Lona Oosthuysen & Co.

Wills

A will is probably the most important tool to provide for your family after your death. Without a will and a little estate planning, it can happen that your spouse has to sell the matrimonial home in order to pay the tax due on the estate. This situation can be readily prevented with a proper will.

Anybody can write her own will and there are even kits available in the bookstores to help with the process, but a problem in Canada is that Estate laws are not uniform accross the country, so any do-it-yourself will is frequently invalid due to some oversight, leaving you intestate.

In Canada, as in most countries, dying intestate creates serious problems for the surviving family members. These problems start as soon as you have children, and indeed as soon as you are pregnant, you have to have a will, otherwise the survivors can have their assets tied up for many years, causing undue hardship.

Furthermore, if you own property in a foreign country, then you need a registered International Will to ensure that only one will needs to be probated.

Estate Tax

Note that Canada does not have Estate Tax. What we have instead, is far worse! When you die, all your assets are deemed sold and you then have to pay income tax on the deemed value. There is also a small Probate Tax, but it is almost inconsequential. Some estate planning is therefore essential to avoid placing an undue burden on your survivors.

Matters to Consider Before Making a Will

Who do you wish to be your primary and alternate Executors, that is, the person(s) who will deal with your debts and funeral arrangements, gather all your remaining assets and distribute it according to your instructions?

If a minor is named as a beneficiary in your will, the Executor may need to make decisions about investments and encroach upon your estate for the welfare of the minor.

Who do you wish to be the guardian of your minor children?

Do you have a mentally handicapped dependant that may need a special trust fund so that (s)he will still qualify for AISH benefits?

Do you wish to include any burial/cremation instructions in your will?

Do you wish to bequeath individual assets to specific people?

If you designate beneficiaries of your life insurance policies and RRSPs, these do not pass through your estate, thus avoiding probate and probate fees. You may also want to put real-estate in joint names so that the property would automatically pass to the joint owner without passing through your estate. Note that "tenants in common" are not treated the same as "joint owners".

If you own a private corporation, then you may want to establish an Intervivos Trust, to keep the corporation outside your estate.

At what age or ages do you wish your children to inherit?

What are your wishes in the event of family demise?

You should consider whether you would like to execute a Personal Directive and/or a Springing Enduring Power of Attorney.

• A Personal Directive (legal in Alberta since November 1997) allows you to direct your Agent to make decisions about your health care in the event that you would lose the capacity to do so yourself. It further allows you to control the quality of life that you are willing to endure while incapacitated.
• A Springing Enduring Power of Attorney appoints a person to look after your financial affairs and assets only if and when you lose the capacity to do so. Without these directives, someone may have to apply to the courts to become your guardian and trustee. These orders have to be reviewed periodically.
• The execution of these two documents will save your family time and considerable ongoing expense should you lose capacity, therefore these are highly recommended.

Please contact us if you have any questions.