Estate Planning: Wills and Probate
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Questions and Answers

What is the role of the executor in a will?

  • To contest the will if it is challenged
  • To pay off debts and distribute the estate as per the will (correct)
  • To act as a witness during the signing of the will
  • To receive the inheritances of the beneficiaries

    • Which of the following statements is true regarding beneficiaries of a will?

  • Beneficiaries can only be direct descendants of the testator.
  • Children under 18 must have their inheritances held in trust. (correct)
  • Beneficiaries must be over the age of 21 to inherit.
  • Unborn beneficiaries cannot be included in a will.

    • What is a key element that invalidates a will?

  • If witnesses are not present during the signing
  • If it is typed instead of handwritten
  • If there are multiple executors named in the will
  • If the testator is not at least 18 years old (correct)

    • What happens to an estate if there is no valid will?

    <p>The court appoints an administrator to distribute the estate based on provincial laws.</p> Signup and view all the answers

    What is a preferential share concerning a surviving spouse's inheritance?

    <p>It entitles the spouse to claim a specific portion of the estate before anyone else.</p> Signup and view all the answers

    Which of the following is NOT a key component typically included in a valid will?

    <p>Appraisal of assets</p> Signup and view all the answers

    What is the significance of detailing age requirements for beneficiaries in a will?

    <p>To ensure that minors do not receive their inheritance too early</p> Signup and view all the answers

    What critical issue may arise when a will is contested?

    <p>The testator's mental competency may be questioned.</p> Signup and view all the answers

    What is required for a will to be considered valid for Indigenous peoples living on reserves?

    <p>It must be written and signed by the testator.</p> Signup and view all the answers

    In the case of an Indigenous person's death without a will, what happens if the estate is worth $80,000?

    <p>The spouse receives $75,000 and the remaining $5,000 is divided among the children.</p> Signup and view all the answers

    What characterizes a holograph will?

    <p>It is written entirely in the handwriting of the testator.</p> Signup and view all the answers

    What is the main purpose of a letter of last instruction?

    <p>It summarizes the testator's wishes and helps family locate important information.</p> Signup and view all the answers

    What automatically cancels any previous wills in most provinces upon marriage?

    <p>The act of marrying itself.</p> Signup and view all the answers

    What is the role of a trustee in a will?

    <p>To manage assets in trust for one or more beneficiaries.</p> Signup and view all the answers

    What is a bequest?

    <p>A gift stipulated in a will.</p> Signup and view all the answers

    What happens to reserve land if a beneficiary is not a band member?

    <p>The land can only be sold to a band member.</p> Signup and view all the answers

    How often should a will be reviewed and potentially updated?

    <p>Every two to three years.</p> Signup and view all the answers

    What is a residual estate?

    <p>The amount remaining after all obligations have been fulfilled.</p> Signup and view all the answers

    What is required for a notarial will in Quebec?

    <p>It must be created in the presence of a notary.</p> Signup and view all the answers

    Who typically does not inherit any assets if they witness a will?

    <p>The witness themselves.</p> Signup and view all the answers

    What can trigger a review of a will aside from death or adoption?

    <p>Relocation to a new province.</p> Signup and view all the answers

    What can protect a trustee from legal liability for honest mistakes?

    <p>A clause ensuring no blame for honest mistakes made in good faith.</p> Signup and view all the answers

    What happens if you do not update your will after getting married?

    <p>Your estate is distributed according to intestate succession laws.</p> Signup and view all the answers

    Which statement accurately describes the probate process?

    <p>The executor submits all required forms and assets to the probate court.</p> Signup and view all the answers

    What are probate fees based on?

    <p>The overall value of the entire estate.</p> Signup and view all the answers

    Which tax must be filed with the Canada Revenue Agency when someone dies?

    <p>Final tax return.</p> Signup and view all the answers

    What defines deemed disposition at the time of death?

    <p>The deceased is treated as if they sold all assets at death's date.</p> Signup and view all the answers

    Which of the following statements about taxes and probate fees is correct?

    <p>Taxes are based on deemed disposition while probate fees are based on estate value.</p> Signup and view all the answers

    What can significantly influence the estate's overall taxes owed after the death?

    <p>Gains from the principal residence which are not taxed.</p> Signup and view all the answers

    How can an executor reduce the estate's tax burden?

    <p>By filing separate returns for unpaid income or rights owed.</p> Signup and view all the answers

    When is the final tax return due after a person's death?

    <p>Within six months or by April 30 of the following year, whichever is later.</p> Signup and view all the answers

    Study Notes

    Estate Planning: Wills and Probate

    • Estate: A deceased person's assets after paying debts.
    • Executor: Person in the will who pays debts and distributes assets.
    • Beneficiaries: Individuals who receive assets, cannot receive inheritance if younger than 18 without a trust.
    • Estate Planning: Planning how assets are distributed after death.
    • Will: Legal document detailing estate distribution at death.
    • Testator/Testatrix: Person creating a will.
    • Beneficiary/Heir: Recipient in a will.
    • Administrator: Court-appointed person distributing assets if no will.
    • Intestate succession: Laws governing distribution of assets without a will.
    • Preferential share: Set portion of estate given to surviving spouse.
    • Age of majority: Minimum age for creating a valid will (18-19, varies by province).
    • Mental capacity: Must be mentally competent when creating will.
    • Indigenous Peoples' Wills: Governed by the Indian Act, simpler requirements on the reserve.

    Types of Wills

    • English Form Will: Signed by testator and two witnesses.
    • Notarial Will: Signed by a notary public (Quebec).
    • Holographic Will: Entirely handwritten by the testator.

    Key Components of a Will

    • Trustee: Manages assets for beneficiaries.
    • Bequest: Gift of assets in the will.
    • Residue: Remaining assets after debts and bequests.
    • Clauses: Detailed instructions for estate management.
    • Letter of Last Instructions: Non-legally binding document with wishes or details.
    • Will Changes: Regular reviews and updates are necessary.
    • Effects of marriage on a Will (Most Provinces): Marriage will revoke wills created earlier unless updated in a new one.

    Probate Fees and Taxes at Death

    • Probate: Legal process to validate a will and distribute assets.
    • Probate Fees (Estate Administration Taxes): Fees to the government based on estate value. Fees vary by province.
    • Final Tax Return (CRA): Filed with the Canada Revenue Agency (CRA) within six months of death or April 30th of the subsequent year.
    • Deemed Disposition: Treating deceased as having sold all assets on their death date for tax purposes.
    • Capital Gains/Losses: Tax implications based on the difference between assets' market value at death and their original cost.
    • Exemptions: Principal residence and retirement accounts (RRSPs) may be exempt or have deferred taxes.
    • Optional Tax Returns: Additional returns can reduce tax burden.

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    Description

    Test your knowledge on essential concepts of estate planning, including wills, probate, and the roles of executors and beneficiaries. This quiz covers key terms such as intestate succession and the importance of mental capacity. Understand how assets are distributed after death and the legal requirements for creating a valid will.

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