a-matter-of-grave-concern

Three months ago, John Chen* from Vancouver purchased two burial plots—one for him and one for his wife. He bought them from a private seller, and he already has one up for sale on Kijiji because he’s since decided that he prefers to be cremated. “I’m 75 years old, but I’d never thought about buying a grave site,” he says.

Since each plot in the B.C. cemetery can accommodate one casket and one crematory urn, one plot will accommodate both him and his wife, who still wants to be buried. By selling the second spot, Chen figures he’ll be able to pocket some cash.

He’s not alone. There are many reasons people might choose not to use a pre-purchased burial plot. They might move away and prefer to be buried closer to their new homes. Other times, religious considerations affect where they can be buried. Baha’is, for instance, must be buried no more than an hour’s journey from where they die. Other religions have similar restrictions.

Perhaps the biggest reason to sell plots, however, is that more people are opting for cremation, partially because rising land prices are making burial plots costly. The Cremation Association of North America forecasts about 44% of people who die will be cremated in 2015, compared to 34% in 2007. In some parts of the country, cremation rates are even higher. In Vancouver, 75% opt for cremation.

Read: Affordable burials nearly dead

And like other forms of real estate, it’s all about location. The price of a grave in downtown Toronto where land is scarce can be $15,000, compared to $2,000 in the suburbs. Burial plots located in favoured spots or in closed cemeteries, where no new development can take place, can be worth even more. So scarce are plots in Victoria, B.C.’s Ross Bay Cemetery, for example, that cemetery trustees held a lottery six years ago. The 65 winners didn’t get plots— they simply won the right to purchase one for as much as $25,000.

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The rules

So have we uncovered a new asset class? That depends.

Laws regarding burial plots vary depending on your province and “quite often the contract with the cemetery governs,” says Stuart Peikes, a business and estates lawyer with Clark Farb Fiksel in Toronto. “It may say that if the owner no longer requires a plot, it is surrendered back to the cemetery.”

That was true in Ontario until recently, according to Kat Downey, a licensed funeral director and pre-planner with Legacy Matters, operating in Mississauga, Oakville and Milton, Ont.

Owners who didn’t plan to use their plots had to sell them at the original purchase price, which was sometimes a fraction of what new plots were worth in the same cemetery.

The cemetery could then turn around and sell them at a profit.

Read: 3 estate planning mistakes

As of July 2012, Ontario cemeteries are now required to buy back gravesites at fair market value. If they don’t, plot owners are entitled to sell them on the open market. The only exception is when an owner has bought a double plot and one is already occupied; because a shared plot with someone else’s relative has no resale value.

The result has been a growing number of listings for burial plots on Kijiji and Craigslist, often promising good locations (i.e., high and dry, overlooking cemetery) at a substantial discount. There’s even a dedicated website (buyandsellcemeteryplots.com) selling plots in the U.S. and Canada.

Before putting money down, Downey warns, potential buyers should make sure a cemetery representative is on hand with the paperwork required to transfer ownership, as well as a current price list, to ensure the value of the plot is as stated.

Read: Don’t delay planning

3 ways to help executors

  1. Update your knowledge regarding executor’s roles. The executor secures, protects, gathers and liquidates estate assets, pays the decedent’s taxes and debts, and divides what remains of the estate amongst the beneficiaries in accordance with the will.
  2. Raise executor issues in meetings with clients and ensure they’ve given careful thought to naming the right executor. Offer to meet with your client and her executor together.
  3. Ask clients if they might be named executor of an estate, and explain you’re there to help. This ensures you’re the first person they contact when the time comes.

– Mark O’Farrell, president of the Canadian Institute of Certified Executor Advisors

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