Things to Consider when Making a Will

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The thought of making and planning the distribution of your estate can be daunting. It can be difficult to grasp where to start or who to ask for advice. This following considerations should be taken into account when planning for and preparing a Will.

Appointing a Guardian for your Minor Child

When one parent dies, the other parent typically gets legal custody of any minor children. However, if one parent is unfit to care for the child, or if both parents die, the deceased’s family and the Courts will look to the Will to determine who should become a child’s guardian. If there is no guardian named in a Will, or if the named guardian is unwilling or incapable of acting as a guardian, the Courts will make a decision on behalf of the deceased individuals.

To avoid complications, it is wise to name guardians and alternate guardians for your minor children in your Will. It is also important to speak with potential guardians prior to appointing them, in order to ensure that they are willing and able to assume this responsibility.

Choosing the Beneficiaries of your Will

The individuals named in a Will are called “beneficiaries.” The most common types of beneficiaries are family, close friends and charities. A Will outlines the inheritance to be received by each beneficiary after a person’s death.

Value your Assets

In making a Will, it is helpful to consider and list all known assets. If there are significant assets, such as a house, property or motor vehicle, it is important to identify whether the asset is owned independently or in conjunction with someone else. With respect to real property, there are two ways in which property can be co-owned: (i) a joint tenancy, or (ii) a tenancy in common. The nature of the property ownership will impact whether or not the testator’s share of the property can be included in the Will and gifted to a beneficiary.

Specific Gifts

Many people include specifics gifts of items with sentimental value in their Wills so they can ensure that these items are given to a specific person. Even if there is little to no monetary value in the object, sometimes a small personal item will be the one which is most crucial to a beneficiary. Specific gifts may include jewelry, artwork or other family heirlooms.

Appointing an Executor

It is important to consider who should be appointed as the executor of an estate when an individual passes away. The executor is an individual who carries out the instructions in the Will and administers the estate, including paying any taxes and debts, and distributing the property in accordance with the Will. Choosing an executor is an important decision. The named individual should be trusted to carry out the testator’s wishes and instructions honestly. They should be organized and understand their responsibilities as an executor.

For further information or assistance in drafting a Will, please consult a TEP.

Who should be executor of my Will?

Posted on By admin
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One of the most important decisions to make when preparing a Will is choosing an executor (referred to in Quebec as a liquidator and in Ontario as an Estate Trustee), i.e., the person charged with administering an estate and carrying out the final requests of a deceased individual. Appointing the right executor ensures a quick and accurate distribution of an estate, while minimizing animosity among beneficiaries.

Duties of an executor

The duties of an executor are plentiful and include the following.

Immediately After Death

  • Determine whether deceased left a Will
  • Make funeral arrangements
  • Open a bank account for the estate
  • Notify beneficiaries of their interest in the estate
  • Cancel health insurance, driver’s license, credit cards
  • Pay outstanding debts and taxes of the deceased
  • Secure estate assets (ensure proper insurance)

Interim Matters

  • Prepare an inventory of assets including real estate, bank accounts, life insurance, investments, and personal property
  • Arrange for valuation of assets
  • Assess the rights of the surviving spouse (if any) under provincial law
  • Assess the rights of any dependents who were financially dependent on the deceased
  • Pay any outstanding debts and taxes of the deceased

Final Matters

  • File a final T-1 personal tax return and an T-3 trust tax return for the estate
  • Obtain a clearance certificate from Canada Revenue Agency
  • Arrange for transfer of real property
  • Dispose or distribute personal effects in accordance with the Will
  • Distribute the remainder of the estate as indicated in the Will
  • Close estate account

Who can be an executor?

Generally, anyone over the age of 18 who is mentally competent can act as the executor of a Will. The person named as an executor may also be a beneficiary of the Will. When choosing an executor:

  1. Consider naming more than one executor

Multiple individuals (or co-executors) may be appointed to share the burden of administering an estate. One pitfall of this approach is that naming multiple individuals can make decision-making more difficult. If the Will is silent about decision-making, then unanimous consent will be required. However, this may still be the correct approach, and a Will can always provide for a tie-breaker if executors disagree on a decision.

  1. Name a back-up executor

It is important to appoint an alternate executor or executors in the event that the primary executor is unable or unwilling to fulfil their role. Accordingly, Wills should list both primary and alternate executors in order of preference.

  1. Consider the residency of your executor(s)

In addition to the practical difficulties of overseas estate administration, naming an executor who resides in a foreign jurisdiction will cause complications for post-death estate planning. For example, naming a foreign executor could change the tax residency of the estate or prevent the executor from being entitled to make trading decisions on certain investment accounts. There may also be bonding requirements for a foreign executor.

  1. Consider naming an estate professional as an executor

Generally, people appoint family members or close friends to be the executor(s) of their Wills. However, in situations where there is a complex estate, or acrimony among beneficiaries, dependents or family members, it may be appropriate to consider appointing an estate professional as an executor. Estate professionals who provide these services include trust companies, lawyers, and accountants.

Who should I choose as executor of my Will?

The executor is tasked with the responsibility of administering an estate in accordance with a Will. The executor should be someone who:

  • The testator trusts to administer their affairs in accordance with their wishes;
  • Lives within reasonable proximity of the testator so that it is easier to deal with the deceased’s family and assets;
  • Has a degree of knowledge pertaining to the complexities involved in the testators tax filings, investments and financial decision-making;
  • Is driven and able to get things done promptly; and
  • Is likely to survive the testator’s death.

These responsibilities should be assigned to someone who is aware that the duties of an executor are both time-consuming and stressful. In some provinces, once an individual begins the process of dealing with estate assets, they are legally bound to see the administration of the estate to its end, unless relieved of their duties by a court order.

How do I appoint an executor?

The best practice is to first have a discussion with a chosen executor prior to naming them in a Will. If they are amenable to the role, they may be appointed as executor in the Will. Their contact information should be included in the Will, or given to a trusted advisor who holds the Will and will contact the executor.

For additional information or assistance with appointing an executor of your Will, please consult a TEP.

Can I Exclude Dependents From Receiving Assets From My Estate?

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Some people may wish to leave money or other assets to individuals or organizations other than relatives in their Wills. These situations may arise when an individual feels a strong calling to leave most or all their assets to a charity, or in cases where family members are not perceived as those in the most need of subject assets.

While, in theory, a testator can dictate the distribution of their assets however they would like, the right to choose how assets are distributed may be limited by dependants’ relief legislation and family law obligations. Dependants’ relief legislation is in place to ensure that dependants who relied on loved ones for support are not unfairly left out of a Will.

Provincial law

In Canada, each province has its own law dealing with dependant relief. The relevant statutes include:

  • Ontario –Succession Law Reform Act
  • Quebec – Civil Code of Quebec
  • British Columbia – Wills, Estates and Succession Act
  • Alberta – Wills and Succession Act
  • Saskatchewan – Dependants’ Relief Act, 1996
  • Manitoba – Dependants Relief Act
  • New Brunswick – Provision for Dependants Act
  • Nova Scotia – Testators’ Family Maintenance Act
  • Newfoundland and Labrador – Family Relief Act
  • Prince Edward Island – Dependants of a Deceased Person Relief Act
  • Yukon – Dependants Relief Act
  • Northwest Territories – Dependants Relief Act

In British Columbia, the courts have wide latitude to vary a deceased’s Will if the court thinks the Will does not adequately provide for the spouse or children of the deceased. In that jurisdiction, is a moral obligation to provide for spouses and children in a Will, even if the children are self-supporting adults.

By contrast, in most other Canadian jurisdictions, an adult other than the deceased’s surviving spouse must demonstrate that they were dependant on the deceased for support in order to bring an action to vary a deceased’s Will (for example, the adult child of a testator). For advice on how to navigate dependants’ relief legislation in your jurisdiction, contact a TEP.

Who are my dependants?

Dependants eligible to challenge a Will typically include spouses and children who depended on the testator for support immediately prior to their death. Depending on the testator’s province of residence, this may include common law partners and stepchildren. A Court can vary the Will plan if it decides that the dependants are put into financial difficulty by the terms of the Will.

Avoiding disputes with your family

If there is any possibility that a Will may be challenged (for example, a controversial position is taken in the Will), a TEP should be consulted for advice on how to avoid expensive and draining litigation.

If you are concerned that family members may challenge a Will, you may wish to consider the following steps:

  1. Tell your family why you decided not to leave anything to them.
  2. Write a letter to accompany your will explaining your reasons.
  3. Get a doctor’s certificate confirming that you were of sound mind when you made the will, to minimize the risk that it can be successfully challenged on the grounds of mental incapacity.
  4. Clearly communicate your intentions to your TEP in writing.

For further information, or assistance with drafting a contentious Will, please contact a TEP.

What is Probate? What does it mean to probate a Will?

Posted on By Louise Polcaro
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Probate, from the Latin probare, “to test or prove,” involves the act of proving the legal validity of a Will. In certain situations (for example, to access a deceased’s bank accounts or to transfer land), a legal document must be issued by a Court proving that a Will is valid and the person named as Executor within the Will has the authority to act on behalf of the Estate. In most provinces and territories, the Court issues a certificate called ‘Letters Probate’, the ‘Grant of Probate’, or ‘Grant of Certificate of Appointment of Estate Trustee With (or Without) a Will’. The process is commonly referred to in short as “Probate.”

The process for verifying Wills in Quebec differs from the rest of Canada.

If the deceased left a Will

If the deceased left a valid Will, the document should provide who the appointed authorities are (i.e. Executor(s)) to look after the estate administration, who the beneficiaries of the Estate are, and any specific intentions as to how the deceased’s possessions, money or property are to be distributed to them.

The Executor named in the Will may be required to obtain Letters Probate (or Certificate of Appointment of Estate Trustee With A Will, in Ontario), in order to administer any estate assets or settle any claims of the deceased. If required, a probate application form would be prepared and submitted to the Courts, along with other required or supporting documentation. This process varies slightly from province to province. For more information regarding probate in the specific province of residence (determined with reference to the deceased), please click the name of the province below.

If the deceased did not leave a valid Will

If the deceased did not leave a valid Will, they are said to have died “intestate.” Generally, when a person dies intestate, an application must be made to the Court. The Court will appoint an authority (i.e. Administrator(s)) to administer and distribute the Estate according to specific laws called the laws of Intestacy. These laws determine who is eligible to receive assets in the estate, and they do vary province to province as well.

How does the Grant of Probate different than the Grant of Administration?

Although the naming varies slightly between provinces, Courts generally have three different grants they can issue when a person applies to administer an Estate. It depends if the deceased died with a Will or without one. It is the responsibility of the person applying to determine what type of grant they are applying for and to apply for the appropriate grant. Each type of grant will have different application requirements.

(1) If the Will names you as the Executor, you will apply for a Grant of Probate (or in Ontario, a Grant of Certificate of Administration with a Will).

(2) If the Will ‘does not’ name anyone as Executor or the person named as Executor is unable or unwilling to act, it will be necessary to apply for a Grant of Administration with Will Annexed (or in Ontario, a Grant of Certificate of Administration with a Will).

(3) If the deceased died without a Will, you will need to obtain a Grant of Administration (or in Ontario, a Grant of Certificate of Administration without a Will).

There are other grants for more complex situations, which may include replacing an acting Executor or Administrator, or recognizing a foreign Grant of Probate from another province or territory. It is prudent to seek legal assistance prior to making applications to a Court.

Most provinces will not issue grants of administration to people who reside outside the province. In provinces where grants of administration are made or made to people who reside outside the province, the court may require some form of security or bond to be placed by the person assuming the role of administrator. These requirements vary from province to province and a TEP should be consulted regarding the rules specific to the applicable jurisdiction.

Do I need a lawyer to probate a Will?

Estates vary substantially in terms of size and complexity. If the Executor is required to obtain the Grant of Probate, the application process can be very complex. Although most Probate applications do not require a formal appearance in Court, there are a number of legal forms that must be filled out correctly. Determining which forms are necessary, completing them accurately, and enclosing appropriate supporting documentation can be daunting. Legal assistance is recommended, although may not required for simple estates.

If an Estate is contested by a beneficiary or involves administration outside the scope of what is discussed in this overview, Executors should strongly consider seeking formal legal advice.

Is it necessary to probate a Will?

Not all Estates will require the Will to be Probated. The Grant of Probate will provide legal authority to an Executor(s) to handle any assets held by an Estate. Generally, any land or real estate held in an Estate may only be handled by and Executor who has received Probate. If the deceased died with bank accounts in excess of $25,000, the bank may only release those accounts to the Executor if Probate was issued by the Court. For Estates with assets of lessor value, banks may accept other forms of indemnity to handle those assets rather than obtaining the Grant of Probate.

Information on probate by province

The risks of not making a will

Posted on By admin
worried woman

Making a will can seem like an unpleasant or dreary task to be put off indefinitely. However, there are serious implications for the loved ones of someone who dies intestate (without a will). This article highlights some of the consequences associated with not preparing a will.

1. Your estate will be distributed under the rules of intestacy

A person who dies without a will is considered to have died “intestate”. Legally speaking, an intestate person has left no instructions as to how they wish for their assets to be divided and distributed on their death. In such circumstances, provincial legislation governs how property will be distributed amongst surviving relatives. Typically, these rules indicate that if a married person dies, an initial lump sum amount will be left to their spouse, plus a portion of the residue of the estate (the amount depends on whether there are any children of the deceased). If there are children, the residue is divided proportionately between any children and the surviving spouse. Where there are no children or spouse, the estate generally goes to the next of kin.

2. There is no opportunity to appoint guardians for minor children

One of the most important aspects of a will is appointing a guardian to look after minor child in the event of an untimely death. In the event all of the legal guardians of a child pass away without leaving wills, a Court Order will be required to select a guardian for the child. In the absence of such an order, the applicable provincial government would become involved.

3. There is no named executor

An executor is typically named when a person prepares their will. An executor is someone who is trusted to administer the estate according to the deceased’s wishes. However, if there is no will, there is also no appointment of an executor. As such, someone must apply and be appointed to act as administrator of the estate, which may result in delay, expense and frustration for family, friends and loved ones.

Other potential implications of not creating a will include:

  • Stepchildren and, in some jurisdictions, unmarried partners will likely be discounted from the estate;
  • Families may face additional administrative burdens which add to suffering at an already difficult time;
  • Familial disputes may arise; and
  • Expensive legal action may be required to resolve complications.

There are many risks associated with not preparing a will. As such, it is crucial that everyone prepare a will, preferably with the assistance of an experienced professional who can ensure that it is done properly.

For further information or assistance with drafting a will, please consult a TEP.