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Frequently Asked Questions

Wills

When is the reading of the will?

The reading of the will is a great setting for conflicting characters and creating tension in movies, but it almost never actually happens in real life anymore.

Do I have the right to see the will?

Not necessarily. The will is a private document so only those who need to see the will get to see it. For example, if you're left a specific asset, you don't need to see the will. If you're not named at all, you certainly don't need to see it. The only people who need to see it are the executor/executrix, their professional advisors, and any residual beneficiaries. A residual beneficiary is someone who will receive a portion of the remainder of the estate once all bills, debts, taxes and specific bequests have been paid.

How do I know the will is valid?

Almost all wills are probated, meaning they are verified by the probate court.

What if the testator / testatrix (person who made the will) didn’t know what they were signing or were unduly influenced to make the will or make changes to it?

You can apply to the probate court and, if proved, the will would be declared invalid.

Who decides the funeral arrangements if there’s no direction in the will and nothing has already been arranged?

Generally, the family will discuss what they would like and come to agreement, but it's the executor's responsibility to make the final decisions.

What’s the ‘residue of the estate’?

This is the amount left over in the estate after the payment of bills, debts, taxes and any specified bequests, regardless whether they are property, personal possessions or specified amounts of money.

What happens if the will is invalid?

The estate can be administrated by someone appointed by the court. Debts, bills and taxes are paid as in normal situations and the remaining assets are distributed according the provincial or territorial succession act. In most jurisdictions, a preferential share is allocated to the spouse with the balance divided among the spouse and children. The definition of a spouse also varies by jurisdiction. If there is no spouse or children, the estate would follow a sequence: first to parents, if no parents then to siblings, if no siblings then to nieces and nephews, if no nieces and nephews, then distributed to next of kin (based on consanguinity).

Trusts

What is a trust?

A trust is a third-party entity managing assets on behalf of one or more people. If it's created while the person setting up the trust (the 'settlor') is alive, it's called an inter vivos trust and if it's created through direction in a will, it's called a testamentary trust. The following answers assume the trust in question is a testamentary trust.

The executor told me my money is being put into a trust rather than being paid to me. What can I do to stop this?

You can't really stop it if the will is declared valid, since it sets out how the funds are to be paid to you and the only discretion the executor has is what has been granted to him or her in the will. It's a good idea to get a copy of the will in order to understand the terms. Trusts have their own 'language' though, so you may want to speak with a professional. To speak with a Trust Officer CEA, click here.

I’m told the will says my inheritance is to be paid ‘in trust’ to me. Does that mean I just get paid little-by-little over years?

No. The will may have been written years ago when you were still a minor. If you're no longer a minor, you'll receive your share in full when the distributions are made.

Why would my husband have created a trust to control MY money?

There are many reasons, but the first is that it may not be your money at all. You may be the income beneficiary and your children or step-children might be the capital beneficiaries. This means you're entitled to income from the trust, but not the capital. The best way to check is to review the trust terms in the will. Alternatively, he may have left the money in trust to protect you; to ensure you don't outlive the money, to make sure you don't have to worry about managing the funds in your later years, or from yourself, if you have excessive spending habits, any addictions, or simply an overly generous heart. Another possibility is to protect you from future relationships. Even if you marry, your spouse can't access the trust funds, nor will they be awarded any if you subsequently divorce.

Who manages the money in the trust?

This depends on the terms of the trust set out in the will. A trustee may have been named or a corporate trustee appointed. If not, the executor continues to be the trustee. In any of the above, the trustee may outsource the investment management to a third-party professional.

Real Estate

My mother left her house to me in her will but now the executor plans to sell all the furniture and contents. Can he do this?

Yes. You were left the real estate property, but unless the furniture and contents were mentioned specifically you aren't entitled to those assets. You may want to work with the executor to negotiate a package price, using the equity in the inherited property to pay for them.

My father and his sister jointly owned a cottage but the executor says it isn’t in the will and we won’t inherit his half. How is this possible?

If the property was held in joint tenancy ownership, also called 'joint with right of survivorship', then his half effectively disappeared on death and his sister became the sole owner. Had she predeceased him, he would have become the sole owner. It may be that they inherited the property and this arrangement was made to avoid dividing the property among multiple families.

My brother and I jointly owned the family cottage until he passed away recently. How do I claim his half?

You don't have to claim it because it's already yours. It transferred automatically when he died. You do have to notify the land registry office though, to ensure the property is in your name only. This part doesn't happen automatically and you won't be able to sell it without his signature until his name is removed.

The executrix has listed my mother’s house for sale but the asking price is too low. Doesn’t she have a responsibility to get the best possible price?

The executrix is responsible to retain the best possible net value of the estate, but price and value aren't the same thing. Real estate transactions in estate situations are considerably different than regular transactions. She probably knows this and has listed the home at the right price to ensure a prompt sale, in order to avoid incurring long term sunk costs that could erode the overall value of the estate. To speak to a Realtor CEA, click here

My father had several properties and the executor is ordering professional appraisals for every one of them. Isn’t this a bit excessive?

Not at all, it's actually quite prudent. Not only does he need the right valuations in order to be fair to all the heirs, he needs it as at the date of death, and being that specific in a timely manner can be very tricky. Professional valuations are a modest expense, payable by the estate, in order to ensure the terms of the will are accurately met.

Our mother lived on the other side of the country in the family home for decades. My sister, the executrix, and who lives near me, turned me down when I offered to go out to sell the house. Why would she hire people if I volunteered?

Probably because she cares about you. Selling a home that has accumulated personal property for many years can be an enormous amount of work, not to mention the risk of accidently disposing of valuable items or selling items far below their true worth. Realtors and Transition Specialist CEAs know exactly how to handle these situations. To speak with one, click here.

Inheritance

If I’m the beneficiary of registered assets, like an RRSP or RRIF, do I not have to pay taxes on those funds, since they bypass the estate?

This is a common misconception, but no, the estate is liable for the tax. Note that if you're the spouse of the decedent, the funds can be rolled to your own registered account without triggering taxes. Talk to a Certified Executor Advisor to learn more.

Is there a way to reduce those taxes to preserve the estate?

There are plenty of ways if the testator is still living. They can do a liquidity analysis and compare a variety of options by clicking here.

When should I expect to receive my inheritance?

This depends on the complexity of the estate and the jurisdiction. Complex estates may take years to settle, though executors may do one or more partial ('interim') distributions along the way. They have to be very careful not to distribute too much, too early, as they could end up having to pay taxes or debts personally. They have a lot of risk and as a result, total discretion of when to distribute funds. In Ontario, executors (called 'estate trustees' in that province) are now under audit authority for four years from their date of appointment, which may be a factor in how and when they make distributions.

Will my inheritance be taxable?

Generally speaking, no, as we have no official estate or inheritance taxes in Canada. We do have deemed disposition of registered assets and capital property at death however, which triggers taxable income and capital gains tax, but these are payable by the estate of the decedent. So, while the estate may be reduced by these taxes, the funds distributed by the executor are after-tax dollars. Examples of capital property include real estate, shares in private or public companies, shares held in mutual, segregated or exchange traded funds.

What’s the best thing to do with my inheritance, pay down my mortgage or invest in RRSPs or TFSAs?

It makes sense to want to be smart about your money. Most people come into a tax-free lump sum only once or twice in their lives, so it's important to be careful with it. To compare your options about this question and more, click here.

I was supposed to inherit my father’s dining room furniture, but the executrix is telling me that may not happen. Can she do that?

Unless he put it in the will, yes. Anything your father said to you (or anyone else) doesn't supersede the will. If it did, anyone could step forward and claim they were promised anything. So, she may consider your wishes but it might not be possible, and if she does manage to ensure you receive the furniture, its value should be taken into account with the division of the remaining assets.

If I’m named in the will, can I not insist that the executor advance a portion of my inheritance?

No, disbursements are entirely up to the executor, but there are some options: In some cases, the executor may decide to advance a portion of the estate (called 'interim distributions') if they're confident they'll still have enough to cover all bills, debts and taxes, but if they get it wrong, they may have to repay these out-of-pocket, so many may be hesitant to make advance transfers. If you can demonstrate financial hardship, particularly if you were financially dependent on the decedent, the executor will consider your situation and may make advance funds on a case-by-case basis. For those who don't fall into the above, we have a strategic partner willing to provide Inheritance Loans as long as the executor is willing to cooperate with the underwriting of the estate. For more information about inheritance loans, click here.

Executors

What is an executor?

An executor is the person(s) or company appointed by the testator (person who makes a will) to administer (or 'execute') their will and ensure their final wishes are fulfilled. In Ontario, this position is called the estate trustee and in Québec, it is called the liquidator.

What if the executor isn’t telling me what’s going on?

Communicating regularly with heirs is a key responsibility of the executor, but if you're not named in the will they have no need to communicate. If you're named in the will and there's no communication, they should be made aware of their responsibilities. You may want to have a lawyer handle this for you. If the executor continues to fail to communicate, you can apply to the probate court for assistance. The probate court has numerous actions it can take, depending on the evidence, which may include requiring an account of what they have done, removing them as executor, and/or holding them personally responsible for legal costs and estate losses arising from their neglect.

What if the executor can’t or won’t fulfill their duties and there’s no alternate executor named?

Each province and territory has a priority list of who may volunteer for the role by applying to the probate court, using the will with explanation.

Can the executor charge expenses to the estate?

Yes, and most will, but they must be pertinent to the administration of the estate and they must be reasonable under the circumstances. Hiring professionals to do the professional services such as legal and accounting for example is both pertinent and reasonable. The fees may well be less than the money they'll save the estate. Unrelated expenses which benefit the executor without furthering the process of the administration or unreasonable expenses such as wining and dining are completely unacceptable. An application to the probate court can resolve this and may well result in the executor being required to repay the estate for previous misspending.

Is the executor responsible for everything the testator owned?

No. They're only responsible for assets that form the estate, as these are the assets directed by the will, which is the document that gives them their authority. Other assets may transfer through joint ownership or named beneficiary and they're not responsible for these assets.

How do I know who the executor is?

The executor is named in the will and recognized by the probate court when the will is probated.

What if the executor can’t or won’t fulfill their duties?

Usually the will names an alternate or successor executor who can step into the role, providing the first executor hasn't already become involved in administering the estate. If they have, the probate court will require a passing of accounts to ensure the first executor is accountable for their actions in order to protect the alternate.
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January 31st, 2023