Estate Planning

What is a will?
What if there is no will?
If you die intestate, how does your estate get divided?
Who can make a will?
Who should prepare my will?
Is a will expensive?
Who will manage my estate?
Can my will be changed?
Does jointly-owned property eliminate the need for a will?
Does a good life insurance policy replace the need for a will?
Must my will be witnessed and recorded?
Does a will increase probate expenses?
When should I make a will?
What is a joint retainer on wills?
What are the duties of an executor?
Is the executor entitled to collect a fee?
Can the testator fix the executor's compensation?
Who pays the executor?
Can executor's fees be challenged?
Who will be granted custody of your children, and who will be the guardian of their property?
What is a power of attorney for property?
What is a power of attorney for personal care?
What is a living will?

What is a will?

A will is a legal document by which you control the disposition of your property at your death. A will is subject to certain formalities: it must be in writing; and it must be witnessed by two independent persons when the will is not entirely in the Testator’s own handwriting.

What if there is no will?

When a person dies “intestate”, all his or her property will be distributed according to the Succession Law Reform Act. When this occurs, arbitrary rules apply and will NOT take into consideration the special needs of any individual (ex. physical/mental disability; alcohol or drug dependency; mental instability). Only you can address these issues in the form of a properly executed will.

If you die intestate, how does your estate get divided?

This will depend on your marital situation and whether or not you have any children. The following are some common examples:

  1. A Surviving Spouse With No Issue

    • If there is a surviving spouse, whether or not the spouses are separated, and there are no children surviving, the spouse may be entitled to the entire estate. A spouse, for distribution purposes, is limited only to a legally married spouse. Thus, a common law spouse would not be entitled to the distribution of the deceased person’s estate. A common law spouse would have to apply to the court as a dependent or seek a constructive trust, in order to receive a portion of the deceased person’s estate.

  2. A Surviving Spouse With Children Surviving

    • If there is both a spouse, whether or not the spouses are separated, and children surviving, the spouse may be entitled to what is called a “preferential share”. The preferential share is currently set at $200,000.00.

    The spouse is entitled to the preferential share of the estate, calculated in the following manner:

    • If the net value of the estate is less than $200,000.00, then the entire estate passes to the spouse regardless of whether or not there are surviving issue.
    • If the net value of the estate is greater than the preferential share, the first $200,000.00 passes to the spouse, and the remainder will be divided between the spouse and children in the following way:

      • If there is only one child, then the spouse is entitled to one half of the residue over and above $200,000.00 and the remaining one half is for the child.
      • If there is more than one child, then the spouse is entitled to one third of the residue over and above $200,000.00, and the balance is split equally between the remaining children.

    • Alternatively, a surviving spouse has the option to elect to receive a portion of the deceased spouse’s estate under section 5 of the Family Law Act (FLA).
    • Subsection 5(2) of the FLA provides that, when a spouse dies, if the Net Family Property (NFP) of the deceased spouse exceeds the NFP of the surviving spouse, then the latter is entitled to one half the difference between them. If the surviving spouse elects to receive under the FLA, he or she forfeits their entitlement under the SLRA. These options are not cumulative. This option is not available to common-law spouses.
Who can make a will?

The testator must be competent and at least 18 years old. Where there is doubt about someone’s ability to understand the nature of what they are doing, a capacity assessment is often recommended before the will is prepared and signed. This will often defeat a contestation of the will by slighted heirs who allege that the testator was not competent at the time of the will's execution.

Who should prepare my will?

In our experience, the “do-it-yourself” approach, using ready-made fillable will forms, often creates serious problems and ends up costing the estate much more than what was initially saved. The language of wills is precise. The incorrect use of words results in a lack of clarity and, as a result, distribution of an estate in a manner unintended by the testator. A professionally drafted will is always recommended.

Is a will expensive?

No, especially when considering its importance and the size of the estate. Normally, the lawyer’s fee is determined by the time spent in preparing a will, obtaining instructions, reviewing it with the client and making changes depending on the client’s wishes. The more prepared the client is, the quicker the lawyer can focus on the issues at hand. Please inquire about the approximate cost before the will is drawn. Bear in mind that a few hours of a lawyer’s time is a worthwhile investment, which often translates into substantial savings in taxes and probate fees. Clients should have a current Estate Directory of their assets, life insurance, bank accounts, key contact information, financial advisors, etc.

Who will manage my estate?

If you make a will, you choose the estate trustee/executor; that is, a person who you absolutely trust to manage your estate. If you die intestate, someone who you may not want, even a creditor, may be appointed as trustee of your estate. Extra expenses may be incurred for bonding. Preference should be given to Ontario residents so as to avoid issues like bonding. You can select more than one person to act as your executor.

Can my will be changed?

Yes. As long as the testator is mentally competent, he or she can change the will. A periodic review makes good sense, and a rule of thumb is every 5 years, or whenever there is a material change in the person’s circumstances. These include births, deaths, marriage, separation, divorce, or changes in the nature and extent of property owned. For example, a will executed before a marriage is null and void unless made in specific contemplation thereof. Under Ontario law, a husband or wife is entitled to a portion of the estate of the deceased spouse unless that person has released such rights.

Does jointly-owned property eliminate the need for a will?

No. Assets like bank accounts, real estate, stocks and bonds are often held in the joint names of the husband and wife. Such jointly owned assets automatically pass to the survivor upon the death of one of them, and does not form part of their estate whatsoever. However, we should still prepare a will. If one spouse dies shortly after the other, such as in the case of a common accident, the survivor may not have the time or the capacity to make a will, with the result that all of that person’s property may pass to unintended heirs of the survivor. Such unintended beneficiaries could include children who have not been seen for years, or even a separated spouse! Joint assets can also cause serious problems when not properly documented.

Does a good life insurance policy replace the need for a will?

No. Life insurance is taken out to fill a particular need. Where certain circumstances have been put into place, like in a separation agreement, then care should be taken so as to not contradict a previous will. Where minors are beneficiaries of a life insurance policy, the proceeds will not be paid to them until they are 18 and at which time they will be free to dispose of the inheritance as they see fit. Consideration should be given to the creation of an insurance trust.

Must my will be witnessed and recorded?

No. In Ontario, you can make a holograph will which is a will that is entirely prepared in your own handwriting and signed by you. Such a “do-it-yourself” approach often creates serious problems, especially when there are unintentional contradictions in the holographic will. As such, a lawyer will usually provide for 2 witnesses to prove the signature of the testator. In Ontario, a will is not recorded by a third party during the lifetime of the maker, like it is in Quebec. The terms of a will are confidential until it is probated. If you have real estate in another province or country, such as a vacation home, the law of that jurisdiction will prevail and it is always recommended that a foreign will be prepared and executed in such circumstances. In Ontario, a gift to a person who witnesses the will is void!

Does a will increase probate expenses?

No. It is possible for a well-drawn will to actually reduce expenses. Where private corporate share are owned, it is customary to have a will that only deals with such corporate shares. In such circumstances, probate fees do not have to be paid on such assets, as the corporate will is not submitted to probate. In the context of estate planning, certain techniques are available to otherwise reduce or eliminate probate fees, and these should be carefully reviewed with our lawyers.

When should I make a will?

Whenever you own assets or anticipate assets that you wish to see disposed of in a specific and orderly fashion.

What is a joint retainer on wills?

This occurs when a husband and wife both prepare and execute wills with the same lawyer. Professional rules prevent the lawyer from subsequently preparing a new will for either party especially where the dispositive provisions are being changed.

What are the duties of an executor?

An executor is responsible for the administration of the estate, including arranging the burial of the deceased, collecting the estate’s assets, converting the estate’s assets into money to the extent necessary, settling the estate’s debts, and satisfying bequests and legacies. In addition, an executor must distribute the residue of the estate to persons entitled to it. The executor has a year to wind up the estate, unless the terms of the will dictate otherwise or factors have prevented the orderly liquidation of assets within that year.

Is the executor entitled to collect a fee?

Yes. Executors' compensation is statutory in nature. Specifically, section 61(1) of the Trustee Act provides that “A trustee, guardian or personal representative is entitled to such fair and reasonable allowance for the care, pains and trouble, and the time expended in and about the estate, as may be allowed by a judge of the Superior Court of Justice.”

The 5 basic criteria that have been applied in many Ontario cases when fixing the compensation of executors are:

  • Magnitude of the estate;
  • Care, responsibility and risks assumed by the executor;
  • Time spent by the executor in carrying out his or her responsibilities;
  • Skill and ability required and displayed by the executor; and
  • Results obtained and degree of success associated with the efforts of the executor.
Although the above factors provide some guidance in terms of what criteria should govern the calculation of an executor’s fees, they do not provide an easy method for arriving at a specific dollar value. Hence, in an effort to develop some consistency and predictability, the courts have developed guidelines over the years that serve as a point of commencement. Of course, this is subject to an increase or a decrease in the appropriate circumstances.

These guidelines apply percentages to various categories of the estate receipts and disbursements, and is expressed in the following manner:

  • 2 ½ % of the total value of capital receipts of the estate.
  • 2 ½ % of the total capital disbursements of the estate.
  • 2 ½ % of the total revenue receipts of the estate.
  • 2 ½ % of the total of revenue disbursements of the estate.
  • Annual fee of 2/5 of 1% of the average annual market value of the capital of the estate.
Despite these guidelines, the courts still require evidence to justify the quantum of compensation being claimed by the executor. This evidence can include time dockets or time logs. For example, if the estate consisted of only one bank account with $300,000.00 on deposit, it is unlikely that the court would approve compensation of $15,000.00. If there is more than one executor, then the compensation will be split among them.

In some cases, the courts do award an additional allowance to the executor, where the administration of the estate was made more difficult than usual – i.e. where the estate has involved the management and operation of a company or where litigation was initiated by the executor on behalf of the estate. Where the administration of the estate is relatively simple and straightforward, a 3% compensation may seem more appropriate. All executors must keep an account record of all transactions during their administration, and failure to do so will lead to personal responsibility.

Can the testator fix the executor's compensation?

The testator can avoid the application of the guidelines by specifically providing, in the will, the amount that he or she wishes the executor to receive in compensation. However, be mindful that the compensation should be sufficient to actually cover the executor’s time, otherwise the executor may renounce his right to act as an executor and the estate will then be left with no executor.

Who pays the executor?

In administering the estate, the executor will pay any debts of the estate, which include funeral and testamentary expenses and income taxes. Thereafter, the executor will distribute any specific gifts. It is from the remaining residue that the executor is compensated, thereby reducing the residue of the estate that is otherwise available for distribution.

Can executor's fees be challenged?

If a beneficiary is dissatisfied with the amount that an executor claims as compensation, the law provides for a summary procedure called a "passing of accounts" for settling the issue. Each residual beneficiary has a right to make his or her views known. It is at this time that an executor will have to be represented by counsel at the passing of accounts.

Who will be granted custody of your children, and who will be the guardian of their property?

One of the most significant reasons for parents with small children to make a will is to appoint a guardian. In addition to choosing a capable custodian, parents should also be concerned with considering the manner in which the custodian(s) will raise the children, and who will be the guardians of their property until the children reach the age of majority. All of this can be specified in a will.

Under the Children’s Law Reform Act, the will-appointed guardian will have to apply to the court ninety (90) days after his or her appointment for a permanent order of custody if he or she is interested in continuing as the minor’s guardian. You should always consult with your proposed guardians ahead of time to ensure that they are able and willing to act, should the need arise. Although the designation of a custodial parent in a will is not binding on the court, it is significant evidence as to what the deceased believed was in the best interests of his or her children. Where desired, the deceased can name one person as custodian of the child, and a different person as the guardian of the child's property/assets.

Consider holding a child’s interest in the estate until they are sufficiently mature to deal with their inheritance. This could take the form of an inheritance being paid in stages: 1/3 @ 21 years of age; 1/3 @ 25 years of age and the balance at 30 years of age; or all at a specific age, such as 25 years of age. In default of specifying an age, the law will impose 18, and many 18 year olds are not capable of handling large amount of affluence.

For assistance creating a will that reflects your family's particular needs, a living will, or a power of attorney, please contact one of our experienced lawyers at the phone number listed above.

What is a power of attorney for property?

A power of attorney for property (often referred to as a financial power of attorney) is a document that you sign during your lifetime to allow someone to act on your behalf. It should be given to someone you absolutely trust. It allows the appointed person to act for you if you become incapacitated, either physically or mentally. Usually, the individual you appoint as your attorney will be given specific power to sell assets, enter safety deposit boxes, pay accounts, invest money, etc. If the right language is used in the power of attorney, it will prevent the Public Guardian Trustee from administering your estate. If you wait until you become incapacitated, it is too late!

What is a power of attorney for personal care?

This is a separate document which appoints someone to make “personal care” decisions, such as hospitalization, surgery or other health care needs, in the event that you are unable to do so. You only lose the right to make such health care decisions when you are so assessed. Your attorneys then carry out your health care directives.

What is a living will?

A living will is typically included in a Power of Attorney for Personal Care. It deals with the situation where there is no reasonable expectation of you recovering from extreme physical or mental disability. It directs that you be allowed to die without being kept alive by medications or machines (ex. artificial means).

Our estates & trusts lawyers have substantial experience in the areas of estate planning and trusts. In this area, our focus is on long term estate planning requirements. We will also deal with family-related concerns where an intergenerational transfer of assets is being contemplated.

We have extensive experience to provide you with comprehensive advice on a wide range of legal issues in this area, including the interpretation and enforceability of wills and trust arrangements, the rights of beneficiaries, the duties of executors and trustees, and mental incapacity issues.

Where appropriate, our lawyers advise clients with regard to the creation of inter vivos trusts.

PLEASE NOTE: This information is based on Ontario law and is general in nature. It is not meant as legal advice and does not create a solicitor/client relationship between the firm and the reader. Specific facts in any given case may alter their application, or otherwise involve other laws not referred to herein.

We also have experience dealing with farm transfers between generations and strive to protect the interests of the parents (preservation of capital) while at the same time trying to accommodate the wishes of the younger generation (growth at a reasonable cost).

Our estates lawyers provide the following services:

  • Tax planning including creation of trusts, family corporations and estate freezes.
  • Preparation of wills, enduring powers of attorney and personal directives.
  • Preparation of all documentation required for the administration and probate of estates.
  • Succession planning for owners of private corporations.
  • Advising on all aspects of estate planning and administration.


Contact Us

info@levesquegrenkielaw.ca

233 Augustus Street
Cornwall, Ontario
K6J 3W2

Tel: 613.932.7654
Fax: 613.938.1692

Hours of Operation

Monday - Friday
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