Dear Heather,

Over the weekend my elderly father was admitted into hospital after a fall. Thankfully, he seems fine but it made me realise that if anything happened to him, we do not have everything in order to ensure a relatively seamless transition of estate matters. Can you advise me as to what I should do?

Daughter of Elderly Dad

Dear Daughter of Elderly Dad,

I can give some general knowledge but would suggest that you seek professional advice via your attorney. You are correct, however, now is a very good time to check that his affairs are in order regarding real estate and other matters, so I have outlined a few key items:

POA

In the event your father is incapacitated during your lifetime, you will be spared a lot of unnecessary anguish if he gets an ‘Enduring Power of Attorney’. If you do not have POA, it may result in your family having to hire an attorney to make an application to the courts for something called a ‘receiving order’ which enables them to look after his affairs if dad is incapacitated. However, this takes time. A word of warning here, Power of Attorney can be abused by greedy family members so choose someone trustworthy and responsible.

Will

If someone dies without a will (ie intestate) in Bermuda, their estate will be transferred to their next of kin. Their wife or husband (if they remarry) may not be the mother or father of their children. Therefore, in order to ensure that their estate goes to whom they wish, it is essential to have a will. The will should be kept on file with the law office with a notarised copy in the owner’s possession. Wills should be reviewed every year or two to ensure the information and person’s desires have not changed. If they have, a new will should be drawn up this cancelling all previous wills.

Executor

In the will, the executor of your estate should be named. This can be a member of the family, but this isn’t always the best choice as this may be prohibitive to them making neutral decisions. If there is no one in your family who is knowledgeable enough, responsible enough, fair enough or objective enough to be your estate representative, then this responsibility is best given to a neutral party (ie, a lawyer).

Registered primary dwelling

The main residence could be exempt from stamp duties (death tax) if you have it registered as a primary family homestead. Application forms are available from the Office of the Tax Commissioner and there is no charge. Failure to do this may result in the property being subject to the prevailing rates of death duties which, in a property worth $1.5 million, could be as much as $162,500.

It is something that should be organised immediately, particularly if there are multiple properties. If there are multiple properties and the primary homestead has not been registered, the government may choose one on your behalf — and it probably won’t be the most valuable. So you can save yourself some money here. The owner does not actually have to be living in the primary residence at the time of death.

Mortgage insurance

This is actually the same thing as term life insurance. This will cover a lump-sum payment of your mortgage should the owner die before it is paid off. This is a tremendous help for your surviving or loved ones.

Taxes

If you have dual citizenship or you are the alien spouse of a Bermudian, you will need to investigate any tax repercussions of property ownership in Bermuda with a good tax advisory specialist. Tax policies vary tremendously from country to country, it may be pricey but it will save you money in the long run.

Joint accounts

If dad has a bank account, it is best to add someone on as joint account holder. That way if he becomes incapacitated, the bills can still be paid, etc. Note, assets held in that account will automatically go to the joint account holder upon his demise. It is not wise to keep large amounts of money in a joint account as these monies are beyond the control of the instructions in the will.

Bills

Put all the bills in a responsible family member’s name (maybe the joint account holder?). If illness occurs, there is no need to add to the stress by having to organise every single bill in someone else’s name so that services can continue uninterrupted. Do it now.

Real estate

It is really helpful if you know where your deeds are. If you have a mortgage with a bank, they will be in their vault. If the property is owned outright they should be in the owner’s possession, however, people tend to put things in safe places and then forget where that safe place is! So try and secure them whilst dad is still aware of where they may be. If you own real estate, it can sometimes be a huge asset that you may want to tap into, particularly if healthcare costs escalate. You may be able to borrow money against it, rent it out or sell it. A consultation with your real estate agent will help determine what best suits your needs.

• Heather Chilvers is among Coldwell Banker Bermuda Realty’s leading sales representatives. She has been working in real estate for nearly 30 years. If you have a question for Heather, please contact her at hchilvers@brcl.bm or 332-1793. All questions will be treated in confidence. Read this article on Facebook: Ask Heather Real Estate