When do I need a Will?
Anyone with minor children, those who want to leave assets to persons outside of matrimony or to anyone that falls outside of the ‘Ontario Intestacy Rules’.
What happens if I die without a Will?
You will have died “intestate”, which means your assets will get divided by the “intestacy rules” under the Succession Law Reform Act of Ontario. Within these rules, a common-law spouse is not considered, so you either need a Will to include them or they will have to bring a claim in court. There are specific divisions of assets between surviving spouse and children. If you have no surviving kin or they cannot be located, then the estate assets become the property of the Crown.
What about Estate Administration Tax?
Estate Administration Tax, also known as Probate, is imposed on the estate of a deceased person and is paid as a deposit when the estate representative applies for a Certificate of Appointment of Estate Trustee with the Superior Court of Justice. The current tax rates are:
- $5 for each $1,000, or part thereof, of the first $50,000 of the value of the estate, and
- $15 for each $1,000, or part thereof, of the value of the estate exceeding $50,000.
On a sizable estate, this could easily amount to a significant amount of tax.
How can my estate avoid the Estate Administration Tax?
There are various strategies that can reduce or avoid the Estate Administration Tax through the use of Joint Ownership with Right of Survivorship, Living Trusts, use of Beneficiary designations and/or Life insurance products, including segregated funds. There are pros and cons to each of these strategies, and you particular estate needs will also have to be considered.
What other planning considerations do I need to make?
In the event that you can no longer make decisions regarding your finances or your health, you should have your lawyer write up Power of Attorneys for Property and Power of Attorneys for Care. The will appoint someone you trust to make decisions for you in the event of incapacity and assist them with directives that you designate.