Estate Planning amidst COVID-19
By Jasdeep Dhillon http://legal-solutions.ca/about/jasdeep-dhillon/
We have all heard the famous 1789 Benjamin Franklin quote “In this world nothing can be said to be certain, except death and taxes”. As morbid as that may sound we cannot deny the truth behind this quote, death is inevitable and taxes will be paid one way or another. It is important to be responsible and take the necessary planning steps to draft a will to ensure that our families and friends are provided for and taken care of, or at the very least relieved of the stress as much as possible that comes with coping with a passing of a loved one and dealing with a distribution of an estate.
So when should I get a Will drafted by a lawyer? Why do I need a Will? Who can I talk to about estate planning? Typically, we tend to think about these types of questions in our elderly years and when we are entering into retirement.
However, in light of recent global health issues such as COVID-19 that is plaguing our society, communities and our loved ones across the globe it is never too late to get your Will properly drafted by a lawyer. At the very least, it is important to get advice on Wills and Powers of Attorney and organize how to properly estate plan so that you leave your loved ones in the most secure and comfortable position as possible.
Think of a Will as people think about insurance or investing. Questions like when should I get life insurance? Or when should I invest? The answer is almost always…you should have done it yesterday. In any event consider the common questions lawyers are asked to advise on from clients who are thinking about drafting their will outlined below.
What are the steps involved in getting a will drafted?
The first few steps involved in drafting a Will for a client or, commonly referred to as a testator is a meeting with a lawyer, and for the lawyer to gather information from the client and to make sure that the testator has capacity to give instructions. The information gathered by the lawyer includes such things as, property, finances, bequests, devises, personal items, estate trustees and class of beneficiaries.
Do I have the freedom to leave my estate to whomever I wish and I name in the Will?
For the most part yes, you have the freedom to choose who will benefit from your estate. However, it is important to consider a couple of common statutory constraints on testamentary freedom. First, Part V of the Succession Law Reform Act (SLRA) is intended to ensure that certain person who were financially dependent upon the deceased during his or her lifetime are not put into dire or deprived situations by virtue of inadequate provision having been made by the deceased for those persons.
The second major constraint on testamentary freedom is matrimonial property claims under the Family Law Act. Absent a marriage contract or separation agreement waiving it, a surviving spouse has the right to choose between accepting his or her entitlement under the Will and claiming an equalization payment representing a sharing of the “marriage spoils”.
Can my spouse and I draft wills together?
Yes, absolutely married or common law spouses may request to have wills made for each of them, there is usually an expectation that they have reached a common understanding as to how their respective estates will be disposed of, irrespective of which of them survives the other.
However, after both parties have made such wills, once one of the parties dies, the survivor may decide to dispose of his or her property in a different manner and make a new Will to reflect that decision.
The “mutual will doctrine” provides that where two parties have made a contract that, having made wills together, neither of them will change his or her will after the death of the other.
What is the Estate Administration tax and how much will my estate have to pay?
In order to obtain a certificate of appointment of estate trustee, an estate trustee must pay an estate administration tax. This tax is calculated on the value of the estate of a deceased person. As of January 1, 2020, the estate administration tax has been eliminated for taxable estates with assets of $50,000.00 or less. For larger estates, over $50,000.00 the estate tax will be $15.00 for every $1,000.00 of the value of the estate.
Assets that are included in the value of the estate and subject to estate tax are for example, real estate held by the deceased in Ontario, bank accounts, investments and vehicles. Assets that should not be included in the calculation are for example, property held in Ontario in joint tenancy, real estate outside of Ontario, CPP death benefit and investments with designated beneficiaries.
Part of the lawyer’s planning discussion with the client should include a consideration of what steps, if any, should be taken to reduce exposure to estate administration tax.
Call Kesarwani Law Office today and let us advise on and draft your wills and powers of attorney documents. We service across the GTA, including Mississauga, Brampton, Vaughan, and Oakville.
Contact Jasdeep Dhillon at 647-349-8300 or at firstname.lastname@example.org
Please do not construe this as legal advice and contact a lawyer before making arrangements for drafting a will.