at all possible. Not all documents are uniform and not all states have the same requirements or processes. Previewing the documents helps us to help you avoid any delays in the process and allow you to be prepared for signing. For example, many real estate, time share, escrow, deed, transfer, documents we sign require information such as tax numbers, property management information, addresses, bank account numbers for wiring, etc. These documents are complicated and often this information can be missed getting filled out by clients. At my office and ready to sign coming up with the information from a cell phone or other resource is not easy. When our office is able to preview we can confirm what information you should be filling in to make for an efficient signing and accurate document.
For our clients with notarized documents requiring USA Consular approval (a higher level of authentication), here is the detailed mail-in instructions from the US Consulate: US Vancouver Consulate Mail Process – PDF
As a Canadian notary practicing in Victoria, BC, Canada, Beverly Carter Notary Public is registered with the US Consulate in Vancouver and is the go-to person for all USA documents in the Greater Victoria area. Beverly also has a law practice Real Estate (Buying, Selling, New Mortgage, Refinancing, Private Real Estate Contract Drafting), Wills, Remote Wills, Powers Of Attorney, Health Representation Agreements, Advance Directives, Executor Appointments, and Attorney appointments.