New Process for Administering Small Estates in Ontario Following an announcement by the provincial government this past February, on April 1, 2021 Ontario’s new procedure to administer small estates came into effect. The new procedures, which are designed to ease the administration process on “Small Estates” are welcomed and should facilitate a cost effective and timely probate on modest estates. Under The Smarter and Stronger Justice Act,[1] amendments were made to The Estates Act[2], one of which was the introduction of the “Small Estate.” A Small Estate is an estate with a value of $150,000 or less. The new and simpler procedures for Small Estate administration include the following: completing the new and simpler application forms;[3]in some instances, removing the requirement of the applicant to provide certain supporting documents (such as an affidavit of service for the notice of application); andin most circumstances, removing the requirement to post a bond.[4] Estate administration tax is still payable on Small Estates. As with all estates, the first $50,000 is exempt from estate administration tax, and the remainder is taxed at approximately 1.5% of the value of the estate as of the date of death. Once probate has been issued, estate trustees are required to file the Estate Information Return with the Ministry of Finance within 180 days of the issuance of probate. Regardless of the amount of money held in an account, banks and other financial institutions often cannot take instructions from an estate trustee unless probate has been granted. By easing the administration requirements on Small Estates, the hope is that less people will leave these estates unsettled due to the burdens and costs associated with probate. We understand that dealing with a loved one’s estate can be overwhelming. If you have questions regarding Ontario’s new procedures for the administration of Small Estates, or any questions regarding wills and estates in general please contact Esther Abecassis, wills and estates lawyer at Devry Smith Frank LLP at esther.abecassis@devrylaw.ca or 416-446-3310. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” [1] Smarter and Stronger Justice Act, 2020, S.O. 2020, c. 11 – Bill 161. [2] Estates Act, R.S.O. 1990, c. E.21. [3] the following new forms have been introduced pursuant to the Rules of Civil Procedure (R.R.O. 1990, Reg. 194: Rules of Civil Procedure under Courts of Justice Act, R.S.O. 1990, c. C.43) Form 74.1A – Application for a Small Estate Certificate (the “Application”); Form 74.1B – Request to File an Application for a Small Estate Certificate or an Amended Estate Certificate; Form 74.1C – Small Estate Certificate (the “Certificate”); Form 74.1D – Registrar’s Notice to Applicant in an Application for a Small Estate Certificate or Amended Small Estate Certificate; Form 74.1E – Application to Amend Small Estate Certificate; and Form 74.1F – Amended Small Estate Certificate (the “Amended Certificate”) [4] New section 36(3) of the Estates Act provides that “subject to section 6, a bond shall not be required in respect of a small estate, unless, (a) a beneficiary of the estate is a minor; or (b) a beneficiary of the estate is incapable within the meaning of section 6 of the Substitute Decisions Act, 1992 in respect of an issue in the proceeding, whether or not the person has a guardian.” By Fauzan SiddiquiBlog, Wills and EstatesApril 16, 2021July 28, 2021
What is a Continuing Power of Attorney for Property? A Continuing Power of Attorney for Property is a legal document in which you can appoint a person or persons to act on your behalf (called an “Attorney”) with respect to your property and financial affairs. The document will allow them to make decisions for you if you become incapable of managing your financial affairs. *The term “Attorney” refers to the person or persons you have chosen to act on your behalf. He or she does not have to be a lawyer. WHO YOU CAN APPOINT AS YOUR ATTORNEY FOR PROPERTY You can choose anyone you want as your Attorney as long as he or she is eighteen (18) years of age or older. You can also choose multiple people to act. If you appoint more than one person, you can state that the Attorneys are to act “jointly” or “jointly and severally”. If the Attorneys are appointed “jointly”, this means that they will be required to act together at all times. If the Attorneys are appointed “jointly and severally”, this means that either of the Attorneys named can act independently. If you name the Attorneys “jointly”, the advantage is that there is always a second person “double checking”. A disadvantage of naming the Attorneys “jointly” is the lack of flexibility – say, for example, if one Attorney is temporarily unavailable because of vacation, the available Attorney will not be able to make any decisions without the second person. APPOINTING A TRUST COMPANY AS YOUR ATTORNEY FOR PROPERTY Some people prefer to appoint trust companies (many of the big banks offer trust services) because they are professional and impartial. WHAT HAPPENS IF THE PERSON YOU CHOSE IS DECEASED, IS INCAPABLE, OR DOES NOT WANT TO ACT AS YOUR ATTORNEY FOR PROPERTY? If two or more Attorneys act jointly under the Continuing Power of Attorney and one of them dies, becomes incapable of managing property, or resigns, the remaining Attorney or Attorneys are authorized to act, unless the power of Attorney provides otherwise. If only one primary Attorney was named, you can name a substitute Attorney, and the substitute can act. DATE OF EFFECTIVENESS OF THE POWER OF ATTORNEY FOR PROPERTY We generally recommend that the Power of Attorney give your Attorney legal authority as soon as the document is signed. However, you can specify otherwise in the document. For example, some people only want the document to be effective upon a specific date or specific event (such as the Attorney obtaining a letter from your family physician which states that you are mentally incapable and cannot manage your property). An advantage of giving your Attorney legal authority as soon as the document is signed is that your Attorney will not need to go through formal processes to prove to third parties, such as banks, that the Power of Attorney has come into effect. IS MY ATTORNEY ENTITLED TO COMPENSATION? Your Attorney is entitled to take payment at a rate set out by the law, unless you say otherwise in the Power of Attorney for Property. If you want to prohibit your Attorney from taking any payment or you want to set a specific amount yourself, you can do this by including specific instructions in the Power of Attorney for Property. FIVE FACTORS TO CONSIDER WHEN CHOOSING WHO YOU SHOULD APPOINT AS YOUR ATTORNEY FOR PROPERTY Choosing an Attorney for Property is an important decision as that person will have full access to your money and other property. Trustworthiness Is the person honest? Do you know the person well enough or long enough to trust them? Will this person act in your best interest? Does the person have personal issues such as financial or health concerns that may interfere with the management of your property? Reliability Can you rely on this person? Experience Does the person understand financial matters? Availability Does the person have the time to handle your financial matters? Is the person readily available and easy to contact? Does the person live nearby? Willingness Is the person willing to take on the responsibility? Does the person understand the duties and responsibilities involved in being your Attorney? For further information or to schedule a consultation please contact Ashley Doidge of Devry Smith Frank LLP at 416-446-3348. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Wills and EstatesAugust 22, 2019September 30, 2020
7 Estate Planning Tips For Spouses Estate planning is inarguably one of the most important things you can do for yourself and your family. Not only can estate planning legally protect your spouse and assets, it can also instruct others on exactly how you would like things handled after your death. MAKE A WILL If you die without a will, the provincial government decides how your assets will be distributed under intestacy rules. Many people incorrectly assume that if they die without a will their estate would pass to their spouse. This is not necessarily the case. In Ontario, for a spouse to inherit from your estate they must be married to you [common law spouses do not automatically inherit under intestacy rules!]. If you have children, your spouse will receive a “preferential share” up to $200,000 worth of your assets. The remainder of your estate will be divided as follows: If you have one child, your child and spouse will split the remainder. If you have more than one child, your spouse receives one third, and your children will split two thirds equally. Making a valid will prevent the intestacy laws above from taking effect as well as providing additional benefits. UPDATE YOUR WILL REGULARLY They say the only thing worse than dying without a will is dying with an outdated will. If any of the following have occurred since your last will we highly recommend you consider updating your will: birth of new child; birth of grandchildren; beneficiaries may be irresponsible with money and may require funds to be held in a trust; death of your named executor or inability of that executor to serve. CONSIDER MAKING A SECONDARY WILL TO LOWER PROBATE TAXES Probate taxes paid to the Government in Ontario are among the highest in Canada. Since the landmark case of Granovsky v. Ontario was decided in 1998, lawyers have been recommending that certain clients consider making a secondary will which deals with assets that do not need to be probated (such as shares in a corporation or an art collection). The end goal of the secondary will may result in substantial minimization of probate taxes. WHAT IS PROBATE? In Ontario, many executors are required to go through a legal process where the court confirms the validity of the will and the executors’ authority to act on behalf of the estate, this is known as probate. This process is usually required where the deceased owned real estate or bank accounts with substantial amounts of funds. When a will is probated, probate taxes (also known as Estate Administration Fees) are triggered for the assets dealt with in the Will. MAKE A POWER OF ATTORNEY FOR PERSONAL CARE A Power of Attorney for Personal Care is a legal document in which you designate the person or people who will make personal care and treatment decisions for you if you become incapable. This document can be used to ensure that your wishes about personal care decisions will be respected MAKE A CONTINUING POWER OF ATTORNEY FOR PROPERTY A Continuing Power of Attorney for Property is a legal document in which you can designate a person or people to act on your behalf with respect to your property and financial affairs. If you become unable to make decisions about your property and you have not made a Power of Attorney for Property, it is difficult for your family to access your assets and manage them for your benefit. Instead, someone must apply to the court for permission to be your representative or a guardian must be appointed by the Office of the Public Guardian and Trustee CONSIDER TRANSFERRING TITLE IN YOUR HOME INTO “JOINT TENANTS WITH RIGHT OF SURVIVORSHIP” Your home can be held by two or more people in two ways: either as joint tenants or tenants in common. Joint tenants implies an automatic right of survivorship. For example if A dies, A’s 50% interest automatically passes through right of survivorship to B. Tenants in common implies that each tenant owns a separate undivided interest in the property. For example if A dies, a 50% interest falls into A’s estate and will be dealt with according to A’s will or by the laws of intestacy, if A does not have a will. If your home is held as Joint Tenants with Right of Survivorship, the home may not be subject to your Will and may pass outside of your estate. Thus your estate may not have to pay probate tax on the value of your home. A transfer of title should only be considered after consulting with a knowledgeable lawyer and it is not appropriate in every situation. CONSIDER DESIGNATING A BENEFICIARY FOR SPECIFIC ASSETS A person can designate a beneficiary to receive the benefit of certain assets upon death (eg life insurance policies, RRSP, pension plans, TFSAs). When the person who designated a beneficiary dies, the benefits flowing from that asset will flow directly to the person named outside the deceased’s estate (and not pass through the estate). Therefore, since the asset does not flow through the estate it may not be subject to probate taxes and creditor’s claims. Another considerable advantage is that your beneficiaries will have nearly immediate access to funds following your passing. For further information about estate planning or to schedule a consultation please contact: Ashley Doidge at 416- 446-3348 or ashley.doidge@devrylaw.ca “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Wills and EstatesJuly 30, 2019September 30, 2020
The Original Will Has Been Misplaced or Destroyed – What Options Do I Have? We have recently looked at the validity of a Will when the uncertainty of the testator’s wishes are apparent. Especially in the instance whereby the testator has more than one Will. – However, the definition of the modern-day family has somewhat evolved over the years, allowing for the recognition of diversity and the complex intricacies of families in Ontario today. That said, from a legal perspective, one may not have considered what family structure might mean and the implications in which their family could encounter should they fail to have an appropriate plan in place for the future. It is for this reason, estate planning, although often deemed to be a daunting process, is fundamental in eliminating confusion and ensuring your last wishes are observed. In any case, it is this document that will determine how your estate will be divided upon your death. – Someone, namely the selected beneficiaries, will be in receipt of any assets you leave behind and of course, if applicable, the care of minors can be determined in this instance also. While there is no legal obligation to prepare a will, a meticulously drafted Will, will guarantee that your estate and the beneficiaries are protected. But, what transpires when the original signed Will, is misplaced or destroyed? After all, there should only be one copy of the original Will and if for some unforeseen reason the Will becomes inaccessible, there may be some belief that there were intentions by the testator, to revoke it. Generally, an extensive effort to pinpoint its location will have occurred before the assumption of this conclusion. Fortunately, when the original signed Will cannot be located but a photocopy is available, the Ontario Rules of Civil Procedure provides some clarification and states the following: 75.02 The validity and contents of a will that has been lost or destroyed may be proved on an application, (a) by affidavit evidence without appearance, where all persons who have a financial interest in the estate consent to the proof; or (b) in the manner provided by the court in an order giving directions made under rule 75.06. O. Reg. 484/94, s. 12. Permitting the beneficiaries to bring forth an application before the court, to prove a lost or destroyed Will. The application must include a photocopy of the Will, with a declaration stating the trustee of the estate has no reason to believe that the testator destroyed the will or performed any other act to revoke the Will. However, it can only be accepted if all persons, who are believed to possess a financial interest in the testator’s estate, consent to the proof. – If so, validity and the contents of the Will is considered to be proven, thus a court appearance is unnecessary. On contrary, it may be that one or more beneficiaries object to the Will being proven, to which in these circumstances a slightly difficult process and a court hearing is anticipated, whereby the opposing beneficiaries are entitled to provide relevant documentary evidence to demonstrate their position. The Judge will then determine the outcome. Wills and Estates can be somewhat complex, for further advice on ensuring your final wishes are acknowledged or to begin planning for your estate, estate lawyers at Devry Smith Frank LLP will assess your needs and help you determine what is appropriate for you and your family. For more information on how we can assist, please contact our office online or directly on (416) 449-1400 “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Wills and EstatesDecember 4, 2018June 16, 2020
Is Your Will Still Valid After A Recent Ontario Ruling? A recent decision stemming from the Ontario Superior Court of Justice is likely to have far-reaching implications on wills across the Province, and your will could be one of them. On September 11, 2018, Justice Sean Dunphy ruled that wills cannot leave the distribution of one’s assets to the discretion of one’s trustees. If it does, it will be invalid. A need to avoid the “basket clause” The “basket clause” is used when an individual has more than one will. The use of the clause enables the trustees to determine what assets fall into either will, rather than enumerating each asset in one of the wills. Until Justice Dunphy’s ruling, the validity of the basket clause had not been tested in the Ontario courts, however, based on the ruling, it is now clear that the use of the clause can invalidate a will. Given how many lawyers across Ontario rely on and utilize this “basket clause,” when drafting a will, it should come as no surprise that many established and well-respected estate planning lawyers in Ontario are concerned by Justice Dunphy’s ruling. The ruling: Milne Estate (Re), 2018 ONSC 4174, The case before Justice Dunphy concerned a couple who both passed away in October 2017. The couple each had two wills, a primary will and a secondary will, with “materially identical” language in each. Justice Dunphy found that the couples’ secondary wills were valid, and their primary wills were not. Reason being, the secondary wills of each testator (the person who made the will) vested all property of the testator in the executors, and therefore, the requirement of certainty of subject-matter was satisfied. By contrast, the primary wills effectively vested in the executors the entire discretion to determine retroactively whether any assets were vested under the will at death, based upon the executors’ view as to whether probate is necessary or desirable. The court found that it was the uncertainty contained within the primary wills that made those wills invalid. The language used in a will must be certain It is imperative that wills describe with certainty any property that is subject to them. The property or assets that are subject to a will must be ascertainable objectively based upon the expressed intent of the testator, without regard to discretion of the estate trustees exercised after the will has been executed. If your will includes the “basket clause”, or a similar type of clause, you may want to consider contacting a lawyer to update your estate plans. If you have questions about a current will, or need assistance with drafting a new will, contact one of the estate planning lawyers at Devry Smith Frank. This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs. By Fauzan SiddiquiBlog, Wills and EstatesOctober 2, 2018June 16, 2020
Legal Grounds For Will Challenges The loss of a loved one can be a devastating and overwhelming experience. While mourning a loss, you may find yourself scrambling to ensure that all of your family’s affairs are in order, especially if you are listed as an Executor, Administrator, or Trustee of an Estate or Trust for the deceased. However, many individuals have also experienced being left out of the deceased’s will and believe that they are entitled to a share. If someone comes to that realization, it is difficult to determine where to begin, as the law surrounding challenges to a will is complicated. Devry Smith Frank LLP’s (DSF) Estates Litigation lawyers are able to advise clients on how to proceed with your matter and provide advice and support from start to finish, looking out for your best interests, to achieve the best result when challenging the validity of a will. There are three common types of legal grounds on which you may challenge the validity of a will: If the will fails to comply with the Succession Law Reform Act. Ontario requires full compliance with the formalities of execution. Wills prepared by legal professionals will comply with these rules, while a majority of home-made ones do not. If the deceased had the capacity to make the will. Did the deceased know what property and assets they have and that the will would be disposing of these assets after their death? Did they have a true understanding of any obligations they may have to spouses and children? A challenge on this ground would require hiring expert medical witnesses to review medical records and retroactively assess the deceased’s mental capacity at the time the will was made. Whether there were any suspicious circumstances surrounding the drafting of the will or whether the deceased was under any undue influence. The will must represent the true intentions of the deceased. Undue influence can occur when a person feels compelled to honour the wishes of someone making a direct or implied threat, or attempts to leverage a person’s weakened state to their advantage. A child convinces a parent to remove a sibling from the will. A will signed on the deceased’s death bed leaving everything to a caregiver may give rise to a challenge on the grounds of suspicious circumstances. If you are experiencing any of the issues mentioned above, it is important to seek qualified legal advice from an Estates Litigation lawyer. For further information or assistance, please contact our office directly by calling (416) 449-1400 or emailing info@devrylaw.ca “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Wills and EstatesMay 16, 2018June 18, 2021
