Estate Admin Notes

CHAPTER 1 – POWERS OF ATTORNEY FOR PROPERTY
- Deals with Powers of attorney for property

- Capacity, requirements, duties and responsibilities
CHAPTER 2 - PERSONAL CARE AND HEALTH CARE DECISIONS

- deals with powers of attorney for property
- Capacity, requirements, duties and responsibilities
CHAPTER 3 – THE LAW OF WILLS

- Types of wills, elements of wills, requirements of wills
- Capacity, undue influence, suspicious circumstances
- Lapse, anti-lapse, abatement, ademption
- Limits on testamentary freedom
CHAPTER 4 – WILL PREPARATION

- Duty of solicitor, how to take instructions, conflicts of interest, financial disclosure
- Per stirpes, per capita
- Execution
CHAPTER 5 – INTESTACY
- Importance of making a will and barriers
- Misconceptions about estate planning
- Intestacy and what are the rules
- Order of death and survivorship
CHAPTER 6 – CLAIMS AGAINST ESTATES BY FAMILY MEMBERS

- Spousal rights, division of property, support obligations
- Definition of spouse and dependant
- Protecting inheritances
- Limitation periods
CHAPTER 7 – QUEBEC ISSUES FOR CANADIANS OUTSIDE QUEBEC
CHAPTER 8 – OBTAINING THE GRANT OF PROBATE

- Authority of executor and when probate is needed
- Benefits of getting probate
- Probate fee planning
- Process to get probate
CHAPTER 9 – PROBATE FEE PLANNING

- Need and caution of probate fee planning
- Jointly held property and taxes
- Beneficiary designations, multiple wills
- Presumption of advancement and presumption of resulting trusts
- Trusts, Alter ego trusts, joint partner trusts
THESE NOTES WERE PREPARED BY LANDON HANG FOR THE PURPOSE OF THE STEP TEST OF WILLS,
TRUSTS AND ESTATE ADMINISTRATION.
CHAPTER 10 – ADMINISTRATION OF TRUSTS AND ESTATES
- Role of executor
- Duties, obligations, accepting the role
- Delegation
- Conflicts of interest, even hand, prudent investor
- Corporations, instructions from court
- Agent for executor, role of solicitor
CHAPTER 12 – ADMINISTRATION OF PROPERTY HELD FOR OTHERS UNDER STATUTORY AUTHORITY

- Incapable people and guardianship
- Assessment, powers of attorneys
- Minors and presumption of death
CHAPTER 13 – ESTATE AND TRUST ACCOUNTS

- Requirement to keep accounts and why
- Passing accounts
- Executor compensation and calculations
CHAPTER 14 – FOREIGN PROPERTY, MUTIPLE JURISIDCTIONS AND SUCCESSION
CHAPTER 1 – POWERS OF ATTORNEY FOR PROPERTY
1.1.1 Definition of power of attorney

A power of attorney for property is a written document by which a grantor appoints an attorney to act
as a substitute decision maker on the grantor’s behalf with respect to the grantor’s property or financial
affairs.
1.1.2.2 Enduring Power of Attorney

Refers to a power of attorney that is valid during a period of subsequent mental incapacity on the part
of the grantor. Also called a continuing power of attorney. At common law a general power of attorney
is not valid during any subsequent incapacity of the grantor unless specifically stated (1.1.2.4 General
power of attorney)
1.1.2.6 Guardian for Property

If an individual becomes unable to manage his or her financial affairs, provincial laws provides for a
mechanism for someone to be formally appointed by the court to act on his or her behalf in respect of
financial matters. This person may also be called a “guardian”, “guardian for property”, a “committee”
or in Alberta a “Trustee”
1.1.2.8 Specific Power of Attorney

This is a power of attorney that exists for a specific purpose or for a limited time period, such as for a
specific transaction when the grantor is ill or absent, or dealing with a specific type of property such as
all interests in a business or corporation, or for a specified period when the grantor will be out of the
country. It is sometimes referred to as a “limited power of attorney”
1.1.2.9 Springing Power of Attorney

This is a power of attorney that is subject to a condition precedent to be of effective. I.E. only after two
medical doctors have certified the grantor to be mentally incapable of managing property.
1.1.3 Origin
The origins of powers of attorney is based on the common law, mostly the law of principal and agent
although other legal concepts such as law of contract and fiduciary duty are relevant. Every province
has legislation creating statutory powers of attorney that in effect codify and expand the common law
principle and requirements.
1.1.4 Common-law Principles
At common law:
Note some of these have been altered i.e. a POA may “continue” during incapacity if the provincial
legislation provides.
1.1.6 Springing Powers of Attorney

A power of attorney is generally effective immediately unless it specifies otherwise. If the power of
attorney is subject to a condition before it is effect, it is known as a springing power of attorney.
SDA 7(7) - Postponed effectiveness
(7) The continuing power of attorney may provide that it comes into effect on a specified date or when a
specified contingency happens. 1992, c. 30, s. 7 (7).
1.1.7 Power of Attorney vs. Trust
1.2.2 Where this is no Power of Attorney

If an individual is unable to make financial decisions or manage their affairs, the power of attorney will
permit continuation of financial management by the attorney. In the absence of such a document,
there may be a vacuum of decision making authority and no one will be legally able to make financial
decisions unless or until the public trustee becomes involved.
1.2.3 Disadvantage of Court Appointed Guardian

There are numerous disadvantages to the guardianship process including:
1.2.4 Misconceptions about Need for a power of attorney
1.2.4.1 Joint Assets

Married couples often hold majority of their assets jointly and assume the power of attorney for
property is not needed to deal with those assets. A spouse can find themselves unable to deal with an
asset even if property is held in joint names. If the public trustee becomes involved, for example,
accounts or assets can be severed and frozen. This can also restrict the ability to deal with or manage
property held jointly with any other person i.e. common for family members to hold property inherited
under joint names
1.2.4.2 Family Home

The matrimonial home may be protected by Family law and the home may be prevented from being
sold or dealt with unless there is a valid power of attorney that authorizes the attorney to provide the
necessary consent.
1.2.4.4 Trading Authorization
Many investment firms will allow their clients to execute a trading authorisation that permits another
person to give instructions regarding the sale and purchase of securities. These are limited powers of
attorneys. Although a trading authorization may permit dealing with investments in an account, it does
not provide the authority to make withdrawals from the investment account. Accordingly if the funds
are required to support the family then during period of incapacity, the trading authorization is not
sufficient.
1.2.4.5 Bank Powers of Attorney

In Ontario, a subsequent power of attorney will revoke any previous one unless subsequently executed
one specifically permits multiple powers of attorney. For this reason, bank powers of attorneys may
revoke previous powers of attorney even if they have no revocation clause.
Termination
12 (1) A continuing power of attorney is terminated,
(a) when the attorney dies, becomes incapable of managing property or resigns, unless,
(i) another attorney is authorized to act under subsection 7 (5), or
(ii) the power of attorney provides for the substitution of another person and that person
is able and willing to act;
(b) Repealed: 1996, c. 2, s. 8 (2).
(c) when the court appoints a guardian of property for the grantor under section 22;
(d) when the grantor executes a new continuing power of attorney, unless the grantor provides that
there shall be multiple continuing powers of attorney;
(e) when the power of attorney is revoked;
(f) when the grantor dies. 1992, c. 30, s. 12 (1); 1996, c. 2, s. 8.
Execution of revocation
(2) The revocation shall be in writing and shall be executed in the same way as a continuing power of
attorney. 1992, c. 30, s. 12 (2).
1.2.4.6 Attorney’s power is not Exclusive

As long as the grantor is capable, the grantor can continue managing their own affairs, notwithstanding
the existence of a power of attorney. Similarly, an attorney may not prevent the grantor from dealing
with his or her own assets at any time providing the grantor has capacity.
1.3 Requirements for a Valid Power of Attorney
Provincial legislation requires a power of attorney to be in writing, signed by the grantor, and witnessed
by two persons.
Execution
10 (1) A continuing power of attorney shall be executed in the presence of two witnesses, each of whom
shall sign the power of attorney as witness. 1996, c. 2, s. 6 (1).
Persons who shall not be witnesses
(2) The following persons shall not be witnesses:
1. The attorney or the attorney’s spouse or partner.
2. The grantor’s spouse or partner.
3. A child of the grantor or a person whom the grantor has demonstrated a settled intention to treat
as his or her child.
4. A person whose property is under guardianship or who has a guardian of the person.
5. A person who is less than eighteen years old. 1992, c. 30, s. 10 (2).
1.3.2 Capacity
Re K. set out a four-part test for continuing powers of attorney. Under the test the grantor must have
the mental capacity to understand the following in order to grant a valid enduring power of attorney:
In Canadian cast Godielie v. Pauli (Committee of) an addition test was added:
Capacity to give continuing power of attorney

8 (1) A person is capable of giving a continuing power of attorney if he or she,
(a) knows what kind of property he or she has and its approximate value;
(b) is aware of obligations owed to his or her dependants;
(c) knows that the attorney will be able to do on the person’s behalf anything in respect of property
that the person could do if capable, except make a will, subject to the conditions and restrictions
set out in the power of attorney;
(d) knows that the attorney must account for his or her dealings with the person’s property;
(e) knows that he or she may, if capable, revoke the continuing power of attorney;
(f) appreciates that unless the attorney manages the property prudently its value may decline; and
(g) appreciates the possibility that the attorney could misuse the authority given to him or
her. 1992, c. 30, s. 8 (1).
The degree of capacity required to grant a power of attorney for property is not necessarily the same
degree of capacity required to manage one’s financial affairs.
1.4 CHOICE OF ATTORNEY
1.4.1.1 Who can be appointed to be an Attorney

While the common law requires the donor to have capacity, there are no rules prohibiting the
appointment of a minor as the attorney. However, a minor will not be able to act until reaching the age
of majority.
1.4.1.4 Alternate Attorneys

A power of attorney document can provide for an alternate attorney. The successor will need to prove
that his or her authority is now effective. In the absence of an alternate attorney, unless the legislation
allows the court to appoint a new attorney, it may be necessary to have a property guardian.
Third parties will require evidence that the alternate has authority to act. As with springing powers of
attorney, there may be legislation that sets out the requirements for an alternate to prove his or her
authority to start acting.
1.4.2 Who is appropriate?

- investment knowledge and financial management skills
- nature and complexity of the assets of the grantor
- family situation
- appointing children
- location of attorney 1.4.2.5
o A Canadian investment advisor is prohibited under Canadian securities regulation from
taking instructions from a resident of the U.S. Accordingly if there are investment
accounts with Canadian financial institutions, it would be best to have resident Canadian
attorneys.
- income tax considerations for Canadian Controlled private Corporations 1.4.2.6
o an attorney is considered to own the shares of the grantor. Where there are holdings in
private corporations, the existence of non-resident attorneys causes the corporation to
lose its status as a resident of Canada for tax purposes. In addition the choice of a
particular attorney may cause the corporation to become “associated” for tax purposes
with other Canadian controlled private corporations. Both of these would result in
adverse income tax consequences.
- Age of the attorney
- Corporate attorney
1.4.2.9 Consider appointing Several Attorneys Acting Together

- In some cases the attorney may not always mange the property with the best interests of the
grantor in mind
- This may occur when the attorney turns out to be dishonest and appropriates the grantor’s
property for their own benefit. Often there is a gradual pilfering of the grantor’s property over a
long period of time.
- Where one child is appointed as the attorney over a parent’s financial affairs, sometimes that
child develops a sense of entitlement to the parent’s property because the ability of the
attorney has to control it.
- When one children is appoint it may be wise to appoint at least one other child, if only to
alleviate the apprehension that the other children may have with respect to suspicion of the
child who has the sole control of the parent’s assets.
1.5 ATTORNEY’S POWERS
1.5.1 Limitation of Attorney’s Power

At common law, an attorney does not have the power or authority to:
- It is generally accepted that the act of designating a beneficiary designation for a life insurance
policy or a registered plan, such as a RRSP or RRIF or more recently TFSA, is a testamentary
disposition and therefore may not be made by an attorney under a power of attorney
1.5.2 Personal Acts of Appointments

There are some actions that are personal to an individual that cannot be performed by an attorney
under a power of attorney. If the grantor has been elected as an officer or director of a corporation, the
attorney may not exercise the grantor’s duties or powers as a director or officer of the corporation since
these positions are personal to the individual grantor. Similarly, an attorney may not take over the role
of an executor or a trustee, or as attorney for another person in place of the attorney.
1.6.2 Duties and Powers

Nine common law duties of the attorney include:
1.8.1 Assets Outside the Jurisdiction
- Generally a power of attorney is governed by provincial law where the grantor is resident
- Where the grantor has assets outside the province, particularly real property, it may not always
be possible or practical to deal with those assets with the power of attorney created in the
grantor’s province of residence
- If an individual has property outside the province (particularly real property), it may be prudent
to have a power of attorney prepared in accordance with the laws of the jurisdiction where the
property is located
1.8.2 Multiple Powers of Attorney

- Whenever multiple powers of attorney are drawn up, it is imperative that they be permitted to
operate concurrently, or sequentially if that is intended, and that they not inadvertently revoke
each other
- In Ontario care must be taken as under the SDA a power of attorney revokes any previous
power of attorney even if there is no revocation clause, unless the document specifically permits
multiple powers of attorney
1.8.6 Compensation
- Ontario is unique, providing for a prescribed fee schedule
- If an attorney takes compensation, he or she may be held to a higher standard of care in the
management of the grantor’s assets
- This is specifically provided for in the legislation in Ontario
Standard of care
(7) A guardian who does not receive compensation for managing the property shall exercise the degree
of care, diligence and skill that a person of ordinary prudence would exercise in the conduct of his or her
own affairs. 1992, c. 30, s. 32 (7).
Same
(8) A guardian who receives compensation for managing the property shall exercise the degree of care,
diligence and skill that a person in the business of managing the property of others is required to
exercise. 1992, c. 30, s. 32 (8).
1.8.7 Judicial Power for Removal of Attorneys

In general, a court will only remove an attorney where there is strong and convincing evidence of
misconduct or neglect. An attorney may be removed where conduct clearly demonstrates an inability to
understand and perform the duties diligently. Furthermore, the court must also be satisfied that it
would be in the grantor’s best interests to remove the attorney.
1.9 Drafting and Taking Instructions for Powers of Attorney

- Solicitor has duty to ensure the client has capacity and is free from undue influence
- That the document gives legal effect to the instructions
- Is validly signed and witnessed
- Suitable arrangements are made for custody and safekeeping of the signed documents
- Client should be advised regarding accidental revocation
- Must make proper inquiries into financial and family circumstances of the client to property
advise with regard to the choice of attorney and particular issues that might be addressed
1.10 ESTATE PLANNING UNDER A POWER OF ATTORNEY

While it is clear that the attorney may not alter or make a Will or any other act that is testamentary in
nature on behalf of the grantor, there are some other estate planning strategies that fall short of an
actual testamentary disposition or document.
1.10.1 Advance on Inheritance Not Permitted
Re Goodman – an attorney who was the son of the grantor was prevented from transferring property to
himself and his sister even though the property was bequeathed to them under his mother’s Will. The
transfer was characterised as an “advance on the inheritance” which was prohibited under the power of
attorney since it was not for the sole benefit of the grantor.
1.102 Gifts to reduce Value of Estate and Reduce U.S. Estate Tax Not Permitted
Re Bradley Estate – an attorney was prevented from making fits to the grantor’s spouse and children to
reduce exposure to U.S. estate tax on the basis that the proposed gifting plan would significantly reduce
the value of the grantor’s estate notwithstanding the potential tax benefits.
1.10.3 Estate Freeze Permitted Where it Would Not Reduce the Value of the Grantor’s Estate During
his Lifetime
O’Hagan v. O’Hagan (2000) – Attorney was permitted to undertake an estate freeze of the grantor’s
property where the freeze was structured through a trust and where the grantor was to be the sole
beneficiary during his lifetime. The court permitted the freeze notwithstanding that it was not
necessary for the benefit of the grantor on the basis that there would be no reduction in the value of the
grantor’s assets during his lifetime and that a freeze would result in benefit to the grantor and his family.
1.10.4 Transfer to Inter Vivos trust to preserve assets of an incapable grantor not permitted because
trust benefitted the attorneys
Banton v. Banton – father got remarried, prior to marriage sons used POA to transfer a sum of money to
an irrevocable trust for benefit of father with the sons being the residual beneficiaries after their
father’s death. The court found that:
- The father had the capacity to marry

- The father did not have the capacity to make a new will or a new power of attorney, and
- The powers granted in the power of attorney document did permit the attorneys to create the
trust
Notwithstanding the power to create the trust, the court concluded the attorneys breached their
fiduciary duty in the creation of the trust by giving an irrevocable remainder interest to themselves
since:
- Attorneys are not authorised to make gifts to themselves, and

- The effect of the transfer of property to the trust denied the grantor the right to revoke his will
by marrying and deprived his new wife of any right to make a claim for division of family
property under provincial law
1.10.5 Where Estate Planning is Permitted Under a Power of Attorney
- It appears the courts will be reluctant to permit an attorney to do any type of estate planning
that potentially diminishes the value of the property that is available to the grantor during the
lifetime of the grantor or restricts control of or access to the property
- At a minimum, any estate planning by the power of attorney must be for the grantor’s benefit
and must be capable of being revoked by the grantor should he or she regain capacity, and the
ultimate disposition of the property upon the death of the grantor should remain undisturbed
by any planning undertaken
CHAPTER 2 - PERSONAL CARE AND HEALTH CARE DECISIONS
2.1 Introduction/Definition
Powers of attorney for property:

- Deal only with the assets and financial affairs of an individual and
- May be exercised (if permitted in the document) even if the grantor is capable of managing his
or her financial affairs
Personal Directives
- Deal only with the person’s physical environment and physical body and
- Can never be exercised if the individual is capable of making personal or health care decisions
themselves
There are two components to personal directives:
1. A “directive” component records the individual’s instructions or preferences about personal

decisions or health care decisions, usually pertaining to advance (prior) instructions relating to
what medical treatment is to be administered or not administered in certain circumstances (the
“living will” component)
2. An “appointment” component, whereby the individual appoints a specific person to make

personal decisions for the individual as a substitute decision maker, can be called a “proxy”
2.2.1 Personal Directive

A personal directive is the document executed or instructions given by an individual to provide
instructions for personal care and/or health care decisions in the future when the individual is incapable
of making such decisions and appoints a person to make decisions about his or her personal care when
incapable.
2.2.4 Living Will

A living Will refers to the directive or instruction component of a personal directive document. It sets
out the directions with respect to the individual’s preferences, wishes, and instructions regarding
personal care decisions. It is not binding at common law. IS IT BINDING UNDER LEGISLATION?
2.2.6 Personal Care and Health Care Decisions

In Ontario, personal care includes all types of non-financial decisions relating to the person, including
health care decisions as well as a number of non-medical type decisions. Typically these include:
- Health care decisions including medical treatment, and
- Other “personal care” decisions, including living conditions accommodation shelter, placement
in a health care facility or long-term facility, personal conditions such as food, nutrition, clothing,
personal hygiene, social activities, and social contracts
2.2.7 Ulysses Agreements

An advance instructions typically given by a person with a known mental illness to prevent the maker
from the consequences of expressing inappropriate and unwanted instructions made subsequently
when under the influence of mental illness.
2.3 Why Required
A personal directive permits an individual to ensure that his or her wishes expressed while capable with
respect to personal care are known, and (where enforceable) respected, once they are no longer able ot
make those decisions.
If a proxy/attorney is appointed then the maker/grantor will know that the person they have chosen will
be someone they trust.
With a personal directive, physicians are other health care professionals will not have to wait until a life-
threatening situation arises in order to act in the absence of instructions.
2.7 Capacity to make a personal directive
- The maker must understand the nature, effect, and consequences of the personal directive and
that the proxy may be able to make personal care decisions on his or her behalf in the event of
the subsequent incapacity of the maker
- An individual may have capacity to grant a personal directive even if incapable of making
personal care decisions
- A maker need on be 16 years of age in Ontario CHECK THIS
2.8 Formalities
Generally a personal directive should be in writing and signed by the maker and have two witnesses.
Execution
48 (1) A power of attorney for personal care shall be executed in the presence of two witnesses, each of
whom shall sign the power of attorney as witness. 1996, c. 2, s. 31 (1).
Persons who shall not be witnesses
(2) The persons referred to in subsection 10 (2) shall not be witnesses. 1992, c. 30, s. 48 (2).
2.9 Result Where No Directive
In Ontario, the Health Care Consent Act lists who may make decisions about or give consent to medical
treatment in an order of priority.
List of persons who may give or refuse consent

20 (1) If a person is incapable with respect to a treatment, consent may be given or refused on his or her
behalf by a person described in one of the following paragraphs:
1. The incapable person’s guardian of the person, if the guardian has authority to give or refuse
consent to the treatment.
2. The incapable person’s attorney for personal care, if the power of attorney confers authority to
give or refuse consent to the treatment.
3. The incapable person’s representative appointed by the Board under section 33, if the
representative has authority to give or refuse consent to the treatment.
4. The incapable person’s spouse or partner.
5. A child or parent of the incapable person, or a children’s aid society or other person who is
lawfully entitled to give or refuse consent to the treatment in the place of the parent. This
paragraph does not include a parent who has only a right of access. If a children’s aid society or
other person is lawfully entitled to give or refuse consent to the treatment in the place of the
parent, this paragraph does not include the parent.
6. A parent of the incapable person who has only a right of access.
7. A brother or sister of the incapable person.
8. Any other relative of the incapable person. 1996, c. 2, Sched. A, s. 20 (1); 2016, c. 23, s. 51 (1).
CHAPTER 3 – THE LAW OF WILLS
3.1.1.1 Conventional Will

A conventional will is a will that is authorized under the ordinary rules in the laws of the applicable
jurisdiction. Sometimes called an attested will.
3.1.1.2 Intestate
Is an adjective that refers to the state of dying without a Will, as in “an intestate estate”
3.1.1.4 Proponent of a Will

The proponent of a Will is the person, usually the named executor, who applies for probate of a Will to
seek formal court recognition of the Will’s validity.
3.1.1.9 Will in Solemn Form

There is a presumption that a Will is valid when admitted for probate. Where any question is raised
about the validity of the Will, the Will needs to be proved before the court to be certified as a valid Will.
Once certified, the Will is said to be proved in solemn form. This is in contrast to a Will in common form,
which is probated upon an unopposed administrative application to the court.
3.2 The Nature of A Will

- Generally an intervivos gift is immediate and is irrevocable once completed and completion, or
“perfection” as it is sometimes called, takes place upon delivery, or constructive delivery, of the
property that is subject to the gift
- A testamentary gift is a gift that is intended only to take place on the death of the testator
- A testamentary gift has no legal effect while the testator is still alive
- The will does not create any legal enforceable rights during their lifetime and the testator
always retains the right to revoke or modify the will as long as they are competent
- A contract not to revoke a will is unenforceable in that the testator cannot be forced to comply,
but there may be an action available for damages for breach of contract
3.3 REQUIREMENTS OF A VALID WILL
3.3.1 Introduction
The law is very strict about the requirements for a Will to be enforceable. These requirements include:
3.3.2 Formalities of a Will

In general, conventional Wills have four major requirements:
Execution
4 (1) Subject to sections 5 and 6, a will is not valid unless,
(a) at its end it is signed by the testator or by some other person in his or her presence and by his or
her direction;
(b) the testator makes or acknowledges the signature in the presence of two or more attesting
witnesses present at the same time; and
(c) two or more of the attesting witnesses subscribe the will in the presence of the testator.
Idem
(2) Where witnesses are required by this section, no form of attestation is necessary. R.S.O. 1990,
c. S.26, s. 4.
The formal requirements must be followed precisely. The courts will insist on strict compliance with the
rules and failure will result in a declaration that the Will is invalid.
A beneficiary or the spouse of the beneficiary under the Will should not be a witness as any gift in the
Will to an attesting witness or his or her spouse will be void.
Witness etc., beneficiary from will

Bequests to witness void
12 (1) Where a will is attested by a person to whom or to whose then spouse a beneficial devise,
bequest or other disposition or appointment of or affecting property, except charges and directions for
payment of debts, is thereby given or made, the devise, bequest or other disposition or appointment is
void so far only as it concerns,
(a) the person so attesting;
(b) the spouse; or
(c) a person claiming under either of them,
but the person so attesting is a competent witness to prove the execution of the will or its validity or
invalidity. R.S.O. 1990, c. S.26, s. 12 (1).
3.3.3 Substantial Compliance

In some provinces legislation permits the court to dispense with the formal requirements provided the
court is satisfied that the document expresses the testamentary intentions of the deceased. Substantial
compliance, however, is not available in Ontario.
3.3.4 Capacity
In order for a Will to be valid, a testator must meet an age requirement and must have “testamentary
capacity” which is concerned with the testator’s mental faculties.
Leading case on testamentary capacity is English decision in Banks v. Goodfellow and has been cited in
the Ontario Court of Appeal Re Davis:
3.3.5 Undue Influence
- Undue influence is a term that refers to the influence exerted by someone on the testator and
that influence caused the testator to execute the Will or a provision in it.
- Where the testator has been unduly influenced, the Will is not the result of the testator’s
voluntary actions
- If it is showed that the testator was unduly influenced, then the Will or provision in question will
be invalidated.
- Mere influence or persuasion by someone on the testator will not invalidate a Will.
- A will is rendered invalid only where the degree of influence exerted on the testator is so great
and overpowering that it out to be considered undue influence.
- Ordinary influence or a persuasive nature is not sufficient
- There must be an element of force or coercion so great that the testator’s will was not made
freely and voluntarily.
3.3.6 Alleging Undue Influence and the Onus of Proof

- The onus of proof is on the party alleging undue influence to prove that the testator was unduly
influence
- Re Rest Estate - A litigant who pursues such a claim may be penalized as to costs to discourage
litigation of unsubstantiated allegations with no chance of success but which cause enormous
distress and embarrassment to the family
- However there may also be an onus on the propounder of the Will where the person challenging
the validity of the Will can show suspicious circumstances surrounding the preparation of the
Will
3.3.7 Suspicious Circumstances

- Where a will has been prepared in circumstances that are suspicious, it is the responsibility of
the propounderer of the Will to remove such suspicion
- The degree of proof is the “civil” standard of being “on the balance of probabilities” and fall
short of the criminal standard of “beyond a reasonable doubt”
- Leading case is Vout v. Hay where the Supreme Court set out the legal principles on suspicious
circumstances:
-
- Factors that might give rise to suspicious circumstances include he following:
3.3.8 Fraud and Mistake

- Where it is shown that a will or a provision in it was the result of some fraud perpetrated on the
testator, then that Will or provision will be rendered invalid
- It must be shown that the fraud was perpetrated on the testator intentionally with the purpose
of tricking the testator
- Similar to undue influence, the onus of proof is on the party who advanced the allegation of
fraud
- The alleging party must show that the Will provision would not have been made if it were not
for the fraud – that is, the alleging party must show that the fraud was directly responsible for
the making of the Will or a provision in it
- Where a testator was motivated to make a Will or a provision in it by a mistake, then the Will, or
a provision in it is invalid on the ground that the testator did not really approve of it. There are
three categories of mistake
1. A mistaken belief in fact
2. Drafting errors in the Will document
3. Execution of the wrong will
- If a testator made a will based on the mistaken belief that certain facts were true when they
were really false then the Will or a portion of it may be rendered invalid
o i.e. testator revoked a gift because she had received incorrect information that
beneficiaries were dead, then the revocation will not be valid because of the mistaken
belief of facts Campbell v. French
o mistaken beliefs of fact can invalidate a will, whereas a mistaken belief of the legal
effect of the words in a testamentary document will not invalidate it
 if the testator had knowledge of the actual contents and wording of the Will and
approved of it then nothing an be done to correct this mistake
 the courts will enforce the will as it is written even if the legal effect of the
words fails to accomplish what the testator had intended by the Will
 a court could exercise its power of rectification to strike out words that were
inserted by mistake
 however a court will only do so if it is shown that the testator did not
approve of the Will’s contents
 also the power of rectification generally only allows the court to strike
out certain words inserted in the Wil by mistake, but it does not go so
far as to allow the courts to add more words in the Will
 In general, if the testator had read over the Will or if it was read to the
testator by someone else, then the courts will presume that the
contents were approved by the testator
 In the Goods of Boebm – example of removing duplicate name but didn’t add
correct name
3.4 Amendment
- An amendment to a Will must be executed in the same manner as a will as a Will to be valid. A
will may be amended by another testamentary document called a codicil. A codicil must
conform to all the requirements of a Will in order to be valid.
- If an alteration is made on a formally executed Will after the execution of the Will, it is of no
effect unless signed and witnessed in the same manner as required for a Will
- Initials are generally acceptable in lieu of full signatures of the testator and witnesses
- Alterations will be effective to the extent that any alterations renders particular words no longer
apparent
3.5 Revocation
A will must be revocation. Revocation must conform to the statutory requirements in the jurisdiction.
Revocation generally
15 A will or part of a will is revoked only by,
(a) marriage, subject to section 16;
(b) another will made in accordance with the provisions of this Part;
(c) a writing,
(i) declaring an intention to revoke, and
(ii) made in accordance with the provisions of this Part governing making of a will; or
(d) burning, tearing or otherwise destroying it by the testator or by some person in his or her
presence and by his or her direction with the intention of revoking it. R.S.O. 1990, c. S.26, s. 15.
Revocation by marriage
16 A will is revoked by the marriage of the testator except where,
(a) there is a declaration in the will that it is made in contemplation of the marriage;
(b) the spouse of the testator elects to take under the will, by an instrument in writing signed by the
spouse and filed within one year after the testator’s death in the office of the Estate Registrar
for Ontario; or
(c) the will is made in exercise of a power of appointment of property which would not in default of
the appointment pass to the heir, executor or administrator of the testator or to the persons
entitled to the estate of the testator if he or she died intestate. R.S.O. 1990, c. S.26, s. 16.
Revocation, change in circumstances
17 (1) Subject to subsection (2), a will is not revoked by presumption of an intention to revoke it on the
ground of a change in circumstances.
3.5.1.1 Holographic Revocation and Alterations

Where holographic wills are permitted a holographic codicil or other instrument may revoke or amend a
formally executed will or a prior holograph will. Holographic alternations to a formally executed will may
to be made by writing on the Will itself.
Holograph wills
6 A testator may make a valid will wholly by his or her own handwriting and signature, without
formality, and without the presence, attestation or signature of a witness. R.S.O. 1990, c. S.26, s. 6.
3.5.1.2 Presumption of Revocation: Lost Wills

Where a will was known to last be in the possession of the testator, but cannot be found upon death,
there is a presumption of revocation. However, in order for the presumption to apply, a thorough
search for the Will must be made, and the court must apply the presumption.
3.5.1.2 Revocation by Operation of Law: Change in Marital Status
Revocation by marriage
16 A will is revoked by the marriage of the testator except where,
(a) there is a declaration in the will that it is made in contemplation of the marriage;
(b) the spouse of the testator elects to take under the will, by an instrument in writing signed by the
spouse and filed within one year after the testator’s death in the office of the Estate Registrar
for Ontario; or
(c) the will is made in exercise of a power of appointment of property which would not in default of
the appointment pass to the heir, executor or administrator of the testator or to the persons
entitled to the estate of the testator if he or she died intestate. R.S.O. 1990, c. S.26, s. 16.
3.5.2.2 Effect of Divorce
In Ontario divorce will revoke any benefits or appointments in favour of the former spouse under any
Will made before the divorce. The divorce decree must be final for this rule to have effect. Separation
or a Decree Nisi is not sufficient. The legislation operates to interpret the Will as if the former spouse
pre-deceased the testator.
Revocation, change in circumstances

17 (1) Subject to subsection (2), a will is not revoked by presumption of an intention to revoke it on the
ground of a change in circumstances.
Exception on termination of marriage
(2) Except when a contrary intention appears by the will, where, after the testator makes a will, his or
her marriage is terminated by a judgment absolute of divorce or is declared a nullity,
(a) a devise or bequest of a beneficial interest in property to his or her former spouse;
(b) an appointment of his or her former spouse as executor or trustee; and
(c) the conferring of a general or special power of appointment on his or her former spouse,
are revoked and the will shall be construed as if the former spouse had predeceased the testator. R.S.O.
1990, c. S.26, s. 17.
3.6 Will substitutes

There are a number of Will substitutes, including:
- Intervivos gifts
- Donation mortis causa (a gift in contemplation of death)
- Inter vivos trust,
- Joint tenancy (joint interests in property) and
- Designation of beneficiaries for insurance or registered plans authorised by statute
3.6.1 Gifts
- Gifts deprives the donor of the enjoyment of the property since a valid gift is irrevocable
- There are a number of drawbacks including:
- Never give anything away that may be needed in the future
3.6.2 Gifts Donatio Mortis Causa
- Sometimes called a “gift in contemplation of death” is a gift made during the lifetime of the
donor in contemplation of death, although not necessarily in the expectation of death
- Death must be anticipated from an existing peril such as illness, event, or high-risk activity such
as military posting to a war zone
- The git I not valid unless the donor actually dies as a result of the specific clause contemplated
- Brown v. Rotenberg lists the requirements:
o the gift must be made in contemplation of death;
o the property that is subject of the gift must be delivered to the donee, although
“constructive delivery” is sufficient;
o the gift must be made in circumstances that make it clear that the gift is only to take
effect in the event of death; and
o the donor must die from the peril contemplated
- the gift is revocable during the lifetime of the donor and if the giver does not die from the
disorder or event that was contemplated, the gift reverts back to the giver
3.6.3 Intervivos Trusts
- a trust arises where one person transfers property to another person with instructions that the
property is to be used for the benefit of a third person
- use of trust can be excellent way of planning for transfer of property in the future, while
dictating the terms and conditions upon which it will be held in the meantime
3.6.4 Jointly Held Property with Right of Survivorship
- in an ownership structure known as joint tenancy one or more persons can own property
together
- each person has an interest in the property and if one of them dies their entire interest in the
property reverts by operation of law to the surviving joint owners
- only upon the death of the last surviving owner will property pass through the estate of the
surviving owner since all the survivorship interests of the other pre-deceased joint owners have
been extinguished upon their death
- a joint interest in property with a right of survivorship can be used as a Will substitute because
upon the death of someone who owns property in this way, their share of the property will pass
to the other owners of the property who are still alive
- the income tax consequences of transfers of property on death are not avoided by the use of
joint property with rights of survivorship
- Percore v Pecore and Madsen Estate v. Saylor -two cases from the Supreme Court have recently
altered the nature of property interests held in a joint tenancy on death by finding in some
circumstances that a joint tenancy does not necessarily result in the surviving joint owner having
an absolute interest in property
- Where there is a gratuitous transfer for property into joint names with a right of survivorship to
an adult child, for example, there is a presumption of resulting trust such that the property
remains as part of the estate of the transferor
3.6.5 Beneficiary Designations
- Legislation permits beneficiary designations to be made naming a beneficiary on the death of

the life insured with respect to the death benefit of a life insurance policy
- Similarly legislation permits the annuitant or holder of certain plans registered under the
Income Tax Ct, such as RRSPs or RRIFs including locked in version
- Every jurisdiction has recently passed legislation permitting the holder of a TFSA to designate a
beneficiary
- Where a valid beneficiary designation has been made, the property (i.e., the registered plan or
insurance proceeds) will pass directly to the named beneficiary and not form part of the assets
of the estate of the deceased.
- Where the designation is in the Will, drafting techniques exist to keep the insurance or plan
proceeds separate from the assets of the estate to maintain creditor protection and probate fee
savings.
3.7 TYPE OF WILLS
3.7.1 Holographic Wills
- Unlike the conventional Will, holograph Wills do not require any witnesses. The only formal
requirements for a holograph Will is that the entire Will must be written in the handwriting of
the testator and signed by the testator.
3.7.2 Mirror Wills
- Mirror Wills are separate Wills made by two individuals that are identical, except they make
each other the beneficiary with identical gifts over on the death of the survivor.
3.7.3 Mutual Wills
- Mutual Wills are used by two or more individuals who have agreed to dispose of their property
in a certain way and there is an agreement, implied or otherwise, that the individuals will not
change the terms of his or her Will after the death of the other individual.
3.7.5 Multiple Wills
In some circumstances it may be appropriate for a testator to make more than one Will to deal with
separate assets of his or her estate.
3.7.5.1 Property Outside the Jurisdiction
- A separate Will for property in another country or another province may be the most
expeditious way of transferring such property on death
- Will can be prepared in accordance with the formalities of the other jurisdiction and, if
appropriate, in the language of that country where outside Canada.
- The separate Will avoids the two-step procedure that might otherwise be required to have the
Will probated in the jurisdiction of residence and the procedures to have the original grant
recognised in the other jurisdiction.
3.7.5.2 Probate Fee Planning
- Multiple Wills or dual Wills are sometimes used to limit the value of the estate subject to
probate fees See Chapter 9
3.8 Testamentary Gifts
- Devises referred to gifts of real property such as land

- Bequests were gifts of tangible personal property such as antique books or a car
- Legacies refer to gifts of money or other intangible property such as stocks and bonds
- Specific gifts are gifts that the Will has described in sufficient detail to determine which specific
item the testator intended to give
- General gifts are those that do not describe the specific piece of property that the testator
wants to gift away. For example, if the Will says “$10,000 to Sarah if she survives me,” this gift
would be a general gift since the $10,000 can be taken from any of the property of the estate
- Demonstrative gifts are gifts of money that the testator intended to be paid out of a designated
fund, but in the event that the designated fund no longer exists or has been diminished to a
point where it cannot satisfy the amount of the gift, then the gift can be paid from elsewhere in
the estate.
- A residuary gift is a gift of the residue or residuary property of the estate, which is the portion of
the estate that remains after the payment of debts, taxes, and all the other types of gifts have
been given
3.8.2 Lapse
- Lapse is a legal doctrine that provides that where a beneficiary pre-deceased the testator, the
gift that was intended for the beneficiary will fail to take effect
- This means that the gift will not pass to the estate of the deceased beneficiary but will form a
part of the residue of the testator
- Where the testator expressed an intention in his or her Will that the lapse doctrine is not to
apply, then the testator’s intentions will be respected. A testator can express such an intention
by providing for a substitute or alternate beneficiary for the gift in the event the beneficiary pre-
deceases the testator. This is known as a “gift over.”
3.8.3 Anti-Lapse Legislation
- Ontario has also enacted “anti-lapse” legislation that explicitly ousts the lapse doctrine where
the beneficiary of a gift is a close relative of the testator being a child, grandchild, or other issue,
or in some jurisdictions to a brother or sister.31
- Anti-lapse legislation does not apply if there is an intention to the contrary in the Will
Substitutional gifts
31 Except when a contrary intention appears by the will, where a devise or bequest is made to a child,
grandchild, brother or sister of the testator who dies before the testator, either before or after the
testator makes his or her will, and leaves a spouse or issue surviving the testator, the devise or bequest
does not lapse but takes effect as if it had been made directly to the persons among whom and in the
shares in which the estate of that person would have been divisible,
(a) if that person had died immediately after the death of the testator;
(b) if that person had died intestate;
(c) if that person had died without debts; and
(d) if section 45 had not been passed. R.S.O. 1990, c. S.26, s. 31.
3.8.4 Abatement
- The assets of an estate may be insufficient to satisfy all the liabilities of the estate and all gifts in
the Will. When this occurs, the gifts must be reduced to satisfy the payment of debts and
liabilities.
- Where abatement is required, gifts are abated according to the type or category of gift. The
following gifts abate in the following order
1. the residue of the estate is reduced fi rst until it is exhausted;

2. general gifts abate second;
3. specific and demonstrative gifts, other than real estate, abate next and for the purposes of
abatement they are reduced pro rata together as one category of gift; and
4. specific gifts of real property abate last.
For example, suppose that the entire residue must be used to pay liabilities but
For example, suppose that the entire residue must be used to pay liabilities but $60,000 of debt must
still be paid. If the Will contains two general gifts, one of $30,000 to Alpha, and one of $90,000 to Bravo,
each gift will be reduced by 50% since the total of general gifts is $120,000 and the amount of the
abatement must be 50% of the general gifts. So Alpha would receive $15,000 and Bravo would receive
$45,000.
In the same example above, assume that the amount of unpaid debt after exhausting the residue was
$200,000, and there was a further gift of the family cottage worth $350,000 to Charlie. The general gifts
would be exhausted completely, and $80,000 of unpaid liability would have to be satisfied from the
specific gift of the family cottage. As a result, the cottage property would have to be sold and Charlie
would receive the balance of the funds or $270,000 after the remaining debt of $80,000 was paid.
3.8.5 Ademption
- “Ademption” refers to situations where a testator gifted some property to a beneficiary by Will,
but for one reason or another, the testator no longer owned the property at the time of death.
The property may have been destroyed, or the testator may have sold the property, or the
property no longer matches the description given in the Will
- In such a scenario, the gift is said to have adeemed and the beneficiary receives nothing. Only
specific gifts (i.e., gifts of specific property), described in the Will, are subject to ademption.
3.8.6 Class Gifts
- A class gift is a gift that is made to a defined group of persons, called a “class.” The group is
often a group of persons related to the donor, such as children or grandchildren, but any
defined or otherwise ascertainable group can be the object of a class gift
- It is only when the “class closes” that the actual members of the group who benefit from the gift
can be determined. Until that time, persons who fall within the description of the group are only
potential beneficiaries
3.9 Limits on Testamentary Freedom
Testators generally have the freedom to dispose of their property in any way they see fit. In most cases,
a testator is able to dispose of his or her property as intended. However, testamentary freedom may be
abridged for a number of reasons, such as:
• the gift is contrary to public policy,

• spousal rights,
• the rights of dependants,
• gift is disclaimed by beneficiary, or
• refusal by a designated person to take on the role of trustee or executor
3.9.1 Conditions Contrary to Public Policy
- A court may strike down a condition attached to a gift as invalid if the condition is, in the court’s
opinion, contrary to public policy
- In Re Millar Estate the Supreme Court of Canada said that the courts will not enforce a
condition attached to a testamentary gift on public policy grounds when the following wo
conditions are met: 1) the “…prohibition is imposed in the interest of the safety of the state, or
the economic or social well-being of the state and its people as a whole” and 2) “… the harm to
the public must be substantially incontestable, and does not depend on the idiosyncratic
inferences of a few judicial minds.
- In general, conditions are void for public policy reasons where any of the following issues arise:
o the condition requires performance of an illegal or immoral act,
o where it restricts marriage or matrimonial life,
o where the condition limits the rights of the beneficiary to deal with
o the gifted property (restraint on alienation), or
o where it discriminates on the basis of race or ethnicity or other rights protected by
human rights legislation or the Charter.
- The courts will not enforce a condition that would require someone to commit a crime or is
otherwise against the law
3.9.1.1 Interference with Family or Matrimonial Life
- A condition that attempts to control or restrain marriage is void.

- Re Gelinas - where a testator purports to make a gift to a person while they are unmarried with
a condition that the gift will be revoked if that person marries, the courts will sever the
revocation clause from the gift
- Re Nurse - Conditions that interfere with married life may also be void- In one case, the testator
made a gift to his married daughter but also gave a power to the executors to withhold part of
the gift if the daughter aided or supported her husband or allowed the husband to reside with
her. The court held that the condition was void for public policy reasons because it would force
the daughter to violate her matrimonial responsibilities
- Cowan v. Allen - a gift or trust fund created for the purpose of supporting the testator’s
surviving spouse as long as that spouse does not remarry is not contrary to public policy
- Clarke v. Darraugb - A condition that prevents a minor child from residing with his or her
parents would be against public policy
3.9.1.2 Restraint on Alienation
- A condition that prevents the beneficiary of the gift from selling or otherwise disposing of the
property is void for repugnancy
- Noik v. Noik Estate - The courts have held that gifts should be given absolutely — that is, the
beneficiary ought to have the right to deal with the property as he or she sees fit
3.9.1.3 Discrimination Contrary to Provincial Human Rights Law and Constitutional Charter Rights
- Where a condition is contrary to the Charter by discriminating on the basis of race, ethnicity,
sexual orientation, or religion, then the courts will not enforce that offending condition. Each
province has similar human rights legislation that also sets a standard by which to judge public
policy
- Generally it is possible to have a condition that benefits particular beneficiaries based on
religion or some other human rights protected criteria as long as the reason is not hateful or
prejudiced per se. So a bursary for Protestant students would be acceptable
- Canada Trust Co. v. Ontario Human Rights Commission - a scholarship that was based on
blatant religious supremacy and racism excluding “all who are not Christians of the White Race,
all who are not of British Nationality or of British Parentage, and all who owe allegiance to any
Foreign Government, Prince, Pope, or Potentate” was found to be offensive and the condition
was struck
3.9.2 Rights of Dependants
- In Ontario, dependant relief legislation has been enacted that allows persons classified as
dependants to apply for support and maintenance out of the estate where the deceased was
under a duty to support the dependant in question.
- Dependants include the spouse and minor children and, depending on the jurisdiction, may also
include common-law partners and adult children
3.9.3 Spousal Rights
- In addition to claims under dependant relief, in most jurisdictions the spouse of the deceased
can also make a claim for division of property under family property legislation
- Family property legislation is based on the premise that marriage is an economic partnership
and the contribution of both parties to that partnership, whether pecuniary or otherwise (such
as homemaking, child rearing, or other family activities), should be recognised as having equal
value.
- Thus, when the marriage ends as a result of divorce or death, a spouse is generally entitled to
50% of the property acquired during the marriage and the amount of appreciation in property
that was acquired by either spouse before the marriage (although the definition of what is or
isn’t shareable family property can differ greatly between the jurisdictions).
3.9.4 Renunciation and Disclaimer of Gifts and Executor Appointments
- A testator’s plans as laid out in his or her Will may be thwarted by the choices of others.
- In cases of gifts, the beneficiary is entitled to disclaim the gift — that is, the beneficiary can
refrain from taking the gift.
3.10 Delegation of Testamentary Powers
- A testator cannot delegate his or her Will-making powers to someone else.

- A valid Will requires that the testator had knowledge and approval of its contents.
- Therefore, no one other than the testator can create a document to dispose of his or her
property.
- One exception to the rule that a person cannot delegate their Will-making powers is that a
testator may permit the executor to determine what charitable beneficiaries shall benefit from
the estate.
- A second exception is that a testator may appoint another person to determine the manner in
which certain property is to be disposed of after death. This is called a power of appointment.
3.11 When Minors May Make A Will
Age of Majority When Minors can make a Will

Ontario 18 Is or has been married; is made
in contemplation of
marriage; is a member of a
component of the Canadian
Forces, as a regular force, or
while placed on active service
or is a sailor and at sea or in the
course of a voyage (s. 8)
3.14 Will Legislation and Formal Requirements By Jurisdiction
Jurisdiction Legislation Witnesses Holographic Wills Wills from other

jurisdiction
Ontario Succession Law 2 witnesses and Yes (s.6) For Wills Made in
Reform Act testator sign at or outside of
end (s. 4); Ontario see 35-37
Exception for for list of options
a member of
the Canadian
Forces placed on
active service; a
member of any
other naval, land
or air force while
on active service;
or a sailor when
at sea or in the
course of a
voyage (s. 5);
Gift to witness
may be void
(s. 12)
CHAPTER 4 – WILL PREPARATION
4.1 Duty of Solicitor
Will preparation is considered part of the practice of law, and anyone preparing a Will for another
person who is not a solicitor may be subject to sanction or prosecution by the body responsible for
regulating the legal profession in the province
The solicitor has a number of essential duties in Will-making practice
1. Duty to ensure the testator has capacity and is not subject to undue influence.
2. Duty to prepare the Will.
3. Duty to ensure the Will gives legal effect to the instructions of the testator.
4. Duty to ensure the Will is validly signed and witnessed.
5. Duty to advise against accidental revocation.
6. Where appropriate, maintain custody of the Will.
- Ideally the solicitor should meet with the client when taking instructions.
- At the meeting with the client it is the solicitor’s responsibility to be satisfied that the client has
testamentary capacity.
- The solicitor should make sufficient inquiry into the testator’s assets and family to ensure no
obvious beneficiary has been omitted and that the client appreciates the nature and extent of
the estate.
- In order to guard against undue influence, the solicitor should obtain instructions, or confirm
the instructions, in a private meeting without any beneficiary or other interested party being
present
- an interpreter is required, a disinterested party should translate.
4.1.1 Capacity and the Duty to prepare the will
- Where the client has capacity, the solicitor has a clear duty to prepare the Will
- If capacity is uncertain, and the time frame does not allow for further inquiries or a medical
assessment, the duty of the solicitor may be to proceed rather than to refrain from taking
instructions and preparing and attending to execution of the Will.
- Hall v. Bennett – the solicitor visited a terminally ill client in the hospital. The client was lucid, at
least temporarily, but the lawyer decided not to follow the client’s instructions because of
concerns regarding capacity. The client died later the same day, and the prospective beneficiary
under the client’s instructions sued the lawyer.
o The Court of Appeal decided that the issue was not whether or not the client had
testamentary capacity but “whether a reasonable and prudent solicitor in those
circumstances could have concluded that the client did not have such capacity.”
- The court recognised the dilemma facing a solicitor who has reservations about capacity, noting
that it is a no-win situation. If the solicitor fails to prepare the Will, there may be liability to the
prospective beneficiaries under the proposed Will; but if the Will is prepared, the solicitor may
be exposed to liability to the personal representatives of the estate for costs incurred by the
estate in determining that the testator lacked capacity.
o In the result, the court found that the solicitor did fulfill his obligation to the client, and
since there was actually no retainer to prepare a Will, he owed no duty to the
prospective beneficiary.
4.1.2 Liability of Solicitor to a Disappointed Beneficiary
It is now clear that a solicitor may be liable to a disappointed beneficiary. The leading case is the 1995
English House of Lords decision in White v. Jones,8 subsequently followed and now the law in Canada.
Earl v. Wilhelm, - the Saskatchewan Court of Appeal found a solicitor liable to the beneficiary of a farm
property that had been transferred by one of his law partners to a corporation.
Whittingham v. Crease - the solicitor was found to be liable to the beneficiary whose wife witnessed
the Will at the request of the solicitor.
4.1.3 Joint Retainers and Conflicts of Interests
- A conflict of interest may arise where there is a joint retainer, such as for both husband and
wife, to prepare Will
- A as a general rule, the solicitor cannot keep any matter confidential as between the two clients
where there is a joint retainer.
- Wills are prepared under a joint retainer, no subsequent Will can be prepared for one of the
parties without the knowledge and consent of the other. If consent is not given, the solicitor
must refuse to act in the preparation of a subsequent Will.
- A conflict of interest may also arise where a solicitor acts for a family member in preparing a Will
or where the solicitor is a beneficiary under the Will
4.2 Taking Instructions
When taking Will instructions there are two major tasks:

1. ensure that the instructions obtained accurately reflect the wishes of the testator and
2. identify and alert the testator to problems that may hinder effective administration of the
estate.
- It is important to take notes when interviewing a client to obtain Will instructions
These notes should record:
- reasons for any unusual dispositive provision, such as a dependant or spouse being excluded
from the Will;
- any advice given that the client refuses to follow, such as providing for dependants or obtaining
tax advice, confirmed in writing with the client;
- reasons for any dramatic change in instructions as compared with the previous Will; and
- any concerns the solicitor has regarding the testamentary capacity of the client.
4.2.2 Disclosure of Financial Information
A statement of net worth should be prepared that includes:
• all property owned by the testator;
• all property held jointly with or without a right of survivorship;
• all insurance policies, with details of beneficiary designations;
• all pension plans and registered plans, with details of beneficiary designations; and
• liabilities, including mortgages and any other liabilities secured against property.
- It may be appropriate to verify the information provided by the testator. Copies of insurance
policies, investment statements, beneficiary designations, and title deeds may be requested.
- The solicitor should make reasonable inquiries into the actual title of assets being disposed of in
the Will, particularly if they are the subject of specific gifts. An independent subsearch to
confirm the title or ownership of real propertymay be appropriate.
- Failure of the solicitor to verify the ownership of property may lead to liability in respect of a
claim from a disappointed beneficiary.
- Earl v. Wilhelm- the solicitor prepared a Will on the instructions of the testator to leave the
farm property to a particular beneficiary. At the time the Will was prepared, another lawyer in
the same fi m had acted for the testator in the transfer of the farm property to a corporation.
The named beneficiary in the Will successfully sued the lawyer for failure to ensure that the
farm property passed to the intended beneficiary.
4.2.4 Discovering Dependants and Family Members
The solicitor should consider a number of questions with regard to dependants and family members.
- To whom is the testator providing support or assistance?

- Does the testator wish to provide for these persons in the Will?
- Are there any potential claims for dependant relief?
- If parents are living, does the testator want to provide for them in the event they survive the
testator?
4.2.4 Choice of Executors
4.2.4.1 Attributes
- be trustworthy, conscientious, and intelligent,

- has the time and inclination to act, and has agreed to act,
- be willing to hire professionals and experts to assist him or her,
- understands and will respect the testator’s instructions,
- has the confidence and respect of the beneficiaries,
- be young enough to carry out all duties under the Will and any trust of which the executor is a
trustee,
- be detail-oriented enough to attend to all the “red tape” but have the big-picture savvy to put
the many tasks of administering the estate into perspective,
- ideally be resident in the same province for convenience, and
- at least be a resident of Canada for income tax reasons and to avoid the requirement of security.
4.2.5 Personal Effects and Personal Property
It is common to have a general gift as to personal effects that provides any or a
combination of the following:
• beneficiaries may agree among themselves as to the distribution, with any items over which
there is a dispute to be sold and the proceeds falling into residue,
• the executor has discretion to distribute among named beneficiaries or a class of beneficiaries,
or
• division of personal effects into lots by the executor with beneficiaries choosing lots.
4.3.8 Administrative Provisions
Powers of the executors are granted usually to provide maximum flexibility and discretion to executors
in dealing with the assets as part of the administration of the estate
• to make investments at their discretion,

• to borrow, mortgage, or give guarantees,
• to lend or advance any amount to a beneficiary or otherwise,
• to pursue, defend, or settle any claims or debts,
• to make elections permitted by statute or regulation,
• to hire agents and professional advisors,
• to determine income and capital receipts and disbursements,
• to deal with shares of corporations or other securities, and
• to deal with real property.
4.3.9 Other Provisions
• protection for executors from liability for any loss if acting in good faith,
• permission for executors to purchase property from the estate,
• the right for professional advisors who are executors to take their normal professional fees,
• the ability to operate spousal trusts to preserve the spousal rollover (i.e., refrain from loans that
could taint the tax status),
• family law provision — for example, in Ontario, such provision may protect the income from any
inheritance from becoming subject to the equalisation of property with the spouse of a
beneficiary,
• custody of person and property of minors (i.e., guardians),
• donation of body and organs,
• funeral and burial instructions, and
• governing law.
4.4 Specific Drafting Issues
4.4.1 Mirror Wills for Husband and Wife
Care must be taken to provide for survivorship in the event one spouse dies within close proximity in
time to the other, such as in the case of a common accident
4.4.2 Intention Regarding Jointly Held Property
- A statement in the Will may be made to clarify the testator’s intention regarding property
transferred gratuitously into joint names with a right of survivorship
- In addition, where it is intended that the surviving joint owner hold the property in trust on
behalf of the estate, including a statement of intention to that effect, the Will may serve to
protect the estate beneficiaries by recording the obligation of the surviving joint owner to
account to the estate
4.4.3 No Contest Clause or in Terrorem Clauses
In order to discourage beneficiaries from litigation, a testator may want to include a gift that is
conditional on the beneficiary not taking any action to challenge the validity of the Will or any provision
in the Will.
Generally at common law such clauses were thought not enforceable because the courts had considered
they were intended only to threaten rather than actually disinherit the beneficiary. However, such
clauses may be enforceable under the circumstances below.
• The conditions are limited to challenges to the validity of the Will and do not attempt to oust
the jurisdiction of the court to interpret the Will or related matters over which the court has
exclusive jurisdiction.
• They are not void for public policy.
• There is a specific gift over or alternate gift in the event the beneficiary challenges the Will (i.e.,
the gift cannot simply fall into residue or increase the share of other residual beneficiaries but a
direction that this is to occur is sufficient).
As an alternate to the requirement for a specific gift over, there may be another gift for that beneficiary
expressed to be effective whether the condition is complied with
or not.
4.4.5 Gift Over, Lapse, and Anti Lapse
- A “gift over” refers to an alternate gift to a substitute or replacement beneficiary if a gift or

other benefit to a first-identified beneficiary fails
4.4.6 Gifts to Minors

A gift to a minor should be held in trust until the beneficiary attains the age of majority. Otherwise, the
gift may come under the supervision of the public guardian for the province and any funds over a certain
threshold may have to be paid into court. Where the amount is small, it is common to permit the
executor to make payment to the parent or legal guardian
4.4.7 Ademption and Substitute Gifts
- A gift of specific property will adeem if the particular property is not owned at the date of death.
The testator may wish to replace the gift with another if that property is no longer held by the
testator at the time of death, and instructions should be obtained.
- The alternate gift could be for a fixed sum or, if the proceeds are segregated in an investment
account, a gift of the proceeds.
- Specific gifts of shares of public or private corporations should be carefully drafted to address
future corporate reorganisations whereby the particular shares are no longer owned at death
but replaced by shares in a successor corporation.
4.4.8 Per Stirpes Division
A per stirpes division is a manner of dividing a particular gift or fund among the issue (meaning,
descendants) of an individual by “stocks” or by roots. It is also sometimes described as a division “by
representation.” A per stirpes distribution can only be made to issue because the nature of the division
is that a share of a pre-deceased descendant who has issue surviving is always re-distributed among
those surviving descendants of more remote degree
In a per stirpes division, at each degree of lineage, there is a division into equal shares
for:
1. each living individual: each individual at that degree of lineage who survives the decedent; and
2. each pre-deceased person who has issue surviving: each person at that degree of lineage who
dies before the decedent but who has issue who survive the relevant decedent.
4.4.9 Per Capita Distribution
- Per capita is a method of dividing a gift or fund among a number of individuals. Per capita is
Latin for “by head” and essentially means that each person who is in the described group will
receive an equal share. A per capita division differs from a per stirpes division in that there is no
re-division of any share among the issue of a predeceased beneficiary. The division takes place
once in equal shares among all the persons entitled without regard to their degree of
relationship.
- A gift to be divided in equal shares per capita among a class of beneficiaries all at the same
degree of lineage from the testator, such as grandchildren, will be divided in equal amounts and
each member of that class will receive the same amount regardless of the number of brothers
and sisters each member of that class has
4.5 Execution
A solicitor may be liable for negligence if a Will is not properly executed.
In addition to ensuring that the Will is validly signed and witnessed, and intestacy avoided, executing a
Will with a solicitor’s supervision has several other benefits:
• the solicitor will have the opportunity to confirm the capacity of the testator,
• the solicitor can review the final contents of the Will with the testator,
• the solicitor can ensure that the testator’s instructions are reflected in the Will,
• the solicitor can answer any questions that arise,
• the solicitor can ensure the Will is signed voluntarily by the testator, and not under duress or in
circumstances that could suggest undue influence, and
• the solicitor can make last-minute changes where there has been any misunderstanding or the
testator has altered the instructions. See 3.3.2 for Formalities of a will
CHAPTER 5 – INTESTACY
5.1 Importance of Making A Will

A Will determines how the estate of an individual will be administered and distributed. Where an
individual dies without a Will, he or she is said to die “intestate,” meaning without a Will, and the estate
will be divided and distributed according to a formula set out in the law of each province
5.1.1 A will Permits Choice of Beneficiaries

The primary reason for making a Will is to provide for the beneficiaries of the estate. On an intestacy,
the provincial formula will dictate who the beneficiaries will be and the share of the intestate estate that
each of them is entitled to receive. The distribution of the assets of the estate may not be to those
whom the deceased would have chosen.
5.1.2 A Will Permits Choice of Disposition of Specific Assets

Only through a Will may an individual ensure that particular beneficiaries become entitled to particular
assets. The rules of intestate distribution do not address how specific assets are to be divided among
beneficiaries. The only way an individual can ensure that specific assets will be inherited by the
individuals intended is through a valid Will.
5.1.3 A Will Provides Choice of Administrator

The choice of executor or administrator of an estate is key to preserving family harmony and providing
an orderly transfer of the individual’s wealth to beneficiaries and providing for responsible stewardship
during the estate administration process. There is no guarantee that the person the individual would
have chosen or the appropriate person will end up being the administrator of the estate. The provincial
rules do not ensure that the best person will be the person with priority, nor will it necessarily prevent
disputes among those who rank equally, or even those who have different priorities if there are
allegations of unsuitability in respect of those with higher priority.
Estates Act
To what persons administration shall be granted
29. (1) Subject to subsection (3), where a person dies intestate or the executor named in the will refuses
to prove the will, administration of the property of the deceased may be committed by the Superior
Court of Justice to,
(a) the person to whom the deceased was married immediately before the death of the deceased or
person with whom the deceased was living in a conjugal relationship outside marriage immediately
before the death;
(b) the next of kin of the deceased; or
(c) the person mentioned in clause (a) and the next of kin,
as in the discretion of the court seems best, and, where more persons than one claim the administration
as next of kin who are equal in degree of kindred to the deceased, or where only one desires the
administration as next of kin where there are more persons than one of equal kindred, the
administration may be committed to such one or more of such next of kin as the court thinks fit.
5.2 BARRIERS TO WILL-MAKING AND CONSEQUENCES OF INTESTACY
5.2.1 Discomfort about Death and Dying

The psychological tendency to put off what is perceived as a frightening task can create unnecessary
worries for a surviving spouse or dependants if tragedy strikes.
5.2.2 Unresolved Issues about Wishes or Family Relationships

There may also be difficult questions that need to be answered in order to properly prepare a Will that
the individual may not be ready or willing to face or answer. Unresolved issues may involve family
relationships, complex financial decisions, anxiety as to how specific assets are to be distributed, and
how to treat all family members fairly. For example:
 Which children should inherit the cottage?

 Who should be the guardian of children under the age of majority?
 Who can be trusted to carry out the duty of executor without the beneficiaries objecting?
 How should the “black sheep” beneficiary be treated?
5.2.3 Cost
The cost of hiring a lawyer to prepare a Will may be seen as an expensive exercise for many.
5.2.4 No Perceived “Deadline”

The best time to make a Will is when it is not needed — before a crisis or other circumstance makes it
imperative. Deathbed Wills can be particularly difficult for the testator, family, and the professional. It is
easier to make decisions about the administration and distribution of one’s estate when death seems far
in the future. The prospect of death and distribution of one’s estate can then be treated as a somewhat
hypothetical exercise, and decisions can be made without the interference of time pressure and
emotional distress.
5.2.5 Procrastination May Lead to Intestacy

Many individuals put off making a Will on the assumption that at some future point in time they will
“get around to it.” This can be a dangerous strategy as it is not possible to predict when or how one will
die.
5.2.7 Provision for Minor Children

Without a Will, the administrator of the estate will be required to make special arrangements with
respect to the inheritance of a minor beneficiary. The provincial official (such as the Public Guardian and
Trustee) has responsibility for safeguarding the interests of minors and incompetent adults or may
become involved in overseeing the administration of the estate to ensure minor beneficiaries’ interests
are protected. In most provinces, the inheritance will be required to be paid into court and may be
administered by the Public Trustee for the jurisdiction. In many cases, this is not what the deceased
parent or grandparent would have wanted, especially where a child has a surviving parent who will not
have control over the property, nor any say as to how funds are invested or distributed for the benefit of
the minor child. These
5.2.8 Delay in Administration of Estate and Distribution to Beneficiary
The additional steps required to administer an intestate estate and the complexities that arise will add
to the cost of the administration of the estate and delay the ultimate distribution of assets to the
beneficiaries. In Ontario, no distribution may be made until one year after death.
5.2.9 Additional Tax Costs

The distribution of an estate on intestacy may attract additional income taxes. If the deceased dies
intestate where there is a surviving spouse, spousal rollover may not be available for all property if the
value of the estate exceeds the preferential share.
5.2.10 Failure to Engage in Tax Planning or Probate Fee Saving Strategies

Where an individual dies without a Will, he or she will not have taken advantage of possible strategies
available to reduce probate fees and income taxes. The following opportunities will be missed:
 maximise the spousal rollover for capital property and

 maximise the use of the capital gains exemption.
In the case of probate fees, a number of strategies are available to reduce or defer probate fees, which
will not have been explored or implemented
5.3 Misconceptions About Intestacy

A number of misconceptions exist with respect to the need for a Will and the distribution that will result
on intestacy. The result that occurs may be completely contrary to what the individual may have wanted
and may leave surviving family members inadequately provided for.
5.3.1 My Spouse Will Inherit Everything

Depending on the size of the estate, and the particular jurisdiction, the surviving spouse may have to
share the value of the estate that exceeds the preferential share, called the distributive share, with the
children, including adult children Where the value of the estate exceeds the preferential share, the
surviving spouse will not be the sole beneficiary unless none of these other family members survive the
deceased.
5.3.2 My Common-Law Spouse or Partner Will be Entitled on Intestacy

In Ontario, common-law souses are not recognised on intestacy in the same way a married spouse is
recognised. In Ontario, a separated spouse will inherit and a common law spouse will receive nothing
on intestacy, even if the separated spouse is in a new relationship.
5.3.3 Everything Will Pass Outside the Estate to My Spouse Even Without a Will
 This may be technically true on the death of the first spouse, providing that the individual does
not want to provide for any beneficiary except the surviving spouse and is comfortable leaving
the ultimate disposition of his or her wealth in the sole discretion of the surviving spouse. This
may not always be the case.
 This plan will result in an intestacy on the death of the second (surviving) spouse. If there are no
children or other issue, the combined wealth of the couple will be distributed to the family of
the spouse who dies last. If the husband and wife die in a common accident, there would be no
surviving spouse, and no time to make a Will.
5.4 PARTIAL INTESTACY OR INVALID WILL
Generally the courts will interpret a Will so as to avoid intestacy wherever possible. There is a
presumption against intestacy in interpreting a Will. However, even where the individual has a Will,
intestacy may result if not all the estate has been disposed of in the Will or the Will is invalid. For
example, a Will may be found invalid if:
 the testator was incapable,

 the Will was prepared in circumstances where the testator was subject to undue influence, or
 there was an error in the formalities of execution of the document that cannot be repaired by
the court.
A partial intestacy may occur where:

 the provisions of the Will do not dispose of the entire estate of the deceased or
 some or all beneficiaries of the residual estate in the Will have predeceased the testator.
Where a family member of a deceased is entitled to a distribution under the Will and, in addition, is
entitled to a share of distribution in respect of an amount on intestacy, the beneficiary may generally
“double dip,” subject to adjustment under the particular legislation of the jurisdiction. For example, in
Manitoba and Ontario, the preferential share of the surviving spouse on a partial intestacy will be
reduced by any benefit received under the Will.
5.5 STATUTORY REGIME OF DISTRIBUTION
5.5.1 Introduction and Summary

In general, where there is a surviving spouse and issue of the deceased, the estate will be divided
between the spouse and the surviving issue. In most provinces, the surviving spouse will be entitled to a
“preferential share” before any amount is to be divided between the spouse and issue (see Figure 5.1).
The preferential share is generally a dollar amount. If the value of the estate is equal to or less than the
preferential share, then no amount is distributed to issue under the formula, although minor children or
other dependants may be entitled to make a claim for dependant relief.
The portion of the estate in excess of the preferential share for the surviving spouse is called the
“distributive share.” The division of the distributive share between the surviving spouse and issue varies
by how many children either survive the intestate or die before the intestate with issue surviving.
The surviving issue of the intestate will be entitled to the remainder of the distributive share, or if there
is no surviving spouse, he or she will be entitled to the entire estate of the intestate
In Ontario, the formula for distribution to issue of the intestate is a combination of per stirpes and per
capita distribution.
5.5.2 Rule 1: Share of Spouse Where No issue

Where the deceased has a surviving spouse and no children or other issue, the entire estate will go to
the surviving spouse.
Intestacy where spouse and no issue

44 Where a person dies intestate in respect of property and is survived by a spouse and not survived by
issue, the spouse is entitled to the property absolutely. R.S.O. 1990, c. S.26, s. 44.
Preferential share of spouse
45 (1) Subject to subsection (3), where a person dies intestate in respect of property having a net value
of not more than the preferential share and is survived by a spouse and issue, the spouse is entitled to
the property absolutely. 1994, c. 27, s. 63 (1).
5.5.3 Rule 2: Share of Spouse Where Only One Child

If there is a surviving spouse and only one surviving child or only the surviving issue of one child who
pre-deceased the intestate, the surviving spouse will receive the spouse’s preferential share, as shown
in Figure 5.1, plus one-half of the distributive share.
Jurisdiction Preferential Share Spouse and one Spouse and Matrimonial

Child Children Home
Ontario $200,000 per ½ to spouse 1/3 to spouse See Family Law
regulation ½ to child 2/3 to children
If child pre-deceased leaving issue, to
the child’s issue equally among his or
her issue who are of the nearest degree
in which there are issue surviving.
See s. 47 and 5.10, Intestacy Rules

Where There Is No Spouse or Issue
(by Jurisdiction), for example of
distribution to issue of a predeceased
child.
5.5.4 Rule 3: Share of Spouse Where Two or More Children

Where the surviving spouse is also survived by two or more children or their issue, the surviving spouse
will receive the preferential share and one-third of the distributive share.
Residue: spouse and children

Same: spouse and one child
46 (1) Where a person dies intestate in respect of property and leaves a spouse and one child, the
spouse is entitled to one-half of the residue of the property after payment under section 45, if any.
Same: spouse and two or more children
(2) Where a person dies intestate in respect of property and leaves a spouse and more than one child,
the spouse is entitled to one-third of the residue of the property after payment under section 45, if any.
Same: issue of predeceased children
(3) Where a child has died leaving issue living at the date of the intestate’s death, the spouse’s share
shall be the same as if the child had been living at that date. R.S.O. 1990, c. S.26, s. 46.
5.5.5 Rule 4: Children or Issue Only

If there is no surviving spouse but there are surviving children or issue of more remote degree, the
entire estate will be inherited by the children and issue of any pre-deceased child.
In Ontario, the distribution among surviving issue is similar to that of Manitoba, but not identical, as
descendants of the same degree may not necessarily receive an equal share. The estate is divided per
capita at the generation closest to the intestate that has a surviving member, with an equal share also
being created for any pre-deceased descendant of the nearest degree who has issue surviving. This first
division is the same as the division for Manitoba in point 1 above.
Next, the share of any pre-deceased descendant is distributed in a similar manner as if that pre-
deceased descendant was intestate (i.e., the share in the first division created in respect of a deceased
descendant is divided into equal shares for the surviving descendants of that pre-deceased descendant).
5.5.7 Rules Where No Spouse, Children, or Issue
• Parents: In all provinces but Quebec, parents will take next in equal shares or all to a sole
surviving parent.
• Siblings: In every province except Manitoba and Quebec, brothers and sisters will take after
parents.
• Nieces and Nephews: In every province but Quebec, nieces and nephews take after brothers
and sisters.
• More Remote Next of Kin: In all provinces, once all these relatives are exhausted as potential
beneficiaries on intestacy, more remote relatives of the deceased person who are the closest
surviving next of kin will inherit the estate on an intestacy. This will be based on “degrees of
consanguity,” or how closely related by blood one person is to another.
• Last Resort Escheat: In all provinces, in the event no such next of kin exist or can be discovered,
the estate of the intestate will escheat to the Crown. Essentially this means that the provincial
government will inherit the assets of the deceased.
5.5.8 Calculation of Spousal Share where Children have Pre-deceased the Intestate
Where a child has died before the intestate with issue surviving, that child will be considered alive for
the purpose of determining the spousal share
5.5.9 Rights to the Matrimonial Home

In Ontario, the Family Law Act excludes the value of the matrimonial home when calculating the
deceased’s net family property and if that deceased spouse owns the home at the date of death his or
her net family property will include the home’s entire value, not just its change in value during the
marriage.
5.5.10 Rights of Common-law Spouses
Common law spouses are not entitled to distribution on intestacy in Ontario.
5.5.12 Multiple Spouses

The recognition of common-law spouses in various jurisdictions, and under the Income Tax Act, creates
the possibility of having more than one spouse. This could include more than one common-law spouse
or a common-law spouse and a married spouse. Where this situation exists, the rights of the surviving
spouse and common-law spouse may be restricted in the legislation or may not be provided for at all,
leaving uncertainty with respect to how surviving multiple spouses would share on an intestacy.
5.5.13 Disqualification of a Spouse’s Entitlement

It is well-established law that an individual cannot profit from his or her crime. As a result, a spouse who
is convicted of murdering the deceased will not share on intestacy and will be disentitled to benefit
under the Will of the deceased.
5.6 APPOINTMENT OF ADMINISTRATOR OF AN INTESTATE ESTATE
Each jurisdiction has rules that set out who may be appointed to administer the estate of an intestate
Generally the persons who have priority to be appointed follow the same ordering as the rights to
distribution on an intestacy. Generally the following family members have priority to be appointed and
are ranked by priority as follows:
• spouse (or common-law partner where recognised on an intestacy),

• children,
• other descendants ranked by degree (i.e., grandchildren first, greatgrandchildren next, etc.),
• parents, and
• brothers and sisters
5.7 SURVIVORSHIP RULES AND ORDER OF DEATH

Where two or more individuals are in a common accident, or otherwise die within a short time of each
other, the order of death can significantly affect the distribution of property whether there is a Will or
one or more of the persons dies intestate. However, the outcome may be more arbitrary on intestacy as
Wills are often drafted to provide for more appropriate results where there is a simultaneous death or
death within 30 days.
Where the order of death can be ascertained, and the second to die is a beneficiary of the estate of the
first to die, the assets of the individual who died first will go through two estates before being
distributed to a beneficiary and potentially subject to probate fees twice. In addition to the double
probate fee burden, in some circumstances seemingly inappropriate results with respect to the
distribution of property can result.
Where the order of death cannot easily be determined, forensic evidence may be used to obtain a
declaration as to which of two persons died first. In Adare v. Fairplay, a husband and wife died in their
home of carbon monoxide poisoning caused by a broken gas main in front of their home. It was found
that the husband died first based on autopsies establishing the onset of rigor mortis. The statutory
presumption, discussed below, did not apply since the order of death could be ascertained on the
evidence.
Where the order of death cannot be determined, a survivorship rule may be relied upon in the
provincial statutes. The older person is deemed to have died first
In Ontario, where property is held jointly with a right of survivorship and the joint owners die in
circumstances where the order of death is unknown, the joint tenancy is deemed to be severed and is
treated as a tenancy in common so that each deceased owner’s share is distributed through that
owner’s estate.
In Leach v. Egar (1990), 38 E.T.R. 65 (B.C. C.A.), following her divorce and division of assets, the former
wife and her children were lost at sea and presumed dead. The former wife and the children all died
intestate. The presumption of death in order of seniority applied. Since the wife is deemed to have died
first, her estate devolved to her children, and since they died intestate as well, their estate devolved to
their father. Consequently, the wife’s estate was inherited by her ex-spouse, and her other family
members were not entitled to anything.
5.8 CASE STUDIES ON INTESTATE DISTRIBUTION
5.12 DEFINITION OF SPOUSE AND COMMON-LAW SPOUSE FOR PURPOSES OF INTESTATE SUCCESSION
(BY JURISDICTION)
1(1) “spouse”, except in Part V, has the same meaning as in section 1 of the Family Law Act; (“conjoint”)
“spouse” means either of two persons who,
(a) are married to each other, or
(b) have together entered into a marriage that is voidable or void, in good faith on the part of a person
relying on this clause to assert any right. (“conjoint”) R.S.O. 1990, c. F.3, s. 1 (1); 1997, c. 20, s. 1; 1999,
c. 6, s. 25 (1); 2005, c. 5, s. 27 (1, 2); 2006, c. 19, Sched. C, s. 1 (1, 2, 4); 2014, c. 7, Sched. 9, s. 1.
CHAPTER 6 – CLAIMS AGAINST ESTATES BY FAMILY MEMBERS
6.1 Introduction
In addition to creditors for debts of the deceased and the estate, family members may have an
enforceable right to make a claim against an estate. Good estate planning will take potential claims of
family members into consideration. The estate’s legal costs of dealing with a claim and those of a
successful claimant may reduce the assets available for distribution.
Priority may be given to specific rights in the legislation, For example, spousal rights in Ontario to net
family property and in Quebec to family patrimony take precedence over any distribution in the Will or
on intestacy, but “double dipping” with rights under the Will is not permitted in Ontario, whereas it is in
Quebec.
Although property rights may take priority, the right to dependant relief may exist in addition to the
spousal right to property where the result is inadequate. For example, in Ontario, it is possible to make a
claim for property and make a further claim for dependant relief with the result that a surviving spouse
may be entitled to no less than the provincial formula for property but may be entitled to an additional
amount under dependant relief.
6.2 Spousal Rights to Property and Support

In addition to rights to support, division of property, and rights to the matrimonial home during lifetime,
a surviving spouse has a potential claim against the estate of the deceased spouse or partner.
A spouse and dependent child and certain other family members may also have rights to support that
are enforceable during lifetime or on death. The right in respect of support from a deceased person is
generally available under dependant relief legislation.
In Ontario, the claim in respect of property is subject to a specific formula that can be deviated from
only at the discretion of the court where there are special circumstances.
6.3 PROVINCIAL RIGHTS IN RESPECT OF PROPERTY ON DEATH OF A SPOUSE
6.3.4 Ontario
Definition of Spouse: Persons who are legally married. Common-law spouses are not recognized for
purposes of this statute.
Limitation Period: Six months from the date of death. If an election is not made, the surviving spouse is
deemed to have elected to take under the Will or intestate provisions.
FLA Election
Spouse’s will
6 (1) When a spouse dies leaving a will, the surviving spouse shall elect to take under the will or to
receive the entitlement under section 5.
Rights: Upon death, whether the deceased left a Will or the estate is distributed under the intestacy
rules, the surviving spouse may elect to take his or her entitlement under the Will or intestacy, or take
an equalization payment under the Family Law Act.
Property Included: Net family property includes all property owned at the date of death unless
excluded. If property was owned prior to the marriage, the increase in value is included. The
matrimonial home, or homes, will be net family property no
matter how or when acquired.
Property Excluded: Net family property excludes the value of property that can be traced to a gift or
inheritance received during marriage. If a gift or an inheritance is spent or mixed with other family
funds, the protection may be lost. If a beneficiary wants to protect the amount received by inheritance
from the potential claims of a spouse, it is important that the inheritance be preserved in some form
and kept in a separate account so that it is not mixed with other family funds or assets.
Principle of Division: On marriage breakdown or death, there is a right to an equalization payment for
net family property on a 50/50 basis.
Marriage Contract: Domestic contracts are recognized.
Priority: The spouse’s entitlement is in priority to gifts under the Will, intestate beneficiary rights, and
orders for the support of dependants, except for an order in favour of a child of the deceased.
6.4 ESTATE PLANNING AND THE PROPERTY CLAIM OF A SPOUSE
6.4.1 Exceptions for Inherited Property, Gifts, and the Family Home
Generally each province has laws that may limit the right of a spouse to make a claim against inherited
property on marriage breakdown or death. It may be necessary to keep the inheritance separate from
other property since the protection can be lost if the inheritance is mixed with family assets or
otherwise used to support the family.
Any property used as a residence, including a recreational property, may be subject to special rights that
attach to a matrimonial home.
6.4.2 Protecting an Estate Plan from the Potential Claims of a Spouse

One strategy is to ensure that the surviving spouse receives enough to discourage a claim or to provide
for at least as much as the spouse would be entitled to if a claim were made to decrease the risk that a
claim would be successful. However, such strategies cannot be relied upon entirely to prevent a claim,
as the appropriate amount to discourage or avoid a claim cannot be calculated precisely.
In some cases the individual may want to take steps to minimise the impact of such a claim. This may be
possible by entering into a marriage contract (sometimes called a “domestic contract” or a “pre-nuptial
agreement.
A marriage contract may be set aside on any number of grounds, including lack of independent legal
advice, undue influence, and failure to fully disclose financial information
The use of an inter vivos trust may also be effective to shelter assets from a claim since generally the
assets in the trust will not form part of the estate. Beneficiary designations for insurance and registered
plans and the use of jointly held property with a right of survivorship may also keep assets outside the
estate of the deceased spouse and provide some insulation from a claim
6.4.3 Protecting an Inheritance of a Beneficiary from the Potential Claims of a Spouse

If a child inherits property directly from a parent, there is nothing to prevent the child from sharing the
inheritance with the spouse or becoming subject to the influence by the spouse regarding the use of the
funds
If a parent is seriously concerned about the potential claim of a child’s spouse on marriage breakdown,
or that the child needs to be protected from voluntary sharing with the spouse, a protective
testamentary trust may be appropriate. For example, a trust for the child’s benefit during his or her
lifetime with a gift over to grandchildren or other beneficiaries on his or her death will preserve the
estate for the benefit of these other beneficiaries and still give the testator’s child access to the funds
during his or her lifetime
6.5 CLAIMS UNDER DEPENDANT RELIEF LEGISLATION
6.5.1 Eligibility for Claim — General Comments
A child or spouse of the deceased, and certain other family members to whom the deceased may have
had a support obligation, may be entitled to make a claim against the estate under dependant relief
legislation for support or maintenance.
Relief is available if the person qualifies as a dependant under the relevant provincial (or territorial)
legislation and if the deceased individual dies without making adequate provision for such person
A three-step process determines an award under a dependant relief claim.
1. Does the person making a claim qualify as a “dependant?”

2. Was adequate provision made in the Will of the deceased or as a result of an intestate
distribution?
3. What form of relief and what amount of relief is appropriate?
“dependant” means,
(a) the spouse of the deceased,
(b) a parent of the deceased,
(c) a child of the deceased, or
(d) a brother or sister of the deceased,
to whom the deceased was providing support or was under a legal obligation to provide support
immediately before his or her death; (“personne à charge”)
Order for support

SLRA 58 (1) Where a deceased, whether testate or intestate, has not made adequate provision
for the proper support of his dependants or any of them, the court, on application, may order
that such provision as it considers adequate be made out of the estate of the deceased for the
proper support of the dependants or any of them.
6.5.3 Married Spouse

The legislation in every jurisdiction allows a spouse of the deceased to apply for relief as a dependant.
Traditionally, a spouse was defined as an individual who is legally married to another person in an
opposite-sex relationship. The definition of “spouse” has been expanded in various jurisdictions over
time to include common-law partners and same-sex spouses and partners. In Manitoba, Ontario, Prince
Edward Island, and Yukon, a former spouse or partner (i.e., divorced spouse) of the deceased is also
entitled to apply for dependant relief in certain circumstances (usually where the divorced spouse was
still financially dependent upon the deceased at the time of death).
6.5.4 Common-law Spouses

Common-law partners have a right to make a claim for dependant relief on the same basis as a spouse in
all jurisdictions
There are three components to each definition:
1. duration of the relationship,

2. nature of the relationship, and/or
3. whether or not the couple has a child (natural or adopted).
The required duration of a relationship ranges from twelve months to three years. The period of
cohabitation is reduced where there is a child of the relationship.
6.5.5 Claims by Children

The definition of a child includes an adopted child and children born outside marriage, although not all
statutes specifically include illegitimate children. Manitoba and Ontario: A person who was treated as a
child by the deceased may also be included.
The rights of children may also depend on whether the child is a minor or an adult. Adult children are
often excluded unless the child is dependant on the deceased in some way
6.5.5.1 Minors
In all jurisdictions minor children of the deceased are considered dependants and eligible for dependant
relief.90 Applications for a minor may often be made by a public official on behalf of the minor. Some
jurisdictions permit the parent to make the application for the minor child.
6.5.5.2 Adult Children

Whether or not an adult child may be entitled to make an application depends on the jurisdiction and
the adult child’s circumstances. Many jurisdictions require an adult child to satisfy a set of criteria that
reflects some level of dependency or need for further support while attending a post-secondary
institution.
Ontario: An adult child may qualify for dependant relief if the child is a full-time student and has not
withdrawn from parental control or the deceased parent was actually providing support immediately
before death.
6.5.6 Other Dependants

In some jurisdictions, other people in the deceased’s life may qualify as dependants and be eligible to
advance a claim under the applicable dependant relief legislation.
Ontario: A brother or sister, parent, grandparent, or grandchild of the deceased may apply if the
deceased was actually providing support immediately before death.
6.5.7 Contracting Out of Dependant Relief Legislation

Generally it is not possible to contract out of a support obligation to a spouse or dependant.
Ontario: The legislation specifically makes the waiver of statutory dependant relief rights invalid.
6.5.8 Court Awards
6.5.8.1 Types of Awards

The legislation gives the court a wide discretion to make any order that they feel is necessary to provide
the dependant with adequate support. Generally these include a lump sum payment, an annuity for a
limited period or for the life of the dependant, the establishment of a trust for the benefit of the
dependant, or a combination of these.
6.5.8.2 Criteria Considered by the Court

The courts must determine whether or not the deceased made adequate provision for the dependant or
if the intestate distribution rules are adequate. The courts are granted wide discretion to inquire into
the circumstances to determine the answer to this question, ranging from the applicant’s entitlement
under the Will or intestacy and assets received outside of the estate to other factors relevant in the
circumstances. The court also has a wide power to make any order for relief that would be reasonable,
adequate, or just and equitable. For a summary of the criteria set out in the legislation, see 6.15,
Summary of Dependant Entitlement and Criteria Considered.
6.5.8.3 Additional Criteria

Ontario has a list of specific factors including:
• needs and standard of living of the dependant;

• obligations of the deceased to others, including other dependants;
• relationship between the dependant and the deceased and its duration;
• reasons the deceased did not provide for the dependant;
• needs of other persons;
• size and nature of the estate;
• the conduct of the applicant;
• any agreement, including a marriage contract, between the deceased and the dependant;
• whether the dependant is receiving support from others, including government support;101
• any financial contribution made by the dependant to the deceased; and/or
• intention of the testator.
• Determination of amount
• 62 (1) In determining the amount and duration, if any, of support, the court shall consider all the
circumstances of the application, including,
6.5.9 Assets Used to Satisfy Orders

Generally all property owned by the deceased at the date of death is available to satisfy a court order
under dependant relief legislation.
Ontario: Section 72 of Ontario’s Succession Law Reform Act casts a broader net and deems the following
to be included in the estate of the deceased and available to be discharged for payment of a dependant
relief order:
• gifts mortis causa (made in anticipation of and condition on the donor’s death);
• deposits in the name of the deceased in trust for another, or in joint names with the deceased,
including those in a bank, savings office, credit union, or trust company;
• property transferred by the deceased into joint tenancy and owned at death;
• property transferred by the deceased in trust or to another where the transfer was revocable by
the deceased;
• life insurance proceeds on any policy owned by the deceased; and
• pension benefits or rights, including RRSPs and RRIFs passing under a beneficiary designation.
Value of certain transactions deemed part of estate

72 (1) Subject to section 71, for the purpose of this Part, the capital value of the following transactions
effected by a deceased before his or her death, whether benefitting his or her dependant or any other
person, shall be included as testamentary dispositions as of the date of the death of the deceased and
shall be deemed to be part of his or her net estate for purposes of ascertaining the value of his or her
estate, and being available to be charged for payment by an order under clause 63 (2) (f),
(a) gifts mortis causa;
(b) money deposited, together with interest thereon, in an account in the name of the deceased in
trust for another or others with any bank, savings office, credit union or trust corporation, and
remaining on deposit at the date of the death of the deceased;
(c) money deposited, together with interest thereon, in an account in the name of the deceased and
another person or persons and payable on death under the terms of the deposit or by operation
of law to the survivor or survivors of those persons with any bank, savings office, credit union or
trust corporation, and remaining on deposit at the date of the death of the deceased;
(d) any disposition of property made by a deceased whereby property is held at the date of his or
her death by the deceased and another as joint tenants;
(e) any disposition of property made by the deceased in trust or otherwise, to the extent that the
deceased at the date of his or her death retained, either alone or in conjunction with another
person or persons by the express provisions of the disposing instrument, a power to revoke such
disposition, or a power to consume, invoke or dispose of the principal thereof, but the
provisions of this clause do not affect the right of any income beneficiary to the income accrued
and undistributed at the date of the death of the deceased;
(f) any amount payable under a policy of insurance effected on the life of the deceased and owned
by him or her;
(f.1) any amount payable on the death of the deceased under a policy of group insurance; and
(g) any amount payable under a designation of beneficiary under Part III. R.S.O. 1990, c. S.26,
s. 72 (1); 1999, c. 12, Sched. B, s. 17.
6.5.10 Claims on Behalf of Minors and Incapable Adults

Where a minor child or other incapable adult has a potential claim for dependant relief, a public official,
usually the Public Trustee or Public Guardian and Trustee in the jurisdiction, will advance the claim
6.5.11 Rights of Governments to Make Claims

Some jurisdictions also give certain government agencies the right to make claims or intervene in
proceedings
Ontario: Government agencies may apply to recover the cost of benefits, assistance, or other support or
maintenance provided to a dependant.
6.6 DOWER AND CURTESY

“Dower” and “curtesy” are terms that refer to the right of a spouse to receive a life interest in real
property of the other spouse when that other spouse dies. “Dower” is used when the surviving spouse is
female, and “curtesy” is used when the surviving spouse is male. Dower and curtesy have been
abolished in British Columbia, Ontario,
6.7 MORAL OBLIGATION: TATARYN

The existence and enforcement of a “moral obligation” as the basis for a dependant relief claim has
been established in Canada permitting a redistribution of the testator’s estate even where need is not
established.
In Tataryn v. Tataryn Estate, the Supreme Court found that dependant relief legislation must be
interpreted according to contemporary standards and read in the light of modern values and
expectations and that what is “adequate, just and equitable” must be viewed in the light of current
societal norms.
6.7.1 Tataryn and Moral Obligation in Jurisdictions Outside British Columbia

Tataryn was a case that originated in British Columbia, and the issues centred around that province’s
Wills, Estates and Succession Act. While the British Columbia courts have accepted the court’s analysis
completely, it has not been strictly followed in other jurisdictions.
6.7.1.4 Ontario
In Ontario, the Cummings decision of the Ontario Court of Appeal examined Tataryn, finding that
“adequate provision” was not limited to a needs-based economic analysis in determining a dependant
relief application and that the moral duty was a relevant consideration in Ontario. The applicants were
the two children of the deceased. The children were in need of support, but the court refused to set
aside the second wife’s beneficial ownership in the matrimonial home, even though the wife was not in
need of support, on the basis of a moral obligation to the wife. The question of moral obligation was to
be examined in the light of society’s expectations of what a judicious person would do in the
circumstances.
The court observed that society’s expectations are that in addition to support for children and spouses,
spouses will share in each other’s estate when the marriage is over, and that in examining the reasoning
in Tataryn, these expectations were not confined to British Columbia. This case is interesting in that the
finding of a moral obligation to another person was the reason for denying relief to the applicant
children rather than being a reason to grant relief.
6.7.2 General Comments on Tataryn and Its Long-term Impact

The Tataryn case enlarged the powers of the courts to grant dependant relief by allowing courts to
consider applications with reference to the deceased’s moral duties toward the applicant. There is a
concern within the estate planning community that Tataryn gives the courts an overly broad power to
rewrite the Wills of testators, thereby introducing great uncertainty in the field of estate planning
6.10 LIMITATION PERIODS – SPOUSAL CLAIMS AND DEPENDANT RELIEF

Ontario – Spousal Claims: 6 months from date of death – Dependant Relief Claims: 6 months from date
of grant (probate or administration)
6.11 COMMON-LAW RELATIONSHIP CRITERIA BY JURISIDCTION

Ontario – Duration: 3 years – Nature of Relationship: Living in a conjugal relationship
6.4 DEFINITION OF SPOUSE FOR PURPOSES OF DEPENDANT RELIEF LEGISTLATION

Ontario - Married or have cohabited continuously for a period of not less than 3 years or in a
relationship of some permanence, if they are the natural or adoptive parents of a child.
6.15 SUMMARY OF DEPENDANT ENTITLEMENT AND CRITERIA CONSIDERED
Nature of entitlement: If the deceased has not made adequate provision for the proper support, the
court may order that such provision as it considers adequate be made out of the estate of the deceased
for the proper support of the dependants. The application may be made on behalf of a dependant by
the dependant’s parent. Certain government agencies who have been providing certain benefits to the
dependant may also make the application on behalf of the dependant (SLRA-O, s. 58(1)-(3))
6.16 EXAMPLE OF TYPES OF DEPENDANT RELIEF AWARDS FOUND IN LEGISLATION
Ontario: A court can also make an order for the testator’s estate to repay the dependant’s debts. The
legislation (s. 63(2) of the SLRA-O) states that provision may be made out of income or capital or both
and an order may provide for one or more of the following, as the court considers appropriate,
a. an amount payable annually or otherwise whether for an indefinite or limited period or
until the happening of a specified event;
b. a lump sum to be paid or held in trust;
c. any specified property to be transferred or assigned to or in trust for the benefit of the
dependant, whether absolutely, for life, or for a term of years;
d. the possession or use of any specified property by the dependant for life or such period
as the court considers appropriate;
e. a lump sum payment to supplement or replace periodic payments;
f. the securing of payment under an order by a charge on property or otherwise;
g. the payment of a lump sum or of increased periodic payments to enable a dependant
spouse or child to meet debts reasonably incurred for his or her own support prior to an
application under this Part;
h. that all or any of the money payable under the order be paid to an appropriate person
or agency for the benefit of the dependant;
i. the payment to an agency referred to in subsection 58 (3) of any amount in
reimbursement for an allowance or benefit granted in respect of the support of the
dependant, including an amount in
CHAPTER 7 – QUEBEC ISSUES FOR CANADIANS OUTSIDE QUEBEC
7.1 A PRIMER ON CIVIL LAW
The current Civil Code integrates some elements of common law, including the law of trusts, and
contains 10 books. The primary source of law is the code, which is organised in a systematic fashion and
covers a broad area of law.
7.1.1 Legal Profession in Quebec
Only lawyers may litigate (i.e., appear before the courts) to resolve a dispute. Lawyers act in an
adversarial environment, whereas notaries must provide information and advice to all parties in a
matter or transaction.
Both lawyers and notaries have legal training and attend law school for three years. However, lawyers
proceed to bar admission school and notaries pursue notarial studies at university for an additional year.
Notaries can give legal advice to all parties or sides in a matter, draft legal documents, authenticate
those documents, and keep formal records of transactions that can be relied upon in future. A large part
of a notary’s practice consists of transferring real property, called “immovables” in Quebec, and a
secondary area of practice is Wills, successions, and estate planning.
7.2.1 Real Property or “Immovables” in Quebec

- The law of the province or territory may apply to real property or an interest in real property
located in that jurisdiction. If an individual owns real property in Quebec, it will be necessary to
comply with the laws of succession in the province to deal with the property on the death of the
owner.
- A grant of probate from the jurisdiction where the deceased was resident and domiciled at
death does not need to be “resealed” in Quebec in order to permit the executor or
administrator to deal with the property and either sell it or distribute it to the beneficiaries.
There is no procedure in Quebec similar to resealing or obtaining an ancillary grant of Letters
Probate or Letters of Administration. The probated Will may be deposited with a notary, who
then issues a certified copy. It is also important to verify if the foreign executor or
administrator’s authority extends to property situated in Quebec; if not, then a liquidator should
be appointed by the Quebec court to deal with the Quebec property.
- As it is not possible to have a right of survivorship in Quebec, any joint ownership of real
property (or other property governed by the laws of Quebec) will be in undivided co-ownership,
which is comparable to the concept of tenants-in-common, and the interest in the property of
any deceased owner will pass through his or her estate and not to the surviving joint owners.
- The rules relating to mandates in the event of incapacity are quite unique in Quebec, and if
property, particularly real property, is owned in the province it may be advisable to have a
mandate prepared under Quebec law specifically limited to property in the province.
7.2.2 Moving from or to Quebec

Whenever an individual moves from one province or territory to another, changing residence and
domicile, a different set of laws will apply to his or her property and civil rights. It is important for
individuals to review their Wills, powers of attorney for property, and personal care and health care
directives with a lawyer in the new jurisdiction to determine whether changes need to be addressed.
Individuals who formerly lived in Quebec may have insurance policies issued in Quebec. Insurance
policies issued in Quebec have unique characteristics that should be examined. In addition, there may
be a marriage contract made under Quebec law that could affect the devolution of the estate.
7.2.3 Beneficiaries in Quebec

Where an individual has family members or other potential beneficiaries located in Quebec, the rights of
such persons will be subject to the laws in Quebec with respect to the transfer and ownership of real
property in Quebec, matrimonial property rights, minors, and incapable adults.
7.3 UNIQUE FEATURES OF SUCCESSION LAW
7.3.1 Concept of Trusts
In general, civil law does not recognise trusts and there is no concept in civil law of the separation of
legal and beneficial ownership of property.
A trust is conceived as a “patrimony by appropriation.” Essentially the “trust patrimony” consists of the
property transferred in trust. The concept of “patrimony” is key to the Quebec trust. Inherent in the
concept of patrimony is that it constitutes a fund comprised of assets and related liabilities that
fluctuate over time.
Trusts cannot be created by unilateral declaration in Quebec. They may be created by contract, by gift,
by Will, or under a specific provision of the law. Quebec trusts do recognise the triangular relationship
between the settlor, the trustee, and the beneficiary (described as dedication or appropriation to a
defined purpose), as well as the assets that form a patrimony separate from that of the settlor,
beneficiary, or trustee. In addition, as in the common-law jurisdictions, the court has the role of being
available to enforce performance of the trust.
Beneficiaries of Quebec trusts are protected from third party claims of creditors and others in respect of
the patrimony unless there is fraud. The property of the trust does not form part of the settlor’s
patrimony and is not available to the settlor’s creditors. In addition, like the settlor, the beneficiary has
no real right in the trust property, and trust property is a distinct and separate patrimony from that of
the beneficiary. The beneficiary does have a personal claim against the trust for payment of his or her
interest, and it is possible for a creditor to seize this interest that a beneficiary has in the trust. However,
the creditor cannot have any greater rights than the beneficiary to enforce rights against the trusts.
7.3.2 Marriage and Civil Unions

In the province of Quebec, couples who are united by traditional marriage or by “civil union” are both
accorded identical rights and obligations. The Code was amended to recognise civil unions that are a
form of contract that can be entered into by either same-sex or opposite-sex couples in order to have
access to the identical rights and obligations that exist between married couples.
While those in a civil union have identical rights to family patrimony, distribution on an intestacy, and
dependant relief, there are some differences. Civil union is dissolved by agreement made before a
notary, not divorce. In addition, although couples married in Quebec will be recognised as married in
other provinces in Canada, a civil union may not be recognised as a marriage per se, and this may have
consequences where the parties own property outside Quebec in jurisdictions where their status may
be uncertain. However, persons in a civil union may qualify to be recognised as common-law couples
where these are recognised in other provinces or territories in Canada.
7.3.3 Family Patrimony

Married couples and those in a civil union in Quebec have economic rights to the family patrimony on
separation “from bed and board,” divorce, annulment, or death. Essentially the couple must divide the
value of the family patrimony accrued during the marriage or civil union upon such events and these
rights take precedence over any rights on intestacy, under the Will, or any agreement to the contrary.6It
includes the following:
• all family residences and furnishings but excluding collector’s items,

• vehicles used by the family, and
• benefits under a retirement plan except plans providing death benefits to the surviving spouse.
The calculation of the value of family patrimony is similar to the manner in which net family property is
equalised under Ontario law. The value of family patrimony that each spouse owns at the relevant date
for division (whether the date of separation, divorce, or death) is added together and divided by two.
The value of family patrimony owned individually by each spouse is then compared. The spouse who has
less than one-half of the aggregate family patrimony owned by both is entitled to a payment from the
other or from the estate in the case of death.
There is no specific right in the division of specific property per se. Rather, the spouse entitled to a
payment becomes a creditor of the other spouse, or the estate, for the amount of the shortfall.
In Ontario, and all other common-law jurisdictions except Newfoundland and Labrador, only the
surviving spouse may make a claim in respect of property on death. However, in Quebec (and
Newfoundland and Labrador), either the surviving spouse or the heirs of the deceased can make a claim
in respect of family patrimony. This could result in the surviving spouse being entitled to a payment or
transfer of property from the heirs or the heirs of the deceased being entitled to a transfer of property
from the surviving spouse.
7.3.4 Compensatory Allowance

In addition to the partition of family patrimony, a surviving spouse may be entitled to a compensatory
allowance in recognition of his or her contribution in property or services that enriched the spouse. The
right to compensatory allowance must be made in the year following death and is only available to a
surviving spouse.
7.3.5 Other Rights of the Surviving Spouse

There are two “matrimonial regimes” for married couples in Quebec, including those in a civil-law union.
Matrimonial regime refers to the rights and obligations arising under family law. Depending on the date
of the marriage or civil union, under either the community of property regime (for marriage before July
1, 1970) or the regime of partnership of acquests (for marriage after July 1, 1970), the surviving spouse
may be entitled to division of property in addition to the family patrimony
7.3.6 Probate
In Quebec, the object of probate is limited to proving that the testator has in fact died, that he or she
was the person who executed the Will, and that the Will is valid as to form. The scope of the court’s
jurisdiction in matters of probate in Quebec is quite narrow and does not extend to hearing grounds of
nullity, such as lack of capacity or undue influence. The court does not confer authority on liquidators or
executors; their authority derives from the Will and the law. Furthermore, there are no probate fees
levied on the value of the estate assets. In addition, probate is only required for holograph Wills and
Wills made in the presence of two witnesses; it is not required if the Will has been prepared by a notary.
7.3.7 Wills and Marriage Contracts Prepared in Quebec

Notaries are required to retain the original of any notarial Will and codicil. There is a central registry of
Wills in Quebec that retains registration of any Will prepared in the province by a notary or lawyer
except those prepared by a lawyer where the testator has retained the original.
The Will registry also records any testamentary disposition made in a marriage contract since 1994,
along with the name of the notary or lawyer who has retained the original document. Marriage
contracts in Quebec must be notarised and registered and, as for Wills, it is possible to conduct a search
to determine if any document exists in respect of a particular individual.
In circumstances where an individual appears to have died intestate, but once lived in the province of
Quebec, a search should be done to determine if a Will has been registered in the province or a
marriage contract exists that contains a testamentary disposition.
7.3.8 Beneficiary Designations

In the province of Quebec, beneficiary designations may be made for death benefits of life insurance
policies, but it is not possible to designate a beneficiary for any registered plan under the Income Tax
Act, such as an RRSP, RRIF, TFSA, or RDSP. Rather, these assets will pass according to the law of
succession in the province of Quebec and cannot be paid directly to a beneficiary.
Where an individual is resident and domiciled in Quebec, it is not possible to name as beneficiary of an
RRSP, RRIF, TFSA, or RDSP even a beneficiary who is living outside Quebec. However, it is possible for an
individual resident and domiciled outside Quebec to name a resident of Quebec as a beneficiary of his or
her registered plan.
7.3.9 De Facto Spouses

Couples who are not legally married or have not entered into a civil union have virtually no rights or
obligations arising from their relationship in the province of Quebec. On the death of one de facto
partner, the surviving de facto partner is not entitled to family patrimony, compensatory allowance,
division of property under any matrimonial regime, distribution on an intestacy, or dependant relief. In
addition, since the family patrimony rules do not apply, any movable property owned by the couple
(tangible personal property, i.e., household furnishings and other personal effects) will be deemed
owned in undivided co-ownership unless the surviving spouse can prove he or she is the sole owner of
such property.
The absence of any rights on death for de facto couples makes it extremely important for individuals in
such a relationship to plan their estates to ensure the result on death is according to each party’s wishes
and that the surviving partner is adequately provided for. The lack of legal rights for de facto couples
who fail to get advice and do estate planning is potentially more severe in Quebec than it might be in
other provinces as there is no survivorship feature of joint ownership, nor can any beneficiary
designations be made for RRSPs or RRIFs.
De facto couples who fail to make Wills may face considerable difficulty on the death of the other
partner. For example, even if the home is owned jointly, this will be without a right of survivorship and
the heirs of the deceased partner could force the surviving partner to vacate the family home.
7.3.10 Jointly Held Property

Jointly held property in Quebec is described as being divided or undivided coownership. In both types of
co-ownership, there is no right of survivorship. Accordingly, it is not possible for the surviving joint
owner to automatically inherit the interest of a deceased joint owner by operation of law as it is in the
commonlaw provinces. Rather, the property is treated as what in common-law jurisdictions would be
called tenants-in-common and the share of the deceased joint owner will form part of the estate of the
deceased owner and will pass according to the law of succession in the province of Quebec either under
the Will or on an intestacy or otherwise under the laws of succession in Quebec.
7.3.11.1 Mandate in Anticipation of Incapacity

Quebec is the only province where special approval is required before a springing power of attorney for
property, called a “mandate in anticipation of incapacity,” may be effective. It must be confirmed by a
homologation procedure before a clerk or judge of the Superior Court or a Quebec notary.
7.3.11.2 Distribution on Intestacy

Quebec is the only province where the surviving spouse may not inherit the entire estate of the
deceased spouse where there are no children or other issue. The spouse takes all if no issue, parents,
siblings, or nieces or nephews survive. If parents, siblings, or nieces or nephews of the deceased survive,
the surviving spouse will be entitled to only two-thirds of the estate and the remainder will be divided
among these other family members according to who survives (i.e., first to parents, then to siblings, and
then nephews and nieces of a pre-deceased sibling).
7.3.11.3 Revocation on Divorce

While marriage does not revoke a Will in Quebec, a legacy made to a spouse before divorce is revoked
unless the testator otherwise manifested an intention of benefitting the spouse. Divorce entails the
lapse of gifts made in contemplation of death by one spouse to the other in consideration of marriage in
a marriage contract. Divorce also has the effect of revoking the designation of the spouse as liquidator
of the succession unless a contrary intention is demonstrated.
CHAPTER 8 – OBTAINING THE GRANT OF PROBATE
8.1 REQUIREMENT TO OBTAIN PROBATE
8.1.1 Authority of the Executor or Administrator
The authority of the executor appointed under the Will arises immediately upon death of the testator
and derives from the Will itself. However, in many cases it will be necessary for the executor to obtain
Letters Probate in order to deal with the assets of the estate and carry out the duties of the
administration of the estate.
Similarly, where there is no Will, the administrator of the estate must obtain Letters of Administration in
order to be appointed as administrator. Unlike the executor under a Will, no administrator exists until
appointed by the court in the Letters of Administration. The administrator of an estate has no authority
until the grant of Letters of Administration is given by the court. Until an administrator is appointed, the
authority to manage the estate is lodged with the court.
8.1.2 Understanding the Process for Obtaining the Grant
In Ontario, the process of obtaining probate is called obtaining a “Certificate” and Letters Probate or
Letters of Administration are called a “Certificate of Appointment of Estate Trustee with a Will” or
“Certificate of Appointment of Estate Trustee without a Will,” respectively.
8.1.3 Benefits of Obtaining the Grant
In some cases, it may be possible to administer an estate without the grant of probate. However, there
may be very good reasons for doing so even where it is not absolutely necessary.
8.1.3.1 Protect the Executor from a Subsequent Challenge and Liability

The executor may want to confirm his or her appointment under the Will to prevent any subsequent
challenge to his or her authority or to limit his or her potential liability in the event a subsequent Will is
discovered or the Will is declared invalid.
8.1.3.2 Ensure Certain Claims Expire

Claims in respect of property by a spouse or dependant relief claim may expire only after the grant. The
limitation period for a claim by a spouse in respect of property runs from the date of the grant.
Potentially the executor, the beneficiaries, and any undistributed assets of the estate or any trust
created under the Will could be subject to liability. The executor may be able to reduce the risk of
liability with releases.
8.1.4 Where Grant Is Mandatory

Generally the grant of probate will be necessary under a number of specific circumstances.
8.1.4.1 Where There Is No Will

Where there is no Will, the administrator must obtain Letters of Administration in order to have
authority. The probate process is mandatory on intestacy.
8.1.4.2 To Deal with Real Property
Title to real property, any mortgages or other loans or guarantees secured with real property, or any
other liens against real property are subject to the land registration system under provincial legislation.
It is usually not possible to transfer, encumber, or otherwise deal with real property of a deceased
person without the grant. In Ontario, it may be possible to deal with real property under the Registry Act
without a Will. However, this is becoming less frequently possible as the registration of land in Ontario is
being transferred into the electronic registration system. Where the real property is located outside the
province where the testator resides, it may still be necessary to obtain a grant of probate in the other
jurisdiction. This can be done by a resealing or, in appropriate circumstances, by an original grant in the
other jurisdiction.
8.1.4.3 To Deal with Property and Third Parties

Banks, financial institutions, transfer agents for shares of public corporations, and other third parties will
not permit a transfer of property into the name of the executor or administrator without the grant
because of potential liability. There will be no protection from the claims of others in the event property
is transferred on the instructions of an executor without a grant if subsequently there is a successful
challenge to his or her authority under the Will. However, if the Will has been probated, there is
statutory protection for acting on the instructions of the executor whose appointment is confirmed in
the grant, even if subsequently the grant is revoked or otherwise set aside. For example, the Bank Act1
provides that proof of the grant of probate “is sufficient justification and authority” for the transfer of
the property. Similarly the Trustee Act2 of Ontario provides:
Revocation of erroneous grant - Validity of prior acts (Trustee Act)

47. (1) Where a court of competent jurisdiction has admitted a will to probate, or has appointed an
administrator, even though the grant of probate or the appointment may be subsequently revoked as
having been erroneously made, all acts done under the authority of the probate or appointment,
including all payments made in good faith to or by the personal representative, are as valid and effectual
as if the same had been rightly granted or made.
8.1.4.4 To Conduct or Defend Litigation on Behalf of the Estate or the Deceased

It will not be possible for the estate to defend or pursue any claim without the grant.
8.1.4.5 To Protect the Executor from Potential Liability

Just as the grant protects third parties who deal with the executor, if the executor has obtained a grant,
the executor will be protected from claims of others who purport to have authority under another Will
or testamentary document. This does not mean the executor will have protection for his or her own
negligence in carrying out their duties but rather will be protected vis-à-vis acting as executor per se.
The authority of the executor once the grant is obtained cannot be disputed, unless a further application
is made before the court that issued the grant requesting that the grant be set aside and stating the
basis on which the grant should not have been obtained.
8.1.4.6 To Resolve Any Dispute over the Validity of a Will

The Will may be invalid for any number of reasons. These could include the fact that, for example:
• a more recent Will exists that revokes the Will, or there is a codicil to the existing Will that
appoints different executors;
• the testator lacked capacity;
• the testator was subject to undue influence or fraud with respect to the document; or
• there were errors of execution that cannot be repaired by the court under substantial
compliance legislation, where available.
Where probate has been granted, the Will is presumed to be valid and third parties may rely on the
grant unless it has been revoked. When the application is made for probate, the validity of the Will may
be formally challenged and the grant will not be made until the challenge is either withdrawn or
adjudicated upon.
8.1.5 Dealing with the Estate Assets Before the Grant
Probate fees must be paid and the original Will must be located before the grant can be obtained. This
potentially produces a catch-22 situation where the executor needs the grant to open a safety deposit
box or to access accounts in a financial institution.
Many financial institutions will deal with the executor on a limited basis before the grant is issued. For
example, the financial institution may agree to draw a cheque payable to the funeral home or payable
to the Treasurer of the province drawn on the account in order that the funeral expenses and probate
fees may be paid.
Before the grant is issued the executor may want to manage any investment accounts with brokerage
firms or investment companies. Without the grant, this may pose some problems. However, if the
instructions are conservative, designed to preserve capital, or the investments are only being managed
in the ordinary course, the financial institution may permit the executor to give instructions and manage
the accounts on an interim basis until the grant is issued. Conditions may be imposed similar to those
that might be required in order to waive probate.
8.1.6 Assets Not Requiring the Grant
The following items may be transferred without the grant:

• Canada Pension Plan survivor benefit,
• personal effects,
• automobiles (with some exceptions — for example, in British Columbia, probate is required for
vehicles with a value in excess of $25,000),
• shares of private corporations, and
• any amounts passing outside the estate by virtue of:
o property held jointly with a right of survivorship as long as the deceased is not the sole
surviving owner immediately prior to death,
o life insurance passing under a beneficiary designation, or
o registered plans such as an RRSP, RRIF, or TFSA passing under a beneficiary designation.
8.1.7 Waiver of Probate
Where the estate is small or the account with a particular financial institution is under a certain dollar
limit, it may be possible to deal with the estate assets without probate. Most financial institutions in
Canada will agree to transfer assets without probate, but the conditions may vary and may include
specifics as outlined below.
• The account is under a certain dollar limit. As a rule of thumb, banks may waive probate where
the accounts do not exceed $30,000 as a maximum amount.
• For Canada Savings Bonds, if they do not exceed $20,000 and if the individual applicant is
entitled to the entire estate or if the estate passes to the surviving spouse, the limit is $75,000.
Probate is not required to transfer these assets
• In other situations, where the amount is over the institutional dollar limit, waiver may be
granted on additional terms, such as providing security, indemnities, and/or retaining the funds
or investments at the financial institution.
8.2 JURISDICTION, OFFICIALS, AND THEIR DUTIES
8.2.1 Province and Judicial District Where Application for Grant Is Filed
The application for probate is normally made in the province where the deceased resided at the time of
death or was domiciled3 at the time of death
8.2.2 Role of the Estate Registrar

The district court where the application for the grant is made may be managed by a local estate
registrar, who is responsible for making administrative decisions and supervising the application
procedure. The local registrar may be required to give notice to a central registrar for the province of
any application for probate in order to ensure multiple grants are not given for the same deceased
person. In Ontario, for example, no grant may be issued until the local registrar has received a certificate
from the Estate Registrar for Ontario that no other application for a grant has been made for that
deceased person.
8.2.3 Role of Court Officials and Judge

The application for the grant along with all supporting documents, including security or proof of security
(where required) and payment of probate fees, is usually fi led on an over-the-counter basis at the
relevant court office. Once the application is fi led, the court officials will review the application and the
documents to make sure everything required is included and that the Will is in a proper condition and
has been executed in accordance with the provincial requirements.
Once the application is complete and errors or deficiencies addressed, a judge will normally review the
application and sign the order to issue the grant on an in camera basis — that is, without any public
hearing or even the requirement that anyone appear in person before the judge. This non-contentious
process of obtaining a grant is called “proving the Will in common form.”
8.2.4 Proving the Will in Common Form and Proving the Will in Solemn Form
Where the Will is proved in common form, it is valid and third parties may rely on the authority of the
grant unless it is subsequently revoked. A grant proved in common form may be subject to challenge at
a subsequent time by a formal action brought to revoke the grant of probate on the basis that the Will
was not valid. A Will may also be proved in solemn form, in which case it cannot be challenged
subsequently except in limited circumstances. This normally occurs only where there is a dispute over
the validity of the Will or there is some question as to the validity of the Will that the executor wants
reviewed by the court
Proof in solemn form protects the Will from a later action to revoke the grant unless it is discovered that
the Will was revoked or the grant in solemn form was obtained by fraud. Due to the permanent nature
of the grant proved in solemn form, the process is more formal.
8.3 TYPES OF GRANTS AND MODERN LANGUAGE
Letters of Administration is the name of the grant to an administrator where there is no Will.
In Ontario, “estate trustee” is used to describe an executor or an administrator whether male or female,
eliminating the now archaic and awkward Latin terms “executor,” “executrix,” “administrator,” and
“administratrix.”
8.3.1 Letters Probate (in Ontario, Certificate of This is a grant given by a court certifying that the
Appointment of Estate Trustee with a Will) Will that is attached to the grant has
been duly proved and registered with the court
and verifying the executor’s authority
named under the Will.
8.3.2 Letters of Administration (in Ontario, This is a grant where the deceased died intestate.
Certificate of Appointment of When issued, this grant authorises
Estate Trustee without a Will) the person appointed, called the “administrator”
(or, in Ontario, the estate trustee without a Will),
to administer the estate.
8.3.3 Letters of Administration with Will Annexed This is similar to Letters Probate since there is a
(in Ontario, Certifi cate of Will but made to a person other than an executor
Appointment of Estate Trustee with a Will) named in the Will. This may be required if the
executor has died, is unable to act, or has
renounced his or her appointment.
The application process is similar to that for

Letters Probate, although there may be additional
requirements. For example, in Ontario, security is
required if the applicant is not named as the
executor in the Will, although, as in most cases,
the court has the authority to waive this
requirement. As with an intestate estate, someone
must apply to administer the estate and be
appointed by the court as part of the probate
process (see 5.6, Appointment of Administrator of
an Intestate Estate).
8.3.4 Administration De Bonis Non Administratis Where Letters of Administration have already
(in Ontario, Certifi cate of Appointment of been issued and it is necessary to appoint a new
Succeeding Estate Trustee without a Will) administrator, the original grant must be
surrendered and a new application for a grant
made.
8.3.5 Administration De Bonis Non Administratis This is similar to where Letters Probate have been
with Will Annexed (in Ontario, Certificate of issued and the sole remaining executor dies. The
Appointment of Succeeding Estate Trustee with a court will appoint another person to administer
Will) the estate. This grant is not issued if the executor
dies before Letters Probate were obtained, in
which case Letters of Administration with Will
Annexed should be issued (see 8.3.3, Letters of
Administration with Will Annexed (in Ontario,
Certificate of Appointment of Estate Trustee with a
Will)).
8.3.6 Letters of Administration Pendente Lite (in This is a grant of probate made by the court in
Ontario, Certificate of Appointment of Estate order to preserve the assets of the estate when
Trustee during Litigation) there is a legal action to resolve a dispute over the
validity of the Will. Pendente lite means “during
litigation.”
8.3.7 Ancillary Letters Probate (in Ontario, Appointment of Estate Trustee with a Will)
Certificate of Ancillary Ancillary Letters Probate are issued where the
original grant has been issued by a foreign non-
British court and the deceased owned property in
the province. This grant is required in order to
administer the assets located in the province.
8.3.8 Resealing
Where a grant is made by a British court or another province or territory in Canada, the original grant
given in a particular province may be resealed in another province. This permits the transfer of property
outside the jurisdiction where the grant was originally made. Where the grant is resealed, it has the
same force and effect as if it had been originally granted in that jurisdiction.
8.4 PROBATE FEES OR PROBATE TAXES
Generally probate fees or probate taxes must be paid in order for the grant to be issued.
It may be necessary to obtain probate (or a resealing of the original grant) and pay probate fees or taxes
in another jurisdiction if the deceased owned property, especially real property, outside
the province or territory of residence.
However, in Eurig, the constitutionality of the Ontario probate fees was challenged on the basis that
since the amount of the fee bore no relation to the service provided (i.e., they were not a flat rate but
rather were based on the value of the estate), the fees were actually a tax.
The Supreme Court of Canada agreed but permitted retroactive amendment to the legislation in order
to permit the province to incorporate the fees into the actual statute. Other provinces followed suit,
with the result that in Ontario “probate fees” are now called “estate administration taxes,” although in
other provinces they are still commonly referred to as “probate fees.” In this chapter they are referred
to variously as probate fees or probate taxes, although technically they are only fees in the provinces
that charge nominal amounts.
8.4.2 Assets Not Subject to Probate
The assets that are subject to probate are only those that pass through the estate and under the
administration of the Will or under the administration of the grant without a Will.
As a matter of jurisdiction, real property located outside the province is generally excluded from the
calculation of probate fees since levying probate fees on real property outside the province would be
beyond the powers of the province under the rules relating to conflicts of laws and under Canada’s
Constitution.
Assets not subject to probate should not be confused with assets that do not require probate to be
administered or managed by the executor or administrator. If probate is required, the value of all assets
of the estate, even those that do not require probate in order to transfer title, must be included in the
value of assets of the estate upon which the fees are calculated.
8.4.3 Effect of Debts on Probate Fees
Normally liabilities of the deceased are not deducted from the value of the estate in determining the
amount of probate fees. However, there are exceptions. Usually any amount that is secured against real
property may be deducted.
In Ontario, the forms specifically indicate that “insurance payable to a named beneficiary or assigned
value if a property held jointly and passing by survivorship, or real estate outside Ontario” will be
excluded.
In addition, in Ontario, the value of the estate is subject to the estate administration tax reduced by “the
actual value of any encumbrance on real property that is included in the property of the deceased
person.”5 Similar and other exclusions exist in other jurisdictions.
8.5 PROCESS TO OBTAIN GRANTS
8.5.1 Requirements to Apply for a Grant of Probate in Common Form
The estate solicitor will attend to preparing the necessary documents, sending notices and filing the
required documents with the court. If the executor is a corporate trustee, or has retained a corporate
trustee as agent for the executor, the corporate trustee will usually attend to sending the required
notices and preparing the inventory of assets.
The following documents will usually be required for the application:

• the formal application requesting the court to issue the grant,
• the original signed Will (or notarial copy of a notarial Will from Quebec),
• proof that notices of the application, and prescribed information, have been sent to all
beneficiaries and other parties as required,
• an affidavit of execution of the Will (where required),
• a list of assets, and the fair market value, at date of death,
• a listing of liabilities at date of death,
• a listing of beneficiaries and their entitlement,
• the renunciation of any executor who is not a party to the application,
• proof of bond or security if the executor is resident outside Canada, and/or
• payment of the relevant probate fees or taxes.
Ontario: An Estate Information Return must be fi led with the Ministry of Finance within 90 calendar
days following the issuance of the Certificate of Appointment of Estate Trustee.
8.5.2 Locating the Will
It is necessary to fi le the original signed Will in order to obtain probate. However, if the original cannot
be found, the rules usually provide for proving a lost Will, although this will require additional steps and
paperwork.
8.5.3 Affidavit of Execution
In some provinces, the solicitor who prepared the Will prepares an Affidavit of Execution shortly after
the Will has been executed and keeps it with the original Will. If this has not been done, the Affidavit of
Execution may need to be obtained prior to obtaining the grant. Special rules exist in the event the
Affidavit of Execution cannot be obtained from the witness.
8.5.4 Notice Requirements

Each province has rules that set out who must be notified of an application for a grant. Generally the
rules are similar and require notice be sent to:
• all beneficiaries, whether specifically named or a class of beneficiaries,

• those who would be beneficiaries if there was an intestacy (British Columbia),
• spouses and dependants entitled to apply to vary the Will,
• a surviving spouse who has been separated from the deceased for a specified period,
• if the beneficiary is a minor, to the minor’s parent(s) or guardian(s) as well as the province’s
Public Guardian and Trustee (Ontario: the Children’s Lawyer), and/or
• if the beneficiary is or may be an incapable adult, the adult’s legal representative if there is one
(e.g., property guardian or, in some cases, an attorney under an enduring power of attorney) as
well as the province’s Public Guardian and Trustee.
Legislation sets out the information that must be included in the notice. This will often include a copy of
the Will. In some jurisdictions, if the beneficiary is only entitled to a legacy, the information required
may be limited to an excerpt from the Will setting out the entitlement.
8.5.5 Applications for a Grant of Administration
Although anyone can apply for a grant of administration, legislation usually sets out a
hierarchy based on family relationships (e.g., spouse, children, siblings, etc.).
If an application for a grant of administration is required, much of the same information is required as
for a grant of probate. Requirements include:
• an affidavit stating that a Will could not be located, with applicable evidence of efforts made,
and explaining the applicant’s relationship to the deceased;
• where the named executor has renounced, a renunciation signed by the executor or evidence as
to why a named executor is not able to accept the appointment;
• renunciation by those with priority over, or equal priority to, the person applying for the grant;
• confirmation that notices have been delivered to all intestate beneficiaries entitled to share in
the estate (see Chapter 5) and others as required by the applicable legislation;
• asset, liability, and beneficiary information as above;
• proof of bond or other security if applicable; and
• payment of the relevant probate fees or taxes.
8.5.6 Value of the Estate

The value of the estate must be estimated in order to obtain the grant and to calculate the amount of
the probate fees or taxes payable. Where the assets of the estate are complex, it may be possible to
obtain a grant with an estimated value or with the value to be ascertained and pay the probate fees or
taxes based on that value, pending a later finalisation of the valuation of the assets.
8.5.7 Security for the Administration

Corporate trustees are not required to post security when administering an estate with or without a
Will. Executors named in a Will also do not have to post security. If the executor lives outside Canada,
security may be required. When there is no Will, security is required for all personal administrators. The
court has discretion to waive security where it is satisfi ed that the interests of all beneficiaries and
creditors will be protected. Security may be waived where:
• there are no debts,
• the value of the estate is small,
• the applicant is the beneficiary, or
• all parties or their representatives are potentially beneficially interested in the estate consent.
Security may be in the form of a bond, or other arrangements may be possible depending on the assets.
If the beneficiary(ies) include minors or an incapable adult, security will usually be required.
8.5.7.1 Obtaining the Grant without Paying Probate Fees

Some provinces provide special rules for obtaining the grant in advance of paying probate fees. For
example, in Ontario, the grant may be issued before payment of the estate administration tax where the
judge is satisfied that the grant is urgently required, financial hardship would result without the grant,
and sufficient security is given. Such applications should be used as a last resort as they are not readily
granted unless the circumstances are severe.
CHAPTER 9 – PROBATE FEE PLANNING
9.1 INTRODUCTION
An examination of the table of provincial probate fees in Chapter 8 (see Figure 8.2) will demonstrate the
motivation for engaging in probate fee planning. Generally probate fees will not be a planning priority in
Alberta, Quebec, Yukon, the Northwest Territories, and Nunavut. In these jurisdictions the fees are
nominal. However, if an individual lives in one of these jurisdictions but has real property in one of the
other provinces that impose higher fees (i.e., “probate tax”), some consideration may be given to
probate fee planning regarding that extra-provincial property.
9.1.1 Caution, Caution, Caution: Probate Fee Planning Is Only Part of the Planning Process
Probate fees are easily understood, as they are similar to sales tax. They represent a flat rate — or
almost flat rate — upon the value of an estate
Many probate fee planning strategies can be implemented easily and without the benefit of a solicitor
or legal advice (perhaps with the exception of transfers of real property). These include making
beneficiary designations and transferring property into joint names
9.1.2 Example of Consequences of Bad Planning with Jointly Held Property and Elderly Parents
If nothing goes wrong, that is, no child dies before the parent, and the parent dies within the year rather
than living for a number of years, the planning may not have any harmful effects
However, few professionals would implement an estate plan that could potentially lead to the following
results:
 more income tax being payable than probate fees are saved and
 the client’s indented distribution of wealth will be thwarted if certain future events intervene
before he or she dies.
9.1.3 More Income Tax

9.1.3.1 Capital Gains on Principal Residence
If the principal residence has been transferred, the principal residence exemption may be compromised
since there are now multiple owners who must claim the exemption for the years of ownership to the
exclusion of any other property if the entire gain is to be sheltered. If children have their own
residences, they may be giving up the exemption on their own property for some years, or the gain on
the home previously owned solely by the parent will not be fully sheltered.
9.1.3.2 Tax Payable by Joint Owners

Children may be in higher tax brackets than the parent, and there is a risk with this kind of planning that
the Canada Revenue Agency (CRA) will assess the children on their portion of the income from the
jointly held property. In addition, a transfer of property by gift to children may be viewed as a
disposition at fair market value, resulting in tax on capital gains at the time property is transferred into
joint names. The legal consequences of joint accounts are no longer certain as a result of the Pecore and
Madsen decisions, leading to uncertainty about the tax results as well. See 9.3.8.3, Effect of Pecore and
Madsen on Presumption of Resulting Trust.
9.1.4.2 Jointly Held Property
With jointly held property it is not possible to provide for succession as it is in a Will. In a Will, if the
intended beneficiary dies before the testator, provision may be made for a gift over to other
beneficiaries. If the intended beneficiary is a child, the gift over is often to the surviving issue of the
deceased child. However, if the property is jointly held, and the intended beneficiary dies, the property
will always pass by operation of law to the other surviving joint owner or owners. This may not always
be the result intended if there is an “out of order” death (i.e., a transferee joint owner dies before the
original sole owner of the property).
9.1.4.3 Beneficiary Designations

Beneficiary designations may also be problematic. In most cases, unless contingent beneficiaries are
designated, the surviving beneficiaries in a designation will take the entire property. Even if contingent
beneficiaries are designated, it is not possible to provide for the same complexity or number
of alternate beneficiaries that may be included in a Will.
9.1.5 Diminishing Return of Probate Fee Planning

The greater the value of the estate, the greater the probate fees, However, the legal costs and other
potential costs — such as annual filing of trust tax returns, transfer taxes, or other transfer fees, and
ongoing legal and tax advice — have to be weighed against the probate fee savings. This will depend on
a number of factors.
 How much are the probate fees in the particular province?
 Are there other assets that could be transferred to the alter ego trust or other benefits that
could be obtained from the strategy suggested?
 Does the client have tolerance for complexity
 Is the individual able to understand and make decisions about sophisticated planning
strategies?
 Is the individual comfortable paying for professional advice to properly consider and implement
the planning strategies?
 Does the plan involve continuing costs and fi ling requirements?
 What is the total cost of implementing the plan?
 Are there other cost saving or tax saving strategies that are more appropriate or produce better
savings?
 Will family members understand and appreciate the strategy and take the appropriate steps to
follow the plan after the death of the testator?
9.2 OTHER BENEFITS OF REDUCING THE VALUE OF THE ESTATE
Reducing the value of the estate, or structuring one’s affairs to avoid probate altogether, has potential
benefits other than probate fee savings. These include the following:
- privacy,
- executor fees savings,
- savings on legal fees,
- protection from claims of spouses in respect of property and dependant relief, and
- protection from creditors.
9.2.1 Privacy
The application for probate, including the supporting documents that show the value of the estate and
the contents of the Will, are a matter of public record. Obtaining probate exposes the entire contents of
the Will and the value of the assets of the estate to public scrutiny. Even in jurisdictions where probate
fees are not a factor, inter vivos trusts and other Will substitutes may be used by wealthy families or
those for whom privacy is a priority to transfer assets on death outside the estate.
9.2.2 Executor Fee Savings

The costs of executor fees are usually based on the value of the assets of the estate under
administration. Significant reduction in the value of the estate or the assets passing under the Will can
reduce executor’s fees. compensation. However, depending on the complexity of the assets and the
nature of the estate, it may be appropriate even for a family member to charge fees, especially where
there are other beneficiaries who are not executors. In addition, where a trust company is an executor,
reducing the value of the estate may reduce the fees. Executor’s fees are typically a maximum of 5% of
the value of assets under administration.
Corporate executors (i.e., trust companies), who agree with the testator to be appointed as the executor
during the testator’s lifetime, will usually enter into a compensation agreement that provides for a
declining rate of fees based on the value of the estate. For example, the fees on the first $1,000,0000 of
value may average out to 4.5%, may decrease to 3% on the next $1,000,000, and reduce to 2% of the
value on the balance of the value of the estate.
9.2.3 Savings on Legal Fees

Most legal fees for administering estates are based on an hourly rate for the services provided by the
solicitor
9.2.4 Protection from Claims of Spouses in Respect of Property and Dependant Relief
An individual may wish to reduce the value of his or her estate to shelter assets from the claims of a
spouse in respect of property or for a claim in respect of dependant relief. However, it should be noted
that the clawback of certain assets is specifically provided for in some provinces. Dependant relief
legislation in Ontario, Prince Edward Island, the Northwest Territories, and Nunavut gives the courts
authority to access insurance and lump sum pensions in order to make an appropriate award.
9.2.5 Protection from Creditors

Life insurance proceeds and RRSP and RRIF plans that pass by beneficiary designation outside the estate
of the insured or annuitant, as the case may be, are protected from creditors of the deceased. If these
pass through the estate, however, creditor protection will be lost. Thus it is a very valid planning
strategy, quite apart from probate fee planning, to ensure that to the extent possible creditor protection
is provided for these assets.
9.3 PROBATE FEE PLANNING STRATEGIES
9.3.1 Objective of Planning Strategies
Since probate fees are levied on the value of the estate, almost all probate fee planning
strategies are designed to accomplish either of the following objectives:
• reduce the value of assets in the estate subject to probate or
• have all assets that require probate pass outside the estate so that probate is not required at all
on death.
There are many assets that do not require probate, and it is possible to arrange one’s affairs to remove
certain assets from the estate. However, it is important to realise is required in order to transfer those
particular assets or not, must be included in the value of the estate for the purpose of calculating
probate fees that once probate is required, the value of all the assets in the estate, whether probate is
required in order to transfer those particular assets or not, must be included in the value of the estate
for the purpose of calculating probate fees. The only exception to this “all or nothing” rule is where
multiple Wills are used to divide the assets of the estate into a probatable estate and a non-probatable
estate.
9.3.2 Reduce Value of Assets in the Estate

The value of assets passing through the estate may be reduced by any number of Will
substitutes, including:
• beneficiary designations for life insurance and registered retirement plans,
• joint property with a right of survivorship,
• use of a corporation to deduct the value of debt
• inter vivos gifts, or
• inter vivos trusts.
In addition, multiple Wills can be used in some provinces to isolate assets passing
through the estate that do not require probate in a separate Will.
9.3.3 Life Insurance Beneficiary Designations

Naming a beneficiary for life insurance will ensure the proceeds pass outside the estate, assuming the
estate is not the named beneficiary. Where there is a named beneficiary, the proceeds of the policy do
not become part of the estate and are not subject to the debts of the insured. It is a good practice to
name an alternate beneficiary, or a succession of alternate beneficiaries, in the event the first named
beneficiary dies before the insured. In addition to reducing probate fees, there are a number of
additional advantages of naming a beneficiary for insurance.
9.3.3.1 Estate Is Default Beneficiary

If no beneficiary is designated, or the designated beneficiary dies before the insured and no alternate
beneficiary is named, the proceeds will fall into the estate to be administered under the Will or on an
intestacy. In such a case, the proceeds will be subject to probate fees and lose creditor protection. For
this reason it is wise to name alternate beneficiaries where possible.
9.3.3.2 Protection from Creditors

Provincial insurance legislation protects insurance proceeds from creditors of the insured. A beneficiary
designation in a Will for insurance may also exclude the claims of creditors. However, the designation
contained in the Will should state that it is made in accordance with the relevant insurance legislation.
The designation should also be located in the Will before the property of the deceased is conveyed to
the executors in trust.
9.3.3.3 Liquidity
Beneficiaries will receive the funds quickly and not be tied up with the delays and procedures required
in the administration of the estate. Funds will be available immediately to support any of the
dependants of the deceased. The funds may also be used to provide liquidity for estate expenses,
including funeral and burial costs, probate fees, and income taxes for the terminal return. However, care
should be exercised in using insurance proceeds to pay the debts of the deceased or the estate since the
funds legally belong to the beneficiary. Payments by the beneficiary may not be repaid if the estate
turns out to be insolvent. In addition, payments on behalf of the estate may taint the testamentary
status of the estate or any trust created in the Will, and tax advice should be obtained.
9.3.3.4 Trusts for Insurance Proceeds

It may be possible to name a trustee for insurance proceeds. Funding a trust with life insurance
proceeds may be accomplished by drafting a trust document to create a trust that will come into
existence when death occurs and the life insurance is paid to the trustee. Such trusts are called
“executory trusts.” Alternatively the terms of the trust may be contained in the beneficiary designation
itself, typically when the beneficiary designation is located within the Will.
If the designation is in the Will and the insurance proceeds are to be held in trust, care must be
exercised to keep the insurance proceeds outside the estate.
9.3.3.5 Insurance Proceeds Payable to the Estate

Where insurance proceeds are payable to the estate, the practice of life insurance carriers has in the
past been to require Letters Probate or Letters of Administration as a condition of payment to the
executor. Letters Probate were sought in order to protect the insurer from liability in the event the Will
appointing the executor turned out to be invalid. Where there are no other assets of the estate that
require probate, this requirement would have the effect of subjecting the entire value of the estate to
probate fees.
This requirement was litigated in the unreported Ontario decision of Rozon v. Transamerica Life
Insurance Co. of Canada.1 The court found that the insurance company did not have the right to require
Letters Probate as a condition of payment. The insurance company was protected from subsequent
liability under the wording of the Ontario insurance legislation as long as it had no actual notice of a
competing claim to the insurance proceeds at the time of the payment. The liability in respect of the
insurance proceeds if there was a subsequent claim would be that of the payee executor under the
invalid Will.
While the Rozon case may enable some estates to avoid probate fees, it also demonstrates the
difficulties executors face. Without Letters Probate, executors may be exposed to liability if the Will is
challenged. The preferred strategy would be to name a beneficiary wherever possible.
9.3.4 Beneficiary Designations for Registered Plans

If the proceeds of the registered plan pass outside the estate by virtue of a beneficiary designation, the
assets are not subject to probate fees. It is the practice also to include beneficiary designations for
registered plans in the Will to exclude the proceeds from the assets of the estate subject to probate fees
or taxes. The beneficiary designation in a Will is only effective for any registered plans or insurance in
existence at the time of the execution of the Will.
9.3.4.1 Tax Consequences of Beneficiary Designations

One important difference with designations of registered plans is the income tax treatment. Generally
life insurance proceeds are received tax free by the beneficiary as most policies are tax-exempt.
However, RRSPs and RRIFs are fully taxable on death unless a rollover to a qualified beneficiary is
available. The plan proceeds must be reported on the terminal tax return, and the resulting tax is a legal
liability of the estate as a debt of the deceased. The plan proceeds on death will be paid to any named
beneficiary in full without any deduction or withholding taxes.
The inherent tax liability in making beneficiary designations for registered plans must be taken into
account when the beneficiary designation is made. It is a common misconception that the tax is a
liability of the beneficiary. Failure to understand the tax treatment of the plan proceeds could result
in unintended consequences, including:
• an unintended windfall for the beneficiary who received the plan proceeds on a gross basis,
• depletion or elimination of the interest of a beneficiary under the Will due to the tax liability on
the plan payable by the estate,
• personal liability for the executor or administrator in respect of unpaid tax liability if he or she
makes a distribution without a clearance certificate, and
• surprise collection assessment on the beneficiary by the CRA if the estate does not pay the tax.
Since the proceeds do not pass through the estate, the executor may not even be aware of the payment
and must make inquiries as part of the administration process to determine if there are any tax
consequences to the estate.
9.3.4.2 Provincial Legislation Governs Beneficiary Designations for Registered Plans

The legislation permitting such beneficiary designations is provincial. Each jurisdiction permits
beneficiary designations for RRSPs, RRIFs, and Tax- Free Savings Accounts (TSFA). Quebec only allows
direct beneficiaries on insurance products. For both registered plans and insurance, the legislation
generally provides for naming a direct beneficiary or a trustee, and a later designation automatically
revokes a previous designation.
9.3.4.3 Creditor Protection

Creditor protection for registered plans on death is limited. During a lifetime there is protection under
federal bankruptcy law effective July 7, 2008, for the assets of a bankrupt (except for any contributions
made in the 12-month period prior to bankruptcy). However, this protection is not available on death. In
all jurisdictions, there is protection on death to the extent the assets in the plan are life insurance
products.3 This would include segregated funds.
9.3.5 Limitations of Beneficiary Designations Where Trusts Are Created

Although it may be possible to make a beneficiary designation that creates a trust for the proceeds of
insurance or a registered plan, this is often not ideal. It is not possible to do so on the beneficiary form
prepared by the relevant financial institution and must be done in a separate document, usually in a
Will. A formal trust may be drafted to be funded upon the death of the individual under a beneficiary
designation. As noted above (see 9.3.3.4, Trusts for Insurance Proceeds), this is called an executory
trust.
Where the trust is created in a beneficiary designation in a Will, there is a risk that the proceeds may be
considered part of the assets of the estate even where there is a specific statement that it is intended
that the assets will be held in a separate trust. This could have serious consequences, including not only
additional probate fees but also loss of creditor protection (particularly for insurance, where creditor
protection is available across Canada), a potentially even more serious result as the latter could result in
a much greater loss.
Two decisions from Saskatchewan, Re Carlisle Estate4 and Sun Life Assurance Co. of Canada v. Taylor,5
have resulted in debate among practitioners as to whether a beneficiary designation for life insurance
will cause the policy proceeds to be included in the assets of the estate
9.3.6 Multiple Wills

One probate fee planning strategy is to isolate the assets that require probate in a separate Will. . The
primary Will generally will include assets that cannot be transferred without probate. These would
include accounts at financial institutions, real estate, shares of public corporations, and any other assets
requiring probate. The secondary Will will deal with all other property. The intention is that only the
primary Will will be probated, thereby sheltering all the assets that pass under the secondary Will from
probate fees. The multiple Will strategy requires careful drafting with respect to defining the separate
assets that each Will governs, ensuring that gifts are not made twice, that debts are paid in full even if
the assets from one Will are insufficient, and normally the executor should be the same persons.
9.3.6.1 Many Wills; One Estate

Where multiple Wills are drafted, there is still only one estate. In Ontario, naming the same executors is
generally the practice in order to avoid any potential conflicts with respect to managing and
administering the estate as a whole. It is also important in executing multiple Wills to ensure that the
revocation clause in each prevents the other one from inadvertently being revoked. In addition, if there
are assets outside of the jurisdiction, it may be appropriate to do a further Will in respect of those assets
or they can be included in the primary Will.
9.3.6.2 Origin of Multiple Will Strategy

The multiple Will strategy has been blessed in Ontario as a result of the Granovsky case.
9.3.6.4 Drafting Multiple Wills

Multiple Wills may be used to achieve objectives other than probate fee savings. For example, separate
Wills are frequently used to deal with assets in separate jurisdictions. In drafting multiple Wills, special
attention should be paid to some specific conditions.
1. Revocation clauses must ensure that the Wills do not revoke each other. Sometimes mutual
non-revocation clauses are included. More caution may need to be exercised in preparing a
codicil where multiple Wills are in use. In some circumstances it may be preferable simply to re-
execute multiple Wills rather than do codicils.
2. In applying for probate, it may be necessary to prove that the secondary Will did not revoke the
primary Will. Generally this can be done by fi ling an affidavit.
3. It may be necessary to use crossover debt clauses so that the assets under one Will can be used
to pay liabilities arising in respect of property in the other. For example, if a residence or
vacation property is mortgaged and it is intended that clear title will pass to a beneficiary, it may
be necessary to provide for the assets of the other Will to be utilised to pay the mortgage.
4. Similarly, if shares of a private corporation pass under the secondary Will to a family member,
the assets governed by the primary Will may be needed to pay the income tax in respect of
those shares.
9.3.7 Property Held Jointly with a Right of Survivorship
9.3.7.1 Types of Joint Ownership
There are two types of joint ownership — with and without survivorship. With a right of survivorship,
the property passes to the surviving owner or owners on the death of a joint owner. Property held
jointly with a right of survivorship passes outside the estate to the surviving joint owners by operation of
law. Joint ownership with a right of survivorship does not exist in the province of Quebec. Joint
ownership without a right of survivorship is treated as a partial ownership of property. Each joint
owner’s share becomes property of his or her estate on death and is dealt with under the terms of the
Will. If the property is real estate, title is taken as “tenants-in-common.”
9.3.7.2 Joint Ownership with a Right of Survivorship and Probate Fee Planning
Individuals often hold property jointly with a right of survivorship to avoid probate fees on death
because such property passes outside the estate of the deceased joint owner to the surviving owners. If
the intention is for the surviving joint owner to transfer the property to the estate trustee to be divided
and administered as part of his or her estate, the property is technically subject to probate fees, if the
estate requires probate. There may also be no way to ensure the surviving joint owner will fulfi ll his or
her obligation to dispose of the property as intended.
9.3.7.3 Joint Ownership with a Spouse
This is a very convenient way for couples to pass property to the surviving spouse. A minimum of
paperwork is required and probate fees can be avoided because the property does not pass through the
estate of the first spouse to die. In addition, there are no Canadian income tax consequences to
transferring ownership of property between spouses — either into joint names or from one spouse to
another,9 including common law and same-sex spouses who are treated identically to married spouses
under the Income Tax Act after at least 12 months of cohabitation. However, it may not be appropriate
where there are other beneficiaries, such as children of a first marriage.
9.3.7.4 Tax Consequences of Creating Joint Accounts

The CRA has generally taken the position that where property is transferred into joint names, there is a
deemed disposition as to the proportionate share of the property conveyed and that there is another
disposition on death.
The income tax consequences of a transfer of survivorship only under the new concepts created by the
Pecore and Madsen decisions are not clear (see 9.3.8.3, Effect of Pecore and Madsen on Presumption of
Resulting Trust). The CRA’s position may remain the same as for other transfers into joint names even
where only a right of survivorship passes on death. However, it may be possible to argue that the
disposition, if any, on the creation of this type of joint account should be for a lesser value (potentially
zero), with the capital gain being realised upon the death of the original owner.
9.3.7.5 Problems with Jointly Held Property with a Right of Survivorship:

Conflict between Surviving Owners and Beneficiaries of the Estate Conflict can arise during the
administration of the estate of a person who has transferred property into joint names with a right of
survivorship. Disgruntled beneficiaries under the Will may claim that the property should be part of the
estate rather than passing to the surviving owner and often argue there should be a resulting trust (see
9.3.8.1, The Presumptions).
9.3.7.6 Disadvantage: Difficulty with Severance

It may not be possible to sever the joint tenancy unilaterally. When a joint tenancy is severed, the
ownership of the property is treated as a tenancy in- common. This situation would enable each joint
owner to dispose of the interest in the joint property by Will
9.3.7.7 Other Problems with Jointly Held Property with a Right of Survivorship
In addition to the potential conflicts discussed above, there are a host of other problems that may arise,
and it’s important to be aware of all potential consequences. In general, property should be transferred
into joint names with a right of survivorship only when an immediate gift is intended. There are many
considerations.
• All joint owners may have immediate and full access to the property.
• Assuming a “right of survivorship” the property passes to the surviving owners on the death of
one joint owner, bypassing the deceased’s estate and possibly conflicting with distribution plans
in their Will. The property may become part of the estate if the status of the joint account is
challenged
• If property is held jointly with a right of survivorship with children and there is an “out of order
death,” family members may be disinherited. For example, a person’s grandchildren will not
receive the share of property owned jointly by the person and his or her children if one of the
children dies first. On the death of the parent, the property will pass only to the surviving
children.
• The property may become subject to the claims of creditors of all joint owners.
• The property may become subject to the claim of a spouse of a joint owner if there is a marriage
breakdown.
• A transfer into joint names, unless to a spouse, creates a “deemed sale” for income tax purposes
on the portion passed to another joint owner. The death of a joint owner generates another
deemed disposition on the accrued gain on that person’s share.
• All joint owners must declare their portion of the income and capital gains from the jointly held
property.
• A portion of the “principal residence exemption” will be lost if the jointly owned property is a
principal residence and other joint owners have their own residence on which they will claim the
exemption.
• Special caution must be exercised if any of the joint owners is a U.S. citizen, U.S. resident, or
green card holder because of the potential liability for U.S. gift tax and U.S. estate tax.
• The co-operation and signature of all joint owners may be required to make any change in
ownership.
• Where there is a joint account with a parent and children, when the parent passes away the
account will remain joint with a right of survivorship unless the property is transferred into
ownership without a right of survivorship.
9.3.8 Effect of Presumption of Advancement and Presumption of Resulting Trust
9.3.8.1 The Presumptions
At common law, the presumption of a resulting trust applied to the gratuitous transfer of property
unless the presumption of advancement applied. As a result, when the donor died, the executor or
others having an interest in the estate could argue that the property was held in trust by the recipient
owner for the benefit of the estate and that the property should pass to the heirs of the donor.
The presumption of advancement has been altered by statute in many provinces. For example, in
Ontario and also in Nova Scotia, the presumption of advancement between spouses has been abolished
except with respect to property held as joint tenants or monies held on deposit in both names.
9.3.8.2 Documenting Intention

The presumption of resulting trust or presumption of advancement can be rebutted by evidence of the
transferor’s intention. If a client wishes to add a child as a true joint owner of an asset, it is
recommended that they sign an agreement indicating that is their intention. If, on the contrary, the
intention is that the child will administer the assets under the terms of the Will or convey them back to
the executor to do so, this should also be documented.
9.3.8.3 Effect of Pecore and Madsen on Presumption of Resulting Trust

Two cases of the Supreme Court of Canada14 have altered the law of presumption of advancement and
resulting trust and the nature of jointly held property.
These cases, Pecore and Madsen, have abolished the presumption of advancement between a parent
and an adult child but preserved the presumption for transfers by a parent to a minor child. Where
jointly held property passes to the child upon the death of the parent, the child will be holding that asset
in trust for the estate of the parent, and therefore the asset is to be distributed according to the
parent’s Will.
In addition, the nature of property interests held in a joint tenancy have been altered by Pecore and
Madsen. The Supreme Court found that when property is transferred gratuitously into joint names with
a right of survivorship, there could be a gift at the time of the transfer (this is consistent with the law
before these decisions) or there could be a gift only of survivorship that takes place upon the death of
the transferor
9.3.8.4 Probate Fee Planning Causes Litigation Where Intention of Deceased Ambiguous: Neufeld and
the Doctrine of Resulting Trust
The Neufeld decision is a prime example. The court considered the plaintiff’s argument that the
deceased, who knew she was terminally ill, carried out an estate plan designed to avoid payment of
probate fees and taxes. The court found that this was the intention of the testator based on the
evidence and that the defendant had not provided sufficient evidence to rebut the presumption of
resulting trust. The court found that the presumption of resulting trust applied not just to the jointly
held property but also to the beneficiary designation of the RRIF. In the result the assets in dispute were
held by the defendant brother in trust for the estate of the deceased.
9.3.9 Alter Ego Trusts and Joint Partner or Common-law Partner Trusts
Individuals who have attained age 65 may settle a trust on a rollover basis where the settlor is entitled
to the net income during his or her lifetime and no one other than the settlor is entitled to the capital
during his or her lifetime. Generally these trusts do not have any income tax benefits. However, they are
very effective for probate fee planning as any property in the trust passes to the beneficiary of the trust
on the death of the settlor and not under the settlor’s Will.
Other benefits of alter ego trusts may include privacy, protection from creditors, claims of family
members, or as a convenient alternate to managing property under a power of attorney, particularly
where the settlor has been diagnosed with a debilitating mental condition such as Alzheimer’s disease
Not all property can or should be transferred to an alter ego trust:

• Registered Plans. These must remain in the name of the annuitant.
• Qualified Farm Property or Qualified Shares of a Small Business Corporation. An alter ego trust
cannot claim the capital gains exemption, nor can it allocate the capital gain to a benefi ciary on
the death of the settlor.
• Other Rollovers: None of the rollovers otherwise available on death will be available for
property in the trust. This includes the spousal rollover and intergenerational rollover of farm
property.
• U.S. Real Property. U.S. real property may be subject to gift tax.
• Property that May be Subject to U.S. Estate Tax. There may be a mismatch of U.S. tax and
Canadian tax credits in the alter ego trust.
However, it should be pointed out that an alter ego trust is not generally recommended for a U.S. citizen
because of the adverse U.S. tax consequences.
Charitable giving through an alter ego trust is problematic. A limited donation credit may be available if
the trust qualifies as a charitable remainder trust; this requires that there be no right to encroach on
capital during the lifetime of the settlor.
It is also possible to set up a joint partner trust or common-law partner trust for the benefit of the
settlor who is over 65 and his or her spouse, including a commonlaw spouse for income tax purposes (12
months’ cohabitation). Where both spouses want to set up joint partner trusts, they can settle one trust
with both of them as beneficiaries as long as they are both at least 65 years old.
In general the income tax consequences of an alter ego trust are outlined below.
• There is a rollover on transfer of property to the trust on settlement of the trust as long as the
settlor is 65 years of age or over.
• The 21-year deemed disposition rule does not commence until the death of the settlor, or the
last death of the settlor and his or her spouse in the case of a joint partner trust.
• There is a deemed disposition at fair market value of all property on the death of the settlor, or
the last death of the settlor and his or her spouse in the case of a joint partner trust.
• The trust will be subject to the top marginal tax rate on any income taxed in the trust. This will
apply, for example, on the deemed disposition occurring on the death of the settlor and/or his
or her spouse.
• The trust is a separate taxpayer, and this may result in a mismatch as between the trust and the
settlor or his or her spouse in relation to various credits and other tax attributes and accounts
and may complicate or compromise loss utilisation.
9.3.10 Uses of Corporations in Probate Fee Planning
Using a corporation to hold assets has many consequences that are not discussed here. These include
legal consequences, rights of shareholders, tax implications, and costs of professional fees and
corporate and tax compliance.
The transfer of property to the corporation may be done on a rollover basis by making an election
under section 85 of the Income Tax Act as long as shares are taken back as consideration and the value
of other non-share considerations, including any assumption of debt, does not exceed the tax cost of the
property transferred. If the property transferred includes shares of a private corporation, the value of
non-share consideration cannot exceed the tax paid up capital of the shares transferred to the
corporation. Tax advice is essential. The use of a corporation may create double tax on the assets in the
corporation and on the shares held in the transferee corporation. Although there are strategies to
reduce or eliminate this potential double tax burden, they are complex, expensive, and not always fail-
proof.
Not all property is suitable to be transferred to a corporation. As a general rule

personal use property, such as a home or cottage, should not be transferred to a
corporation because of the shareholder benefit rules. Real property that is inventory
may not be transferred on a rollover basis.
9.3.10.1 Matching Assets with Debt in a Corporation

If an individual has debt that is not secured against real property, it will not be credited against the value
of the assets subject to probate. If the debt is transferred to a corporation, it may indirectly reduce
probate fees.
9.3.10.2 Facilitating the Use of Multiple Wills

Multiple Wills can be used to shelter the value of shares in a private corporation from probate fees. To
the extent that property is held in a corporation, it may be sheltered from probate fees
9.3.11 Other Will Substitutes

A number of other strategies may be used to pass property outside the estate.
9.3.11.1 Inter Vivos Gifts

Generally it is not recommended to save taxes or probate fees by giving property away. The probate fee
savings should not be the sole motivation of making a gift. Caution should be exercised especially where
the individual is elderly and may be subject to the pressure of family members or others who wish to
benefit under the guise of probate fee savings. These cautions also apply to the creation of joint
accounts.
The potential donor must consider the following:

• loss of control over the property;
• the property is no longer available to the donor;
• will there be sufficient assets after the gift in the event of an emergency, change in financial
position, or change in health condition;
• the property will be exposed to the creditors of the recipient;
• the property may be subject to claims of a spouse under family law;
• if the recipient dies, the property will pass under his or her estate and be subject to the claims of
the recipient’s family members;
• the gift will be a disposition at fair market value for Canadian income tax purposes unless it is to
a spouse or common-law partner;
• there may be U.S. gift tax if the donor is a U.S. citizen (or if the property is U.S. real property, but
this would not be subject to probate fees or taxes in any event);
• there may be legal fees and other transfer costs;
• the effect of the gift on distribution of the estate both in the Will and outside the estate; and
• the effect of the gift on the recipient.
Family members will not have to wait until the donor is dead to enjoy the benefits and the donor can
see and appreciate the enjoyment of others that is made possible by his or her bounty
9.3.11.2 Inter Vivos Trusts Other than Alter Ego or Joint Partner or
Common-law Partner Trusts
Providing the inter vivos trust is not an alter ego or joint partner or common-law partner trust, and the
attribution rule in subsection 75(2) of the Income Tax Act does not apply, the following are some of the
more important tax consequences:
• there will be no rollover on transfer of property into the trust,
• the trust will be subject to the 21-year deemed disposition rule,
• there will be no disposition on transfer of property to a Canadian resident beneficiary, and
• there will be no disposition on the death of the settlor.
•
9.3.12 Eliminating the Need for Probate
In some cases it may be possible to have all assets otherwise requiring probate pass outside the estate.
This strategy has its limitations and may only be appropriate where the value of wealth is modest and
the plan of distribution is simple. The individual should still have a Will as a backstop to deal with:
• assets subsequently acquired;

• assets not requiring probate, such as personal effects, vehicles, private corporation shares, and
small bank accounts;
• any insurance or registered plans that may fall into the estate because designated beneficiaries
have all died before the testator; and
• • jointly owned property where all other joint owners died before the testator.
There are some drawbacks to this strategy. If the estate is stripped of most of the wealth, or consists of
assets that are intended to be distributed in specie, or are not liquid (such as shares of a private
corporation), how will expenses normally paid by the estate be funded? Expenses will include:
• income taxes on registered plans passing outside the estate,
• income taxes on the deemed disposition of jointly held property,
• other income taxes payable in the terminal return,
• funeral and burial costs, and
• debts owing by the deceased at the time of death.
9.4 USING A HOTCHPOT CLAUSE TO ADJUST FOR DISTRIBUTIONS OUTSIDE THE ESTATE
The use of hotchpot clauses is discussed at 4.3.6.7, Hotchpot Clause. These can be very effective in
probate fee planning to ensure that the plan of distribution intended by the estate is effective whether
property passes through the estate or outside the estate. Hotchpot clauses may be included in Wills and
inter vivos trusts. A hotchpot clause can only adjust the share of any beneficiary to the extent they are
assets of the estate. Where the majority of the assets are passing outside the estate, a hotchpot clause
may not be able to fully remedy any disproportionate distribution. Perhaps running through an example
would be useful.
CHAPTER 10 – ADMINISTRATION OF TRUSTS AND ESTATES
10.2 ROLE OF EXECUTOR
10.2.1 Acceptance by Executor and Interaction with Co-Executors
An executor who is appointed in a Will has no obligation to accept the appointment. When the
application for the grant is made, any executor named in the Will who does not wish to accept the
appointment may renounce his or her appointment. If none of the executors wish to act, another person
will have to apply, although the provisions of the Will should be examined to determine if alternate
executors have been named.
Once an executor has commenced to act, however, even before the grant is issued, renunciation can
only be made with the approval of the court. The executor should be warned to not deal with the assets,
represent themselves as the executor, or ask others to act on his or her authority as executor until the
decision has been made to act. Otherwise, the unconditional right to renounce is forfeited and personal
liability may result from losses relating to administration of the estate.
A person may wish to renounce at the outset, for example, if the estate is insolvent, or if the person
intends to make a claim against the estate, in which case he or she should not continue to act in any
event because of conflict of interest.
Another factor in considering whether to accept the appointment is the ability to cooperate and work
with the other executors. Unless the Will states otherwise, or there is a tie-breaker rule under the
provincial statute, executors must make decisions unanimously. Generally courts will not break a
deadlock where executors do not agree and the only remedy may be to find a compromise unless the
conduct of the co-trustee warrants his or her removal. A court will generally refuse to remove an
executor on the grounds of a poor or hostile relationship with a co-executor or beneficiary even where
the administration of the estate is stalled, unless there is specific malfeasance on the part of the
executor.
10.2.2 Understanding the Fiduciary Duty
The executor’s role is mainly administrative, particularly in an immediately distributable estate. Where
ongoing trusts are created in the Will such as for minor children or a surviving spouse or otherwise, the
executor may also be the trustee of these testamentary trusts
In carrying out his or her duties, the executor has a fiduciary duty. This means the executor must always
act in good faith for the best interests of the beneficiaries.
10.2.3 Delegating Duties and Seeking Professional Advice
The executor need not carry out all his or her administrative duties personally. The Will may also provide
authority for the executor to delegate some of his or her duties, such as the authority to manage
investments that cannot normally be delegated. Professionals may be retained to carry out or assist with
some of the tasks. These might include the following:
• a lawyer to obtain the grant of probate, advise the executor, handle the sale or transfer of
certain assets, maintain estate accounts, and assist with passing of accounts;
• a tax advisor (lawyer or accountant) to advise on the tax aspects of estate administration, do
post-mortem tax planning, and advise regarding the clearance certificate;
• an accountant to assist with financial statements and tax returns for any corporations held by
the deceased, prepare tax returns for the deceased and the estate, and any alter ego or joint
partner trust;
• an appraiser to provide valuations for real estate and other assets; and an agent for executor
(usually a trust company) to carry out some of the administrative duties.
Notwithstanding the ability of the executor to delegate administrative tasks and seek advice, the
executor cannot delegate his or her decision-making obligations. This would include the power to
exercise discretion to distribute income or encroach on capital, or whether to sell property or distribute
in specie, or to decide what price should be accepted on a sale. The executor must select and retain
professionals or agents who have the appropriate expertise and must supervise their work. In Wagner
v. Van Cleef, the administrator of an estate delegated all the responsibilities of estate administration to
a solicitor who misappropriated a substantial sum. The court found the administrator was personally
liable for the lost funds.
To the extent that the executor delegates administrative duties, there may be a reduction in executor
compensation. Record keeping, preparing an inventory of assets, opening bank accounts, preparing
reports for beneficiaries, determining liabilities of the deceased, and arranging for payment of debts of
the deceased and the estate are administrative duties that would normally be carried out by the
executor. A reduction will not apply to all costs incurred. For example, the following would generally not
reduce executor compensation:
• real estate commission on sale of real estate,

• broker’s commission on investment sales and purchases, and
• lawyer’s and accountant’s fees to the extent the advice is beyond the requirements of the
executor’s role, such as specialised advice, resolving beneficiary disputes, or added costs of
formal passing of accounts.
Executors may wish to save the cost of professional advisors, but they run a very high risk that costly
mistakes may be made. In addition to personal liability, the executor may be risking his or her own
inheritance if he or she is a beneficiary. The executor will be personally liable for the value of any
distribution made to a beneficiary without having first obtained a tax clearance certificate under the
Income Tax Act.
An executor may also be personally responsible for any loss or failure to minimise liability if tax advice is
not obtained. There are multiple tax planning opportunities associated with the tax consequences of
death, the tax returns available in the year of death, and post-mortem tax planning. In addition, dealing
with non-residents or distributions to non-residents can create tax obligations. If the deceased owned
U.S. real property or securities of a U.S. issuer with a value in excess of $60,000US, a U.S. Estate Tax
Return is required and U.S. estate tax may be payable.
10.2.4 Conflicts of Interest
As a fiduciary, an executor must avoid placing him- or herself in a position of conflict of interest.
There is a direct conflict of interest if an executor makes a claim against the estate, as might be the case
where the executor/spouse makes a claim in respect of property under family law or a dependant relief
claim. In such a case, the executor must cease to act, and if there are no co-executors, an administrator
ad litem must be appointed.
10.2.5 Maintaining an Even Hand
The rule most often arises with respect to the exercise of any discretion during the administration of a
trust that may favour one class of beneficiary over another, such as a life tenant versus a remainderman,
or other successive interest or residual beneficiary. The executor must not favour one over the other.
10.2.6 Standard of Care
Generally an executor is held to a high standard of care but will not be liable for honest mistakes. An
executor who is an individual who is not a professional will be held to an ordinary standard of care. A
lawyer or accountant who acts as executor as part of his or her practice or a trust company will be held
to a higher standard of care. These different standards of care for non-professionals apply whether or
not they take compensation.
10.2.7 The “Prudent Investor” Rule and Investments
Provincial law sets out the requirements for investments by trustees. All provinces have a form of the
“prudent investor rule,”
One common principle, for example, is diversification, known popularly as not “putting all your eggs in
one basket.”
The Will may also permit delegation of investment-making powers, and provincial legislation may permit
delegation of investment powers as well. The legislation of most jurisdictions specifically states that
investing in a mutual fund is not considered an improper delegation of decision making over
investments, even if the fund is managed by an external money manager (however, the executor must
still decide whether investing in any particular mutual fund would be considered a prudent investment).
10.2.8 Managing a Business
Where the deceased was carrying on a business, the executor must act to preserve the interest of the
estate in the business. If the deceased was a sole proprietor, the executor may have to wind up the
business if it cannot be sold or a family member does not want to continue the business. If immediate
sale of the interest in the business is not possible or practical, it may be appropriate to arrange for
continuation of the business until a sale can be made. The executor would not be expected to carry on
the business personally.
The executor should make inquiries to determine if the deceased made any succession plans. Potential
purchasers for a business usually include family members, employees, other partners or shareholders in
the business, competitors, or suppliers
10.2.9 Problems with Closely Held Corporations
The executor may act as shareholder of the corporation, but this may not necessarily permit the
executor to control the corporation unless he or she is elected as an officer and/or director of the
corporation.
The general advice is that the executor should seek to be appointed as a director and officer of the
corporation so that the corporation may be managed in the best interests of the beneficiaries.
This places the executor in a position of conflict because as executor the obligation is to the
beneficiaries; whereas as a director or officer, there is a primary obligation to act in the best interest of
the corporation. The legal obligations of a director trump those of the executor with respect to
corporate decision making.
Where there is an ongoing trust with an income beneficiary, there is always a question as to whether
dividends should be declared and, if so, the quantum of such dividends. . However, the declaration of
dividends by a corporation is always discretionary. The executor may have to contend with other
shareholders and directors regarding the payment of dividends.
10.2.10 Interpreting the Will and Obtaining Advice and Direction of the Court
Provincial rules generally permit an executor to apply to the court for advice and direction of the court
with respect to any questions that arise in respect of the administration of the estate. For example,
section 60 of the Trustee Act of Ontario provides:
A trustee, guardian or personal representative may, without the institution of an action, apply to the
Superior Court of Justice for the opinion, advice or direction of the court on any question respecting the
management or administration of trust property or the assets of a ward or a testator or intestate.
Generally the courts will not permit these applications to be used to substitute the decision of the court
for one that should be made by the executors. So, for example, the court will not intervene to break a
deadlock between co-executors who cannot agree. Nor will the court entertain an application to ask
how the executors should exercise their discretion or to approve a decision to exercise a discretion that
is clearly authorised under the Will, since such approval is not necessary.
Questions of interpretation might include:
• when a class of beneficiaries closes,

• whether a particular person is a member of a class of beneficiaries, or
• whether the executors have the authority under the terms of the Will to carry out a specific act.
The role of the executor in making such an application should be neutral. The executor cannot be an
advocate for a particular beneficiary or a particular outcome. The executor’s responsibility is to
determine the appropriate interpretation of the Will in order to discharge the obligations of an
executor.
10.2.11 Agent for Executor

Many executors want to accept the appointment in order to honour the wishes of the deceased, who is
usually a close relative or friend. However, the “honour” comes with a heavy responsibility, a lot of hard
work, time-consuming red tape, and potential personal liability. In addition, beneficiaries, anxious to
receive what is their due, possibly oblivious (or wilfully blind) to the role of the executor in settling an
estate, may exert pressure at every turn, badgering the executor, who needs time to carry out the duties
required, or second-guessing the executor with respect to every decision.
One choice an executor may make to relieve some of the work and anxiety associated with estate
administration is to hire an agent for executor, usually a trust company. Often there is a clause in the
Will specifically authorising an agent for executor. However, a specific clause may avoid criticism by
beneficiaries or persuade co-executors that this is appropriate. Hiring an agent for executor has a
number of advantages.
• The agent can carry out only those administrative duties assigned by the executor, whether
limited or comprehensive.
• The fee arrangement is flexible so that only those services provided are included in the fee.
• The executor is relieved of much of the “legwork” involved but still must make all decisions.
• The executor and beneficiaries can be confident (assuming a trust company or other
professional such as an estate solicitor is hired) that the administration is being carried out by
professionals who have expertise in estate administration.
The fees for agent for executor are generally deducted from any compensation that the executor may
claim. The cost of hiring an agent for executor is sometimes seen as an unjustified expense or a drain on
the assets of the estate. However, the compensation that may be claimed by an executor is not any less
than may be charged by an agent for executor for the same work even if the executor is a family
member
10.3 ROLE OF THE SOLICITOR
The executor should retain a solicitor to provide advice pertaining to the executor’s duties, the
interpretation of the Will, and any legal matter that arises during the administration of the estate. In the
usual case, the solicitor normally carries out the following functions:
• prepares the application for the grant of probate,

• prepares notarial copies of documents, such as Letters Probate, as required,
• advertises for creditors, and
• performs any legal work required to transfer the real estate of the deceased.
Where the executor does not wish to carry out all his or her duties personally — either due to
availability, lack of expertise, inconvenience, or for any other reason — the solicitor may be requested
to carry out all the administrative duties on behalf of the trustee. In addition to the above, these might
include:
• preparing the inventory of assets,

• securing the property and arranging for insurance as required,
• realisation of assets,
• preparation of income tax returns,
• application for the tax clearance certificate,
• distribution of property to beneficiaries and obtaining releases,
• preparation of accounts, or
• any other administrative duty.5
As discussed above, the executor must still make all decisions and must oversee the work done by the
solicitor.
The fees charged by the solicitor to perform administrative duties of the executor will be deducted from
the executor’s compensation. The solicitor should keep a separate record of the time and charges
related to executor’s duties for this purpose, even where the solicitor is the executor.
10.4 THE EXECUTOR’S YEAR
Generally an executor cannot be forced to make any distribution or any payment of income during the
first year of administration of the estate. The basis for the rule is that until the assets and liabilities are
determined, the executor will not be in a position to determine what funds, if any, are available. In
addition, to some extent the Canada Revenue Agency (CRA) recognises the executor’s year and in most
circumstances will permit any income earned by the estate in the first year to be taxed in the estate
return even if income is payable to the beneficiary under the terms of the Will.
10.5 INSOLVENT ESTATES
The administration of an insolvent estate is particularly difficult. The executor must exercise care in all
his or her actions as he or she may be called to account to creditors as well as beneficiaries. “Insolvent”
generally means the inability to pay one’s debts as they fall due. An estate will be insolvent when all the
debts, liabilities, and expenses exceed the realisable value of estate assets.
10.6 TRUST ADMINISTRATION COMPARED WITH ESTATE ADMINISTRATION
However, most of the other requirements and duties of an executor are identical to those of any trustee
of a trust. These include, but are not limited to, the following:
• the fiduciary duties and obligations of trustees,

• the standard of care,
• the requirement to account to and communicate with beneficiaries,
• the requirement to maintain an even hand,
• any requirements regarding investment and management of trust property,
• the requirement to prepare and fi le tax returns,
• the exercise of discretion as permitted under the trust document,
• the distribution of income and/or capital in accordance with the terms of the trust,
• the final distribution of trust property,
• preparing and presenting accounts and passing them before the court if required, and
• the risk of personal liability where distributions are made without a tax clearance certificate.
Where there is an ongoing trust created in the Will (i.e., a testamentary trust), the role of the executor
in administering the “estate” may shift from the role of estate administration to administering the
testamentary trust created in the Will. This shift normally takes place once all the estate matters have
been settled
The period of administration of a testamentary trust begins only after the estate has been administered
and the assets or fund that is directed in the Will to be paid to the trust has been distributed to the trust
by the executor or administrator. This may be confusing where the testamentary trust comprises the
residue of the estate because there may appear to be a seamless transition from the administration,
gathering assets and paying liabilities, and the commencement of the residual trust.
The timing of the commencement of the administration of testamentary trusts is

important for several reasons.
• Accounts may be passed before transfer to the testamentary trust. This protects the executor
and trustees of the trust.
• A clearance certificate should be obtained since the funding of the testamentary trust is a
distribution by the estate.
• The rights of beneficiaries to distribution under the trusts may not commence until the trusts
are funded by the estate.
• The trust may have trustees who are not the same persons as the executors.
10.8 T3 TRUST INCOME TAX AND INFORMATION RETURN
The T3 Trust Income Tax and Information Return is fi led by trustees for inter vivos and testamentary
trusts. The T3 return is also used to report income earned by an estate after the date of death. It is fi led
by the executor annually until the administration and distribution of the estate assets has been
completed.
CHAPTER 12 – ADMINISTRATION OF PROPERTY HELD FOR OTHERS UNDER STATUTORY AUTHORITY
12.1 TERMINOLOGY
Pass Accounts: The process by which formal accounting records for the assets of a trust or estate,
including the “estate” of a living person, are submitted by the trustee, attorney, guardian, or other
person in charge of managing the financial affairs and property on behalf of another person to the court
for approval.
Public Trustee: The public official who is charged with the responsibility of protecting the interests of
vulnerable and incapable persons under provincial law. This office is sometimes called the Public Trustee
or the Public Guardian and Trustee,
Grantor: The grantor is the individual who makes a power of attorney for property.
Guardian: The person appointed by the court to manage the financial affairs of an incapable person is a
guardian
12.2 ADMINISTRATION OF PROPERTY FOR AN INCAPABLE ADULT PERSON
If a power of attorney for property has been granted, the person appointed in the power of attorney
document will have the authority to act.
If the individual has transferred all or a portion of his or her property to an alter ego or other self-benefit
trust, the trustee of the trust will be governed by the common law of trusts and the provisions of the
Trustee Act of the particular jurisdiction.
12.2.1 Applications for Guardian to Manage Financial Affairs
If no arrangements have been made to manage the financial affairs of an incapable person, generally
the courts will have the jurisdiction granted under provincial law to appoint someone, called a guardian.
Alternatively the public trustee or other provincial official may have the authority to manage the affairs
of the incapable person.
An application for guardianship will be subject to the requirements set out in the relevant provincial
legislation The applicant may have to give notice of the application to interested parties such as to
family members and/or the public trustee. The legislation may set out who has priority in making an
application for guardianship, similar to the priority for appointing an administrator of an estate. The
statutory regime may include the following requirements:
• posting a bond or other security equal to the value of the assets of the incapable person,
• a management plan setting out the manner in which the assets will be invested and managed,
• regular reporting and accounting to the public trustee,
• an assessment of capacity if a finding has not already been made,
• notice to and consent of relatives and third parties including the public trustee, and
• relationship to the incapable person and reasons he or she should be appointed.
12.2.2 Assessments of Capacity
Generally an assessment of capacity is required in order to establish whether an individual is capable of
managing his or her financial affairs. Provincial law will set out the procedure for an assessment of
capacity. The persons entitled to make an assessment of capacity may include physicians, psychologists,
social workers, and other health care professionals. Specific certification or training as an approved
assessor may be required. Consent to the assessment may be required by the person to be assessed,
although the law of the particular jurisdiction should be examined to determine if it is possible to do an
assessment or obtain a court order for an assessment without consent.
12.2.3 Assessments of Capacity Under Mental Health Law

An individual may be declared incapable under the mental health laws of the jurisdiction when admitted
to a mental health care facility. This route, and the procedures required, are generally involuntary and
may be quite different from the assessment procedure provided for under capacity legislation for
substitute decision making (which generally must be voluntary).
12.2.4 Role of Public Trustee

When an individual is found to be incapable, the public trustee may have prima facie authority to
manage the financial affairs. The public trustee will defer to an attorney under a power of attorney, or a
court appointed guardian, although details are province-specific.
12.2.5 Management Under a Power of Attorney
Under a power of attorney, the terms of the document will determine when the authority commences.
If the document has no condition, it will be effective immediately whether the individual is capable or
not. However, the attorney may not have any obligations or duties until he or she commences to act as
attorney. There may also be a shift in the nature of the obligations once the grantor becomes incapable.
Generally an attorney is an agent during the capacity of the grantor and is accountable to the grantor.
However, once the grantor becomes incapable, the statutory regime will dictate the duties and
obligations and the attorney may have additional duties and obligations more in the nature of a
fiduciary if such duties have not already arisen or been imposed.
12.2.6 Duties of Attorneys and Court Appointed Guardians
The duties of an attorney acting for incapable persons and of court appointed guardians will be set out
in the provincial legislation. Generally both have a fiduciary duty to act in the best interest of the
incapable person and to account for their management of property.
An attorney has a duty to account and during incapacity may be compelled by a third party to prepare
and pass accounts, such as the executor or relative of the incapable person. An attorney may also be
required to pass accounts by the grantor.
A guardian is under no duty to preserve the capital of the estate of the incapable person for the benefit
of potential estate beneficiaries. Re Vickers Estate
12.3 ADMINISTRATION OF ASSETS OF ABSENTEES OR MISSING PERSONS
Under provincial law, a person may apply to the court under the relevant legislation to have a person
declared missing, and the court may appoint a person to manage the financial affairs of such person.
The public trustee may also be appointed to manage the property of an absentee. The person appointed
has powers, duties, and obligations as set out in the provincial statute and may be the same or similar to
that of court appointed guardians or trustees, although not necessarily identical.
In some cases the Trustee Act or Public Trustee Act of the province may provide for the administration
of the property of a missing person.
12.4 PRESUMPTION OF DEATH
Absentee legislation or related legislation may also provide for an application for presumption of death.
Usually such application may be made after a prescribed period of absence, but it may also be possible
to apply for such an order in special circumstances of peril, such as a plane crash, 9/11-type disaster, or
other criteria that make it reasonable to conclude that the missing person is deceased. If the application
is granted, the estate of the absentee may be administered and distributed as if the person were
deceased. The order as to death must specify the date on which the person is presumed to have died.
The legislation may also permit payment of life insurance proceeds, but the specific presumption of
death legislation and provincial insurance legislation should be examined
Ontario Absentees Act

Declarations of Death Act
CHAPTER 13 – ESTATE AND TRUST ACCOUNTS
13.1 INTRODUCTION
The obligation to keep records and any requirement to pass accounts extends to all trusts, not just
estates, and extends to trustees and other fiduciaries as discussed.
13.2 REQUIREMENT TO KEEP ACCOUNTS
13.2.1 General Duties
The trustee has an obligation to:
• keep trust property separate from personal assets,

• retain original documents for every transaction and record, including any paper trail such as
receipts, invoices, bank statements, investment statements, and the like,
• report to beneficiaries on a regular basis, and
• pass accounts when requested or required.
13.2.2 Why Are Accounts Required?
The duty to keep adequate records and accounts is a paramount responsibility of an executor or trustee.
Under provincial legislation, financial records and accounts must be maintained by trustees and other
persons managing property in a fiduciary capacity. The records and accounts must be produced for
inspection to those entitled under provincial law upon request. Any expense incurred by the trust,
estate, beneficiaries, or other fiduciary caused by the failure to provide accounts will be the personal
expense of the trustee or other fiduciary.
The obligation to keep accounts is also founded on the fiduciary obligation to act in the best interest of
the beneficiary. If called upon, a trustee must be able to demonstrate he or she has managed property
responsibly, in the best interests of the beneficiaries, in accordance with the terms of the trust, and not
committed any fraud or other misappropriation. This can only be done if proper financial records and
accounts are kept.
In addition to the legal requirement to keep accounts, there are a number of benefits to keeping
accounts and providing regular, informal financial reports to beneficiaries, including:
• issues can be dealt with before they grow to become problems by permitting inquiries to be
made and answers given during the administration of an estate
• an environment of trust and co-operation is created from a transparent administration of the
trust property that demonstrates fair treatment of beneficiaries, value for assets sold, and
sound investment of trust funds;
• reduce the risk that beneficiaries will
o refuse to approve informal accounts,
o demand passing of accounts, or
o raise objections upon passing of accounts;
• protect the trustee from accusations of impropriety;
• assist with the preparation of tax returns; and
• keep a record of financial information that may be the basis for trustee compensation.
13.2.3 Requirement to Provide Information to Beneficiaries and Others
Trustees do not have an obligation to volunteer information. However, they must provide it if requested
by a beneficiary or others as provided by statute.
However, it may be a good policy for a trustee to provide information voluntarily and make regular,
informal reports for the reasons stated above.
In some cases, persons other than beneficiaries may have a right to information or accounts if they have
an interest in the estate. These individuals may include creditors or the public trustee on behalf of a
minor, incapable person, or charity. Such persons may also have a right to compel passing of accounts.
The Will or trust indenture may also set out specific requirements regarding accounts, providing
information to beneficiaries and others, and passing accounts. However, as a general rule, the Will or
trust document cannot relieve the executor or trustee of the obligations to maintain proper records and
accounts or pass accounts.
13.3 BASIC SYSTEM FOR TRUST ACCOUNTS
13.3.1 Accounting Principles
Trust accounting is “cash accounting.” All financial transactions are categorised as either income
(revenue) or capital, and as either receipts or disbursements.
In categorising a receipt as capital or income, trust principles, not tax principles, are used. So if a capital
asset, such as shares of a corporation, is sold at a gain, the entire proceeds are recorded as capital, even
though for income tax purposes a portion of the receipt would be included as income.
13.3.2 Form and Types of Statements
No specific form of accounts is required unless the accounts are to be passed, in which case they must
be prepared in “court form” under provincial rules. It is important to obtain experienced estate
accounting help to ensure compliance with the formal court rules for trust accounts. Generally accounts
must include the following statements:
• statement of original assets,

• statement of all money received,
• statement of all money disbursed,
• statement of all investments purchased and sold,
• statement of all property remaining on hand at the time the accounts are prepared,
• statement of liabilities at the time accounts are prepared, and
• statement of compensation claimed by the trustee.
13.4 PASSING ACCOUNTS
The requirement to pass accounts is like an audit of the financial records of the trust or estate. It is the
process by which formal accounting records for the assets of a trust or estate, including the “estate” of a
living person, are submitted by the trustee, attorney, guardian, or other person in charge of managing
the financial affairs and property on behalf of another person to the court for approval.
13.4.1 When Required

The beneficiaries, public trustee, creditors, or other persons having an interest in the trust or estate may
require accounts to be passed. Where the trustee does not cooperate, a court order may be obtained to
compel passing of accounts.
In Ontario, for example, there is no obligation to pass accounts. Where not obligatory, it is generally
done only at the request of a beneficiary due to conflicts or where there are minor or incapable
beneficiaries.
Where passing accounts is not obligatory, the trustee may voluntarily decide to pass accounts even if
not requested to do so by a beneficiary or other interested party. If the trustee decides that a passing of
accounts is not necessary for protection from liability, and the beneficiaries do not insist, an estate or
trust can be administered and fully distributed without passing accounts. As an alternative to passing
accounts, the trustee may request the beneficiaries to sign releases and approvals of the accounts.
If beneficiaries refuse to sign releases and approvals, the trustee must pass accounts, and the additional
cost of the application, assuming there is no wrongdoing on the part of the trustee, will generally be
paid out of the trust or estate. It may also be necessary to pass accounts to discharge any bond or other
security required to be posted by an executor or trustee.
Passing accounts is strongly recommended if the estate is insolvent or if there is a deficiency in assets
resulting in abatement
Accounts may be passed at intervals during administration of an estate or trust or only upon
termination. There is no set time period for passing accounts, but in order to limit the development of
potential problems and make the task less onerous, it may be prudent to pass accounts every few years.
13.4.2 Common Objections on Passing Accounts
Many types of objections may be made. The most common ones include the following:
• trustee or executor compensation,

• alleged breaches of trust,
• failure of the trustee or executor to demonstrate the standard of care required in discharging
his or her duties,
• inadequate sale price on disposition of an asset,
• failure to act impartially,
• conflict of interest,
• improper investments resulting in loss or lost opportunity, and
• excessive expenses such as professional fees.
Where a beneficiary or other person entitled to pass accounts has an objection, there is a formal
process to fi le a notice of objection after the application to pass accounts has been served.
13.4.3 Process to Pass Accounts
Beneficiaries and other interested parties must be given notice of the request to pass accounts and may
object to the passing of the accounts. Special rules may apply with respect to notice to minors, incapable
persons, and charities. If there are no objections, the accounts may, in some jurisdictions, be passed
“over the counter” at the court office without a hearing, although the court will not pass the accounts
without being satisfied that they are in order and there are no deficiencies or irregularities. Upon an
application to pass accounts, the court has the discretion to inquire into any matter with respect to the
administration of the estate, including any alleged misconduct of the trustees, and provide for relief.
The court may:
• inquire into any complaint or claim of misconduct,

• require additional information be submitted,
• hear evidence,
• decide any disputed matter,
• order a trial of an issue,
• vary the compensation of the trustee,
• assess any legal bill charged to the estate, and
• award damages payable to the trust or estate.
Once the accounts are passed, the court will issue an order approving the accounts.
13.4.4 Effect of Passing Accounts
An order passing accounts will bind the beneficiaries with respect to any objections for the accounting
periods covered by the order. The order will also relieve the trustee of any future liability with respect to
trust property for that period except in the case of fraud, mistake, or non-disclosure.
Because passing accounts brings closure to any objections and relieves the trustee of liability, trustees
often pass accounts voluntarily to ensure contentious issues or decisions regarding complex assets or
large estates are not re-opened at a later date. Passing of accounts is often done when new trustees are
appointed, either as a condition of court approval for a retiring trustee or to protect the new trustee
from liability arising from any acts taking place prior to his or her appointment. Trust companies
routinely have accounts passed as a matter of policy and risk management.
13.4.5 Costs of Passing Accounts

The cost of preparing informal accounts and communicating with beneficiaries and others is generally
included in the executor’s compensation. Assuming no wrongdoing or neglect on the part of the
executor, the cost of passing accounts and, in some cases, the additional cost of preparing accounts in
formal court format are proper expenses of the estate.
13.5 EXECUTOR COMPENSATION
One of the potentially most contentious issues for beneficiaries is executor compensation. Beneficiaries
often do not appreciate the time, responsibility, and extent of the duties that are involved in
administering an estate and any testamentary trusts. Beneficiaries may expect family members to act
for free, assuming that this is appropriate.
When final accounts are prepared, a statement of trustee compensation should be included. Generally
the executor may not take compensation without approval by the beneficiaries. If beneficiaries do not
approve, or cannot approve due to incapacity, the executor will be forced to pass accounts to authorise
the amount of compensation.
13.6 COMMON-LAW RULES
If a trustee seeks compensation from a trust, the trustee is in a conflict of interest. There are three
exceptions to this rule.
1. The Trust Has a Charging Provision: The settlor can permit a conflict of interest in the trust
document by explicitly providing for the trustee to be paid compensation.
2. Beneficiaries Consent: If all the beneficiaries are adults and have full legal capacity, the
beneficiaries may consent.
3. Court’s Inherent Power: The courts have an inherent power to allow remuneration. However,
this is rarely used given the statutory power that is now provided for in all jurisdictions.
13.7 CHARGING PROVISIONS AND COMPENSATION AGREEMENTS

There are two approaches commonly used to provide for compensation in Wills and trusts. One
approach is to incorporate the terms of payment within the document.
Re Bryant Isard The provision must be clearly spelled out in order to be binding.1 A provision that
authorises compensation, or authorises a trustee or executor who is also a professional to charge
professional fees for professional services provided to the estate or charge, is sometimes referred to as
a “charging provision.”
The second approach, often used by corporate executors and trustees, is to enter an agreement with
the testator or settlor setting out a detailed fee scale. The signed agreement is then incorporated by
reference into the Will.
13.8 STATUTORY RULES
13.8.1 Executor and Trustee Compensation
The Trustee Act of each jurisdiction provides for a court to allow compensation to an executor or trustee
that is “a fair and reasonable allowance for the care, pains and trouble and the time spent in
administering the estate or trust.” It is important to note that the legislation suggests the general
criteria or factors to be considered are care, pains, trouble, and time spent
13.9 APPROVAL TO COMPENSATION
Subject to a compensation agreement in a trust or Will, an executor or trustee must obtain approval to
the proposed compensation before charging the fees to the trust or estate. There are two ways to
obtain approval — from the beneficiary(ies) or from the court.
13.9.1 Beneficiary Approval
If all the beneficiaries of the estate are adults and have legal capacity, they may approve an executor’s
compensation.
This rule also applies to the approval of a trustee’s fees. However, when a trustee of a continuing trust is
requesting approval to fees for services to date, and not at the time of final distribution, beneficiary
approval is only possible if all current, future, and contingent beneficiaries consent. As a result, it is less
likely for a testamentary trustee to be able to rely on this process.
Where beneficiary approval is possible, the executor or trustee will set out the request for approval in
writing. The request should set out the details supporting the calculation of the compensation to ensure
that the beneficiary understands how the fees are calculated. The written consent should be retained on
file.
13.9.2 Court Review
When it is not possible to obtain beneficiary consent, or all beneficiaries do not consent, the executor or
trustee can apply to the courts to pass the accounts and seek approval to the compensation claimed.
Disputes about the accounts, including expenses, are addressed during the passing. Once disputes are
resolved, if there are any, the court will consider the question of the compensation.
13.10 CALCULATING COMPENSATION FOR ESTATES AND TESTAMENTARY TRUSTS
Legislation in each jurisdiction provides no further guidance on how to calculate executor or trustee
compensation. As a result, a percentage-based approach for determining an appropriate fee for
executor and trustee fees has evolved. However, although these “usual percentage” calculations may
provide a starting point, the courts have ruled that the resulting calculation must be assessed against a
set of criteria that has been laid down in the case law. This two-step process is summarised at 13.10.1,
Calculating Executor Compensation Using “Percentage Guidelines.”
13.10.1.1 Ontario Practice (No Compensation Agreement)
In Ontario, where there is no compensation agreement, a different approach is used to calculate the
fees. Rather than charging a single percentage against capital and revenue as set out above,
- the general rule is to charge up to 2.5% on the value of the asset or cash received, including
revenues, and
- 2.5% on the value of the asset or cash distributed.
-
Because the initial charge to the capital is based on the date of death value of an asset, if the asset is
sold at a gain, an additional fee is charged against the gain when it is realised.
See Figure 13.2 for example
- $1M estate
- $250k paid out for expenses and $750k left
- Estate earned $10k in interests and dividends
- Capital fee of collecting assets at death = 1M x 2.5% = $25k

- Capital fee on paying expense = 250k x 2.5% = $6,250
- Revenue fee on revenue collected = $10k x 2.5% = $250
- Revenue fee on revenue paid = $10k x 2.5% = $250
As a result, a percentage tariff calculation has been developed through case law, which now serves as
the baseline for the calculation of executors’ compensation. The tariff sets claimable executor’s
compensation at 2.5% of the value of each of the capital receipts, income receipts, capital
disbursements and income disbursements, and also permits an overall care and management fee of 2/5
of 1% of average annual value of the assets. (.4%)
13.10.1.2 Five Factors for Determining Fair and Reasonable Compensation
Once the usual percentages are applied, it is necessary to review the final amount and consider the five
factors set out in the case law to determine what is fair and reasonable in the circumstances. In
assessing the reasonableness of the remuneration, courts consider: Re Jeffrey Estate/Toronto General
Trusts Corp. v. Central Ontario Railway
1. the trust’s magnitude,

2. the care and responsibility springing therefrom,
3. the time occupied in performing its duties,
4. the skill and ability displayed, and
5. the success that attended its administration
13.10.2 Factors that May Reduce the Compensation Allowance
An executor’s compensation may be disallowed where the trustee has been guilty of serious
misconduct.
Compensation might also be disallowed if the work was totally unnecessary or if the executor or trustee
agreed to accept the role for no compensation.
Compensation may also be reduced by the amounts paid to agents who assisted the executor and
carried out tasks that the executor could have performed personally unless the Will specifically
authorised the agent to be hired.
13.10.3 Agent for Executor Services

When a corporate trustee or law firm provides administration services to executors who do not have the
time or skill to administer the estate, the fees paid to the agent will likely reduce the executor’s
entitlement to compensation.
13.10.4 Pre-Taking Compensation
Generally compensation may not be charged until it has been approved by the beneficiaries or the
court. Where the executor or trustee pre-takes compensation, he or she may be ordered to repay the
amount in excess of the amount finally approved, with interest, from the time of pre-taking.
It has been suggested that the courts in Ontario have returned to a hard line on pretaking.
As a result, there are two schools of thought:
• View #1: The rule is strict — pre-taking is not permitted and is a breach of trust. The amounts
should be repaid, with interest, until determined by the court.
• View #2: There will be an exception to pre-taking in limited situations. Where permitted, as long
as the fees taken do not exceed the final amount approved, there is no breach. If the amount
taken exceeds the amount approved, the excess must be repaid to the trust plus interest.7 An
example where this may be permitted is when a trustee wishes to claim the annual care and
management fee. In the William George King Trust case, Misener J. noted on the burden of the
cost to trust if annual applications are made each year to pass accounts and obtain approval to
the fees.
Corporate trustee compensation agreements specifically address the timing for payment of
compensation to avoid these issues.
13.11 SHARING COMPENSATION AMONG EXECUTORS AND TRUSTEES
When dealing with executor compensation, the courts look at the compensation to be awarded
generally for the work done. The court does not become involved in the division of the compensation
among trustees. A dispute between executors and trustees will likely be a separate action and because it
does not affect the estate or trust, all costs incurred in the dispute will likely be paid for by the parties
personally.
Compensation agreements with corporate trustees generally deal with the corporate trustee’s
entitlement to compensation. Payment to other co-executors and co-trustees may or may not be
addressed. If additional fiduciaries have been appointed and they wish to seek compensation, legal
advice may be required. It may be necessary to obtain consent from the beneficiaries or apply to court.
13.12 COMPENSATION AND INTER VIVOS TRUSTS

As noted above, the Trustee Acts’ rules also apply to inter vivos trusts. However, itis more common to
see compensation addressed in the trust or in a compensation agreement. Compensation agreements
will vary between corporate trustees and other professionals.
While care and management fees and revenue collection fees may be included in a compensation
agreement, the approach to charging capital fees may vary.
13.13 TAXATION OF EXECUTOR AND TRUSTEE FEES
If an executor or trustee charges compensation, the amount received is treated as taxable income. If the
executor or trustee is an individual and does not include the compensation as business income, it is
treated as income from an office or employment. All applicable taxes must be charged, including
GST/HST if applicable, and withholdings from the fees may be required, including Canada Pension Plan
(CPP) premiums.8
13.14 LEGACIES IN LIEU OF COMPENSATION
If a Will leaves a legacy to the executor, there is a rebuttable presumption that the legacy was intended
to be in lieu of compensation. Unless the Will specifically indicates that the legacy is in lieu of
compensation, an executor who wishes to claim compensation must rebut the presumption by
providing evidence to show that the legacy was intended to be in addition to compensation.
Although it is not difficult to rebut the presumption, the executor’s success will depend on the facts.
Factors include the relationship of the executor to the testator, the amount of the legacy, gifts to other
beneficiaries, and the wording used.
13.15 INDEMNIFICATION FOR ESTATE AND TRUST EXPENSES AND LIABILITIES
The common law recognises that an executor or trustee should be reimbursed for proper expenditures
required in the administration. The right to reimbursement is also referred to as the right of
indemnification. Legislation also recognises this entitlement to reimbursement.
Beneficiaries may dispute an expense for a number of reasons. These include:
the necessity of an expense incurred,
• the reasonableness of the amount paid,

• the decision as to whether the expense should be borne by the capital beneficiaries or the
revenue beneficiaries, and/or
• the executor or trustee is personally liable for expenses or liabilities under a contract.
13.15.1 Court Review of Proper Expenses
Expenditures and payment of estate liabilities will be reflected in the estate and trust accounts provided
to the beneficiaries. If the beneficiaries dispute any aspect of the accounts, it will be necessary to
resolve the dispute in a court passing. Disputes may relate to expenses incurred, the amount of the sale
proceeds received or the appropriateness of the sale price, or any other transaction that affects the
amount that a beneficiary might receive.
Generally, if the executor or trustee incurs the expense in good faith and the expenditure benefits the
estate or trust, it will be approved. However, the general duty of care always applies.
The rule is fairly simple: a trustee will be indemnified in respect of expenses properly incurred in the
context of an administration. The difficulty, however, lies in the fact that the propriety of a given
expense will often be judged by the beneficiaries after the event and in light of its outcome. A trustee,
however, does not have the benefit of hindsight.
13.15.2 Contractual Liabilities
When an executor or trustee enters a contract to deal with third parties, it is important to recognise the
executor’s or trustee’s legal position. Generally, an executor or trustee enters contracts personally and
not as an agent of the estate, trust, or beneficiaries. Where the contract is properly entered, the
executor or trustee is entitled to indemnification if the executor or trustee is liable for any losses or
liabilities arising under the contract.
13.15.3 Legal Services to an Estate or Trust
When an executor or trustee is also providing legal services to a trust, it is necessary for the Will or
trustee to specifically permit the executor or trustee to charge his or her professional fees for those
services. Where an executor or trustee is providing legal services in addition to executor or trustee
services, the legal services should be identified separately from executor and trustee services to avoid
any confusion as to the basis for the expense and the methods used to determine the
amount due.
The Trustee Acts in these jurisdictions specifically permit a barrister and solicitor to charge for
professional work done in connection.
13.16 COMPENSATION OF SUBSTITUTE DECISION MAKERS
Substitute decision makers for financial affairs are allowed to be reimbursed for their proper expenses.
The entitlement to compensation, however, is less consistent across jurisdictions.
13.16.1 Property Guardians
The legislation that provides for the appointment of a property guardian addresses the right to
compensation.
Compensation is usually fixed at the time the accounts are passed. In most if not all jurisdictions, the
approach to compensation is similar to that used for executors and
.
Ontario: Ontario has established a prescribed fee scale for substitute decision makers
under the Substitute Decisions Act, 1992.13 Property guardians and attorneys acting
under a continuing power of attorney may charge the following without approval:
• 3% on capital and revenue receipts,

• 3% on capital and revenue disbursements, and
• an annual fee on the average market value of the assets at the rate of 0.6% or 3/5 of 1%.
The guardian or attorney may apply to the public guardian and trustee for an additional allowance.
Ontario: See 13.16.1, Property Guardians, for the allowance permitted for an attorney
acting under a continuing power of attorney.
CHAPTER 14 – FOREIGN PROPERTY, MUTIPLE JURISIDCTIONS AND SUCCESSION
In Canada, when can the laws of a province or territory other than that of residence may apply. 14.2
- there is property in another jurisdiction
- there is a dependant or beneficiary in another jurisdiction, or
- the individual is domiciled outside the province or territory of residence
When may the laws of a foreign jurisdiction apply even when an individual is reside of Canada? 14.2
- the individual has his or her domicile in another country even though resident in Canada
- the individual is a citizen, sometimes called a “national” of another country, or
- property is located in another jurisdiction
What issues does conflict of laws deal with? 14.2

- which court has jurisdiction to determine an issue,
- which law applies to a particular issue, and
- whether a court will enforce the legal judgement of another jurisdiction
What are four considerations to determine conflict of laws? 14.2

- the “situs” of property, or its location for legal purposes, which is divided between movable and
immovable property under common-law principles with different choice of law rules for each
type
- citizenship
- domicile
- residence
What are three types of domicile? 14.3

Laws relating to personal matters of individuals, including laws of succession, are usually decided on the
basis of the laws of the place where the individual has his or her permanent home. There are three
types of domicile.
1. The domicile of origin is determined at birth by the place of birth and will continue to be the
domicile of an individual throughout his or her life unless one of the other domicile rules
subsequently applies.
2. Domicile of choice is the place where an individual, after attaining the age of majority, takes up
residence with the intention of remaining indefinitely.
3. Domicile of dependency is conferred by operation of law upon those persons who, by reason of
legal or mental disability, are unable to acquire a domicile of choice, including minors and
certain mentally incapable persons.
Domicile may be the place where the person has his or her residence or the place where the person has
the centre of his or her affairs, the seat of his or her wealth, and the affection of his or her family.
What is the difference between movable and immovable property? 14.4

Movable property includes any property that is portable. The legal definition of movable property
includes all personal property, such as goods, chattels, and personalty. It also includes intangible
property, such as negotiable instruments and securities.
Immovable property includes real property, anything permanently affixed to real property, or any
interest in real property. Immovable property includes land, buildings, mining rights, leaseholds, and
rights to receive rent or income from real property. The situs of property is the location of property for
legal purposes, such as taxation.
Application of Law Governing Succession The choice of law that applies for the purposes of
succession depends on whether the property is
Canadian courts generally takes the position that movable or immovable
they have no jurisdiction with respect to land or
real property outside Canada For movable the law of domicile governs
For immovable property the law of jurisdiction

where the property is located (“lex situs” governs)
Law Governing Estate Administration The law of administration of the estate generally is
the law of the country where the personal
Within Canada the grant is usually issued from the representative received the original grant of
jurisdiction in which the Canadian resident had his probate
residence or where his or her property is located.
Once the grant of probate has been issued in the
principle jurisdiction, the grant may be used in
another jurisdiction as an ancillary grant or
resealed grant, to deal with property in that other
jurisdiction.
Law Governing Succession of Property With respect to matters of succession relating to
distribution of property to beneficiaries, including
intestate distribution, capacity to make a will, and
dependant relief is governed by
Movable: the law of the last domicile of the

deceased for movable property and
Immovable: by the law of situs of immovable

property.
Intestate Distribution within Canadian Provinces For the purpose of distribution within Canadian
and Territories jurisdictions
The courts have resisted this result, tending to Movable: the law of domicile applies to movables
avoid “double dipping” by restricting the
aggregate preferential share to the highest Immovable: the last of the situs will apply
amount available among the relevant jurisdictions.
Testamentary Succession within Canadian The law of testamentary succession includes the
Jurisdiction formal validity of a will, capacity, essential validity
of the Will, and interpretation of the Will Essential
validity of a will includes questions such as the
validity of gifts to witnesses or relatives of
witnesses, forced heirship, compliance with the
RAP, and accumulations, the validity of charitable
gift, testamentary capacity, and whether a will was
a free and voluntary and not subject to fraud,
mistake or undue influence.
Movable: the law of last domicile of the deceased
Immovable: law of situs
Dependant Relief in Canada The ability to make a claim for dependant relief
within Canada, in terms of the court’s jurisdiction,
is not necessarily confined to the laws of the
jurisdiction in which the deceased was domiciled.
Generally the applicable legislation contains no
conflict of laws rules. An award for relief affects
testamentary freedom. In Corlet, a widow who
had resided with her husband in Alberta at the
time of his death was not entitled to make a claim
for dependant relief in Alberta because her
husband was domiciled outside the province at the
time of death and all property consisted of
movables, which as a result were not considered
to be property located in Alberta or subject to
such claims.
What is forced heriship? 14.6

- Refers to laws that limits testamentary freedom by providing that on death property must pass
to certain family members of the deceased.
- Forced heirship provdies a forumal for distribution among family members that overides or
takes precedence over the Will
- Generally transfers on death that violate the forced heirship rules are void or voidable or the
property may be clawed-back into the estate
Question 3 in example
- Beatrix died domiciled in Ontario
- Testate/intestate
o Horses in Utah
o Home in Italy
o Paintings in Italy
o Lives in Toronto
o Problem interpreting her will – domicile in Ontario so governed by Ontario
o Questionswhether she was capable when it was executed – domicile in Ontario

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CHAPTER 1 – POWERS OF ATTORNEY FOR PROPERTY

- Deals with Powers of attorney for property

CHAPTER 2 - PERSONAL CARE AND HEALTH CARE DECISIONS

CHAPTER 3 – THE LAW OF WILLS

CHAPTER 4 – WILL PREPARATION

CHAPTER 6 – CLAIMS AGAINST ESTATES BY FAMILY MEMBERS

CHAPTER 7 – QUEBEC ISSUES FOR CANADIANS OUTSIDE QUEBEC

CHAPTER 8 – OBTAINING THE GRANT OF PROBATE

CHAPTER 9 – PROBATE FEE PLANNING

CHAPTER 12 – ADMINISTRATION OF PROPERTY HELD FOR OTHERS UNDER STATUTORY AUTHORITY

CHAPTER 13 – ESTATE AND TRUST ACCOUNTS

CHAPTER 14 – FOREIGN PROPERTY, MUTIPLE JURISIDCTIONS AND SUCCESSION

1.1.1 Definition of power of attorney

1.1.2.2 Enduring Power of Attorney

1.1.2.6 Guardian for Property

1.1.2.8 Specific Power of Attorney

1.1.2.9 Springing Power of Attorney

1.1.6 Springing Powers of Attorney

SDA 7(7) - Postponed effectiveness

1.2.2 Where this is no Power of Attorney

1.2.3 Disadvantage of Court Appointed Guardian

1.2.4.1 Joint Assets

1.2.4.2 Family Home

1.2.4.5 Bank Powers of Attorney

1.2.4.6 Attorney’s power is not Exclusive

1.3 Requirements for a Valid Power of Attorney

Capacity to give continuing power of attorney

1.4 CHOICE OF ATTORNEY

1.4.1.1 Who can be appointed to be an Attorney

1.4.1.4 Alternate Attorneys

1.4.2 Who is appropriate?

1.4.2.9 Consider appointing Several Attorneys Acting Together

1.5 ATTORNEY’S POWERS

1.5.1 Limitation of Attorney’s Power

1.5.2 Personal Acts of Appointments

1.6.2 Duties and Powers

1.8.2 Multiple Powers of Attorney

1.8.7 Judicial Power for Removal of Attorneys

1.9 Drafting and Taking Instructions for Powers of Attorney

1.10 ESTATE PLANNING UNDER A POWER OF ATTORNEY

1.10.1 Advance on Inheritance Not Permitted

- The father had the capacity to marry

- Attorneys are not authorised to make gifts to themselves, and

1.10.5 Where Estate Planning is Permitted Under a Power of Attorney

Powers of attorney for property:

There are two components to personal directives:

1. A “directive” component records the individual’s instructions or preferences about personal

2. An “appointment” component, whereby the individual appoints a specific person to make

2.2.1 Personal Directive

2.2.4 Living Will

2.2.6 Personal Care and Health Care Decisions

2.2.7 Ulysses Agreements

2.7 Capacity to make a personal directive

2.9 Result Where No Directive

List of persons who may give or refuse consent

3.1.1.1 Conventional Will

3.1.1.4 Proponent of a Will

3.1.1.9 Will in Solemn Form

3.2 The Nature of A Will

3.3.2 Formalities of a Will

Witness etc., beneficiary from will

3.3.3 Substantial Compliance

3.3.6 Alleging Undue Influence and the Onus of Proof

3.3.7 Suspicious Circumstances