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Estate Planning has become increasingly important due to new laws which have been implemented and the adverse effect it can have on you and your loved ones if the proper documents are not prepared.

On March 30, 1994, the Ontario Rules Committee approved new estate rules which came into force on January l, 1995. These rules introduced changes in procedure, as well as new terminology. Stewart Corbett has incorporated the new terms into this section of our website and to assist you in this regard, please find below a list of some of the new terminology as follows:

 OLD RULES  NEW RULES
Executor or an Administrator with Will Annexed Estate Trustee with a Will
Administrator Estate Trustee without a Will
Letters Probate, Letters of Administration with Will Annexed Certificate of Appointment of Estate Trustee with a will
Letters of Administration without a will Certificate of Appointment of Estate Trustee without a will


We pride ourselves in being able to assist our clients in the following areas:-

  • wills
  • spowers of attorney
  • family trusts
  • tax planning
  • managing and distributing assets
  • settlement of estate accounts
  • dispute resolution
  • estate litigation
  • safekeeping of wills and other personal documents
  • advising estate trustees of their duties
  • advising individuals acting as power of attorney


STEWART, CORBETT HAS EXPANDED ON THE FOLLOWING TOPICS FOR YOUR CONVENIENCE AND INFORMATION:

 WILLS

A Will, simply stated, is a legal document which directs how the assets of your estate are to be distributed on your death. There are numerous considerations to bear in mind when making a Will to ensure that it accomplishes the wishes of the deceased. If one has no Will then the assets of the estate are distributed in accordance with the laws of the province where the deceased lived. (back to topics)

LIVING WILLS

A Living Will is a document in which a person indicates his or her wishes on how to be treated in the event of incapacity. The Living Will usually expresses how someone wishes to be cared for as opposed to actually appointing an individual to carry out one's wishes.

If one wishes to name an individual to fulfil the intent of the Living Will then a Personal Care Power of Attorney would be drafted incorporating the terms of the Living Will. (back to topics)

POWERS OF ATTORNEY
Continuing or Enduring or Property Power of Attorney

A Power of Attorney for property or what is sometimes referred to as a continuing or enduring Power of Attorney is a legal document that gives another person or persons the power to manage one's property or business interests. It may be restricted in scope and if properly worded would continue to be effective if the person who granted the Power of Attorney becomes mentally incapable - hence the term continuing. (back to topics)

POWERS OF ATTORNEY
Personal Care Power of Attorney

A Power of Attorney for personal care is similar in nature to the property Power of Attorney, in that one grants authority to another to do something on one's behalf. The personal care Power of Attorney, instead of dealing with property, deals with a wide number of personal care issues ranging from health care to food and lodging decisions. Again, these powers may be limited or restricted by the grantor. (back to topics)

SOLICITOR'S DUTIES

The solicitors role in the administration of the estate is as extensive or as minimal as is agreed with the estate trustee(s). What follows is a list of the duties that are normally performed by the estate solicitor.

  • Read and, if necessary, interpret the will;
  • Prepare the application for Certificate of Appointment of Estate Trustee (with or without a will) for signature by the estate trustee(s), if necessary;
  • Prepare legal documents for asset registration notarial copies of Certificate of Appointment), declarations of transmission;
  • arrange for real estate conveyance and/or re-registration;
  • advertise for creditors;
  • arrange for settlement of creditors' claims if needed;
  • assist the estate trustee(s) in preparing accounts for the estate;
  • arrange for and appear in court to pass estate trustee accounts if necessary;
  • prepare releases for the beneficiaries to sign, releasing estate trustee(s) from future liability after administration completed and estate distributed.
    (back to topics)

ESTATE TRUSTEE'S DUTIES

The estate trustees' duties are of a more administrative nature. However, many estate trustees involved in an estate for the first time, are completely unaware of the scope and seriousness of their responsibilities. It is the duty of the solicitor to make the estate trustees aware of the extent of their newly acquired duties, and of the options that are available to them to obtain assistance in the performance of those duties, if they feel it is necessary, and if it is authorized.

The estate trustees' responsibilities are as follows:

  • make funeral arrangements, when there is a will;
  • If there is no will appointing an estate trustee, the funeral is the duty of the next-of-kin;
  • determine, locate and notify beneficiaries of their interests;
  • locate, inventory, value and secure the assets;
  • retain a solicitor for advice;
  • determine the debts of the deceased and pay them after contestation and settlement if necessary;
  • file tax returns in all necessary jurisdictions, pay taxes owing, and obtain appropriate tax clearances or releases;
  • distribute the assets as directed by the will, or according to the rules of intestate succession on intestacy;
  • invest assets for establishment of ongoing trusts if so directed by will;
  • maintain proper accounting records and prepare statements periodically for the beneficiaries to keep them abreast of the progress of the estate administration. (back to topics)

CERTIFICATE OF APPOINTMENT (without a will)
When a Certificate of Appointment of estate trustee without a will is necessary (formerly Letters of Administration)

If the deceased had no will, it is necessary for someone to be appointed by the court to administer the assets and settle the estate according to the laws of intestate succession, as set out in the Succession Law Reform Act. The person appointed is the estate trustee and the basis of authority is the Certificate of Appointment of Estate Trustee without a will granted by the Court of the applicable jurisdiction. (back to topics)

CERTIFICATE OF APPOINTMENT (with a will)
The necessity for obtaining a Certificate of Appointment of estate trustee with a will (formerly Letters Probate)

A major reason for obtaining a Certificate of Appointment of estate trustee with a will is to make the job of administering the estate easier or perhaps possible at all. Most banks, trust companies and stock transfer agents will not release funds or transfer securities to the beneficiaries of an estate without receiving a notarial copy of the Certificate of Appointment of estate trustee with a will or Certificate of Appointment of estate trustee without a will. In some instances, it is possible to obtain the funds in bank accounts, redeem investment certificates or transfer Canada Savings Bonds without either of these certificates. However, it is usually necessary to prove that the estate is very small, usually less than $10,000.00, that it goes to only one beneficiary and that the deceased had no debts that have not already been paid or that will not be paid out of the funds being released. It may be necessary for the estate trustee named in the will and the beneficiary to sign an agreement promising to indemnify the institution for any claims that might subsequently be made against it for the funds. Without a Certificate of Appointment as the basis of its actions, the banking institution would otherwise be fully liable to the claimant for misuse of the deceased's assets.

If a person died, leaving a will which appoints one or more estate trustees who are able and willing to administer the estate, the person or persons so named must make the decision whether to apply for a Certificate of Appointment of estate trustee(s) with a will. The Certificate of Appointment confirms the validity of the will and the appointment of the estate trustee(s). An estate trustee acting under a valid grant of Certificate of Appointment is protected if a later will is discovered or if for some other reason, the will admitted to the court is later found to be invalid. (back to topics)

COURT FEES

Fees for the granting of a Certificate of Appointment of estate trustee (with or without a will) are based on the size of the estate, as follows:

  1. on the first $50,000.00 of the value of the estate being administered, per thousand dollars or part thereof...$5
  2. on the portion of the estate being administered that exceeds $50,000.00, per thousand dollars or part thereof...$15

If subsequent assets are found or if revised valuations are made, a revised submission must be made to the Court and the additional fee, if applicable, paid. The fee for a Certificate of Appointment is submitted at the time the application is made, with a cheque made out to the Minister of Finance. (back to topics)

T-1 TAX RETURN
The Final T-1 Income Tax Return

The Income Tax Act requires that a tax return be filed for a deceased person reporting all the income of that person up to the actual date of death. The personal representative is responsible for filing the return for the final year of the person's life, as well as any returns for prior years which had not already been filed. (back to topics)

ESTATE TAX RETURNS
Income Tax Returns for Estates

When a taxpayer dies, a new taxable entity is created in the form of the estate. The estate is treated as a separate entity and all income received by the estate must be reported annually by the trustee.

There are many specific concerns that are involved with the filing of a T-3 return which have a bearing on the tax consequences and the operation of the estate itself. (back to topics)

 

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