Estate Lawyers Ottawa Planning

Probate

Probate fees in Ontario are calculated at the rate of 1.5% of the value of the estate in excess of $50,000 (the first $50,000 attracts fees of 1%). On an estate of $3,000,000, the probate fees will be about $45,000. This is not an insubstantial burden, particularly if the value of the estate is further reduced by income taxes. Multiple wills are recognized by the courts in Ontario as a legitimate estate planning technique that in certain cases may be used to reduce probate fees.

Probate is not required to validate a will – a will is valid on its own terms. Probate is the process by which a will is approved and the appointment of the estate trustees is confirmed by a court pursuant to provincial legislation. Pursuant to such legislation, third parties are entitled to rely on the probated will and the authority of the trustees thereby appointed. While an estate is not required to obtain probate (and some estates are not probated, particularly where virtually all property has transferred pursuant to the survivor under a joint tenancy), probate is almost invariably required where there is real estate or investments with institutions. Where the estate holds real property (such as house or cottage) in Ontario, probate of the estate and an estate Lawyer, Ottawa based if you live in this area, may be appropriate.

Multiple Wills

Multiple wills is a technique that may be used in certain circumstances reduce the probate fees that would otherwise be payable in a single will. Multiple wills are simply that – the use of two or more wills, each of which deals with a particular part of the estate. Multiple wills may be structured in a different ways, most commonly by jurisdiction, in order to take advantage of jurisdictions with lower probate fees, such as Quebec or Alberta. An Ontario resident taking advantage of multiple wills would have an “Ontario” to address real property located in Ontario and might have Quebec will to address other property, such as institutional investments. Other multiple will structures are used, such as an Ontario will to address property requiring probate, and a second Ontario will for property that does not require probate, such as shares in a closely held private company.

If an estate is comprised of an $800,000 home in Ontario, and $2,200,000 investment portfolio. If a single will is used, probate fees will be approximately $45,000. If instead, the testator used an Ontario will for the home and a Quebec will for the investment portfolio, the probate fees will be about $12,000 in total, a savings of about $33,000 may be realized.

Multiple wills are complex and not available in all circumstances. There are increased costs to set up multiple wills and administer multiple wills, although these may be minimized through use of the same executors. Where appropriate, multiple wills are very effective to reduce the probate fees on death.

Frequently Asked Questions

Wills - How are they validated? Can I hand write my own?

I made my own hand-written will few years ago. I believe it’s valid and truly reflects my wishes, however my financial advisor told me I should get a proper will drafted by a Lawyer. Why should I do that?

‍Wills are legal documents that will dictate the distribution of assets after one’s passing and there are many reasons why wills should be prepared by a Lawyer specializing in this area of law.

‍Formal validity For wills to be valid and legally binding they have to be executed (signed) according to legal requirements. A Lawyer preparing your will would ensure that the document is executed properly and therefore legally valid and binding.

‍Comprehensiveness A Lawyer can make sure your will deals with all important matters, such as appointment of executor(s) and alternate executor(s), distribution of your assets, appointment of custodians and guardians for your children and setting up trusts for minor beneficiaries. Your Lawyer will also ensure your will gives executors enough powers to properly and efficiently administer your estate and follow your testamentary wishes.

‍Reflecting all your legal obligation

‍Under the law you are obliged to provide for your spouse and your dependents. Your Lawyer can advise you of your obligations to such persons.

‍Clarity of language

‍A properly drafted will should use language that is clear and precise in order to prevent any issues with interpreting your instructions contained in the document. Your Lawyer will make sure that proper language is being used to avoid any ambiguities and clearly reflect your intentions.

‍Preventing future challenges to your will

‍Having a Lawyer draft your will significantly reduces any risk of future legal challenge to its validity based on your legal capacity or any undue influence. When your legal capacity might be an issue, your Lawyer will gather and keep all the required evidence to prove you had the necessary legal capacity to make a will. He or she will also ensure there is no undue influence from any individuals, including family members that would affect any of the provisions of your will.

Can a person with dementia participate in a lawsuit?

“I recently learned that my elderly Aunt is a victim of Fraud. The police have advised me that some victims of the fraud are considering a lawsuit and that someone may wish to speak to a Lawyer on my Aunt’s behalf. My Aunt suffers from dementia and I hold power of attorney. Can my Aunt participate in a lawsuit?"

Special rules apply to lawsuits involving people, like your aunt, who suffer from a mental illness and therefore lack capacity at law.

Generally, children under the age of 18 and people who suffer from mental illness, including those who suffer from dementia, must be represented by a litigation guardian within legal proceedings. There are also special rules which apply to how limitation periods apply to persons who lack capacity at law.

Litigation Guardians assume responsibility for litigation on behalf of a litigant who lacks capacity. Litigation Guardians serve an important role and are saddled with significant responsibilities. They assume the responsibilities of retaining and instructing Lawyers on behalf of the incapable litigant, and litigation guardians assume personal responsibility for any costs liability incurred as a result of a lawsuit.

However, the litigation guardian plays an essential role in ensuring access to justice for some of society’s most vulnerable people. Without people agreeing to stand as Litigation Guardian people who suffer losses could be left without recourse to the courts.

Generally a Lawyer works very closely with a litigation guardian to ensure that risks are properly understood. Lawyers also put in place measures to ensure the risk of personal exposure to the guardian is minimized.

If you are asked to stand as a litigation guardian you should consult with a Lawyer before deciding whether or not to stand.

Do I need a lawyer to get a will and powers of attorney?

Your last will does not have to be drafted or signed by a Lawyer. However, a will is a legal document that will determine who will have control of your estate and how it is going to be distributed. There are certain legal requirements that have to be met for the will to be valid. As such it is very important that your will is drafted, signed and witnessed properly.

‍How can a Lawyer help?

‍A Lawyer will ask you right questions to help you determine how to distribute your estate while taking into consideration various contingencies and scenarios that might be in place at the time of your passing. She will discuss with you legal clauses that you might want to include in your will, such as a beneficiary designation for your RRSP and insurance policies, expressing your wishes in regards to the custody of your minor children or confirming compensation for the executor. Your Lawyer will also talk to you about the powers that you want to give to your executor in addition to the powers he would have under current legal framework or limits that you want put on such powers. She will properly draft your will and will try to help you understand all the legal clauses and legalities contained in a will. Your Lawyer will also make sure that your new will revokes all your previous wills or other testamentary documents. Most importantly, your Lawyer will also make sure that your will is properly signed and witnessed.

Your last will is an important legal document and you should retain a professional to help you with its preparation and execution. Seeking and using such help will give you peace of mind knowing that your affairs are in order and make sure that your will reflects all your wishes.