Wills & Estates: Questions and Answers

1. “I have five children. I have given one child an early advance of $100,000 to cover tuition for medical school. How can I ensure equality amongst my children on death whilst taking this advance into account?”

A testator may wish to make a substantial inter vivos (lifetime) gift to one or more children. This gift may be intended as an advance (early inheritance) or ‘in addition to’ the inheritance upon death. The intention of the testator can be clearly documented in the Will. You should also discuss the suitability of a “hotchpot” clause with your estate lawyer. The effect of a hotchpot clause is to create equality by clawing back or “subtracting” the substantial lifetime advance from the inheritance upon death.

2. “I own a business and/or have substantial personal affects. Are there any tax-planning opportunities to avoid or minimize Estate Administration Tax?”

Yes. Every business owner or holder of substantial personal affects should be discussing the advantages of multiple Wills with their Estate Lawyer, not only to reduce your estate’s tax liability, but to avoid the situation where the CRA is going through your oil paintings collection in a subsequent audit. Although individuals colloquially refer to having or needing “a Will”, the case of Granovsky Estate v. Ontario (1998) CanLII 14913 makes it clear that multiple Wills are fine in Ontario. Generally, multiple Wills refers to a “Primary Will” and a “Secondary Will” (also called a probate Will and non-probate Will). Some assets must go through probate, but other assets such as personal affects, furniture, assets held on a resulting trust, and shares in your company can be “carved out” and go through the non-probated Will. It is only the probated Will which has assets valued for estate administration purposes. For larger estates, multiple Wills also provides for greater privacy re your assets.

3. "Can my Will have a specific clause that allocates my Air Miles to a beneficiary?"

Yes. Easy peasy.

4. “I fear there might be a feud amongst the beneficiaries of my estate. I am advised that if there is a Will challenge, defending the Will in estate litigation can cost a substantial sum of money which will come out of the estate.”

You should explore with your lawyer recent developments in the law relating to No-Contest Clauses and their enforceability. A no-contest clause can be inserted into a Will that can operate to disinherit a beneficiary if he or she challenges the Will. Granted, there must be an alternate beneficiary named and nothing done to “oust” the jurisdiction of the court. How “challenge” is defined in the Will is critical so that the clause is not accidentally triggered, and it is generally good to limit the scope of the clause (e.g. to the beneficiary likely to challenge the Will). Where the clause operates, if the Will is successfully challenged, the beneficiary will either inherit under another (valid) Will or under the law of intestacy, but if the challenge is unsuccessful in theory the court will give effect to the clause and the beneficiary will “not” inherit. This should in theory mean only the highest quality challenges are made.

5. “I am a member of a local clay pigeon shooting club and have several Italian-made shotguns that I hold dear. Can I insert a clause and appoint a specific trustee and custodian to look after my rifles and allocate them to the named beneficiaries once they fulfill conditions to receive the said rifles?”

Yes. A bespoke firearms clause can be inserted.

6. “I would like to donate my organs. Can this be arranged?”

You have the right to provide a direction as to what to do with your body. Wills commonly state that the testator wishes that his or her body be “cremated” or “buried” or “disposed of as my trustee sees fit”. Sometimes the Will may refer to a pre-paid funeral plan, and sometimes testators will want their Executor or Executrix to throw a “disco party” or want their ashes spread off the coast of California. Importantly, these are non-binding directions. (For policy reasons, e.g. sometimes a Will is not discovered until after a funeral).

7. “I have a disabled child. How can I ensure they receive an inheritance without it cutting off their ODSP benefit?”

The Will can have a Henson Trust inserted into it which does exactly this. However, if there is no trustee available to administer the Henson Trust, the banks often have a minimum amount of assets in play before they will act as trustee over a Henson Trust or protective trust. Therefore, you should explore the benefits of a Registered Disability Savings Plan with your Estate Lawyer.

8. “I want to leave most of my estate to my children, and nothing or only a small amount or percentage to my spouse. What is the law’s position on this?”

Spouses of a deceased person have a right to “elect” to receive under a Will or an equalization payment under the Family Law Act. So, a testator who leaves everything to their children and nothing to their surviving spouse could have their estate plan blunted if the surviving spouse elects to make an Equalization Claim within 6 months of death.

9. “What qualities are important in an Estate Trustee?”

In a word, the sort of person or persons you would want to run your company.

10. “What is a survivorship clause?”

A survivorship clause is a clause that states that, if a beneficiary is not alive 30 days after the testator’s death, the beneficiary is not considered to have survived the testator. This gives the testator some measure of control that an unintended beneficiary will not receive the inheritance. For example, A dies leaving her estate to children B and C equally. C has no children, but a best friend D and C leaves everything in his Will to D. If there is no survivorship clause in A’s Will, and C dies within a week of A’s death, 50% goes into C’s estate, and from C’s estate to C’s friend D as the beneficiary. If A had a survivorship clause, on the other hand, because C did not survive A by 30 days, B would receive 100%.

Disclaimer: this blog does not constitute legal advice. If you have a Will or estate planning related question, it is best to contact a lawyer. Please do not hesitate to reach out for a consultation: colin@cuttresslaw.com