Wills & Estates
Frequently Asked Questions
Why do I need a Will ?
The purpose of a Will is to provide some meaningful order to the administration of your estate. In the absence of a Will, it is not evident who has the authority to deal with your assets and liabilities upon your death and there are no personal instructions as to the distribution of your estate to any preferred beneficiaries.
What happens if I do not have a Will ?
This is called an “intestacy”. In such a case, the administration of your estate would be governed by the Succession Law Reform Act and Estates Act. It would be necessary for someone to volunteer to act as the Estate Trustee of your estate and once appointed he/she would be required to deal with your estate in a strict fashion as established by statute. It is a cumbersome process that can be avoided with a properly drafted and executed Will.
How often should I update my Will ?
There is no strict requirement but you should certainly review your Will on a periodic basis to ensure that your wishes and intentions are still accurately reflected in your Will. Certainly, any material change in your life or your assets should give rise to a review of your Will. For instance, a Will made prior to marriage is invalidated by marriage, unless it specifically states that it was made in contemplation of marriage.
What can invalidate a Will ?
It can come as a surprise that a marriage will invalidate a Will while a separation or a divorce will not have a similar effect. As a result, it is important that you update your Will soon after marriage and that you review your Will after a change in your marital status to ensure that revisions are made to reflect this change.
Why do I need a Power-of-Attorney for Property ?
A Power-of-Attorney for Property can prove very useful when you are unable to manage your own financial and property affairs. In designating someone that you trust to act as your attorney for property you are ensuring that your affairs can be managed by someone on your behalf and in your name. Such a document can be limited in time or in relation to specific property items or financial accounts and can be conditional on certain events (i.e. medical incapacity). However, many powers-of-attorney for property are drafted without condition or qualification and can be exercised immediately following the execution of the Power-of-Attorney.
When does a Power-of-Attorney for Property take effect ?
That will depend on the language of the specific Power-of-Attorney for Property but, in many cases, the Power-of-Attorney can take effect immediately.
Why do I need a Power-of-Attorney for Personal Care ?
The value of a Power-of-Attorney for Personal Care is that it provides you an opportunity to designate someone to make decisions on your behalf that relate to your personal and medical care if you are no longer able to make those decisions yourself. It can prove to be a very helpful document but, of course, it must be signed while the person granting the Power-of-Attorney still has legal capacity to do so.
When does a Power-of-Attorney for Personal Care take effect ?
Unlike the traditional Power-of-Attorney for Property, a Power-of-Attorney for Personal Care can only be properly exercised when you are no longer able to make such decisions yourself.
What is “Probate” ?
This word is commonly used but has been replaced in Ontario by a “Certificate of Appointment of Estate Trustee”. The issuance of a Certificate of Appointment of Estate Trustee in an estate is the judicial validation of the appointment of an Estate Trustee who has either been designated under a Will or who has volunteered under an intestacy. Once a Certificate of Appointment has been issued by the Superior Court of Ontario the appointed Estate Trustee can then proceed with the administration of the deceased’s estate and deal with the deceased’s assets and liabilities in accordance with the terms of the applicable Will or statute (if there is no Will).
Is there a fee associated with the issuance of “Probate” ?
The estate administration tax is a charge assessed by the Government of Ontario that is due upon the submission of an application for a Certificate of Appointment and is tied to the value of the estate of the deceased individual at the time of his/her death. The tax is equal to 0.5 % on the value of the estate up to $50,000.00 and 1.5% on the value of the estate for any value in excess of $50,000.00.
How can I reduce my estate’s exposure to the estate administration tax ?
This tax is very much linked to the character and composition of your assets at the time of your death. While there are some techniques to reduce this potential liability, you must also be certain that any such effort does not prejudice the over-all objectives of your estate plan.
How long does it take to administer an estate ?
This question is dependent on the composition of the estate and, more importantly, the instructions within the governing Will. If the Will itself provides for a trust in favour of a child or other trusteeship the estate could be maintained as long as required by the trust terms within the Will. For a conventional estate the length of time taken to complete its administration is frequently dependent on the filing all necessary tax returns on behalf of the deceased and his/her estate and in obtaining a clearance certificate from Canada Revenue Agency that confirms that all such returns have been received and taxes fully paid. This process can be protracted and can result in a simple estate administration taking eighteen months.
Resources
- Estate Administration Tax calculator: https://www.ontario.ca/page/calculating-estate-administration-tax
- Estate Distribution Principles: https://www.attorneygeneral.jus.gov.on.ca/english/family/pgt/heirclaim.php