Preparing Your Loved Ones for the Mortgage Transition in Case of Death
Proactive planning eliminates uncertainty and protects your family in the most difficult moments. In case of death, the administrative steps related to the mortgage are numerous and complex. Completing them during a period of grief is taxing. By preparing the necessary documents and sharing essential information with your spouse, you transform a potentially chaotic situation into an orderly process.
Essential legal documents in Quebec
- Notarial will: this is the safest form in Quebec. Unlike a holograph will (handwritten) or one made before witnesses, a notarial will does not need judicial verification (probate), considerably speeding up estate settlement. Cost: $300 to $500 at a notary.
- Protection mandate: this legal document designates the person who will manage your affairs, including your mortgage, in case of physical or mental incapacity. Without a mandate, a court must appoint a tutor, a long and costly process. Cost: $200 to $400 at a notary.
- General power of attorney: allows your mandatary to act on your behalf for banking and mortgage transactions during your lifetime, if needed (extended travel, temporary hospitalization).
- Complete and accessible mortgage file: gather in one secure location the lender's name, account number, current balance, contract conditions, insurance in force, and contact information for your AMF broker and notary.
Calculating your life insurance need
Your life insurance coverage should at minimum cover three components. First, the remaining mortgage balance to free the residence from all debt. Second, 6 to 12 months of living expenses to allow your family to adjust financially without immédiate pressure. Third, for self-employed workers, the potential loss of business income and the costs of winding down or transitioning the business. An AMF-certified insurance broker performs a personalized calculation based on your family situation, debts, and specific needs.
Information to share with your spouse
- Lender identity and contact information: The financial institution's name, mortgage account number, mortgage service phone number, and your advisor's name if applicable.
- Mortgage contract détails: The interest rate, rate type (fixed or variable), term maturity date, residual amortization, prepayment conditions, and approximate current balance.
- Insurance in force: Life insurance policies (individual and lender), policy numbers, coverage amounts, insurer names, and contact information for submitting a claim.
- Document locations: Where the mortgage contract, insurance policies, will, protection mandate, and any other relevant documents are located. Also inform your testamentary liquidator.
An AMF-certified broker coordinates with your notary and insurance broker to ensure all pieces of the puzzle are in place. This integrated planning guarantees that your family will be protected and the mortgage transition will proceed smoothly, regardless of circumstances.