What Happens to a Home When Someone Passes Away in Manitoba? Probate, Inheritance and Selling the Property

When someone passes away and leaves a home behind, deciding what happens to the property can be a major part of settling the estate.

One of the first steps may involve probate, the legal process that confirms an executor's authority to manage a deceased person's estate.

For an executor or family member, selling an inherited house in Manitoba involves more than preparing the property for sale. Understanding probate, property ownership and estate responsibilities can help determine what needs to happen next.

What Is Probate in Manitoba?

Probate is a court process that confirms the validity of a deceased person's will and the authority of the executor named in it. 

To start the process access the Court of King's Bench Forms and Sets of Forms

or the Laws of Manitoba at https://www.gov.mb.ca/chc/statpub/index.html

When probate is granted, the court issues a Grant of Probate. This document confirms the executor's legal authority to manage estate assets, including real estate.

Not every estate requires probate. Whether it is necessary depends on several factors,

• How the deceased person's assets were owned

• Whether there is a valid will

• The requirements for transferring ownership

For example, a home held in joint tenancy with a right of survivorship generally passes directly to the surviving owner. A property owned solely by the deceased may require probate before ownership can be transferred.

In Manitoba, probate charges based on the value of an estate were eliminated in 2020. However, probate itself remains in place. Legal, court and estate administration expenses may still apply.

Is There a Waiting Period Before Applying for Probate in Manitoba?

Manitoba no longer requires executors to wait seven days after a person's death before applying for probate. This requirement was removed in October 2022.

An executor can generally apply once the necessary documentation is prepared. However, provisions in the will, including survivorship requirements, may affect when an application can be submitted.

Who Is Responsible for an Estate Property in Manitoba?

If there is a valid will, it will generally name an "Executor" to administer the estate.

The executor's responsibilities extend beyond the home. They may include,

• Identifying and protecting estate assets

• Managing debts and expenses

• Maintaining estate property

• Communicating with beneficiaries

• Distributing assets according to the will and applicable law

If someone dies without a valid will, a different court process is required to appoint an "Administrator". An Administrator is appointed by the King's Court and granted legal authority to handle the estate when there is no will or Executor involved. 

The "Public Guardian and Trustee" administers estates of people who die in Manitoba and there is no one else willing or able to do it.

A "Beneficiary" is an individual or entity (such as a charity) designated to receive the belongings or assets of another person after that person’s death. Being named as a beneficiary in a will does not automatically give someone the authority to list, sell or transfer a property. 

Before making significant decisions, the person responsible for the estate should seek legal advice about their authority and obligations.

Can You Name a Direct Beneficiary for Real Estate in Manitoba?

Unlike a RRSP or life insurance policy, a home in Manitoba generally cannot have a designated beneficiary who automatically inherits the property upon death.

A homeowner can leave real estate to a specific person through their will. However, the property may still require estate administration and probate before ownership can be transferred.

An important exception is property held in joint tenancy with a right of survivorship - but this is not an example of a situation naming a direct beneficiary.

What Happens If the Deceased Person Jointly Owned the Home?

Before assuming a home must be sold as part of an estate, it is important to determine how the property is registered on title.

In Manitoba, spouses or common-law partners may own their home as joint tenants. Joint tenancy is a form of property co-ownership where two or more people own the entire property together with equal rights and responsibilities.This arrangement generally includes the right of survivorship.

When one joint owner passes away, their interest generally transfers directly to the surviving joint owner. The property usually does not become part of the deceased person's probate estate. The surviving owner may become the sole owner, regardless of what the deceased person's will says about that property.

Documents must still be filed with the Land Titles Office to update ownership records.

Joint Tenants vs. Tenants in Common

Joint ownership does not always include the right of survivorship.

Joint tenancy: The surviving owner generally receives the deceased owner's interest automatically through survivorship.

Tenancy in common: Each person owns a separate interest in the property. When one owner dies, their share generally becomes part of their estate.

This means the wording on the property title is important.

There may also be additional protections for a surviving spouse or qualifying common-law partner under Manitoba law.

A real estate or estate lawyer can review the title and determine whether the property

• Passes to a surviving joint owner

• Forms part of the deceased person's estate

• Is affected by spousal or common-law property rights 

How Does Real Estate Transfer After Death?

What About Adding an Adult Child to the Property Title?

A homeowner may consider adding an adult child as a joint owner so the property can pass through survivorship.

Adding someone to the title can create immediate ownership rights and may have tax, creditor and estate consequences. Joint ownership also does not guarantee that the property will pass beneficially to the surviving person in every situation.

Legal and tax advice should be obtained before making this type of ownership change.

What Happens to a Home in Manitoba If There Is No Will?

When someone dies without a valid will, they are said to have died "intestate".

This does not mean family members can simply decide who receives the home or other assets.

In Manitoba, The Intestate Succession Act establishes how property belonging to an intestate estate is distributed. The Intestate Succession Act sets out who is considered the deceased’s closest living family for the purposes of determining who can apply to administer the estate, who is entitled to receive a share of the estate, and the proportions of the estate to which each family member is entitled.

The first step is determining whether the home actually belongs to the estate. A property held in joint tenancy may pass directly to the surviving owner instead.

What If There Is a Surviving Spouse or Common-Law Partner?

A surviving spouse or qualifying common-law partner may have significant inheritance rights.

How the estate is distributed depends on several circumstances, including

• Whether the deceased had children or other descendants

• Whether those descendants are also descendants of the surviving spouse or partner

• Whether the deceased had children from a previous relationship

These situations can become more complicated in blended families.

A Surviving Spouse May Have Other Rights to the Home

The Homesteads Act can provide protections for a surviving spouse or qualifying common-law partner.

Depending on the circumstances, these protections may include a life estate, which can provide the right to occupy the family home for life.

Owning a home, inheriting an interest in an estate and having the legal right to remain in a home are not necessarily the same thing.

When there is no will, important questions include,

• Is the property jointly or solely owned?

• Is there a surviving spouse or common-law partner?

• Are there children from another relationship?

• Are there homestead rights?

• Who has legal authority to administer the estate?

An estate lawyer should review these circumstances before the property is sold or transferred.

What If There Are Children From Another Relationship?

Manitoba's intestate succession rules may divide the estate differently when the deceased has descendants from another relationship.

Questions may arise about whether,

• The home should be sold

• The surviving spouse or partner can remain in the home

• One beneficiary wants to purchase the interests of others

• The property's value should be established through an appraisal

Financing, estate accounting and legal advice may all be required.

Can an Executor Sell a House Before Probate Is Granted in Manitoba?

Probate can affect the timing of an estate property sale, particularly when the home is registered solely in the deceased person's name.

An executor may be able to begin preparing the property for sale before probate is granted.

This could include,

• Obtaining a property valuation

• Reviewing current market conditions

• Discussing a potential sale with a REALTOR®

• Considering repairs or property preparation

Depending on the circumstances, an estate property may also be marketed or an offer considered before probate is completed.

However, the executor's legal authority must be established. The transaction may require specific conditions and enough time to obtain the necessary court documents.

The ability to list a property and the ability to complete its legal transfer are not necessarily the same.

Before signing a listing agreement or accepting an offer, the executor should consult the estate lawyer. This can help determine what is permitted and how probate may affect the possession date.

Why Can Selling an Estate Home in Winnipeg Take Longer?

An executor may have several responsibilities to complete before an estate property can be sold or the proceeds distributed.

These may include,

• Locating and reviewing the will

• Establishing authority to administer the estate

• Identifying estate assets and debts

• Confirming property ownership

• Securing and insuring the home

• Arranging property valuations

• Dealing with personal belongings

• Communicating with beneficiaries

• Preparing tax returns

• Maintaining the property

• Obtaining legal and accounting advice

• Preparing the home for sale

• Distributing estate assets

The executor may also need to coordinate with lawyers, accountants, REALTORS®, appraisers and insurance providers.

For these reasons, selling an estate property in Manitoba may take longer than a typical home sale.

What Does It Cost to Keep an Estate Home Before Selling?

Until the property is sold or transferred, the estate may be responsible for several ongoing costs.

Property taxes: Municipal property taxes continue while the estate owns the home.

Home insurance: The insurer should be informed when the homeowner passes away or the property becomes vacant. Vacant homes may have different coverage requirements.

Mortgage and secured debt: Any mortgage, home equity line of credit or other financing must be addressed as part of the estate.

Utilities: Electricity, natural gas and water may need to remain connected. Maintaining heat during Winnipeg winters is particularly important to prevent damage.

Property maintenance: Grass cutting, snow clearing, security, seasonal maintenance and regular property checks may still be required.

Cleaning and contents removal: The estate may need to pay for cleaners, contractors, storage, waste removal or estate sale services.

These ongoing expenses are known as carrying costs and should be considered when deciding how and when to sell an inherited property.

What Should Happen to the Belongings Before an Estate House Is Sold?

Furniture, photographs, jewellery, documents, collections and other personal belongings may form part of the estate.

Executors should avoid clearing the home simply to prepare it for the real estate market. Decisions about personal belongings should first be made according to the will and applicable estate requirements.

Once those decisions are made, belongings may be,

• Distributed to beneficiaries

• Appraised when necessary

• Retained by family members

• Sold through an estate sale

• Donated

• Placed into storage

• Removed through a professional cleanout service

After the contents have been addressed, it becomes easier to determine what the property needs before listing.

Should You Renovate an Inherited House Before Selling?

A dated estate home does not automatically need major renovations before going on the market.

Before committing to improvements, consider four important factors,

• Current market value

• Renovation costs

• Ongoing carrying costs

• Potential market value after improvements

For example, spending $40,000 renovating an estate property does not necessarily mean its selling price will increase by $40,000 or more.

Renovations also take time. If the work delays the sale, the estate may continue paying taxes, utilities, insurance, maintenance and financing expenses.

Preparing an Estate Home for Sale

Preparing a home for sale is different from renovating it.

Simple improvements may include,

• Professional cleaning

• Decluttering after estate contents have been addressed

• Minor repairs

• Yard maintenance

• Improved lighting

• Paint touch-ups

• Removing damaged or heavily worn items

• Staging or partial staging

The appropriate strategy depends on the home's condition, neighbourhood, price range and current Winnipeg real estate market.

How Is the Value of an Inherited or Estate Home Determined?

An estate property may require different types of valuation depending on the circumstances.

Comparative Market Analysis (CMA)

A Comparative Market Analysis is prepared by a REALTOR® and can form part of a home evaluation

It examines factors such as,

• Recent comparable sales

• Competing properties

• Location and neighbourhood

• Property size and features

• Condition and improvements

• Current buyer activity

A CMA helps determine how a property may be positioned in today's real estate market.

Professional Appraisal

A professional appraisal provides an independent opinion of value.

It may be required for legal, accounting, tax, financing or estate purposes.

A CMA and an appraisal serve different purposes and are not necessarily interchangeable.

Fair Market Value at the Date of Death

There can also be an important difference between,

• The property's fair market value when the owner passed away

• The price the property eventually sells for

This distinction can have tax implications for the estate.

Are There Capital Gains Taxes on an Inherited Home in Canada?

The Canada Revenue Agency generally considers a deceased person to have disposed of capital property immediately before death.

If the property was their principal residence, some or all of the gain up to the date of death may qualify for the principal residence exemption.

However, the tax situation can change after death.

For example, suppose a Winnipeg home has a fair market value of $450,000 when the owner passes away.

The estate later sells the property for $485,000.

The $35,000 increase in value may have tax implications for the estate.

Different tax rules may apply to,

• Rental properties

• Investment properties

• Cottages

• Properties partly used to generate income

Because tax treatment depends on individual circumstances, an accountant or tax professional familiar with estates should be consulted.

What Happens to the Mortgage and Other Estate Debts?

Selling an estate home does not mean the sale proceeds can immediately be distributed to beneficiaries.

Mortgages and other estate obligations must be addressed before the estate is finalized.

Additional expenses may include,

• Legal fees

• Accounting fees

• Taxes

• Insurance

• Property maintenance

• Real estate selling costs

This is why beneficiaries should understand the difference between the selling price of an estate property and the amount ultimately available for distribution.

What Is a CRA Clearance Certificate?

Before distributing the remaining assets of an estate, the legal representative should determine whether a CRA clearance certificate is required.

A clearance certificate generally confirms that applicable tax amounts have been paid or secured.

Distributing estate assets without obtaining a required clearance certificate can expose the legal representative to personal liability for unpaid taxes, up to the value of assets distributed.

Selling the estate home and distributing the estate are two separate stages.

The property may be sold while other parts of the estate administration remain unfinished.

What Happens If Beneficiaries Disagree About Selling the House?

One beneficiary may want to sell immediately. Another may prefer to renovate first. Someone else may want to keep the family home or believe it should be listed at a higher price.

The executor's responsibility is not simply to follow the preference of one beneficiary.

Objective information can help support decisions about the property.

Useful documentation may include,

• A Comparative Market Analysis

• A professional appraisal

• Contractor estimates

• Monthly carrying costs

• Recent comparable sales

• Records of offers received

• Invoices and receipts

• Written records of important decisions

Keeping accurate records can be particularly valuable when several beneficiaries are involved.

Can One Beneficiary Keep the Estate Home?

Depending on the will, ownership structure and estate circumstances, a beneficiary may be able to receive or purchase the property.

For example, suppose three beneficiaries are entitled to portions of an estate and one wants to keep the house.

The value assigned to the property can affect how much each beneficiary ultimately receives.

A supportable property valuation becomes particularly important in this situation.

Financing, title transfer, taxes and the interests of other beneficiaries should be reviewed with the appropriate legal and financial professionals.

Who Can Help With an Estate Property Sale in Winnipeg?

Executor or administrator: Manages the estate and makes decisions within their legal authority.

Estate lawyer: Advises on probate, the will, estate administration, property ownership and title transfers.

Accountant or tax professional: Addresses tax obligations relating to the deceased and the estate.

REALTOR®: Provides market information, a CMA, property preparation recommendations, pricing and marketing strategies and assistance with the sale.

Professional appraiser: Provides an independent opinion of value when required.

Insurance professional: Reviews insurance requirements, particularly when the property becomes vacant.

Contractors and property services: Assist with repairs, cleaning, landscaping, snow removal and ongoing maintenance.

Moving Forward With an Inherited or Estate Property in Winnipeg

Whether you are an executor, administrator or beneficiary, understanding the property's ownership, legal requirements and current market value can help determine the next steps.

If selling is being considered, a Comparative Market Analysis (CMA) can help establish the home's current market position before decisions are made about repairs, renovations or preparing it for sale.

As a Winnipeg REALTOR®, I can provide a CMA based on comparable sales, the property's condition and current Winnipeg market activity to assist with the real estate decisions involved in selling an estate property.

Tara Zacharias, REALTOR®

Real Broker Manitoba Ltd.
204-293-0933 

This article provides general information about estate property sales in Manitoba and is not intended as legal or tax advice. Estate circumstances vary and qualified legal and tax professionals should be consulted.