Wills & Estates
In order to ensure that your estate is distributed fairly and to those you want to benefit, it is essential to have a detailed and updated estate plan. For this reason, we work to advise our clients on a variety of matters related to the management of their estate, both during their lifetimes and following their passing. This includes:
For your convenience, any of these documents and services can also be prepared in French.
Should you die without a will, known as dying intestate, the government dictates what happens to your estate – this is set out in the Ontario Succession Law Reform Act (“SLRA”). However, this may not be how you would choose to distribute your property and assets and has some important factors to note.
The SLRA will distribute your estate assets to your relatives, primarily to your spouse and children in the manner as follows:
It is important to keep in mind that in this context, spouse means someone to whom you are legally married. This can also mean that, were you to marry someone, separate, but not formally divorce, they may be entitled to the benefits as mentioned above. Pursuant to this act, common-law partners are considered dependents and are entitled to nothing from your estate unless they file a successful application for dependent support, regardless of the length of time you had been together.
Mirror Wills and Mutual Wills
Mirror Wills are two mostly identical wills often created by partners or married couples. These wills are set up so that person one leaves everything to person two, and person two leaves everything to person one. They also include a clause stating what is to happen to the estate should both parties pass away within 30 days of one another. You can also include specifics such as gifts to charities or to individuals of your choosing.
Mirror wills are not the same as mutual wills in that they can be updated at any time should the individual choose to do so. A mutual will, on the other hand, involves the preparation and execution of a contract preventing changes to the wills without the knowledge or consent of the other party, or that of the beneficiaries if the other party has passed. Another option is to set up a lifetime interest trust. With this trust, the named person, (a spouse for example), receives income from the trust throughout their lives. When the named individual passes, what is left in the trust is given to another specified individual (often children).
When making estate plans, a common goal is to find ways to reduce the overall value of the estate, thereby lowering the estate administration tax (EAT) payable on it. This tax is paid in situations that require an executor (in the case of a will), or another interested party (in the case of intestate persons) , to apply for a Certificate of Appointment Estate Trustee. Some common options used to lower the EAT is through joint ownership of an asset with the surviving individual receiving full rights to ownership, transferring assets out of the estate, or naming beneficiaries for RRSPs and insurance policies. Another method is through dual wills. The purpose of dual wills are to help separate your assets into two categories: those that will be taxable when transferred to the estate trustee, and those that will not.
When creating dual wills, the primary will is the one that will be submitted to the court and the assets included taxed. The secondary will is not submitted to the court, thus lowering the EAT. If you were to only have one will and an item was to be taxed upon transfer, the EAT will apply to the value of all of the assets included in that will, no matter if they required probate or not. While creating dual wills can be more expensive than if you were to create just one, the potential benefits makes them a great option.
A trust is a method in which property can be held and passed along. In a trust, an individual, known as the settlor, chooses to give property to another individual, known as the trustee. The trustee then manages this property on behalf of other individuals, known as the beneficiaries, until they receive it. There are a variety of types of trust, and some important things to know before establishing one, so be sure to speak to knowledgeable legal counsel.