In Ontario statute and case law have established the regime for the transfer of property through wills, trust and estate planning. Often individuals rely on the courts to manage and regulate trust and estate matters. Unfortunately, estate and trust challenges can be very costly and highly complicated and in most cases very emotional as it involves family disputes that can have lasting effects on relationships. There are many aspects of estates litigation from will challenges/defense, dependents’ relief claims, quantum meruit claims to unjust enrichment claims. Even as a trustee you may need to have your trust or estate administrator approved or need court direction on matters arising in the administration of a trust or estate.
A will is a written document that sets out your wishes concerning how your estate should be dealt with and how your assets will be distributed upon your death. If you do not have a will, your estate will be dealt with in accordance with the statutory scheme for intestate succession. A well-drafted will is essential to minimize future challenges that may have substantial legal costs. Your lawyer needs to take meticulous notes of your instructions and draft a will specifically in accordance to your wishes and ensure the execution of the will is carried as per the requirements of Part I of the Succession Law Reform Act. It is also essential that you are informed of the income tax considerations that are relevant to the taxation of property and income on death. Even the beneficiaries of your estate may be burdened with resulting income tax liability of your estate.
An individual’s estate is the property they own or have a legal interest in. Generally, an estate is understood to mean the assets and liabilities of an individual left by the person upon their death. Estate planning involves the implementation of solutions that can minimize income tax obligations, help shield your assets against high probate taxes, through domestic contracts protect your assets against claims in the event of marital breakdowns, etc
A trust is created to hold property or assets for a beneficiary. Once a trust is created it is managed by a trustee, who has an obligation to deal with the property or assets as outlined by the testator.
INTESTATE SUCCESSION - DEATH WITHOUT A WILL
In Ontario when a person dies without a valid will the Succession Law Reform Act sets out how the persons estate is distributed. Generally, the persons first $200,000.00 is given to the deceased person’s spouse if they have decided to claim his or her entitlement, unless someone who is financially dependent on the deceased makes a claim. In the alternative, a spouse may elect to claim half of the net family property. Discussing, your options with a lawyer will help determine which choice is a better. Anything above the $200,000.00 amount is shared between the spouse and the descendants of the deceased according to specific rules. If there is no spouse, the deceased children will inherit the estate and if there are no surviving children then the deceased persons grandchildren will inherit their share. Inheritance can also flow to the deceased parents, siblings, nieces and nephews etc. The rules are very complex and you should speak to a lawyer to determine if you have a claim to a deceases estate.
POWER OF ATTORNEY
A Power of attorney is a legal document that gives someone else the right to act on your behalf. The Ontario Substitute Act outlines two types of powers of attorney.
- Power of Attorney for Personal Property will enable the person designed in the power of attorney to make decisions with respect to your financial affairs including real estate, investments, bank accounts, etc.
- A Power of Attorney for Personal Care enables a designated person to make decision regarding your medical treatment when you are unable to do so due to incapacity.
Although a court of competent jurisdiction may appoint a guardian for property or personal care unless you have an attorney that has been designated under a power of attorney. Any disputes can generally be avoided by executing power of attorney.