Written for: The Canadian Press
Death & Taxes
They say that the only two certainties in life are death and taxes. As if each were not nerve-wracking enough, there are times when they intersect—when matters of life, money and property become inextricably intertwined.
The easiest—and often forgotten—solution to posthumous issues is creating an effective and legally binding will. But wills can be tricky beasts; they deal not only with division of property, but can also allocate guardianship, express wishes, and assign responsibility for future affairs.
Done well, a will can ensure peace of mind for bereaved family and friends during a difficult time. Andrew Di Lullo, President of Listrom Di Lullo Professional Corporation, cautions that without a will, the process of acquiring legal agency over affairs of the deceased can be lengthy and expensive—and can also have unpleasant repercussions for unconventional relationships or far-flung families.
So what are some things to consider?
Firstly, and unfortunately, there is no such thing as “national perspective” on laws regarding wills, explains Di Lullo. These laws fall squarely within provincial jurisdiction—which means that while the general laws remain similar (having been appropriated from British Common Law) the particulars vary, and specifics are key. Property must be described as accurately as possible, and all finances clearly laid out, whether they are contained within one province or divided among multiple. Two witnesses, unrelated to the affairs of the will, must also sign the document. Unless the letter of the law is followed down to the smallest detail, the will is considered incomplete.
A potential issue for Ontarians is the Succession Law Reform Act. “There is no flexibility under this Act,” Di Lullo says. “It follows pre-written guidelines from forever ago, and is not up-to-date with current relationship styles.”
Under the Succession Law Reform Act, those without a will in Ontario forfeit all estate property to the line of succession: assets are first entrusted to the spouse, then evenly divided among children, and so on. Issues arise when we consider that common-law partnerships are becoming increasingly routine, and that these partners are entitled to absolutely nothing unless specifically addressed in a legal will. Even divorced spouses have legal priority over a common-law partner, regardless of length of relationship—further necessitating a legal will. But who gets prioritized under provincial laws of succession varies across the country. In provinces like Manitoba, for example, the law has a wholly different attitude towards common-law partnerships: under the Family Property Act, a common-law partner retains “homestead rights” after three years of partnership, meaning that upon the death of their common-law spouse, the laws of succession place the principal residence firmly in the hands of the surviving spouse.
The premise of the Succession Law Reform Act and other provincial acts like it, is “to make the will as effective as possible in terms of following the wishes of the deceased,” says Di Lullo. “But incomplete wills are simply not effective.” An incomplete will can lead to unpleasant results: assets can quite simply be lost in the process, and family members omitted from inheritance. Di Lullo advises his clients to add what he calls “residual” or “catch-all” clauses to cover as many extenuating circumstances as possible; like if someone is the last surviving member of the family or if there are any assets left over.
Additionally, the creator of the will may choose to sub-divide their will into what Di Lullo calls “primary and secondary wills.” Within one document, the will holder can choose to divide their estate, generally into within province and out-of-province assets. After death, the government charges a “probate tax,” amounting to roughly 1.5 per cent of the total value of the estate—though that number also varies by province. These kinds of nuances can make it hard to understand the full scope of what constitutes a comprehensive and legal will, which is why Di Lullo encourages hiring legal help.
“It is the job of the lawyer to make sure everything is perfect,” says Di Lullo. “It gives less of an opportunity for people to challenge your will.” In the case that a will spans across multiple jurisdictions, Di Lullo advises to enlist the help of lawyers practicing within the provinces in question. More information means you are better prepared for any eventuality that may arise.
Regardless of whether you want to protect the inheritance of your children, donate money to charities, or just help people decide what to do with your belongings, having a well-mapped and binding will ensures that even after your passing, your wishes are still known—and a piece of you lives on.