Estate

Question 1

will should give appropriately extensive powers and authority to who
.. The above is to

Answer 1

Estate trustee
minimize the likelihood of an application to vary the terms of a trust set out in the will so as to expand the estate trustee’s authority to permit particular actions

Question 2

it is a prudent post-signing practice for the lawyer to alert the client to

Answer 2

future events that may require a review of the will to see if it is still appropriate. Such events would include, for example, marriage, divorce, births, deaths, adoptions, changes of domicile or residence, and substantial changes in net worth

Question 3

lawyer should ensure that the file notes contain sufficient information to support the affirmative conclusions as to
… Above does what

Answer 3

(i) testamentary capacity, and (ii) absence of undue influence or duress
…
assist the estate trustee in a subsequent will challenge where the presumption as to the testator’s testamentary capacity and knowledge and approval of the contents of the will has been “spent” as a result of the presence of “suspicious circumstances”

Question 4

For the will to be valid, a person must be capable of

Answer 4

understanding the nature and extent of the assets and of comprehending and appreciating the persons who should receive the assets (sometimes described as “the natural objects of his/her bounty”).

Question 5

Taking instructions over the telephone or, worse still, through an intermediary, is not sufficient— unless

Answer 5

lawyer ultimately meets with the testator in person prior to the will’s being signed

Question 6

Limited literacy skills can be problematic in at least two respects

Answer 6

• They may interfere with the testator’s ability to communicate to the lawyer either the nature or the value of the testator’s property.
• They may compromise the testator’s ability to understand the draft will when it is given to the testator for review and comment

Question 7

For the lawyer to be able to overcome the client’s reluctance to provide that level of detail, the lawyer must be able to provide a persuasive rationale for doing so

Answer 7

▪ how valuation may be relevant for purposes of assessing exposure of the estate to income tax and estate administration tax;
▪ how the nature and location of assets may raise questions as to whether the laws of some other jurisdiction may constrain the ability to dispose of those assets by will;
▪ that certain kinds of joint ownership will take the asset out of the estate of the client; and
▪ how the estate trustee(s) may be legally bound by contract—e.g., a shareholder’s agreement, a co tenancy agreement, or a separation agreement—to deal with a particular asset on death in a manner contrary to what the client intends.

Question 8

Before January 1, 2022, wills that were executed before a testator’s subsequent marriage would actually have been

Answer 8

revoked by operation of law upon the marriage unless the will contained a declaration that it was being made in contemplation of that marriage (as provided for in the now-repealed s. 16 of the Succession Law Reform Act (SLRA)).

Question 9

While marriages after 2021 no longer revoke existing wills, clients who were married before 2022 and whose will predates the marriage should be warned that

Answer 9

their will is invalid and should be re-executed as soon as possible even if no changes would otherwise be required

Question 10

Exception to age of majority

Answer 10

the client is married, in the armed forces, or a mariner at sea

Question 11

If any one of the client’s children has a disability, an exploration of what must be done

Answer 11

child’s current financial needs and future prospects must be canvassed

Question 12

If any of the client’s children is married what statute is relevant

Answer 12

Ontario’s Family Law Act (FLA)

Question 13

If anyone meets the definition of a “dependant” (of the client) within the meaning of that term in the SLRA, potential claim under what provision

Answer 13

potential claim under Part V of that statute

Question 14

If the client has stored genetic material that may be used at a future time to conceive a child, the lawyer should ask

Answer 14

whether the client intends to be a parent to such a child

Question 15

By virtue of the enactment of the All Families Are Equal Act (Parentage and Related Registrations Statute Law Amendment), 2016, for all wills made on or after January 1, 2017
…
For the above, how to include such children?

Answer 15

a reference in the will to a “child” of the testator—or of any other individual, for that matter—will be construed, in the absence of a contrary intention expressed in the will, to include posthumously conceived and born children
…
steps that must be taken by the spouse of the testator or other individual who has control of the genetic material in order to include such children

Question 16

lawyer who fails to obtain answers to critical questions regarding the client’s personal and financial circumstances risks

Answer 16

exposure to liability at the instance of a disappointed beneficiary

Question 17

What should L do if a client who has signed a separation agreement does not always know or accurately recall what support or property obligations will be imposed in the event of the client’s death

Answer 17

lawyer should ask for a copy of the separation agreement

Question 18

If client refuses or can’t provide cope of sep agreement?

Answer 18

lawyer should document that fact and make it clear that the client must assume the risk that the client’s understanding or recollection of those obligations may be faulty

Question 19

It is now a straightforward process for any person to verify the manner in which title is held and whether there are encumbrances on title by going to

Answer 19

to www.onland.ca and paying the appropriate fee

Question 20

While it is important for the lawyer to record the client’s intentions, they may not carry sufficient weight in

Answer 20

subsequent judicial proceeding if they were being expressed for the first time and it was long after the creation of the joint account

Question 21

Dependant support claims - In order to make a claim under Part V of the statute, three criteria must be met:

Answer 21

▪ The claimant must stand in the right relationship to the deceased, namely, be a married or common-law spouse, parent, grandparent, child, grandchild, or sibling of the deceased (with the parent-child relationship encompassing situations where the former has “demonstrated a settled intention” to treat the latter as “a child of his or her family”).
▪ Immediately prior to death, the deceased must have been actually providing support to the claimant or have been under a legal obligation to do so.
▪ The deceased did not make “adequate provision” for the claimant.

Question 22

There are three possible intentions with regard to the rights of the other joint account holder

Answer 22

(1) the person is an equal owner of the funds or investments;
(2) the person is a joint owner merely in order to be able to assist the client in managing the client’s financial affairs; and
(3) as a result of the Supreme Court of Canada decision in Pecore v. Pecore, the person is entitled only to receive whatever is in the account on the client’s death

Question 23

As a result of the Cummings decision, there is at least one additional dimension to be considered in dependant support claims

Answer 23

moral considerations are now established as being a relevant factor in the exercise of the court’s discretion to fashion the appropriate remedy.

Question 24

Matrimonial property claims options

Answer 24

Absent a marriage contract waiving it, a surviving spouse now has the right to choose between accepting the entitlement under the will and claiming, under the FLA, an “equalization payment” representing a sharing of the “marriage spoils.”

Question 25

Unless the will provides that the surviving spouse’s entitlement, if any, under the will is in addition to the equalization entitlement, the surviving spouse will have to

Answer 25

be put to an election, having to choose accepting the entitlement under the will and claiming, under the FLA, an “equalization payment” representing a sharing of the “marriage spoils.”

Question 26

If choose claiming, under the FLA, an “equalization payment” representing a sharing of the “marriage spoils.”

Answer 26

will entitlement is forfeited, and the will is administered as if the surviving spouse had predeceased the testator

Question 27

Theoretically, a will leaving anything less than 100% of the estate to the surviving spouse raises the possibility of

Answer 27

the spouse’s choosing to elect in favour of an equalization claim. It might be thought that the way to avoid that risk is to provide a will entitlement to one’s spouse that is guaranteed to be not less than the equalization claim.

Question 28

It might be thought that the way to avoid elect in favour of an equalization claim is to provide a will entitlement to one’s spouse that is guaranteed to be not less than the equalization claim. There are at least three reasons why this strategy may not be effective:

Answer 28

- each spouse’s net family property is a moving target; that is, the value of each spouse’s net worth on the valuation date—and therefore, each spouse’s net family property—will not be known at the time the will is executed - Although the general rule is that the equalization claim, if any, is one-half the amount by which the deceased spouse’s net family property exceeds the surviving spouse’s net family property, s. 5(6) of the FLA sets out a number of factors that entitle the court hearing an application to order an equalization payment that is more or less (if an equal division of net family properties would be unconscionable). - The equalization claim is calculated on the basis of asset values on the valuation date even if the estate value declines substantially after the deceased’s death.

Question 29

Why is life interest is no longer a guaranteed strategy

Answer 29

surviving spouse can forego it in favour of an equalization claim

Question 30

What advice can be given to the client whose testamentary plans are vulnerable to an equalization claim?

Answer 30

client should have a marriage contract with the spouse under which, in exchange for appropriate consideration, the latter will give up any right to elect in favour of an equalization claim

Question 31

since an enforceable marriage contract calls for independent legal advice and full financial disclosure to be given to both parties, the practical prospect of obtaining a marriage contract may be poor in a particular client’s situation. So other option is?

Answer 31

“self-help” remedy

Question 32

“self-help” remedy

Answer 32

unilateral steps by the client to minimize the exposure to an equalization claim on death. This would entail ▪ maximizing opportunities for excluding the value of assets from one’s net family property; ▪ minimizing one’s net worth on the valuation date; or ▪ a combination of the two.

Question 33

As for minimizing net worth on the valuation date, the lawyer should

Answer 33

caution the client that a disposition of property for the sole purpose of reducing a spouse’s equalization claim could, under the appropriate circumstances, be set aside as a fraudulent conveyance (Stone v. Stone).

Question 34

When meeting with a joint retainer couple for the first time, or perhaps even before that first meeting, the lawyer should

Answer 34

ask the clients to sign a form of acknowledgment and consent regarding the constraints imposed on the lawyer’s conduct as set out in that commentary

Question 35

Taking optimum advantage of the opportunities to exclude asset values from net family property may involve

Answer 35

keeping careful records that will support a later position that a particular property belongs to one of the categories of “excluded property.”

Question 36

for minimizing net worth on the valuation date, the lawyer should caution the client that

Answer 36

disposition of property for the sole purpose of reducing a spouse’s equalization claim could, under the appropriate circumstances, be set aside as a fraudulent conveyance (Stone v. Stone).

Question 37

What is the exception to the rule regarding gifts and inheritances received during the child’s marriage.

Answer 37

matrimonial home This can be problematic where the parent intends to leave a married child all or a fractional interest in a family cottage. Regular use of the cottage by the child and the child’s spouse would make it a matrimonial home.

Question 38

If the parent forgives a mortgage on a child’s matrimonial home or if the child spends inherited cash to pay down the mortgage

Answer 38

the child’s net family property will be increased

Question 39

Even though the value of a gift or inheritance received during marriage is excluded from the child’s net family property, it may still be vulnerable to

Answer 39

an equalization claim in that its value can be used to satisfy that claim (where the child’s other assets are not sufficient for that purpose)

Question 40

The onus of proving entitlement to an exclusion of a gift or inheritance received during marriage lies with

Answer 40

the spouse claiming it

Question 41

If the child has been careless in segregating an inheritance or in keeping records to prove the source of a particular inheritance (or how it may be traced into other property), the claim for an exclusion

Answer 41

may fail

Question 42

“mutual wills doctrine”

Answer 42

where two parties have made a contract that, having made wills together, neither of them will change his or her will after the death of the other, the survivor takes any property acquired under the will of the deceased on trust, to deal with it in the same manner as is set out in the will that the survivor made at the same time as the deceased made the deceased’s will

Question 43

in the absence of a written agreement that the wills are intended to be mutual ones rather than simply “mirror” wills

Answer 43

the courts are unlikely to establish an oral contract to make mutual wills

Question 44

When party objects if the other, upon surviving, chose to make a new will with a different testamentary disposition

Answer 44

this may give rise to a concern as to whether the solicitor can continue to act for both parties solicitor should raise the possibility of having the couple consider a domestic contract (within the meaning of that term in the FLA) whereby each party agrees, upon survival, not to change the party’s will

Question 45

the solicitor, if competent to draft such a domestic contract, could not

Answer 45

act for both parties in that regard

Question 46

In order to obtain an initial certificate of appointment of estate trustee (with or without a will), an estate trustee must pay an

Answer 46

estate administration tax based on the value of the estate

Question 47

The tax is calculated on the following basis

Answer 47

the first $50,000 of estate value is exempt, while the rate is $15 per $1,000 (or part thereof) for the estate value in excess of $50,000

Question 48

debts and liabilities of the deceased do not reduce the value of the

Answer 48

estate for the purpose of calculating estate administration tax Under the Estate Administration Tax Act, 1998, the one exception to that rule is the value of any encumbrance on real property the value of which is included in the property of the deceased person

Question 49

reduce exposure to estate administration tax

Answer 49

▪ disposing of property during one’s lifetime (either directly to the beneficiary ultimately intended to receive it on the client’s death or to a trust such as an alter ego trust or joint partner trust); ▪ transferring property into joint ownership with one or more other persons; and ▪ ensuring that life insurance, RRSPs, RRIFs, TFSAs, and other “plan” benefits are made payable to a designated beneficiary (rather than to the client’s estate). use of multiple wills

Question 50

How to use multiple wills for reducing exposure to estate administration tax

Answer 50

characterization of each asset owned by the client as either a “bad” one or a “good” one.

Question 51

“Bad” assets

Answer 51

require—either legally or practically—a probated will to transfer ownership from the name of the deceased

Question 52

Each category of assets is governed by a separate will, with the intention that

Answer 52

only the will governing the bad assets (commonly referred to as a “primary will”) will be submitted for probate

Question 53

“good” assets

Answer 53

A separate will governing the disposition of the “good” assets is drafted, and this will (commonly referred to as a “secondary will”) is not submitted for probate

Question 54

The decision in Granovsky Estate v. Ontario confirmed that estate administration tax is payable only on the value of the

Answer 54

assets governed by the primary will

Question 55

The use of multiple wills is particularly effective where the client owns shares of a private corporation because

Answer 55

shares of a private corporation held by a deceased shareholder can be legally transferred in accordance with an unprobated will

Question 56

Who is it up to decide what evidence will be acceptable to prove the authority of the estate trustee to direct what is to happen to the shares formerly owned by the deceased shareholder

Answer 56

director(s) of the private corporation

Question 57

If the director(s) of that corporation were to decide that probate of the will governing those shares was required

Answer 57

the plan to reduce estate administration tax will come to naught.

Question 58

A private corporation controlled by the client can also be used as a bare trustee or nominee to hold the client’s other valuable assets and, by appropriate drafting, have those assets governed by the secondary will. However, it is important that the corporation sign ... Benefits of above

Answer 58

trust declaration to confirm that it is not the beneficial owner of any of those assets that it holds as a nominee.... First, this will prevent the Canada Revenue Agency from asserting that the client disposed of property that could give rise to immediate tax consequences. Second, it will protect those assets from the corporation’s own creditors.

Question 59

absent satisfactory evidence to demonstrate the parent’s intention to make a gift to that adult child, the presumption of

Answer 59

resulting trust will be applied, in which case the property will belong to the parent’s estate (giving rise to additional estate administration tax

Question 60

Where the client is clear that the jointly held property is to be distributed in accordance with the client’s will, strong consideration should be given to

Answer 60

having such property governed by a separate will not intended to be submitted to probate

Question 61

An individual is deemed, immediately before death, to have disposed of capital property and land inventory at what value

Answer 61

at its then fair market value. The (capital) gain is included in the tax return for the deceased’s year of death

Question 62

Where capital property or land inventory is transferred as a consequence of death — to a surviving spouse or common-law partner; or — to a testamentary trust for the exclusive lifetime benefit of the surviving spouse or common-law partner, the property will transfer at its tax cost to the

Answer 62

deceased, unless the personal representative elects to have the property transfer made according to the previous rule

Question 63

Capital gains from a deemed disposition of “qualifying small business corporation shares,” “qualified farm property,” or “qualified fishing property” may be

Answer 63

sheltered under an individual’s lifetime capital gains exemption.

Question 64

one marital partner intends to distribute to the other marital partner his or her entire estate, which consists principally of liquid assets. In that event, it would be appropriate to

Answer 64

appoint the other marital partner as the sole estate trustee, unless the latter has significant limitations (health or language, for example) that would warrant a different appointment.

Question 65

an outright distribution to one or more legally capable adult children will often warrant who to be appointed as estate trustees?

Answer 65

appointing the child(ren) as estate trustee(s).

Question 66

if a person is still a minor when the testator dies, that person could not act with the co-estate trustees until

Answer 66

attaining the age of majority

Question 67

In the case where a minor is the sole executor, s. 26 of the Estates Act provides that the court can appoint

Answer 67

the minor’s guardian or any other person to act until the minor attains the age of majority

Question 68

Appointment of a “foreign” estate trustee—that is, one who is neither resident in a Canadian province or territory nor resident anywhere in the British Commonwealth—will likely require

Answer 68

foreign estate trustee’s bond

Question 69

Where the potential exists for an estate to run for many years (say, for example, because a trust is to be set up for a disabled child with a normal life expectancy), it would be prudent for the testator to appoint

Answer 69

trust company—either together with, or as a substitute for, an individual estate trustee—to deal with the contingency of the individual estate trustee’s dying or becoming incapacitated before the estate has run its course.

Question 70

Should the client’s surviving spouse choose to make an equalization claim against the estate under the FLA, the surviving spouse will forfeit the right to

Answer 70

act as estate trustee

Question 71

where there is a risk of such an equalization claim, the client should

Answer 71

of such an equalization claim, the client should either not name the surviving spouse as estate trustee or should name one or more other persons to act as estate trustee(s) together with or as alternative(s) to the surviving spouse

Question 72

Validity of will because it fails to make an express appointment of an estate trustee

Answer 72

will is not invalid only because it fails to make an express appointment of an estate trustee. (Sometimes, despite the absence of an express estate trustee appointment clause, an individual, by virtue of having been directed to carry out certain tasks that would normally be the responsibility of the estate trustee, may be considered to be the estate trustee by tenor of the language used.)

Question 73

testamentary appointment of a person who will have decision-making responsibility with respect to minor children is legally effective for how long?

Answer 73

90 days after the testator’s death. Thereafter, it will be necessary to apply to the court for a permanent appointment—assuming one is felt to be necessary

Question 74

On an application to make the appointment permanent, the following will occur

Answer 74

— The court will do what is in the best interests of the minor child(ren). — Courts give considerable weight to the parent’s choice made in the will. — Courts are generally reluctant to disturb the status quo (i.e., the temporary living arrangement) without good reason. — Where a minor child is sufficiently mature, the court will solicit the child’s views on an appointment before it is made permanent.

Question 75

The rules for testamentary appointments of a guardian of a minor child’s property are analogous to

Answer 75

those for testamentary appointments of an individual to have decision-making responsibility in respect of a minor child’s person

Question 76

one cannot make a testamentary appointment of a guardian of a minor child’s property unless

Answer 76

one is a guardian of that child’s property

Question 77

child’s guardian of property

Answer 77

parent is not automatically the minor child’s guardian of property. That requires a court order

Question 78

the parent who does not have a court appointment as guardian of the minor child’s property has no

Answer 78

authority to appoint a guardian of property by will

Question 79

Funeral and burial instructions

Answer 79

estate trustee has control of the body and therefore has the authority to determine the place and manner in which the funeral and, if applicable, the burial will take place. In this regard, the testator cannot bind the estate trustee by means of instructions in the will