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Debra, Lawyer
Category: Canada Law
Satisfied Customers: 100483
Experience:  Lawyer
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If denied life insurance coverage due to mental health

Customer Question

If denied life insurance coverage due to mental health issues, (but not mentally incompetent; previous hospitalization years ago for anxiety/depression so insurance company determines higher risk of suicide); can I transfer ownership of assets as gift to grown children/heirs to protect their future inheritance? Would still like to be responsible for payment of mortgage, taxes, etc. so no added debt to heirs and to maintain current lifestyle for self.
Submitted: 1 year ago.
Category: Canada Law
Customer: replied 1 year ago.
Live in Ontario, Canada
Expert:  Debra replied 1 year ago.

Whether you have life insurance or not has no relevance to this question. You can always make gifts of assets to your children at any point in time.

However, if you have a spouse then need to consider the family law issues because you cannot leave your spouse with less when you die than your spouse would be entitled to if your marriage ended.

Let me know if you need any further clarification.

Customer: replied 1 year ago.
The question has relevance to me, since if I should die with the assets still in my name, life insurance benefits would be denied, and my children could lose out on what should be rightfully theirs. They are not in a position to pay for my funeral expenses and pay off what's owing on the mortgage and the penalties for early pay out. I'm angry at having to pay life insurance to cover mortgage for last 15 years, and which could've gone into trust accounts for my children, and now the insurance company tells me they can deny those benefits because of something that happened years ago.
I do not have a spouse so that is not an issue for me.
Expert:  Debra replied 1 year ago.

You can give the children whatever you wish but they or the estate will have to pay off any debts.

Perhaps you should check with another insurance company

Customer: replied 1 year ago.
I understand; I just want to go over all my options for the future, and give my children some advantages should I die unexpectedly (i.e. The property has increased significantly in value over the past few years; as it is in a highly desired and growing tourist area and has great potential to generate income through rentals. Should my children decide they want to hang on to the property as a long term investment, they could easily manage the remaining mortgage and other bills by renting it out)
I've talked to several insurance companies; I tend to get the same response from them, or have to resort to paying a premium that is higher than my mortgage payment! Not worth it, in my opinion.
Expert:  Debra replied 1 year ago.

I can see that being too expensive.

But you can certainly manage your assets how you see best now.

And you can also consult with an estate planner such as a lawyer or accountant.

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