By: Jayson Schwarz LLM and Konstantine Chatzidimos
Capacity
So you have decided to be prudent and have your will prepared. This article explores some of the essential elements of wills which should be considered before having your will drafted. First off, it should be noted that anyone who has attained the age of 18 years can make a will; provided they have what the courts term “testamentary capacity”. In plain English it means that the person making the will has the mental ability to do so.
In situations where the will is contested by unhappy “would-be” beneficiaries, a judge will ultimately decide whether the testator had the mental capacity to make their will. Estate litigation is expensive, and in cases where the court decides that there is, in fact, a definite question as to whether the deceased lacked capacity, the trial judge may order that the costs of the litigation – which could very well be in the $30,000.00 – $50,000.00 range – be paid out of the estate.
The reason we are mentioning this is to advise that wills should be made when one is still in relatively good health. Meaning, you should not wait until an illness occurs to make your will. If you wait until then, the possibility of a challenge to your will by a disgruntled family member is higher; particularly if the will is made under circumstances where you are weak, possibly on medication or under the care and control of another family member.
Executor
Before you decide who gets what, you have to consider who will be your executor, or Estate Trustee – as is the current term. The Estate Trustee is responsible for managing your estate after your passing.
First off, it is advisable you ask the person whom you wish to name as Estate Trustee whether they are prepared to accept this weighty of responsibilities. You may also name more than one person to be your Estate Trustee, but if you do select only one person, it is a good idea to choose an alternate in case your designated Estate Trustee dies before you do or elects not to act when the time comes. Choosing an Estate Trustee is not an exercise to be taken lightly as there are significant responsibilities incumbent on the person you select; a few of these responsibilities include:
- Making funeral arrangements;
- Gathering assets and arranging payments of debts and taxes;
- Filing tax returns for any untaxed years;
- Obtaining a clearance Certificate from the C.R.A., and,
- Arranging for distribution and/or liquidation of assets.
And the list goes on. The significant responsibilities of an Estate Trustee should help guide your decision as to whom to appoint. Do not appoint someone to this position just because you think their feelings would be hurt if you did not pick them; select someone who can handle the job.
Asset Distribution
Your lawyer’s place is not to tell you how to divide your assets on death; however, it is their place to advise you as to the statutory restrictions which restrict your ability to dispose of your property entirely as you may wish.
Specifically, the Succession Law Reform Act states that where a deceased has not made adequate provision in their will for dependants, the court may order that they are provided for out of the estate. Dependants are defined in the Act to be the spouse, common-law spouse, same-sex partner, parent, child or siblings of the deceased to whom the deceased was providing support immediately before his death.
In drafting your will, it is important to keep this provision in mind if you are thinking about disinheriting a dependant as you may be setting your estate up for expensive litigation.
But, what if you have already made up your mind to disinherit your child?
It is important to explain this to your lawyer so that he or she can note it down in the event that your will is ultimately challenged. Further, any disinheritance of a dependant should be specifically noted in your will with a statement to the effect that – “I have elected not to leave my son, “Johnny”, any portion of my estate as I deem him capable of adequately providing for himself.”… The point is that there must be evidence that you at least turned your mind to the issue of disinheriting a possible dependant.
Marriage / Divorce / Separation
There items we would like to explore in this article concern marriage, divorce and separation.
When you marry, or remarry, any existing will is automatically revoked, unless it explicitly states that it was drafted “in contemplation of marriage”. This is something to be wary of and you should consult your lawyer if you have prepared a will prior to your becoming married. Further, the purposes of your will, divorce treats your divorced spouse as having died before you. As such, any gift of property to that person noted in your will is automatically cancelled.
Separation is a different story, however. In the event you separate from your spouse and die before becoming legally divorced, your estranged spouse will still be entitled to a portion of your estate, whether through your will, or through the laws of intestacy. This is something to be wary of if you are currently separated from your spouse and have no will.
Finally, continuing on the pleasant topic of marital breakdown, if you intend to leave property to your married son or daughter, you understandably would not want their spouse to have any claim on it in the event of a divorce. Since 1986, it has been possible to put what is called a family law clause in a will. The purpose of this clause is to indicate that you do not wish any inheritance that you leave your child to be considered family property, which is subject to division in the even of marital breakdown. This is a popular clause in most wills and one you probably won’t find in the over-the-counter will kits you can buy at the drug store.
Kindly note that the above does not purport to be a comprehensive summary on the law in this area. For a more detailed account on any of the issues raised in this article feel free contact us.