Wills and Estate Planning in Canada

• In Canada, excluding Quebec, common law governs general application rules, established by judicial decisions, contrasting with Quebec's codified Civil Code. Consequently, rules of general application differ between Quebec and the rest of Canada.
• All content in this chapter is examinable regardless of residency for study purposes.

Writing a will

• A will executes a person's desires for the estate after death. It can be drafted by a professional to protect an estate from taxation, probate fees, and lawsuits from unhappy heirs.
• Advisors outline tax implications when transferring assets, minimizing tax erosion.
• Wills are only enforced upon death but can be revoked at any time. Testators specify cash transfers, property, bequests, legacies to legatees with the remaining residue for the settlement of outstanding creditors', taxes, and family law obligations.
• Wills require drafting by an attorney. Clear drafting avoids bitterness and disputes, the heirs generally accept wishes better if well articulated.

Types of wills

• Holograph wills are entirely handwritten by the testator, lacking assistance from mechanical devices, and signed with or without witnesses.

Disadvantages

• Holograph wills usually lack professional advice
• If the testator lacks understanding of legal estate and tax implications, omission errors have serious consequences
• The testator who simplifies copied wills may omit critical language
• Ease of creating new wills creates too many changes
• Lack of witnesses makes authentication difficult

Additional Info

• Court evidence from a reliable source like a bank manager is required to verify the handwriting
• Holograph wills often face contests

When to use

• Use only when required, holograph wills are valid in every province except Prince Edward Island.
• Rules may vary by province, especially where assets are located.

Conventional and formal wills

• Wills made in presence of Quebec witnesses must be handwritten by the testator or a third party. It also needs testators' signatures in presence of at least two witnesses who also sign in presence of each other. Age of majority is required for witnesses.

Witness Considerations

• They can not be the beneficiary, but wills can not always be validated if they or their spouse benefits
• Application for validation occurs if the testator is unduly influenced

Notarial wills

• They are typed and executed in Quebec with a notary, the testator, and a witness, following Civil Code procedures. The notary keeps the original, the testator receives a copy, and the certified copies are delivered without proceedings as notarial deeds, avoiding probate upon death.

Further Points

• Notarial wills are still contested, witnesses can not be the notary's spouse, related by blood to the third degree, or connected by marriage, civil union, or be employees unless also a notary.

Affidavit of Executions

• Filing it confirms proper signing and formal execution if there are no objections. It is easier to prove validity if witnesses are available, averting location issues after the testator dies.

Do-it-yourself will kits

• Certain kits give explanations to execute holograph wills, while other have pre-printed forms with software to enable them to be professionally executed, they lack personalized professional advice about the testators' assets and family. Pre-printed kits fall under conventional wills.

International wills

• Wills conform to convention, and are valid regardless of the executors' place or assets, which are useful for testators with multiple assets.
• They are rarely used because there is a smaller number of signed conventions from Alberta, Manitoba, Newfoundland & Labrador, NB, NS, ON, PEI & Saskatchewan recognizing it.

Domicile

• Formal validity of wills depend on the testator's domicile if their will's place of creation differs
• Domicile is one's strongest link and intention to remain/return

Factors to establish Domicile:

• The physical and family home, the location of the place of residence
• Bank locations
• Employment
• Friend groups and other connections
• Frequency of visits to the prior residences
• Written intentions

Importance of Establishing Domicile

Domicile impacts how wills are executed, domicile at death determines intestate laws, real property abides by its locations' laws. New residents may have invalid documents, residency, citizenship, domicile, and mailing address differences require acknowledgement.

Impact on Taxes

• Domicile is needed for some US taxation, domicile will impact US estate taxes.
• Canadians holding US "green cards" may be considered domiciled, US transfer taxes depend on citizenship.

Limitations of Wills

• Testamentary freedom implies right to bequeath property
• Joint survivorship real estate can not be willed away, assets like the shares are subject to shareholder agreements, limiting the right to will.
• Testamentary freedom varies by jurisdiction in the world in what they permit
• Many countries use local inheritance laws with specific proportions, some decree inheritance by family, creating forced heirships similar to intestate distribution in the absence of wills
• Restrictions arise due to religious belief or culture, needing consideration as a professional and need addressing in accordance with local law.

Priority claimants

Claimants like family law and support creditors take priority. They claim assets, not wills. After the creditors' and tax authority's approval, the will distributes assets.

Governing laws for wills

• They are strict, where drafting errors or technicality failures make the procedure unfair, only have powers to resolve violations. Will interpretations can compound errors.
• Compliances can be resolved only with law integrity, integrity can be measured over a long time

Testamentary capacity and undue influence

• The testator making free sound decisions has a sound mind for executing will. These declarations are self-assessments and therefore not effective.
• Beneficiaries may challenge it, because the testator was unduly influenced.

Minimizing future litigation

• Assess the testator, making note of the testator's understanding of estate assets, beneficiaries, claims, and conditions for volition
• Provincial age requirements are present for enacting a valid will, waivers can arise if the minor is wed, but professionals should assess any instructions

Challenging a will

• Spouse and dependants can challenge them with courts who ignore the will if it fails to provide for them
• This does not make wills invalid, it is a lack of support for dependants that is ineffective.

Important Provisions

• Family laws contain marriage support. Dependant relief is meant for many finance dependants
• Relief/child support interplays and varies. Spouses, common-law, parents, or siblings may appeal to courts
• Courts oversee the will if there is no adequate support for dependants

Support Obligations

• Spouses dying after marriage generate support obligation from court orders, unless agreements like insurance releases assets.

Community Property

• Divisions in community property are sometimes determined if surviving spouse will have support
• Some provinces use "equalization" payment, whereas others have "compensatory allowance"
• If a wills' treatment causes surviving spouses feeling without support they will initiate claims, ensuring better support could hinder their choices

More Considerations

• Spouses forfeit equalization pay, if benefits are granted in ways that help one spouse over the other
• RRSP transfers to rollover help the estate after partition

Rights of dependant

• Contracts can waive rights, but support claims can still arise without adequate resources. In QC, surviving spouses can claim contributions in 6 months.
• Common law spouses can claim a "net family property". In QC, family regulations and matrimonial regime rules exist or have court action decided.

The division of inheritance by the end

• There has to be adequate life insurance, provincial legislation needs to be addressed, and a professional should also note provinces' family net worth treatment as this impacts value

Deceased dependance rights

Including children, siblings, descendants, financial support is required, giving the right to claim

Tests for Awarding support

3. 1 if people were supported or had to make payments
4. 2 the failed payments from deceased
5. 3 whether the defendant needs support

Considerations

Relief provided varies, but some account for why some were deprived like past/present lifestyles. There were also rights that may have occurred depending on adequate or objective definitions where creditor disputes were solved and where the will could be rewritten to account for certain obligations like BC Varied act, which could rewrite bills.

Conditions on Gifts that are contrary to Public Policy

• You can not have discrimination in a will, gifts which are contrary to public policy, illegal act, or are discriminatory
• The issue often backfires since the intent is circumvented, and any attempt to challenge the procedure will come from estate
• Revoking and amending happens upon death, people must be deemed incompetent
• The most common way is revoking through other wills, however, you cannot revoke existing ones which validate both

What happens when there is conflict

• Where there are issues with residue, codicils decide those legacies. Usually Quebec determines the last will available, especially if destroying it in clear writing.

Errors in will creation

• People must have an updated will regarding beneficiaries, or face marriage issues where the revocation occurs, or where there is election of spouse that had no revocation. Quebec keeps wills valid and accounts for distribution after marriage

Finality of marriage decisions

• If wills are for an individual, it is important to contemplate whether to distribute assets. Thus, not providing assets is grounds for a new intestate state

Divorce Impact

• While divorce does not equal revocation, B.C, ON., SK., MB., & PE, have clauses of removal of legacies for former partners. Civil Code revokes those as well

Separation

• Unlike legal separation, there was no removal other than in B.C where you have new wills and revisions that consider preparation
• Wills need updating on a term, or an old one results in more problems

Considerations when changing them

Changes can results to due to circumstances or because of size, which require changing it. These occur through birth and end through alteration or laws. A periodical review is needed to reflect current conditions

Codicils, a legally binding document

Codicils enact change without the whole change. Multiple amendments with codicils require a whole new will! Memorandums, a testator who has certain items, can make frequent changes. If it is with a list and in the will, one revision is made. This means there is an enaction before it is signed, or called in if there are handwritten versions. Alterations are in reference to inserting language, and they will work for the people involved.

Appointment considerations

Selection of an executor/liquidator needs heavy thought, as the role must be capable. A will may name all beneficiaries to family for years to come.

Executors/liquidator must be chosen with extreme care based on:

• Financial implications
• They handle thousands of dollars with wealth experience in taxation with asset ability. Selection happens with caring

Designation examples

Corporate, such as trust, which happens if assets are important for multiple years. They understand wealth with much experience, continuity past death, and attention to the matter

Multiple Executors

Are appropriate to take task completion, also impartiality that handles with those, also multifacet such as area knowledge.

Individual examples

If small estates are there it can be useful to find the family expert for the tasks

Considerations with executors:

Age, health, expertise, and personal information Multiple people means one more opinion and consideration! When in QC the rule is unanimous in any case This allows continued control, while the legal document is performed well. The process, a successor is found

Intestate

Explanation

No will can come from failure, superstition, thinking others may benefit, disagreement, and not knowing what is needed Assets may enter with intestate succession A will that is not followed may give assets with those who are known, such as RSP/insurance. However you may not dictate the exact wishes as seen in statutory provincial requirements

• When deaths happen, there is court appointment where administrators can be there for dependents
• A Liquidator in Quebec, can have trouble deciding between the parties.

After appointment

With support from the public, there come separate proceedings as court orders and entitlement for the administrator along spouse, kids. Or other family. An approval of the government runs intestate wills

Probate

An enaction with court in effect to say, what happens in courts of a person depending on the testator

Wills and Probate

Assuming you need to sign documents people cannot access funds and require probate

• The court sees last will and testament (legal speak)
• Homologation, also legal, in all cases One will determine that forms and shapes, along having the will, to get archives

All processes for probate will are required here:

• Holograph
• Lawyer prepared
• Or any additions

More about probate

-Once the court approves estate, lawyers must also apply for letters that can be used to validated. There should be a court for that application for granting letters that say what happened, with all applications are filed and are subject to asset liability-

Finally: the proceedings

This has all details on a motion, and states the person was before a judge and lived there, all heritor are called during these processes! Where there is a list, all the testaments are kept, a valued affidavit, observations.

Assets are now up for distribution

Most assets are kept before the creditor arrives. So executors must submit probate, some asset need legal status or they need letter, those include real estates or funds at bank, they must have approval. Banks often need the probate and what will happen, will be paid but if no probate was available payment does not take place. People need to look at a bond as an alternate,

After probate

To make sure that everyone that they can sue a party or look to make the legal enaction, then have an order to get the true testament. Some people may need legal documents A. holographic needs to be in front B. Fees are there to make sure administrations fees happen, and they help people C. When these are assessed fees are charged at a value, Quebec has flat costs You can make low balances happen as this is a form of hidden tax, it helps people, and it is important, If done and handled properly, can come from a variety of wills and requirements.

Explore wills and estate planning in Canada (excluding Quebec). Understand how wills execute desires for an estate after death. Learn about drafting by a professional, tax implications, and specifying cash transfers, property, bequests, and legacies.