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Appointing an Attorney for Personal Care

In Ontario, a Living Will is often called a Power of Attorney for Personal Care and is largely governed by the Substitute Decisions Act. Living Will gives instructions to a person appointed (the appointed person is called the Attorney for Personal Care) by the person making the Living Will (called the Donor).  The instructions are for what kind of care is to be given to the Donor when that person becomes unable to make decisions.  This includes looking after someone who is caring for a mentally disturbed person, or looking after an infant or other person.  The Attorney for Personal Care can be 16 years of age or older.   This may present problems if the chosen Attorney for Personal Care is under 18 years of age and is asked to make certain business decisions.  Someone who is under 18 is an infant in the eyes of the law and cannot make certain business decisions.

The Donor must have the legal capacity to make the living will.  In other words, the Donor must be coherent and able to understand the effect of the Living Will.

The Attorney For Personal Care is acting as a Trustee and is therefore bound by The Trustee Act and as well, every statute dealing with Powers of Attorney.

A Power of Attorney can be replaced by the Donor by sending a Notice of Revocation to the named Attorney.  There are specific legal requirement for making this revocation.

 

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Why You Need a Last Will & Testament

Since we all will pass on, it is important that we prepare for the inevitable despite the common uneasiness of facing our own mortality. Legally speaking, one of the most important things to do is to make out a Last Will & Testament.  Having a Last Will & Testament drafted by a lawyer is a responsible measure to take. It allows you to achieve the following objectives:

1)  To provide for your loved ones when you are gone and to make sure that they are taken care of;

2)  To distribute your assets in the manner you see fit;

3)  To secure the efficient management of your estate, so that a family member who is ill equipped to handle the distribution of your estate is not left with the burden; and

4)  To avoid any subsequent and costly estate litigation and family bitterness or infighting that may result from the absence of a Last Will & Testament or a poorly drafted Last Will & Testament.

Dying Without a Last Will & Testament

Dying without a Last Will & Testament (intestate), the law, not you, will dictate how your estate is distributed.  And without a Last Will & Testament appointing an executor or executors to distribute your estate, the process of distribution can be a long and costly one. Below is an illustration of what can happen when a person dies intestate (without a Last Will & Testament).

Must a Last Will and Testament Be in Writing?

Yes. Governed by the Succession Law Reform Act, the creation of a Last Will and Testament must be in writing.

What is a Holograph Last Will and Testament?

A Holograph Will is one where the entire document is in the handwriting of the Testator (male) or Testatrix (female).

May I have More than One Last Will and Testament?

Legally speaking it is possible to have more than one effective Last Will and Testament but for the vast majority of people this is not recommended.

Who Inherits My Estate If I Die Without A Last Will & Testament?

If you die  without a Last Will & Testament, then your estate will be distributed in accordance with the Succession Law Reform Act, depending on the situation: a) If you die with an estate worth $200,000 or less and leave a spouse and children, then your spouse will receive the entire estate and your children will receive nothing. b)  If you die with an estate worth over $200,000 and leave a spouse and children, your spouse will receive $200,000.  The rest of your estate beyond that $200,000 is called the “residue” and will be divided between your spouse and your children and their direct descendants should any of your children predecease you. If you leave one child, then your spouse shall be entitled to half of the residue of your estate and to one-third of the residue if you leave more than one child. Therefore, if you leave one child, that child will be entitled to half of the residue of your estate and if you leave more than one child, then your children will divide amongst themselves the balance of the remaining two thirds of the residue of your estate. c)  If you die and leave children or grandchildren but no spouse, then your estate will be divided equally amongst your children or to their direct descendants should they predecease you. If you die without a Last Will & Testament and there are not any surviving spouses, children or grandchildren, then your estate will go to your nearest living relative.  The hierarchy of relatives, from nearest to farthest, is as follows: a) your parents;  b) your siblings and their children; c) your nieces and nephews; d) your next-of-kin; and if you die intestate with no spouse, children or next-of-kin, then your estate becomes the property of the Crown. As you can see, the system established for intestacy (dying without a Last Will & Testament) does not account for many scenarios, particularly if you do not share the statute’s automatic preference for  the spouse over the children.

It should also be noted that the Succession Law Reform Act definition of “spouse” does not include common law spouses, so dying without a Last Will & Testament would leave your common law spouse with no automatic legal entitlement to any portion of your estate. None of these rules apply to someone who dies with a Last Will & Testament. So by making a Last Will & Testament, you can decide exactly who inherits, who does not, and how your estate will be divided up.

When Can My Children Inherit My Estate If I Die Without A Last Will & Testament?

Without a Last Will & Testament, you cannot decide at what age your children or any other beneficiaries may inherit your estate.  If you die intestate and your children have reached the age of 18, they will be able to inherit immediately. If they are minors at the time, the portion of your estate to which they are entitled will be paid into court and held in trust until they reach the age of 18. Many children at the age of 18 are not mature enough to handle a significant amount of money.  With a Last Will & Testament, you can appoint a trustee to manage your children’s inheritance for them until they reach the age you specify.  Otherwise, without a Last Will & Testament, they will inherit at age 18, whether or not they are ready for it.

Who Will Manage My Affairs If I Die Without a Last Will & Testament?

Often times there are assets such as real estate or a business that are difficult to manage and to manage these assets is beyond the capabilities of your beneficiaries to manage. In a Last Will & Testament, you can designate an individual or a corporation to manage your assets on behalf of your beneficiaries so that they can reap the rewards of owning those assets without having to deal with the difficulties of managing them.

Appointing a trustee is also important in situations where you wish to leave assets to a person who is mentally disabled or otherwise incapable of managing their own affairs.  In a Last Will & Testament, you can designate a beneficiary and a trustee to manage the estate for that beneficiary.

If you die without a Last Will & Testament and your beneficiary is incapable, then you will not be able to ensure that your assets are properly managed for their benefit. Instead your assets will be paid into court and an application to appoint an estate trustee will have to be made. The possible administrators of your estate include: your spouse, your next-of-kin, a person selected by your spouse and/or next-of-kin, or the Public Guardian and Trustee.

How Long Will It Take To Administer My Estate Without a Last Will & Testament?

If you have not left a Last Will & Testament, the administration of your estate can be a very long and drawn out process, as numerous issues will need to be resolved through the Court system.  If you deal with these issues before your death in a Last Will & Testament, this will allow for a speedy and efficient distribution of your estate.

What Are The Tax Consequences of Not Having a Last Will & Testament?

The tax consequences of distributing your estate vary depending on the estate and the estate planning. However, death does trigger certain tax consequences, most notably the deemed disposition of certain assets and probate tax.

A deemed disposition means that for tax purposes, an asset will be deemed sold and your estate will realize the capital gain on that deemed sale. For example, if you bought shares in a corporation for $100, and at the time of your death those shares are worth $1,000, then for tax purposes your estate would realize a $900 capital gain on those shares and would be taxed accordingly.  The deemed disposition does not affect ownership of the shares.

Probate taxes work in the following manner:

ESTATE VALUE TAX RATE
$0-$50,000 $5 per $1,000 of value
$50,000 > $15 per $1,000 of value

The table above illustrates that probate taxes are equal to $5 per $1,000 of value for the first $50,000 of the estate and $15 for every $1,000 or part of $1,000 reported as the estate value over $50,000.

In a Last Will & Testament, a Wills Lawyer  can take estate planning measures to lessen the tax consequences of both the deemed disposition and the probate tax.  Without a Last Will & Testament, it is impossible to do so, and this will result in your beneficiaries receiving less of your estate and Canada Revenue Agency receiving more of your estate than is necessary.

As you can see above, there are serious adverse consequences to not having a Last Will & Testament, including an inability to properly provide for your children, unnecessary tax consequences and the inefficient administration of your estate. While this is not an exhaustive list of the shortcomings of not having a Last Will & Testament, it should serve to highlight the necessity of having a Last Will & Testament, properly drafted in consultation with or by a Wills lawyer on your behalf.

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Due Execution of a Last Will and Testament

A Last Will and Testament must be executed properly.  “Execution” refers to the process of signing a Last Will and Testament.  Part 1 of the Succession Law Reform Act R.S.O. 1990, c.S.26 sets out the specific, strict requirements that have to be followed in order for a Last Will and Testament to be valid when it comes to execution. These requirements are often referred to as “due execution”.

To be duly executed, a Last Last Will and Testament and Testament must be in writing and it must be signed.  Sections 3 and 4 of the Succession Law Reform Act set out these two requirements:

Will to be in writing

3.A will is valid only when it is in writing. R.S.O. 1990, c. S.26, s. 3.

Execution

4.(1)Subject to sections 5 and 6, a will is not valid unless,

(a) at its end it is signed by the testator or by some other person in his or her presence and by his or her direction;

(b) the testator makes or acknowledges the signature in the presence of two or more attesting witnesses present at the same time; and

(c) two or more of the attesting witnesses subscribe the will in the presence of the testator.

Idem

(2)Where witnesses are required by this section, no form of attestation is necessary. R.S.O. 1990, c. S.26, s. 4.

Strict Formal Requirements

Unlike some other jurisdictions in Canada, Ontario does not have the benefit of any “substantial compliance” legislation.  In other words, the Succession Law Reform Act specifically states that a Last Will and Testament is not valid unless it is signed by the testator or by some other person in his or her presence and by his or her direction. The testator also has to acknowledge or make the signature in the presence of two or more attesting witnesses, who are present at the same time of signing and those two witnesses also have to sign the Last Will and Testament in the presence of the testator as well.  If these conditions are not met, the Last Will and Testament is deemed invalid, regardless of whether some or most of the requirements are met.

In some other provinces, the legislation allows a court to admit the Last Will and Testament to probate if the court is satisfied that the Last Will and Testament is the true expression of the wishes of the testator, but that is not the case in Ontario.

Although seemingly straightforward, the issue of due execution is one of the most commonly litigated issues in estates litigation.  This is due in large part to the prevalence of “do-it-yourself” Last Will and Testament kits, where people prepare their own Last Will and Testaments, not realizing that a seemingly small technicality can invalidate their Last Will and Testament entirely.

Wills and Estates Litigation

Litigation in this area is by no means restricted to “do-it-yourself” Last Will and Testaments.  Last Will and Testaments prepared by lawyers are also commonly the subject of this type of litigation.  There seems to be a common misconception that drafting a Last Will and Testament is a simple and straightforward matter.  In truth, Last Will and Testament drafting and execution can be a complex and demanding task.  A Last Will and Testament that is improperly drafted or executed can give rise to a claim for negligence against the lawyer responsible for the flaw.  It is advisable that a Last Will and Testaments lawyer be used for drafting a Last Will and Testament to prevent this situation from arising.   The cost of retaining a competent Last Will and Testaments lawyer to draft the Last Will and Testament is minimal when compared to the potential cost of litigation where the Last Will and Testament was prepared improperly.

Armed Forces

It should be noted that the requirement of two or more attesting witnesses does not apply in the case of the will of “a member of forces on active service”.  This includes (a) a member of the Canadian Forces placed on active service under the National Defence Act (Canada); (b) a member of any other naval, land or air force while on active service; or (c) a sailor when at sea or in the course of a voyage.  Such a person may make a will by “a writing signed by him or her or by some other person in his or her presence and by his or her direction without any further formality or any requirement of the presence of or attestation or signature by a witness”

Holograph Wills

The rules of due execution also do not apply in the case of a holograph will.  To be a holograph will, a document must be clearly intended to act as a last will and testament and must be completely in the testator’s handwriting and signed by him or her.  Any material coming after the signature of the testator will not form part of the Last Will and Testament for the purposes of administration.  Section 6 of the Succession Law Reform Act states that “a testator may make a valid will wholly by his or her own handwriting and signature, without formality, and without the presence, attestation or signature of a witness”.

Conclusion

In sum, if you suspect that a Last Will and Testament was not executed properly, it is open to you to challenge the Last Will and Testament on that basis.  In order to succeed on such a challenge in Ontario you will only need to prove that the technical requirements under the Succession Law Reform Act were not met.  If that is established, the Court will not inquire further to determine the intent of the testator.  In such a case, the Last Will and Testament will be invalidated and, unless there is another Last Will and Testament in existence, the estate will proceed based on the rules of intestacy.

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Estate Planning – Joint Bank Accounts and Investment Accounts with Rights of Survivorship

Case Comment -Madsen Estate v. Saylor

In Madsen Estate v. Saylor [2007] 1 S.C.R. 838 (“Madsen”), a father passed away leaving 3 surviving children. One of the surviving children, P., was given a power of attorney by her father, was designated the executor of her father’s last will and testament and was jointly named on her father’s accounts with a right of survivorship (i.e. if her father died, the account would pass to her.)

At her father’s death, P. was appointed the executor of her father’s estate and divided the estate according to the provisions of her father’s last will and testament. However, P. did not include the joint accounts held with her father with a right of survivorship because she believed they solely belonged to her.

P.’s siblings sued P. claiming that it was always their father’s intention that their father’s accounts, although held jointly with P., were intended to be split among the siblings equally.

The Supreme Court of Canada decided the case by examining if there was sufficient evidence to prove that the father’s intention was that the accounts would go to P. alone. Because such evidence was lacking, the Court decided that P. held the accounts with a resulting trust (i.e. for the benefit of all the beneficiaries) and the proceeds of the accounts would have to be included in the estate to be divided equally among the beneficiaries.

The Madsen case once again highlights the importance of having a last will and testament drafted by a competent wills and estates lawyer.  In preparation of your last will and testament, our Toronto wills lawyer can insert clauses in your last will and testament confirming your intention with respect to accounts held jointly with your children so that costly litigation and bitter family animosity to prove your children’s entitlement will be avoided.

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Peace of Mind

A Last Will and Testament drafted according to your needs by a Toronto Wills lawyer gives you and your loved ones the peace of mind that you deserve.  A Last Will and Testament is one of the most important documents that you will ever sign.  It is crucial that your Will accurately expresses your wishes. A Will drafted by a qualified Toronto Wills lawyer ensures that your property is distributed according to your wishes.  A Last Will and Testament saves your loved ones much time and expense after you are gone.

Think you can do-it-yourself with a “will kit” Read Beware of ‘Do It Yourself Will Kits‘ and Challenging A Will On Formal Grounds. In short, the cost of retaining a competent Last Will and Testaments lawyer to draft the Last Will and Testament is minimal when compared to the potential cost of litigation where the Last Will and Testament was prepared or signed improperly.

Our Wills and Estates Lawyer also has an office in St. Catharines, Ontario that serves the Niagara Region.

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Do it yourself Last Will and Testament kits have become very common in the last few years.  These Will kits should be used with caution.  Many people would never dream of “do it yourself” surgery.   Unfortunately, many people  would not think twice about using a “do it yourself” Will kit.  The potential problems with “do it yourself” Will kits are several.

Generic One Size Fits All Forms

Last Will and Testament kits do not give personalized estate planning advice like a Wills Lawyer can provide.  Many Last Will and Testament kits are simple “one size fits all” forms that are not customized to your own personal estate planning situation or to the laws of Ontario.   A Last Will & Testament kit only provides generic information and is therefore unlikely to identify or address all your specific needs.

Problems Signing the Last Will and Testament

Many Wills that are created using a Do It Yourself Will Kit and not supervised by a lawyer, are not signed properly.  In Ontario, the failure to Duly Execute a last will and testament renders it void.

“As Is” No Guarantees

Another common problem is that many Last Will and Testament kits provide the kits “as is” with a limitation of the provider’s liability for any loss or damage arising out of information provided in the Last Will and Testament kit, even where the user misunderstands or misinterprets the instructions in the kit.

he most common disadvantage is that a Last Will and Testament kit cannot give the user the same peace of mind that a Last Will and Testament drafted by a Wills lawyer can.  Few forms come with enough explanations to assure the user that they  are using the form properly.   If you do not use the form in the right way, or execute the Last Will and Testament properly, no alarm bell will ring and you will not know.  Only once you have passed on will these problems become known.  Questions as to whether or not you meant what you were signing can open the door to bitter family disputes and costly litigation.

Advantages To Having a Lawyer Draft Your Will

lawyer drafted Last Will and Testament has several distinct advantages over do it yourself Will kits.

Toronto Wills Lawyers are Licensed

Our Toronto Wills Lawyers are licensed and qualified legal professionals.

Professional Legal Advice

Toronto Wills lawyer is able to use precise legal language that ensures your wishes are accurately expressed in your Last Will and Testament.

Unlike a Will kit, Wills lawyers carry malpractice insurance.  If a Toronto Wills lawyer negligently prepares a Last Will and Testament then damages may be recoverable from the Will lawyer’s insurer.

Customized to Your Legal Needs

Having a Toronto Wills lawyer draft your Last Will and Testament will also ensure a personalized approach to your estate planning.  A lawyer drafted Last Will and Testament is customized to your unique situation and legal needs.  The Last Will and Testament is also customized to comply with the laws of Ontario.

Tax Planning

Toronto Wills lawyer can also advise you with respect to the financial and tax implications of your Last Will and Testament and your estate planning decisions.

Peace of Mind

However, the biggest advantage of using a lawyer to draft your Last Will and Testament is the peace of mind that you get knowing that a qualified, licenced, and insured professional is looking after your interests.

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