Table of Contents

Last Will and Testament and Power of Attorney

Coming to grips with one's mortality is an unpleasant and difficult task at the best of times. However, it can often prove to be a tragic mistake should the unexpected deny you the opportunity to care for your family in the manner in which you would have preferred. The imperative to have or revise a Will becomes crucial in the event of separation, marriage or divorce.
Purpose of a Will
With a Will, your estate shall be distributed according to your wishes, to the person or persons you feel most deserving and no one will have to guess what your intentions were. A proper Will outlining your bequests makes the job of settling your estate infinitely easier and less costly than to leave its distribution to the powers of the legislature of Ontario. It may also serve to limit the bite taken out of your estate by taxes payable upon death.

Many opportunities are available to grant all or part of an estate to specific beneficiaries, to limit the bequest to the use of an asset over the course of a beneficiary's lifetime or to set up trust for beneficiaries or dependants on such terms as the testator deems just. In this regard, the distribution of your estate is limited only to your imagination.
Failure to have a Will
If you do not have a Will or your current Will has become invalid due to marriage, your estate will be divided according to the Succession Law Reform Act of Ontario. A Court appointed administrator, usually a relative of the deceased, will distribute the estate in proportions determined by the legislature of Ontario according to the degree of blood and marital relationship the survivors maintained with the deceased.
The highlights are as follows:
  • If you have no children, the total value of your estate shall pass to your spouse, if married. This will occur even if you are separated from your spouse in the event that you do not have a Separation Agreement or Judgment of Divorce;
  • If you have one child, the first $200,000.00 and one half of the remainder will be passed to your spouse with the remainder distributed to your child;
  • If you have more than one child, the first $200,000.00 and one third of the remaining two thirds in excess of $200,000.00 will be passed to your spouse with a the remainder divided equally among your children;
  • In the event that there are no relatives surviving as determined by the Act, the balance of the estate is acquired by the Crown. All opportunity to plan the distribution of the estate will be lost;
Without a Will, any amounts payable to children under the age of majority shall be paid into Court until the age of eighteen. To acquire funds prior to the age of eighteen, a Court appointed guardian must establish to the Court that access to these funds is absolutely necessary in the best interests of the child. Needless to say, this process is both very expensive and time consuming.
Marriage or Re-marriage
In the event of marriage or re-marriage, any Will that was previously made is null and void.

It is important to note that the Family Law Act of Ontario provides that a spouse may elect to take his or her share of the estate either pursuant to the Will or according to the distribution of Net Family Property under the Act. A Will can be used to lessen the impact of that legislation.

Furthermore, the Family Law Act provides that inheritances acquired by a beneficiary by Will or otherwise during the course of marriage are exempt from division between the spouses. However, in the absence of a direction by Will to the contrary, any income accruing as a result of the bequest is divisible between the spouses. In other words, if you were to die without a Will and your daughter inherited your estate, in the event of a separation between her and her husband, the husband would be entitled to 50% of any income generated from the inheritance from the date of marriage to the date of separation. In the case where the inheritance is acquired early in the marriage, the income generated over the course of the marriage can often be greater than the original bequest.
Appointment of Guardians
Parents may use the vehicle of a Will to appoint guardians for their infant children in the event that both parents die. The designation of a Guardian is effective for ninety days from the time of death. In the event that the residence of the children is disputed by other relatives before the end of that period, an application must be brought before the Court to determine custody of the surviving children. All issues of custody in the Province of Ontario are determined pursuant to the best interests of the children. The designation of a Guardian will be of great influence to a Court in making the determination of custody by providing direction as to the persons the deceased parent considered as capable of maintaining the best interests of the children.
Powers of Attorney
The execution of a valid Power of Attorney is vital to the management of your affairs in the event that you become incapacitated, either temporarily or due to some permanent disability.

Powers of Attorney are used to grant to the recipient the authority to manage the affairs of the grantor.

Pursuant to the Powers of Attorney Act and the Substitute Decisions Act of Ontario, a Power of Attorney can be used to manage the property of the grantor and also to provide for the personal care of the grantor in the event of an incapacity.

With regards to property, you can designate someone to act on your behalf relating to all or specific property which you may have at the time of your incapacity. With a General Power of Attorney relating to property, you can designate a person to do anything that you could do with your own property or restrict the use of the attorney to the management of specific properties.

A Power of Attorney for Personal Care is granted to someone who would make decisions with regards to your health and well being in the event of a mental incapacity. These would be decisions relating to medical health care, life support and treatment. In a Power of Attorney for Personal Care, you can specifically refuse certain types of treatment should you so desire.

A Power of Attorney will allow your affairs to be conducted by someone whom you trust without adding to the burden of a loved one the necessity of bringing an action before the Courts in order to acquire control of your assets in the event that you yourself cannot control them.
Life Insurance
As a last word, cash will often be required to pay for funeral expenses, debts, taxes and administration charges. It is not always possible however to convert assets quickly into cash for the value you believe they should have. For this reason, life insurance can be of great assistance as it provides money for immediate expenses and can be used to lessen the impact of income taxes payable upon death. Therefore, it may also be prudent to contact your life insurance agent in order to canvass the many options available in this area.
Cost of Wills and Powers of Attorney
The cost of a Will is $350.00 and a Power of Attorney is $350.00. For these purposes, we consider the Power of Attorney for Personal Care and the General Power of Attorney to be one document. In addition to the legal fees, there are disbursements relating to the work performed. Typically, these include photocopies, faxes, long distance telephone or postage charges and rarely exceed $25.00. Both fees and disbursements are subject to HST.

Please feel free to contact me should you have any questions or concerns in this area. I would be most happy to assist you in anyway that I can.