Brockville Wills Estates and Trusts are an important part of your and your family’s future. Estate Planning has become increasingly important due to 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 1, 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:
We pride ourselves in being able to assist our clients in the following comprehensive set of areas:
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.
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.
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.
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.
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.
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.
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.
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.
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:
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.
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.
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.