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Thrive Law:
Wills and
Estates
Planning
Terminology
Guardian: a person
Powers of attorney: a
Beneficiary: a person or appointed by the court to
legal document
entity designated to manage the personal
authorizing someone to
receive assets or benefits and/or financial affairs of
make financial or
from a will, trust, or another individual,
personal care decisions
insurance policy. usually a minor or
on your behalf.
someone incapacitated.
Estate Estate administration:
Intestacy: the state of
trustee/executor: a the process of managing
passing away without a
person named in a will to and distributing a
legal will, resulting in the
manage and distribute deceased person’s
distribution of the estate
the deceased’s estate estate, including paying
according to statutory
according to the terms of debts and transferring
laws.
the will. assets to beneficiaries.
Purpose of a Will
A will is a legal document that explains how your
property and assets will be distributed after you
pass away.
Lawyers’ role: the lawyer will help you draft
a will that meets all the legal requirements.
They ensure your will accurately reflects
your wishes and helps manage any tax
issues related to your estate.
The Key Aspects of Drafting a
Will
• You must understand what assets you own
Testamento and who should receive them.
• This includes knowing your property and
ry capacity: recognizing who your benenficiaries are.
Avoiding • It’s important to make decisions on your
own without pressure from others.
Undue • The lawyer will likely meet with you alone to
Influence: ensure your decisions are truly your own.
Appointing an
Estate Trustee
• Role of the estate trustee:
• An estate trustee, also called an executor,
is responsible for carrying out your will’s
instructions.
• They handle funeral arrangements, ensure
your will is legally validated, pay off any
debts and taxes, and distribute your assets.
• Choosing a trustee:
• Select someone you trust to manage your
estate responsibly.
• The trustee should be capable of dealing
with financial amtters and following legal
processes.
Beneficiaries and Property
Clearly list who will receive your assets,
including their names and relationships
Identifying Beneficiaries: to you.
Define any groups of people who will
inherit together (like your grandchildren).
Describe each asset clearly to avoid
confusion.
Disposing of Property: Discuss with your solicitor any legal
restrictions on how your property can be
given away.
Plan for what happens if a beneficiary
Handling Unexpected passes away before you do.
Situations: Conslider how to handle property that
you sell or change before you pass away.
Will Execution and Estate Admin
Tax
Executing a Will: Estate Administration Tax:
• To be valid, a will must be signed • This tax is based on the value of
by you (the testator) and two your estate:
witnesses. • 0.5% for the first $50,000.
• All three individuals must sign • 1.5% for anything above
together and witness each other $50,000.
sign the will. • To reduce this tax, you may:
• Witnesses should not be • Give away property while you
beneficiaries or married to are alive.
beneficiaries to avoid conflicts of • Transfer property into joint
interest. ownership.
• Name beneficiaries directly on
life insurance or retirement
plans, so they receive these
assets outside your estate.
What is a Power of Attorney
• A legal document where you allow someone to
make decision for you if you are unable to. This
person does not have to be a lawyer.
• The person you choose acts on your behalf.
Understan Types of Powers of Attorney
ding • Property: handles your finances such as paying
Powers of bills, managing bank accounts, and selling
property.
Attorney • Personal care: makes decisions about your
health, such as medical treatments and living
Why Have One?
arrangements.
• Ensures your wishes are followed if you're
unable to make decisions,
• Helps avoid court involvement in your personal
affairs.
Powers of Attorney for
Property
Requirements for Attorney’s
Compensation:
Creating: Duties:
• You need to • Must always act • The attorney
understand in your best can receive a
what property interest. fee as set by
you own and it’s • Keep detailed law for their
value. records of all services.
• Be aware of any transactions
responsibilities and decisions.
you have to • Cannot use your
family assets for their
members. benefit.
• Know that you
can change or
cancel the
power of
attorney while
you are still
capable.
Power of Attorney for Personal Care
Choosing an When it Takes Dispute
ThisAttorney:
person can make Effect:
The power of attorney for Resolution:
If multiple attorneys are
decisions about healthcare, personal care comes into appointed and disagree, the
nutrition, and safety. effect when you are judged Public Guardian and Trustee
They should be someone unable to make decisions may step in to decide.
who understands your about your personal care.
values and will respect your This can be due to illness,
wishes. an accident, or other
reasons affecting your
mental capacity.
Creating and Ending Powers of
Attorney
Creating the Ensuring Capacity: Ending a Power of Protection for Third
Document: Attorney: Parties:
Must be signed by you You must be mentally It ends if you cancel it Third partis (such as
and two witnesses who capable when signing. while you are still banks) who act in good
are not your attorney Capacity can be capable. faith on your attorney’s
or anyone benefitting verified by a doctor or It also ends if you or instructions are
from your estate. another professional if your attorney dies or if protected, even if the
Witnesses must watch needed. your attorney becomes power has been
each other sign to incapable. revoked.
ensure transparency. If your attorney
resigns, they must
inform you and any co-
attorneys in writing.
Tax Planning on Death
Understanding the Basics:
• When someone passes away, their estate is treated as a
separate taxpayer.
• Terminal return: the final tax return includes all income up to
the date of death.
• Estate taxation: the estate is taxed as a trust starting the day
after death, using a T3 Trust Return.
Deemed Realization:
• Death triggers a “deemed realization” of assets for tax
purposes.
• Includes non-depreciable and depreciable property, and RRSPs.
Responsibilities and Special
Rules for Estate Trustees
Estate Trustee’s Concessionary Income Splitting and
Duties: Rules: Attribution Rules:
• Ensure all taxes • Spousal rollover: • Transferring
are paid. transfers to a income to lower-
• May be personally spouse or income family
liable if taxes are qualifying spousal members can be
unpaid. trust are deferred beneficial but is
• Prioritize paying for tax purposes. subject to specific
creditors over • Principal residence tax rules to
distributing gifts to exemption: capital prevent abuse.
beneficiaries. gains on a family
home are
sheltered from tax.
Certificates of Appointment and
Asset Administration
Certificates of Appointment: Managing Assets:
• With a will: confirms a trustee to • Inventory and secure estate
execute the will. assets promptly.
• Without a will (intestacy): • Dispose of perishable items and
appoints a trustee to handle the insure valuable property.
estate based on legal priority • Trustees have one year to settle
(e.g. spouse, children). the estate’s affairs and
• During litigation: assigns a distribute assets.
trustee to manage estate assets
until disputes are resolved.
Handling Debts and Estate
Trustee Accounting
Determining and Paying Accounting and
Debts: Compensation:
Prioritize paying off debts before Maintain detailed records of all estate
distributing assets to beneficiaries. transactions.
Keep funds in reserve for taxes and Present accounts to beneficiaries or
other potential liabilities. court for approval.
Advertise for creditors to identify all Trustees may be compensated (usually
claims against the estate. 2.5% of estate receipts and
disbursements).
Lawyer’s fees for administering the
estate are paid from the estate.
Tips and
Tricks When
Buying and
Handling
Real Estate
Inter- Inter-Vivos Trusts: created during the settlor’s
lifetime, these can be used to manage and
protect real estate assets. For example,
Vivos transferring real estate into a trust can avoid
probate fees and simplify estate planning.
Trusts for
Lifetime
Settling Real Estate in Trust: for Ontario real
estate, the trust must be in writing. Settling
property into a trust can also help with
succession planning, ensuring that property
Planning remains within a family without triggering
significant capital gains tax immediately.
Avoiding Ontario Land Transfer Tax
Family Trusts and Principal
Use of Trusts to Hold Property: Residence: structuring
by using a trust to hold real ownership of a principal
estate, one might avoid residence within a family trust
triggering Ontario’s land can be beneficial. This might
transfer tax when transferring help in maintaining the principal
beneficial ownership, as long as residence exemption from
the legal title does not change capital gains tax upon sale
hands and the transaction is provided the trust is correctly
structured correctly. structured and the residence is
designated properly.
Early Gifting of Real Estate
Reduce Taxable Estate: Consider Capital Gains:
transferring real estate to selling real estate to fund
children or other gifts can trigger capital
beenficiaries while still alive gains taxes in the year of
reduces the value of the sale, but this might be less
estate and subsequently the than the potential taxes due
income tax liability at death. upon death.
Thank
you!
Any questions?
