Planning for your own death is a difficult concept to embrace. Often times, we do not think about how our loved ones will be affected once we die. Proper planning ensures that upon your death, your assets are distributed according to your wishes. It is a process of arranging your affairs so as to produce an effective disposition of your assets. Proper planning can ensure that you choose an arrangement which best suits financial requirements, individual personalities and the welfare of your loved ones while at the same time, producing an efficient and economical method of disposition, considering possible reduction of probate taxes and deferral or reduction of income taxes.
The Will is the most important part of the estate planning process. It is a formal document that details how your Estate will be distributed when you die. It is also where you would make provisions for your children, or alternate beneficiaries if both spouses die at the same time.
if you die without a Will (referred to as dying intestate), a court will appoint someone to administer your Estate for you. That person will be required to distribute your Estate according to provincial laws. As a result, the distribution may not suit your wishes or your family’s needs or may leave part of your Estate to a beneficiary you would not have selected.
Planning Your Will
A good approach in planning a Will is by means of applying the “Who?”, “When?”, “What?”, and “How?” tests. By contemplating these factors you can ensure that you will make a considered and reasoned decision.Who?
Although you should think about the assets that you own, try to think of the people whom you want to benefit from your Will and whom you would like to see enforce and carry out your wishes. In terms of whom to leave your assets to, you can deal with this generally in terms of leaving portions or all of the Estate to an individual or individuals, including charities, or you can simply provide for certain specific assets to be left to named parties. A combination of these ideas is also generally effective. Often, spouses will leave all of their assets to the surviving spouse, with the provision that if both spouses die at the same time, the children of that union would share equally in the assets. If children are to be benefit under a Will, trust provisions are usually included to ensure that any bequest to a child would not absolutely vest in that child prior to the age of majority or prior to a later age, even beyond the age of majority, and that children or children of a deceased child are protected, as you can stage distributions or payments from a trust arrangement on a periodic basis to ensure that the children or grandchildren have gained sufficient maturity to handle the assets.
The timing for the conferring of benefits under a Will is an important consideration. You must consider if you want the benefit to be immediate, conferred on a life interest basis (as long as the person lives), terminated on the occurrence of an event (such as remarriage), for a period of time only, discretionary as the need arises, or ontingent on other events occurring.
This is where you consider what assets you own. A full disclosure of your assets is very important if a proper disposition is to be made. However, the disposition of certain assets will often be predetermined independently of the Will. For instance, property held in joint tenancy will pass to the survivor of the joint parties and life insurance or
registered retirement plans under which a beneficiary is named will pass to that named beneficiary, all outside of your Will provisions.
You can accomplish your objective through a variety of means. For example, you may make outright gifts in your Will, create a trust, or create contingent gifts to only apply under specific circumstances.
An important part of estate planning is to choose an Estate Trustee. The responsibilities of an Estate Trustee are to administer the affairs of the Estate and to ensure that the assets of the Estate are gathered, that the debts of the Estate are paid and that the beneficiaries under the Will receive their entitlements. It is very common for spouses to
appoint each other as the Estate Trustee with an alternate Estate Trustee in the event that both spouses die at the same time. In any event, the Estate Trustee is ultimately responsible for ensuring that your final wishes are carried out, making this a crucial appointment.
If you have children, your Will can include provisions to name a guardian for any children under the age of majority in the event that both spouses die at the same time. Although the Will is the best evidence of your intention respecting the appointment of a guardian, the Superior Court of Justice can override that provision and is not bound to name that guardian, if that guardian is inappropriate or if a more appropriate party has applied to be the guardian.
The Will may also include provisions to enable you to donate organs for medical research or for transplant purposes. Any specific instructions respecting burial or cremation services may also be included in the Will. These are simply a few examples of the “personal wish” clauses that you can include in your Will.
Independent of the actual drafting of the Will, this is also an appropriate time for you to review your estate planning generally to ensure that provisions that you have made with respect to life insurance, registered retirement savings plans and investment opportunities and private corporate shareholdings accurately reflect your intentions and
are favourably established from both a legal and income tax standpoint.
Please be advised that the laws in Ontario provide that an individual can prepare numerous Wills, most often a secondary Will dealing with shares or debt in his or her private corporations, as the value of such assets dealt with in such a Will would not be subject to probate costs at the time of death. The primary Will would deal with all of the rest of your assets, save and except for your shares/debt in such private corporations and the value of the assets under that primary Will only, would be subject to probate costs at the time of death.
Power of Attorney
A very important estate planning tool is a Continuing Power of Attorney for Property. This is a document whereby you appoint another to look after and deal with your affairs, while you are alive, mainly in the event you become physically or mentally incapacitated. If you do not take the proper steps to ensure that your bank accounts, investments, home and valuable assets of any type are managed for you upon incapacitation, a court may be required to appoint a third party to manage your affairs. This process can be time consuming and expensive and it does not ensure that the person chosen is the person you would have selected.
Under the Substitute Decisions Act, it is possible for you to prepare a Power of Attorney for Personal Care. This document allows you to appoint another to ensure that your wishes are carried out with respect to medical treatment, healthcare and other personal choice decisions, in the event that you are unable to make those decisions for yourself. This document is finalized by many to ensure their wishes respecting life support issues are carried out.
Also keep in mind that a Will and Power of Attorney documents should be kept up-to-date. Review same regularly and have your documents redrafted when there are major changes in your personal or family circumstances (such as a marriage, death, divorce, separation or the birth of children) or a change in your assets or the status of your
beneficiaries. A regular review (I recommend at least every 5 years) ensures that your Will and Power of Attorney documents reflect your then current intentions.
Leave you loved ones and associates with these tools to ensure you are well cared for and your Estate is easily administered according to your wishes. Feel free to reach out with any questions or requirements.
Practice Areas: Wills & Estates, Estate Administration, Trusts, Corporate Commercial
© Martin Zeidenberg, 2021
This item is provided for general information purposes only and is not intended to be relied upon as legal advice. Informed legal advice should always be obtained about your specific circumstances.