Wills & Estates

Contrary to popular belief, the government does not grab everything if you die without a Will. Instead, it has written a Will for you. It goes like this:

  • If you leave a surviving spouse, but no children, your spouses gets it all.
  • If you leave a surviving spouse and one child, your spouses gets the first $200,000.00, and shares the remainder equally with your child.
  • If you leave a surviving spouse and more than one child, your spouse gets the first $200,000.00 and one third of the remainder. The children share the other two thirds equally. Grandchildren of a child who died before you did will share their parents’ share.
  • If you leave surviving children but no spouse, your children share the estate equally, again with grandchildren of a deceased child getting that child’s share.
  • If only more remote relatives outlive you, then there is s set of rules, which states which level of family will be entitled to share in your estate.

There are no opportunities for tax deferrals if there is no Will. Valuable heirlooms may have to be sold to generate cash to satisfy the succession requirements. There may be severe tax penalties imposed if you do nothing.

Why You Need To Make A Will:

A Will lets you get the most money and property where it is intended. For example, you can:

  • Select more than one person to handle your estate matters so that both sides of the family can be represented, or more than one area of expertise is represented;
  • Defer capital gains tax by establishing a spousal trust;
  • Choose the timing of when people receive their gifts;
  • Give specific things to specific people, such as jewellery, business assets etc…;
  • Write a list of things you want to leave to people and attach it as a schedule to the Will. Beware of changes to the list later – have to re-sign the Will;
  • Insist that a child reach a mature age before getting their money, although you cannot tie the estate up indefinitely;
  • Control who will handle your estate;
  • Select back-up choices;
  • Make charitable gifts, tax deductible to your estate;
  • Have a Will that deals with only certain property, e.g. only your Canadian assets, so that you would have another Will that deals with only the assets in other countries, so that a separate system of executor, trusts and tax avoidance mechanism is set up under the foreign tax regime;
  • Create trusts for your spouse or minor children.

Remember: If you marry, your Will is revoked. If you divorce, all references to your spouse are automatically deleted from your Will.

A Will offers you preservation upon death however it does not provide any protection should you become incompetent. If you get sick or suffer an injury and you are not able to make decisions about managing your money, your property, or your personal well-being, and no power of attorney has been appointed by you, the Ontario government automatically becomes your legal guardian unless you take steps to prevent this from happening. the way to do this is to sign a Power of Attorney before you are incapable of doing so.

Powers of Attorney:

An attorney is simply a person who is given the power to tact in the place of another person.

A Power of Attorney can be revoked if you have the mental and legal capacity to do this. For example, signing a new Power of Attorney will revoke any previous one unless you make it clear that earlier ones are to remain in place.

Powers of Attorney are valid only while the person giving them is alive or until they are revoked.

An attorney under a Power of Attorney must act in your interests only. An attorney is not allowed to use his or her power to benefit himself or herself.

you should consider specifying a back up choice of attorney if your first choice is unable or unwilling to carry out this responsibility. You should also make sure that your chosen attorney is comfortable with your decision.

There are two kinds of Power of Attorney under the law of Ontario:

Continuing Power of Attorney for Property:
This delegates decision-making authority over asset management, investments, business decisions, anything a person can sign their name to, short of a new Will or a Power of Attorney. it can be limited in its duration, when it begins, what it covers and will usually stay operative even after you have lost mental capacity to mange your own property.

Continuing Power of Attorney for Personal Care:
This gives authority to make decisions with respect to: nutrition, clothing, hygiene, safety, consent or refusal of treatment and continuation or cessation of life-saving measures which may prolong your life. It is not operative unless you have lost the mental capacity to make personal care decisions. The attorney must make the decisions that you would have made. It does not usually give guidelines for how this authority is to be exercised.