How high property prices could fuel more inheritance disputes

Soaring real estate prices in Vancouver are a reminder of why wills should be updated regularly.

Real estate prices are a hot topic of conversation in Vancouver right now as the cost of buying a property continues to go up. As the Globe and Mail points out, the average price of a detached home in Greater Vancouver has soared more than 40 percent just in the past five years to $1.16 million. High property values are not just a source of frustration for homebuyers and a boon for sellers, they also have major consequences for estate planning. In fact, soaring real estate prices should serve as a reminder to property owners to ensure that their wills are periodically updated in order to avoid inheritance disputes.

Looming inheritance disputes

As CBC News points out, disputes related to inheritances are expected to rise within the next two decades. The main reason disputes are expected to increase is because Baby Boomers are set to inherit about one trillion dollars from their aging parents over the next 20 years. That will be the biggest intergenerational transfer of wealth in Canadian history.

Not only is there a lot of wealth changing hands throughout the country, but, in hot property markets like Vancouver, real estate prices are also expected to fuel the situation. Many older individuals in such markets may find themselves in possession of properties that have grown considerably in value in the past few decades. Even people who seem to be living relatively modestly could be in possession of a sizable estate if they own property in the Greater Vancouver region.

Avoiding disputes

The problem, especially in places like Vancouver, is that many people may not realize just how large their estates are or how much they have increased in value in recent years. As a result, many people may find that their wills have become outdated rather quickly in the face of soaring real estate prices.

For example, say one person owns two properties, one in the City of Vancouver and one in Kamloops and that he wrote a will ten years ago when both properties were equal in value. In that will, wanting both his children to be equally provided for, he bequeathed the Vancouver property to his daughter and the Kamloops property to his son. Obviously, the values of those properties will have diverged considerably since that will was written and although the individual intended for each child to get an equal share of the estate, in all likelihood the daughter will end up with a property that is worth much more than what the son will inherit.

Revisiting a will

The soaring nature of real estate prices is a reminder of why it is so important to not only have a will, but to periodically ensure that it is up to date. An estate planning lawyer can help with drafting a will and help ensure that any existing will continues to meet one's wishes and expectations. By talking to such a lawyer today, will-makers will have the help and peace of mind they need when planning for their family's future.