Mutual wills arise when two parties sign Wills to achieve a particular distribution of their estates and they make an agreement not to change the terms of those Wills without the consent of the other. This agreement is meant to survive the death of the one of the parties. This means that the surviving party cannot change his or her Will to defeat the parties’ original intentions. By way of an example, a couple in a second marriage, each with children from a prior relationship, may agree to sign mutual wills leaving their estates to each other and then equally to all of their combined children upon the death of the survivor.
Executors (now called estate trustees) often have many questions about their compensation. These are a few of the most common questions that we are asked regarding estate trustee compensation:
I’m an executor and have been told that I need to file an Estate Information Return. What is that?
An Estate Information Return (EIR) is a government form requiring details about an estate and probate, particularly about the values of the assets of the estate and how these values were obtained. If you are acting as an executor (now called an estate trustee) and have received a Certificate of Appointment of Estate Trustee from the Court, you must file an EIR with Ontario’s Ministry of Finance. It may be filed electronically, by fax or mail, and must be received by the Ministry within 90 calendar days of the Certificate being issued.
I filed the EIR a couple of months ago but just learned that I may have made a mistake on one of the asset values. What should I do?
Yes, it is possible for a deceased’s RRSP to rollover to a beneficiary’s RDSP. Let’s start by looking at the tax treatment of RRSPs and RRIFs on death.
Deemed Disposition Upon Death
You may have heard that when a person dies, there is what is called a ‘deemed disposition’ of all of their assets. This means that the deceased’s assets are treated, for tax purposes, as being sold or cashed in immediately prior to death.
When it comes to RRSPs and RRIFs, generally speaking the fair market value of the RRSP/RRIF is included in the deceased’s income for the year of death. It is then taxed as ordinary income at the deceased’s marginal rate. As you can imagine, this often results in a significant tax bill for the deceased’s estate.
Our Wills, Estates and Trusts law boutique seeks to expand our practice areas to better serve our clients. We have established our law practice in the west-end of Ottawa. Kanata-Stittsville is a growing community and an ideal…
The good news is, yes, it is possible to achieve both of these estate planning goals. The bad news is that the situation can lead to friction among the parties involved.
In a Will, you can grant an individual (or more than one) a ‘life interest’ in a real property. This may be a specific property or may be drafted more generally to include any property that is being used as a principal residence at the date of your death. A life interest gives the individual (or ‘life tenant’) the right to use and occupy the property for the duration of their lifetime. The Will will go on to specify how the property shall be dealt with upon the death of the life tenant.
We often encounter this type of estate planning in second marriages.
It is estimated that there are over 200,000 individuals living with dementia in the province of Ontario and this number continues to climb. In an effort to better serve our clients living with dementia and their loved…
Every capable adult 18 years and older should have a Will!
The Ontario Bar Association has deemed November to be ‘Make a Will’ month. What a fitting way to encourage the roughly half of Canadians who don’t have Wills to see to their estate planning.
My affairs are so simple, I don’t think I really need a Will.
Many are surprised to learn that every capable adult over the age of 18 should have a valid, up-to-date Will. Even if a person has very few assets, most people do have something, whether it be some household goods or digital assets such as a Facebook or Instagram account. Also, everyone is required to file an income tax return every year and the year of death is no exception.
