This Frequently Asked Questions (FAQs) page addresses some of the most common inquiries we receive concerning the areas in which we practice!
DISCLAIMER: The questions, answers, and articles on this page should NOT be interpreted as legal advice tailored to your specific situation, concerns, or challenges. The information on this website relates to laws specific to Ontario or Canadian federal law. Legal procedure and legislature may vary in different jurisdictions. Our FAQs are intended for informational purposes only: it does not claim to be a comprehensive and accurate guide on complex legal topics. We encourage you to contact Sweatman Law for professional advice tailored to your unique case: https://www.sweatmanlaw.com/contact/
ESTATE + INCAPACITY PLANNING (9 QUESTIONS)
Why make an estate and incapacity plan?
Estate plans aim to protect your assets and interests, enable you to nominate estate trustees of your choice, and help you outline your wishes and preferences for how you would like your estate to be dealt with after passing. A well-crafted estate plan can also help you minimize taxes and fees, and mitigate potential disputes in the future.
Incapacity planning focuses on creating a plan for the day you become legally incapable of making certain decisions. A central component to incapacity planning is creating a Power of Attorney and appointing substitute decision-makers.
Incapacity plans are important because they empower individuals to ensure their wishes and preferences are carried out during the period of incapacity. These arrangements can protect your peace of mind and save your loved ones from undue stress, cost, and time.
Can estate and incapacity plans be changed or updated?
Yes! In fact, we recommended our clients to review their plans every 5 years. You should consider updating your plans to reflect changes in your life such as marriage, divorce, births, deaths, significant asset changes, or changes in tax and estate law. With the help of a qualified lawyer, you can revoke your old plans properly and update them appropriately to mitigate potential disputes in the future.
What is a Power of Attorney for?
A Power of Attorney is a legal document that lets you appoint someone to make personal care and/or property and financial decisions on your behalf if you become incapable during your lifetime. There are two kinds of Powers of Attorney: Power of Attorney for Property & Power of Attorney for Personal Care.
Powers of Attorney are a vital component of estate and incapacity planning. Having Powers of Attorney set in place can ensure your continuity of care and financial management right from the moment you are incapacitated. Your designated attorneys can step in immediately and handle matters without excess delay.
If you do not have powers of attorney set in place upon incapacity, your loved ones may need to apply to Court for guardianship which can become very expensive and time-consuming. Ultimately, the Court will choose who will make decisions for you, and it may not be according to your preference! This powerful legal instrument can enable you to choose who can make important decisions for you.
Can a Power of Attorney be changed or revoked?
As long as the grantor has capacity, they may change or revoke a Power of Attorney. It is important to consult with a qualified lawyer who will help you revoke and update a Power of Attorney in a proper manner and determine how these changes may disrupt any ongoing transactions, healthcare decisions, or legal matters.
What is Charitable Gift planning?
Charitable Gift Planning is for individuals who would like to gift to charities and non-profit organizations in their lifetime and/or after passing. Once an individual identifies what charitable cause or not-for-profit organization they wish to support, they can include charitable gifting in their estate plans through various charitable vehicles such as setting up bequests in their Will or establishing Charitable Trusts, Donor-Advised Funds, or Gift Annuities.
Are there benefits to charitable planning?
There may be some benefits to charitable giving in your estate plan. One benefit is the potential for tax savings, as charitable donations may qualify for charitable tax credits, and potentially eliminate capital gains tax if the donated assets are those such as stocks or real estate. Charitable giving may also reduce the overall taxable value of your estate.
It is important to consult an estate planning lawyer and tax professional to determine how you can plan to receive these benefits and ensure compliance with tax regulations in your charitable planning.
What is a trust?
A trust is a legal arrangement that allows an individual (the settlor or grantor) to transform assets to a trustee for the ultimate benefit of a beneficiary. The trustee is responsible for managing the trust assets and administering the trust according to the terms of a supplementary trust document. The trustee also has a fiduciary duty to act in the best interests of the beneficiaries of the trust.
How are trusts taxed?
In Ontario, trusts are taxed differently depending on which type of trust is being taxed. It is important to consult a tax professional and an estate planning lawyer to ensure that you are complying with tax requirements when setting up and managing a trust.
Can a person with a disability create a Will or a Power of Attorney?
Yes! If an individual with a disability has the mental capacity legally required to create one, they can create a valid and enforceable Will and/or Power of Attorney.
WILLS (4 QUESTIONS)
What is a Will? Why do I need one?
A Will is a legal document that outlines how you would like your assets distributed after death.
A Will is important to have because it not only allows you to control how your assets are distributed upon death, but it also enables you to choose your beneficiaries, appoint an executor, designate guardians for your minor children, and minimize family disputes in the future.
If you pass away without a Will in place, the Court will distribute your estate formulaically regardless of your personal preferences. Dying intestate (without a Will) can also make the probate process expensive, subject to delays, and overall stressful for your loved ones. This situation can also cause family conflicts and compel the Court to choose an executor and guardian for your minor children, which may not align with your preferences.
Can I write my own Will?
It is generally not recommended to write your own Will without the assistance of an estate planning lawyer for a couple of reasons:
- Wills in Ontario must meet specific legal requirements to be considered valid by the Court. Failure to meet these requirements can make the Will invalid or vulnerable to dispute.
- Often, Wills contain complex provisions. Advising a qualified lawyer can make these provisions clear, enforceable, and compliant under Ontario’s laws. They can also create tailored solutions or provisions for your specific circumstances, family dynamics, financial goals, and tax considerations that align with your objectives.
- Estate planning lawyers are experts in drafting Wills with clarity and paying attention to details, so they can mitigate the risk of errors, ambiguity, contradiction, and disputes in the future. These legal professionals can also make sure that your intentions and preferences are accurately reflected in the Will, alleviating the risk of misunderstandings and misinterpretations.
- Legal professionals can assess testamentary capacity and protect against claims of undue influence or coercion.
- Legal professionals are also updated on the latest changes in estate law and tax regulations, and they can ensure your estate plan can withstand time.
What are mutual Wills for?
Usually made for couples, a mutual Will is a Will made by an individual in coordination with another Will made by their spouse or partner, both of which contain reciprocal provisions for each other in their individual Wills.
In other words, mutual Wills for each partner in a couple mirror one another so that their joint intentions and provisions are consistent across both Wills.
Here are some key aspects of mutual Wills:
- Reciprocal Provisions: In mutual Wills, the parties enter into a mutual agreement to make certain provisions in their mirroring Wills that bind each other and that cannot be changed after one party in the couple dies.
- Joint Intentions: Mutual Wills are made to reflect the joint intentions of a couple across two Wills. Each party is to agree on the terms of their respective Wills and make an agreement to not revoke or alter the terms of their respective Wills without the consent of the other party.
- Binding Nature: if one party to a mutual Will dies, the surviving party is bound by the terms of the mutual Will and cannot make changes that go against the agreed-upon provisions.
Can a person with a disability create a Will or a Power of Attorney (POA)?
Yes! If an individual with a disability has the mental capacity legally required to create one, they can create a valid and enforceable Will and/or Power of Attorney.
CAPACITY ASSESSMENTS (5 QUESTIONS)
What is capacity and incapacity?
Capacity (or decision-making capacity) refers to the legal ability of an individual to make certain decisions about their lives and give consent. All adults (individuals over 18) are legally presumed to be capable of making decisions. This presumption can be rebutted by the facts of each particular case.
Incapacity means that an individual does not have the legal capacity to make certain decisions, such as management of property, personal care, or healthcare decisions. An individual may be incapable due to factors including (but not limited to) their age, cognitive impairment, mental illness, developmental disability, or even temporary conditions like unconsciousness.
How is capacity assessed?
Whether an individual is capable or not is a liquid truth. Basic factors include whether the person has the ability to understand information relevant to making a decision, evaluate the potential consequences of that decision, and communicate that decision.
There is no set test to determine capacity which can be applied in all situations. Capacity is time, task, and situation-specific. It can fluctuate based on the type of decision needed to be made and across a person’s lifetime.
Capacity assessments are a formal process undertaken to evaluate an individual’s capacity to manage property, make personal care decisions, make a Will (testamentary capacity), grant or revoke a Power of Attorney, make gifts, enter into a contract, create a trust, and more.
What is incapacity planning?
Incapacity planning focuses on creating a plan for the day you become legally incapable of making important decisions. You can do this by creating a Power of Attorney and appointing substitute decision-makers, and having conversations with these people about your wishes.
Incapacity plans are important as they empower individuals to ensure their wishes and preferences are carried out during the period of incapacity. These arrangements can protect your peace of mind and save your loved ones from undue stress, cost, and time.
Who can request a capacity assessment?
Anyone with standing can request an evaluation. To initiate a capacity assessment, an individual can be referred through self-referral, family, caregivers, healthcare professionals, or legal authorities (i.e., an order from a judge or through a lawyer).
For timely and convenient access to capacity evaluations, learn more on the Capacity Clinic’s website.
Is consent required for a capacity assessment?
In most cases, consent is required from the person being evaluated before the assessment can be carried out. There are exceptions to the requirement of explicit consent in certain circumstances such as emergencies or if the court orders for the assessment.
PROBATE & ESTATE ADMINISTRATION (8 QUESTIONS)
What is probate?
Probate is the process in which the court confirms the appointment of the estate trustee by granting a legal certificate, either a “Certificate of Appointment of Estate Trustee with a Will” or a “Certificate of Appointment of Estate Trustee without a Will.”
Is probate and estate administration the same thing?
Probate is one aspect of the broader estate administration process. Probate refers to the court process by which an estate trustee is granted a “Certificate of Appointment of Estate Trustee.” Estate administration refers to the entire process the estate trustee is mandated to wind up the deceased’s estate.
Is there probate tax in Ontario?
Yes. Probate tax or estate administration tax is payable as a percentage (currently 1.5%) on the value of assets that fall into the probated part of the estate, payable to the Minister of Finance.
Is probate required for all estates?
No, probate is not always required for every estate or every asset but it is needed in most cases. The need for probate depends on the type of assets in the estate, and the ownership and value of the assets at the time of death. Assets that are held jointly with another person may not require probate.
What are the responsibilities of an executor?
An estate trustee or executor is responsible for locating and probating the last Will of the deceased, arranging the funeral and burial, dealing with liabilities and income taxes, liquidating assets, and administering the estate according to the wishes and instructions of the deceased, all while being a fiduciary.
What happens if someone dies without a Will (Intestate)?
If someone dies with assets in Ontario without a Will (known as dying intestate), their estate is administered according to the laws of intestacy according to the Ontario Succession Law Reform Act (SLRA).
These rules are inflexible, formulaic, indifferent to personal preferences, and may ultimately benefit people other than those you may want to benefit. It is important to create an estate plan as early as possible, so you can control your choices.
When is real estate property dealt with in the estate administration process?
Since probate is typically required to sell the property of the deceased if they were the sole owner, the sale of the property (or transfer of the ownership) takes place once this process is complete. Real estate property held in sole ownership by the deceased can only be transferred by the estate trustee after the Certificate of Appointment of Estate Trustee (with or without a Will) has been granted by the court.
If the deceased owns a property in joint ownership with the right of survivorship with their spouse, a survivorship application will be prepared to delete the name of the deceased from the registry. The estate does not have to be probated nor formally transferred to the spouse to do this.
Are there any taxes involved in transferring real estate property during estate administration?
Yes, there may be land transfer tax and capital gain tax (if the value of the property has appreciated since the deceased’s acquisition).
ESTATE LITIGATION (10 QUESTIONS)
On what grounds can a Will be challenged?
The most common grounds for challenging the validity of a Will include improper execution, fraud or forgery, lack of testamentary capacity, undue influence, and suspicious circumstances.
If a Will is executed properly, it is presumed the testator had the testamentary capacity to create the Will. The party that is challenging the Will (the “Objector”) has the initial burden of proof to show there are “suspicious circumstances” surrounding the creation of the Will to meet the evidentiary threshold required to proceed. Once the Objector has met this threshold, the burden of proof shifts to the estate trustee to prove the Will in solemn form (i.e., the Will was properly executed, the testator had testamentary capacity, and was not unduly influenced).
Who can challenge a Will?
In Ontario, individuals who can challenge a Will include:
- Beneficiaries (over 18)
- Dependents (spouses, children, etc.) of the deceased
- Creditors
- Other interested parties (individuals with legal interest in the estate such as trustees, guardians, and other fiduciaries)
Individuals who cannot challenge a Will include:
- Those who have no legal relationship or interest in the estate
- Those barred by the limitation period
- Those without the legal capacity to challenge a Will
Is there a time period for challenging a Will?
Generally, the limitation period for challenging a Will is two years from the death of the testator. There can be exceptions made to challenges commenced after this time period depending on the particular case.
Can a Will be challenged after probate?
Yes, a Will can be challenged after the Certificate of Appointment of Estate Trustee has been issued (also referred to as “probate”). However, it is important to speak with a lawyer to discuss whether there are legitimate grounds to challenge a Will (whether after or before probate).
What are support claims in the context of estate litigation?
Under the Ontario Succession Law Reform Act (SLRA), support claims made against an estate (also referred to as “Will Variation claims”) enable qualifying individuals to seek financial support from the deceased’s estate if they were otherwise inadequately provided for by the estate plans of the deceased.
A qualifying dependant can include the following individuals:
- Married spouse
- Divorced spouse (if deceased had outstanding support obligations to the ex-spouse)
- Common law spouse or same-sex partner
- Parent
- Grandparent
- Minor dependants
- Grandchild
- Sibling
Is there a time period to make a support claim against an estate?
Yes, a support claim must be commenced within six months from the day the Certificate of Appointment of Estate Trustee is issued. An extension may granted in some circumstances by the court. It is critical to speak with a qualified lawyer before making a decision.
What is an application to pass accounts?
A person who acts as a fiduciary must keep accurate and complete records or accounts of any financial decisions and payments they make and any assets they manage.
A fiduciary includes anyone who manages an estate, trust, or acts as a substitute decision-maker for someone else, such as:
- an executor/estate trustee (of a Will and estate);
- a trustee (of a trust);
- an attorney (under powers of attorney) for personal care and property; or
- a guardian (of the person, of property).
An application to pass accounts refers to the legal process whereby a Court approves the accounts of a fiduciary.
Who can compel an application to pass accounts?
If there is concern about transparency, mismanagement of assets, or potential breaches of fiduciary duty by the fiduciary, some parties can compel a fiduciary to make an application to pass accounts.
Such parties can include beneficiaries of an estate or trust, grantors, individuals represented by substitute decision-makers, other fiduciaries (such as co-fiduciaries in the same estate or trust), the Attorney General of Ontario, or creditors. The Court can also issue an order for an application to be made.
What are fiduciary duty claims?
Fiduciary duty claims refer to legal action taken against fiduciaries who have allegedly breached their fiduciary duties. A fiduciary refers to an individual who manages an estate or trust or acts as a substitute decision-maker for someone else, such as:
- an executor and estate trustee (of a Will and estate);
- a trustee (of a trust);
- an attorney (under powers of attorney) for personal care and property; or
- a guardian (of the person, of property).
The main duty of a fiduciary is to act in the best interests of the individual(s) they represent. This means that fiduciaries are expected to make informed decisions, act in good faith, preserve and protect assets, avoid unauthorized self-dealing, keep accurate and complete financial records, and follow instructions governing their responsibilities.
The most common grounds for fiduciary duty claims include breach of duty of loyalty, conflict of interest, mismanagement of assets, failure to account, undue influence, fraud, and negligence.
What are service rendered and quantum meruit claims?
Service-rendered claims are made by service providers to seek payment for services they have provided to the recipient where the agreed-upon fees are not paid in full.
Quantum Meruit claims are made by service providers to seek fair and reasonable compensation for the services they have provided to the recipient party in situations where there is no explicit contract or agreement.
In the context of estate litigation, service rendered and quantum meruit claims are often made by a service provider against the estate of a deceased individual to whom they had provided services prior to the recipient’s death.
DISPUTE RESOLUTION (4 QUESTIONS)
What is alternative dispute resolution?
Alternative Dispute Resolution (ADR) refers to techniques and processes used to resolve disputes between parties rather than through formal litigation. Alternative Dispute Resolution usually refers to proceedings such as mediation, arbitration, and negotiation.
There are several benefits to trying ADR before leaving a matter in the hands of a judge.
- ADR is more cost-effective and time-effective than litigation, deterring prolonged stress on families.
- ADR proceedings are confidential and private unlike court proceedings, optimal for disputes involving sensitive familial and financial matters.
- ADR promotes the preservation of long-term relationships as opposed to the adversarial nature of litigation.
- Parties can collaboratively reach creative and customizable solutions that meet their needs, that may not be available through court.
What is mediation, arbitration, and negotiation?
Mediation is a discussion between parties facilitated by a neutral third party (the mediator) who helps the parties reach a mutually acceptable agreement. The mediator helps clarify issues, introduce options, and promote cooperative communication and compromise. Advice, if there is any given by the mediator, is not legally binding on the parties. Several courts in Ontario offer court-facilitated mediation programs with access to mediators. Mediation is mandatory for estate cases falling under the Ontario Superior Court of Justice in Toronto, Ottawa, and Windsor.
Mediation may take longer to resolve matters where:
- Parties need a legally binding decision
- There are unequal power dynamics
- Abuse or safety concerns exist
- Parties are unwilling to cooperate
Arbitration is a hearing held before a neutral arbitrator (who acts like a private judge) in which parties present their arguments, evidence, and testimonies. Unlike mediation, the arbitrator will issue a decision parties have agreed to accept. Parties can choose an arbitrator, and agree on the rules and procedures that govern the arbitration. Arbitration is more formal than mediation but still more cost and time-efficient than litigation.
Negotiation is a direct dialogue between parties, usually in the presence of or through the representing lawyers, aiming to reach a settlement by the end of the meeting. Parties can discuss their terms, exchange proposals, and negotiate what they’d like settlement to look like.
Is legal representation necessary for alternative dispute resolution?
Legal representation is not necessary but retaining a lawyer can help you navigate through the legal aspects and they can provide you with an objective assessment of your case. Lawyers can advocate for your interests effectively, achieve favorable outcomes through skilled negotiation, and evaluate settlement offers with their expertise.
What happens if alternative dispute resolution proceedings lead to no resolution?
If these techniques do not lead to resolution, the parties can continue in their attempts to resolve their issues on their own, agree to a binding arbitration, or pursue the litigation route.
GUARDIANSHIP (6 QUESTIONS)
What is guardianship for?
An individual who does not have the legal capacity required to make certain decisions needs a legally authorized substitute decision-maker. A guardian is a type of substitute decision-maker individual who is legally authorized by the court.
There are two kinds of guardians: a guardian of property and a guardian of the person.
A substitute decision-maker appointed by way of a Power of Attorney is made by an individual who has the legal capacity to create one. A guardian is appointed by the Court, meant for an individual who does not have the legal capacity to appoint a substitute decision-maker.
You can learn more about guardianships here: https://www.ontario.ca/page/guardianship
What factors does the court consider in guardianship applications?
In Ontario, the appointment of a guardian is subject to court approval. Most importantly, a guardian must be over the age of 18 and capable of making decisions in the best interests of the represented individual. A court will also take into consideration any existing power of attorney or guardianship arrangements.
A court will consider certain qualities of potential guardians such as their empathy, criminal record, and likelihood to act in an honest and ethical manner. The court will also consider a guardian’s capacity to manage finances, retain professionals when needed, and understand the legal requirements of guardianship.
How do I become a guardian in Ontario?
If a guardianship is appropriate, the potential guardian has to bring an application to the Superior Court of Justice. It is highly recommended to consult a qualified lawyer before making a decision.
Can guardianship arrangements be challenged or changed?
Replacing a guardian requires bringing an application to the court which demonstrates that the current guardian is not suitable or capable of fulfilling their duties, or that there is a change of circumstances necessitating a new guardian.
Are guardians entitled to compensation?
Yes. In Ontario, guardians appointed by the court are entitled to receive compensation for their services.
Do I need to apply for guardianship when my child turns 18?
If you know that your child will not be capable of making decisions for themselves and will need a substitute decision-maker once they turn 18, then yes, a suitable adult has to be approved as a guardian by the court through an adult guardianship application process.
If a parent fails to obtain guardianship over the former minor when they reach the age of majority, they lose the legal authority to make decisions on their behalf regarding their personal care, healthcare, financial matters, and other important aspects of their life. The parent will not be able to advocate for their child’s needs, access their confidential information, make legal agreements for them, or take necessary steps on their behalf.
This situation can expose the former minor to the risk of exploitation, abuse, financial mismanagement, challenges in obtaining consent or making treatment decisions, delays in medical care, difficulty accessing assets, legal limitations, and court intervention. It is important to start the guardianship application process in advance so that the guardianship is in place when needed.
MEDICAL ASSISTANCE IN DYING (3 QUESTIONS)
What is Medical Assistance in Dying (MAID)?
Medical Assistance in Dying (MAID) is the process by which an individual can be found eligible for professional assistance by a medical practitioner to end their life. This procedure is only available for individuals who are suffering from an incurable illness, disease, or disability. As of 2021, the death of the suffering individual does not need to be reasonably foreseeable to be eligible to receive MAID.
According to the Criminal Code of Canada, an individual who qualifies for this procedure must:
- be 18 years of age or older;
- have decision-making capacity;
- make a voluntary request that is not the result of undue influence;
- give informed consent to MAID after receiving all information needed to make this decision;
- have a serious incurable illness, disease, or disability;
- be in an advanced state of irreversible decline of capacity; and
- be enduring intolerable physical or psychological suffering that cannot be alleviated in ways that the suffering individual considers acceptable.
As of 2024, mental illness is not considered an illness, disease, or disability that is eligible for MAID, however, this is currently under review for future legislative amendments.
Can you incorporate MAID into your estate planning?
As of right now, consent to MAID through estate and incapacity planning documents such as a Power of Attorney for Personal Care is not sufficient to meet the eligibility requirements for the administration of MAID. You may choose to incorporate a request for MAID in your estate and incapacity documents in case substitute consent is recognized as valid consent by law in the future.
What is the difference between advance consent and advance request?
You must have the legal capacity to consent to MAID immediately before it is administrated. However, you may waive the final consent on the day it is administrated if you were approved to receive MAID before losing decision-making capacity.
Advance consent refers to a written agreement between the individual receiving the administration and their medical practioner to waive final consent before administration upon incapacity. It is recommended you speak with your medical practitioner to determine eligibility for MAID and the process of receiving approval to administration prior to incapacity.
Advance request refers to a situation where a person requests MAID before they are eligible to receive it. Advance requests are not current permitted under the Criminal Code but it is currently under debate. Since advance requests are not currently permitted, consent for MAID in an incapacity plan prior to becoming eligible for the administration will not qualify as valid consent for the administration.
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