Simply put, a will is a legal document that contains the directives for your property and/or any minor children that were in your care before your death. It is read by an officer of the court and specifically and most importantly names:
Your executor (someone who will manage and carry out the desired distribution of your property and any other instructions that you may have left).
Your beneficiaries (any person you want to bequeath your property to) as well as guardians for your children.
It is important to speak with a professional and experienced family lawyer to help determine your settlement choices, as well as help you plan for the future. They can help you decide what is best for you and your family.
If you die without a valid and legal will in place (referred to as intestate), the Ontario's Succession Law Reform Act will then dictate how your property will be distributed. If there is no claim from a financial dependent, then the first two hundred thousand dollars will be appropriated to the spouse of the deceased (if claimed).
Any amount over two hundred thousand dollars is governed by specific rules and shared among descendants and the spouse. If a spouse is deceased, their children stand to inherit their property and if their children are deceased as well, then their grandchildren are next in line, and so on and so forth. If the deceased has none of the above dependants, their estate can be awarded to their parents equally.
At Zeidman Law, our family lawyers always stress the importance of having a legal will in place. Many people put it off for later in life but as death is quite often unpredictable, having your affairs in order is the only way that you can be sure that your wishes will be carried out before and after death.
There are other options available to individuals who would like their assets to be distributed in a certain way. A trust is a financially prudent option to estate planning. It allows a third party (also known as a trustee) to hold assets for beneficiaries.
There are two main types of family trusts - living trusts and testamentary trusts. A living trust, also known as a revocable living trust, allows you to make any changes to it while you are alive. It dictates how your assets should be managed after your death or if you are incapacitated and cannot make these decisions for yourself.
testamentary trust, also known as a will trust, comes into effect after the death of the divisor or testator. It is part of a will and is subject to different types of taxation. The 2014 budget announced that as of January 1st 2016 taxes on incomes in this type of trust would increase (the highest tax rate would be applied based on province).
Some of the advantages of having a trust are:
It allows for some measure of privacy by allowing certain assets to be handled outside of probate, which would also decrease the associated costs and taxes. If you would like your assets to be kept private, a trust is a sure way to keep certain matters off of public record.
With a trust, you control how and when your assets are distributed. A trust is in effect from the date it is legalized, meaning that your death is not a prerequisite.
A trust can also protect your assets from your beneficiary’s creditors and control how they spend the money you have left them. You can also dictate how your property should be used and/or shared, thereby maintaining it as you see fit even after death.
It is important to know what type of estate planning is best suited for you. This is a decision that impacts both you and your family and it is wise to be well-informed. Family battles regrettably occur quite often after a person dies, which is why it is prudent to be well prepared and create a legally sound and clear record of your wishes for the distribution of your estate.
At Zeidman law, our family lawyers are well experienced in helping our clients in all legal matters pertaining to family law. Our fully accommodating staff ensures that you are well informed and satisfied with the decisions that you have reached. As you judiciously plan for your future, we are here to help make this process easier for you. Please call or visit us today.