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FREQUENTLY ASKED QUESTIONS: ESTATE PLANNING
© 2008 M. Jasmine Sweatman

M. Jasmine Sweatman, B.A. LL.B. TEP, LL.M., C.S., EPC
Certified Specialist (Estates and Trusts Law)
www.sweatmanlawfirm.com
Sweatman Law Firm, Oakville
Author of the books Bequest Management for Charitable
Organizations (2003) & Guide to Powers of Attorney (2002)

The following are the more commonly asked questions and answers in the area of estate planning..

Do most people have a Will?

No, surprisingly surveys have shown that most Canadians do not have a Will. It is not clear why. It could be simply procrastination or lack of knowledge of the consequences of not having a Will.

Why have a Will?

A Will is an important part for anyone to get and keep “their affairs” in order. Common reasons for having a Will include:

• to create trust provisions for family members such as children or spouses;

• to ensure your assets are transferred upon death to those whom you wish to benefit;

• to avoid statutory provisions such as the Family Law Act and Succession Law Reform Act that may arbitrarily redistribute the division of your assets;

• to give to charity;

• to ensure items with special significance are given to those intended;

• to avoid conflict and litigation;

• to place the administration and control of your estate in the hands of someone you trust;

• to save or defer the payment of taxes;

• if you have no heirs or family on death to avoid your assets going to the government; and

• to have peace of mind.
   

What happens if you die without a Will?

Each province has a statute that provides the answer. These statutes govern the distribution of assets where there is no Will. These rules are called the rules of intestacy. There is no discretion or flexibility in distribution of the assets as can be provided for in a Will. These rules of intestacy are not considered adequate as they are “one size fits all”.

Is it cheaper not to have a Will?

No. The costs of administration can actually be more.

Does everyone have an estate?

Yes, as long as they own anything (and not just real estate). A bank account, even furniture, can create an estate upon death.

What is a power of attorney?

A power of attorney is a legal document in which you give one or more persons the legal authority to make decisions about your finances or property (called a Continuing Power of Attorney for Property) or personal care (called a Power of Attorney for Personal Care).

It is strongly recommended that everyone have these two powers of attorney in addition to a Will.

What is a trust?

In general a trust is created when a person (called the settlor) asks a trustee to hold certain property in trust for another (called the beneficiary). You can set up a trust during your lifetime (called an inter vivos trust) or upon your death in your Will (called a testamentary trust).

What information do I need to bring when I meet with my lawyer?

Some of the questions that your lawyer will ask you are: your family tree, personal information such as marital status, SIN number, address, etc.; who would you like to act as your estate trustee(s) and alternative estate trustee(s); who do have a legal or moral obligation to support; what are your assets (including ownership status) and debts; if you have minor children who would you want to name as guardians; and who would you like to benefit in your Will.

You may be asked to fill out a form either before you come to the meeting or upon your arrival at the lawyer’s office.

Does joint ownership avoid the need for a Will?

Not usually and sometimes having assets held in joint ownership can lead to other problems and challenges. Joint ownership can be a poor substitute for having a Will.

Can a Will help to reduce taxes?

Yes. A well planned Will can help reduce income taxes and probate fees. You can even determine which assets bear the burden of any tax. Giving to charity can also help to reduce taxes and you can only give to charity upon your death by Will.

What if I want to give to charity?

Then you must have a Will. The rules of intestacy, which are the rules of distribution that apply if there is no Will, do not include any distribution to charity. There are many ways you can give to charity in your Will: You can leave a legacy (i.e. a specific property or sum of money) to charity, part or the entire residue to charity or set up a foundation or charitable trust in your Will.

Do I need a Will if my estate is small?

Yes. Everyone should have a Will. Each spouse should have their own Will even if the two Wills are essentially the same. A Will is unique to the person signing the Will. From all perspectives it is just easier to have a Will regardless of the size or nature of your assets. The cost of having a Will is relatively not that significant as compare to not having a Will.

Must I get permission from my Estate Trustee (formerly called the executor) before naming them in my Will?

No, but it is strongly suggested that you advise them of your decision and even consider providing them with a copy of the Will. This way they know in advance, have an opportunity to tell you whether they would rather you choose someone else, and can prepare for the task.

Can my Estate Trustee refuse to act on my death?

Yes. The Will only appoints the person to the representative capacity of estate trustee. Before taking on the task, the person named may renounce. In this case the alternative person you have named has the opportunity to act as estate trustee. It is not that common that the first named estate trustee will renounce but it does sometimes happen for a variety of reasons. If you have not named an alternative then someone (it can be a family member or a trust company and may not be someone you would have chosen) applies to the Court to be appointed. It is therefore important to name an alternative estate trustee.

Should I include funeral instructions in my Will?

You can but it is usually better not to or at least let your family and estate trustee your plans. Typically the Will is read after the funeral so if the only instructions are contained in your Will it may be that the funeral does not conform with the instructions given.

Is my Will confidential?

A Will is a private document. It can become a public document but not until after your death. If “probate” is obtained then the Will becomes part of the Court system and becomes a public document.

What is “probate”?

Probate is the process of obtaining from the Court a Certificate of Appointment of Estate Trustee with a Will (or without a Will). The process involves an Application which is served on all the beneficiaries of the estate and payment of the estate administration tax (formerly called probate fee). Upon acceptance of the Application the Court registrar issues the Certificate of Appointment.

Can I have more than one Will?

Yes if they are “multiple Wills”. Depending on your particular circumstances and assets it might be beneficially to have one Will that covers some assets and another Will that covers other assets. Usually the difference is putting those assets that require the Certificate of Appointment or probate “into” one Will and all other assets into the other. In this way the amount paid for estate administration tax is reduced and privacy can be maintained. As an example, private company shares do not require probate to be transferred and accordingly a person with private company shares will normally have the two Wills.

What is the probate fee?

In Ontario a tax is payable when applying for a Certificate of Appointment. This estate administration tax use to be called the probate fee. It is calculated on the value of the estate being probated. Therefore the smaller the estate being probated the less tax paid. The tax is $5 per $1,000 for the first $50,000 and $15 per $1,000 thereafter.

Where should I keep my Will?

You should keep your original Will (and you only have one) in a safe place. You should also tell your estate trustee where the original Will is located. You should not keep your Will in your safety deposit box as after your death it is difficult to access the safety deposit box. Most people keep their original Will with their lawyer.