PREPARATION OF A WILL
MEMORANDUM

NO WILL

It is very important to prepare your wills. If no will is prepared, the Succession Law Reform Act l978, applies for the purpose of distribution of the estate to the next of kin. The Act is designed to give the estate of an average person to the usual beneficiaries. For example, if the estate is less than $75,000.00, it will go to his/her spouse. If the estate exceeds $75,000.00, the assets will be divided between the spouse and children, and the children’s share may be held by the Government Trustee until the child reaches the age of eighteen years, and a Court application may have to be made to release these funds.

If a person dies without having prepared the will, the administration of the estate become more difficult. In such a case the appointment of the administrator would have to be done by a court application and a bond may be needed. This procedure can be expensive.

EXECUTORS

The executor is the person who is authorized to deal with the estate of the deceased. He is the person who will make distribution of the assets to the beneficiaries under the authority of the Probate given by the court.

He should be a person who has knowledge of the person you appoint in your will as the executor is usually a person and preferably a person who is aware of the various assets owned by the person making the will.

If the spouse is alive, then he or she is usually made the executor in the will. In the event that the spouse is not alive, there should be another person named to act as the executor.

The executor should be a resident of Ontario, and if a non‑resident is appointed as the executor, the Court will ask for a bond equal to twice the value of the estate, or the Court may refuse to grant the probate.

If no close relative is available in Ontario, it is possible to appoint an institution such as a trust company, or a solicitor as the executor. Executors are entitled to charge remuneration for their services. Where there is a dispute as to remuneration the court is authorized to decide on the appropriate amount of remuneration.

MARRIAGE CONTRACTS

If you have been a resident of Quebec or Ontario and have prepared a marriage contract you should advise me of it. The marriage contract of Ontario is only binding during the lifetime of the spouses. The marriage contract cannot take the place of a will which is effective upon death. Therefore a will should be prepared in addition to the marriage contract.

DOMICILE

The law concerning the wills is the law where the person actually resides and intends to reside in the future. The will should be prepared in accordance with the formalities of the Province or the country where you normally reside. If you have real estate outside of Ontario you should advise me of it.

INTERNATIONAL WILLS

It is now possible between several countries which have been parties to the International Convention, to prepare wills in accordance with special formalities which are acceptable to the countries which have become parties to this treaty. The formalities of signing such wills are different to the signing of the usual Ontario will, and if you have the intention to make such an International will this should be reviewed in detail with me.

SUCCESSION DUTY ACT

Succession duty, which was levied in Ontario, is now abolished as of April 11, l979. This should make estate planning much easier in Ontario.

CAPITAL GAIN TAX

When you are preparing a will you should consider the possibility of Capital Gains Tax. It is levied on any capital assets including real property except the principal residence.

INSURANCE POLICIES

Benefit under the insurance policy goes directly to the beneficiary and not through the will. Where possible you should name your beneficiaries in the insurance. If you do not it will go through the estate and through the will end up with the beneficiaries you have named in the will. If you wish to change the beneficiary in an insurance policy you should ask the Insurance Company for the forms. These forms should be signed with a witness and a copy of this should be retained with your valuable documents.

JOINT OWNERSHIP

If you own a house, bank account or any other property jointly with your spouse or anyone else, the survivor will continue to own the property after your the death of the other person. Joint ownership saves all formalities of dealing with probate and payment of surrogate court fees and the administration of the estate.

ESTATE PLANNING

It is very helpful to plan your estate to minimize the payment of death taxes. In Ontario the main concern is payment of the capital gains taxes payable for capital assets which are increasing in value and are deemed to have been disposed off on death. If you have large enough assets other than your principal residence you should review the possibility of specially designed corporations which can freeze the value of your assets with the increased value going directly to your children. Or if you have revenue sources outside of Canada you can consider tax heaven shelters. We will be pleased to review these with you .

AGE OF MAJORITY

The age of majority now in Ontario is l8 years. When a child reaches the age of l8 years he can receive the whole of the estate at that age. Prior to that age you have to appoint a trustee who can hold the estate for him. Most children do not however reach maturity at that age and accordingly you should decide the age at which you wish to give the benefit to the child. Age 21 or 25 are better if you want to maintain through the trustee some control over the estate. The executor in such cases will be given the power to use the funds for education, maintenance, support or advancement of the child prior to reaching the specified age.

GUARDIAN

If a child is under 16 you should name a guardian in the will who will look after the child until he reaches maturity. The guardian is simply a custodian who will raise the child. You should ask the guardian to ensure that he or she is willing to act as a guardian.

BURIAL OR CREMATION

The decisions regarding the funeral and the disposition of the body are legally made by the executor, but any instructions given to him in the will are always observed by the executor. If you have strong views, you should advise the lawyer so that the instructions are prepared in the will.

DONATION OF ORGANS

You can donate your body or parts of it through your driver’s licence or you can write those wishes in the will. If you want me to write clause to that effect please let me know.

DEPENDANTS’S RELIEF – SUCCESSION LAW REFORM ACT

If you have a dependant whom you have supported during your life time you have to make a provision for such person. If you do not make provision in your will to support such person he or she can ask the court to set aside enough funds from your estate to provide the support. If you have such a situation please let me know so a detailed assessment of the situation can be done.

HOLOGRAPH WILL

A holograph will, prepared by the person in his own handwriting, is now acceptable in Ontario, provided that certain formalities are observed. It is very undesirable to use ready made printed forms of wills in which you fill out the blanks because the printed parts will not be recognized as a holograph will.

SIGNING A WILL

The usual Ontario will requires two independent witnesses who are not related or beneficiaries under the will. If a beneficiary becomes a witness he or she would lose the beneficial interest under the will. It is my practice to have myself and one other person witness your will.

SAFEKEEPING

A registration of the will is not required by law. Wills are usually stored in the lawyer’s office. Where a will is stored at home there is a temptation to change it if there is a dispute. Improperly made change can end up on court. You can if you wish keep the will with the Surrogate Court.

WILL REVIEW

Will should be reviewed about once a year or every two years. Laws change and your family situation or assets would change. The location of the will should also be verified at that time. If you do not know where I am located you can ask the Law Society of Upper Canada. Their telephone number is in the phone book.

LIST OF ASSETS

It is very desirable to prepare a list of assets and keep it with the executor. It is not necessary to have it for the purpose of preparing the will. The list, particularly your bank accounts and the addresses of your properties, should be kept with your executor and updated from time to time.

LIVING WILL OR POWER OF ATTORNEY

The laws affecting the powers of attorney have been changed in 1995. Now it is possible to prepare a power of attorney for personal care in addition to having it for your estate and assets. A personal power of attorney enables the person you appoint, called “attorney” to make decisions for you in the event of your mental incapacity to make decisions for yourself. This form of power of attorney has become very important with the medical advances where doctors can now keep a person alive physically much longer.

It is now desirable to prepare the wills as well as powers of attorney which can remain effective even if you are disabled. They can be made in such a way that they come into effect only when you are disabled.

FEES

The fee for the preparation of a will depends on time spent. It will save considerable time and money if you can read our memo or watch our video tape on wills and provide instructions to us on our checklist. When we have reviewed the details we can quote on the fees.
 

REGARDING MEMOS

Please review the *Disclaimer below. The memorandum is prepared as assistance and guidance to you ONLY and to minimize the time spent in discussion. Any specific questions regarding your matter should be referred to Mr. Chauhan.