Probate of Estates


When a person dies, and has a Will, the Executor's job is to Probate the Will and to carry out the Testator's wishes in accordance with his/her Will. This involves following the Will and also involves determining any possible claims against the Estate and tracking down all of the assets. When a person dies without a Will the job of tracking down assets and liabilities falls to a relative or friend who, after applying for a Grant of Administration is appointed by Probate Court to act for the Estate.


In both situations this carries an obligation to file forms with Probate Court and provide notices to likely beneficiaries of the Estate. A lawyer who is familiar with the law, the process and forms can help by providing advice and/or the preparation of the documents for the representative.


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Wills and Estates


With better health care and move active, healthier lifestyles, people are living longer and accumulating more assets. In fact, it is estimated over a trillion dollars will be passed down to the baby boom generation from their parents.


The baby boom generation is also aging, and many are doing estate planning. Part of good estate planning includes the preparation of legal documents such as Wills, Enduring Power or Attorneys, and Advanced Health Care Directives.


As people plan their future and prepare these documents, we hear many frequently asked questions.






Wills


Q. Why do I need a Will?


A. A Will allows you to give property upon your death to the people or organizations you wish. It also allows you to appoint to person or organization that will handle your estate once you pass away. A Will also allows you to appoint a guardian for your children or anyone else who may require guardianship.


If you do not have a Will, your assets will go to whoever is prescribed in the Intestate Succession Act of your province. This may or may not be what you had intended. A Will can also prevent a dispute as to who will handle your estate, and make it easier to get your estate proceeds. For example, having a person appointed as the executor/trix will eliminate the need to get the consents of all of your next of kin for one person to look after the estate.


Q. Why do I need a lawyer to do my Will?


A. Only two people are given authority by law to prepare Wills, your lawyer and you. Wills are important documents. So important, it is a criminal offence to improperly do something to a testamentary document. With so much money at stake, people can get taken advantage of and disputes can arise quickly and unexpectedly. Thus, it is strongly recommended you get a lawyer to prepare your Will.


Lawyers are trained in drafting Wills, and it is essential your Will be drafted without ambiguity. A lawyer can suggest certain clauses you were not even thinking of, or properly word a clause you were thinking of. There are some things you cannot do with your property, and a lawyer will help make sure the clauses in your Will would be upheld by the courts.


Also, a lawyer can give advice generally about estate planning. It is important your assets be held in a certain way to avoid costly inheritance taxes and probate fees. After consulting with a lawyer, you may find there are additional things you need to do to protect the integrity of your assets such as get a deed to your land n yours and someone else's name, or do a marriage contract.


Finally, and perhaps most importantly, it must be remembered that your Will takes effect upon your death. It will probably not be opened or read until you are buried or cremated. If there is a dispute about the validity of your Will, your lawyer may become crucial in establishing the validity of same.


Wills tend to be challenged for the following reasons: (a) clauses in the Will are ambiguous or certain bequests are missing such as a residual clause (b) the Will is not properly witnessed as required by the Wills Act, (c) it is alleged the testator did not sign the Will voluntarily and was coerced by someone, for example, a family member, and (d) the testator was not mentally competent when he/she made the Will.


When a Will is challenged, happy families can soon turn into feuding ones. Your lawyer will have interviewed you and probably taken notes on the above points to ensure they are satisfied. Your lawyer may even require a doctor's certification of competency if he or she has doubts. The lawyer may have to testify in court, if necessary, to explain what your intentions were or to confirm you were not coerced or incompetent.


Q. Who can witness my Will?


A. A Will must be witnessed by two people, both of whom must be present at the time of your signing. A beneficiary of the Will or the spouse of a beneficiary cannot be a witness.


Q. I want to keep my property in my family forever through my Will. Can I do that?


A. There is a maxim, you can't rule from the grave , meaning that if you leave certain assets to certain individuals, you cannot unduly restrict their use of same. That said, you can set up a testamentary trust which will allow you to control the asset for a period of up to twenty-one years.


Q. I made a Will ten years ago, but have since remarried. Is my Will valid?


A. If you are not married when you make a Will and you subsequently marry, the marriage operates to revoke the Will and you have to make a new Will.


Q. I want to leave funeral instructions in my Will such as what type of casket I want and what hymns to sing. Is that permitted?


A. Yes you can include funeral instructions in your Will, however, often times Wills are not opened or read until people are buried or cremated and the grieving period has passed. If you want to make sure that your instructions are followed, you should make sure to tell your executor that your funeral instructions are in your Will.


Q. What does an executor do?


A. Being an executor is a big responsibility. The executor should first get the Will probated to get the courts seal of approval that the Will is valid and he/she has the authority to look after the estate. He/she has to make sure all debts and taxes owing by the estate are paid. The executor has to preserve and maximize the assets of the estate until such time as they can be transferred to the beneficiaries. He/she has to dispose of all the assets of the estate and give an accounting to the beneficiaries of the revenues and expenses of the estate.


These are only some of the duties. It is important to discuss your desire to appoint someone as an executor with that person first to see if they want to accept the responsibility. A lawyer can help the executor carry out most of his/her duties.


Enduring Power of Attorneys


Q. What is an Enduring Power of Attorney?


A. This is a legal document in which you appoint another person to act on your behalf in the event of you becoming mentally incapacitated. It will allow that person to do such things as your banking affairs or even transferring property. The Enduring Power of Attorney only takes effect upon your mental incapacity.


A power of attorney can also be done to take effect immediately. The attorney can provide limited powers, be for a limited time, or can be all encompassing.


Advanced Health Care Directives


Q. What is an Advanced Health Care Directive?


A. It is sometimes referred to as a living will. It allows you to appoint a decision maker to give instructions to health care professionals about what medical treatment you want or do not want to receive should you not be in a position to give you consent. It also allows you to give your consent to use your organs for transplant if you are fatally injured, or any other specific medical direction you want to give.


Q. Where do I keep my Advanced Health Care Directive?


A. Generally, this document is kept at your family doctor's office and the nearest hospital as part of your medical file.


Family Law Act


Q. I am contemplating a second marriage, what can I do to make sure my property goes to my children?


A. In the event of a second marriage, it is common for the parties to enter into a marriage contract (or a prenuptial agreement before they get married). Without same, in the event of a death without a will, the matrimonial home and one half of the matrimonial assets will go to the surviving spouse, which may not be your intention as your children will be left out. Thus, it is common in such situations for parties to contract with each other that each would keep their own respective properties, and upon their death it would go to their own particular children, despite the legislative provisions.


Joint Bank Accounts


Q. I have my adult child on my bank account. Is this recommended?


A. It depends upon what your intentions are and what you hope to accomplish by doing so. Historically, it was common for an older person, especially where their spouse was deceased, to have a son or daughter added to their account so there would be access to the account in the event of death.


However, if there is more than one child and death occurs, is the money in the joint account to go to the other person on the account as a gift, or is it a part of the estate to go to all the children? The answer really lies in the intention of the person who died if it can be determined. Generally, the Courts stat in such cases, unless there is strong evidence to the contrary, the money in the account, despite the fact that one child's name is on it, is really a part of the estate. The child becomes a trustee of the money and must hold on to same for the benefit of the remaining children. The opposite presumption is true for a surviving spouse. It is presumed the surviving spouse owns the money if the surviving spouse is on the account.


The banks are legally entitled to release the money to whoever's name is on the account. Thus, whether or not you trust your child will hold the money for the benefit of your other children is an important consideration. It is important you know in advance what your intentions are and set up you banking accordingly.


You may leave the money in an account in your name only, however, it then becomes part of your estate and is subject to probate fees. Probate fees can be substantial if there is a lot of money. If you are not sure what to do, seek legal advice.


Moving into a Seniors Home


Q. I want to go into a seniors home, but I am afraid of losing all my assets. What can I do?


A. This question commonly arises. The following would appear to be the situation at the present time:


  • The family home can be kept in your name, conveyed to a member of the family for $1.00 or sold to a third party;
  • Nursing home costs are paid out of your income. Income is assessed based on your net income minus total takes payable as reported to the CRA. This can include income from pensions, employment, dividends, interest earned on investments, RRSPs, etc. The value of your house is not considered in determining income. 85% of the assessed income will be applied to the accommodation charge of $75.50 per day in a nursing home. You cannot be left with less than $2256.00 in income per year.
  • It is common for some people to when settling their affairs to put their money into a trust fund with income coming to them and from the trust to go to their children upon their death.

Including a Trust as part of my Estate planning


Q. Can I avoid Probate Fees and some income tax with a Family Trust?


A. Family Trusts can form a valuable part of our clients' overall Business, Tax and Estate Planning. Generally Trusts fall into two main categories; trusts established during your lifetime, and trusts established as part of your Will. Changes to the Income Tax Act in 2000 allow for a number of new types of Trusts to pass on wealth and control of businesses or assets to family members during your lifetime. If you are a business owner who is transitioning control of the family business to your children, the current economy provides an opportunity to do so with less taxes. If you are considering whether a Spousal Trust, an Alter Ego Trust or a Family Trust might be a valuable part of your business and estate planning, you should seek individual advice from an accountant and lawyer who can assess your situation.





While care has been taken to ensure the information contained herein is accurate, the information provided is based upon the laws of Nova Scotia and is supplied for general interest purposes only. It is not intended, nor should be considered to be specific legal advice or opinion.

Last Revised by Philip Whitehead on November 18, 2010.


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