According to a 2018 Angus Reid Institute survey, just over half of Canadians (51%) do not have a Will. In other words, half of Canadians will not have a say in who handles their estate or what happens to their property when they die.
There are some reasons that Canadians cite for not having a Will. These include:
- Too young to worry about it
- Not enough assets to create a Will
- Dying is not something they want to think about
- Time restraints
A Will can determine:
- Who will be responsible for administering your estate (“Estate Trustee”).
- Who will be the beneficiaries of your estate.
- Who you wish to be Guardian of any minor children.
- Clearly outline any specific provisions for beneficiaries who are not yet of legal age, establish monetary provisions for dependants with special needs, and designate the Trustee who will administer your child or children’s inheritance.
Having a Will reduces costs and expenses with processing your estate and may reduce Estate Administration Tax payable. Having a Will ensures your estate is handled by the person you appoint and that your property is distributed exactly how you want. If a person dies without a Will, the law in Ontario provides next of kin the right to act as Estate Trustee, which may not be who you want to handle your estate. If that person has a spouse but no children, the entire estate would go to the spouse. If that person has a spouse and one child, the first $200,000 in assets would go to the spouse, and whatever is left over after that would be divided equally between the spouse and the child, and if there is more than 1 child, the spouse would receive 1/3 and the children would equally share the remaining 2/3 of the estate. This is generally speaking of course, and there are factors that can impact this, including that a common law spouses are not treated the same as married spouses and step-children are not treated the same as biological or adopted children.
Your solely owned real estate and investment properties will be required to go through the process of obtaining a Certificate of Appointment of Estate Trustee Without a Will (“probate”) to be administered and paid to your legal heirs in accordance with the predetermined distributions by law if you die without a Will. Property owners and investors should consider the tax implications for their surviving family members. The Canadian Revenue Agency treats a deceased’s assets as if they were sold right before their death, meaning capital gains taxes on non-primary residences and other investment properties need to be paid – even if the home is left to a beneficiary. Joint ownership of a property will provide a clean and legal work-around; otherwise, your estate will need to foot the bill.
Probate is not required to deal with shares owned in a private Corporation. If real estate holdings or investments are owned by a holding company, it is possible to separate the shares you own in the holding company from the remaining assets of your estate by preparing Primary and Secondary Wills. The corporate shares would be dealt with in the Secondary Will thereby avoiding paying the applicable Estate Administration Tax on the value of those shares on your death.
We always recommend you consult a Law professional when creating your Will so that it is legally binding and all of your assets are covered. At McMurter & Associates, we start our estate planning consultation by asking you to provide information about your finances, dependants and any particular concerns you would like to address.
At McMurter & Associates, we believe in full disclosure of all fees and disbursements, so you will always know what your fees will be. Our fees are clearly set out on our website at www.mcmurter.com, or you can call us toll-free at 1-800-756-7138.
Note: In this article, mentions of Wills refer specifically to Last Will and Testaments, as opposed to “living wills,” which serve a different purpose.