ESTATE ADMINISTRATION - INVESTMENTS UNDER POWER OF ATTORNEY

An Attorney acting under a Power of Attorney for Property is required to be careful with investments. If the Power of Attorney for Property of the incapacitated person gives specific authority to make certain types of investments, an attorney can make those investments. Otherwise, an attorney should assume that they will be held liable by the incapacitated person or the beneficiaries of their estate when they die (even though they may not actually be liable) for any losses and invest conservatively.

On the other hand, an attorney should not necessarily leave funds in a bank account with a low rate of interest, even if that is where the money was when they began to act under the Power of Attorney. Generally, an attorney should consider placing the funds in a secure interest bearing investment and ensure the deposits meet the requirements to be insured by the Canadian Deposit Insurance Corporation (CDIC).

Speak to your legal adviser to ascertain appropriate investments for the Power of Attorney for Property.

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Feel free to contact us at any point for assistance or advice with respect to Estate Planning, Estate Administration Services, Estate Law or Estate Litigation. We may be reached at 705.435.4339 or contact us via email.

ESTATE ADMINISTRATION - ESTATE INVESTMENTS

An Estate Trustee (Executor) is required to be careful with estate investments. If the Last Will and Testament of the deceased person gives specific authority to make certain types of investments, an executor can make those investments. Otherwise, an executor should assume that they will be held liable by beneficiaries of an estate (even though they may not actually be liable) for any losses and invest conservatively.

On the other hand, an executor should not necessarily leave funds in a bank account with a low rate of interest, even if that is where the money was when the person died. Generally, an executor should consider placing the funds in a secure interest bearing investment and ensure the deposits meet the requirements to be insured by the Canadian Deposit Insurance Corporation (CDIC).

Speak to your legal adviser to ascertain appropriate investments for the estate you are the Executor on.

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Feel free to contact us at any point for assistance or advice with respect to Estate Planning, Estate Administration Services, Estate Law or Estate Litigation. We may be reached at 705.435.4339 or contact us via email.

HOW CAN I PAY FUNERAL EXPENSES?

When a person dies, unless they have prepaid for their funeral, this expense will have to be paid by the Estate Trustee or Executor. Often there are no funds available to pay the funeral expenses as the deceased person’s money is in bank accounts that have been frozen because of the death.

Banks are permitted to release funds to pay funeral expenses and most Canadian Banks will readily provide the necessary funds for funeral expenses. If the bank will not, you may have to bring a ‘Motion’ to the Court to defer the payment of the funeral expenses until the Probate Document (called a ‘Certificate of Appointment of Estate Trustee’) has been issued by the court.

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Feel free to contact us at any point for assistance or advice with respect to Estate Planning, Estate Administration Services, Estate Litigation or Estate Law. We may be reached at 705.435.4339 or contact us via email.

HOW CAN I PAY PROBATE TAX?

When a probate application is filed with the Superior Court in Ontario, Estate Administration Tax (Probate Tax) has to be paid on the value of the estate. Often there are no funds available to pay the Probate Tax as the deceased person’s money is in bank accounts that have been frozen because of the death.

Banks are permitted to release funds to pay Probate Tax and most Canadian Banks will readily provide the necessary funds for Probate Tax. If the bank will not, you may have to bring a ‘Motion’ to the Court to defer the payment of the Probate Tax until the Probate Document (called a ‘Certificate of Appointment of Estate Trustee’) has been issued by the court.

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Feel free to contact us at any point for assistance or advice with respect to Estate Planning, Estate Administration Services, Estate Litigation or Estate Law. We may be reached at 705.435.4339 or contact us via email.

WHAT TO DO WHEN THERE ARE MORE DEBTS THAN ASSETS IN AN ESTATE

What does an executor do if the debts of the estate exceed the assets?

First of all, the executor (estate trustee) is not required to assume the executor role. Dealing with an insolvent estate can be complicated and time consuming. However, many estate trustees (executors) named in a Will seem reluctant to not tie up the loose ends of their loved one.

If the executor decides to assume the estate administration responsibility, they will gather in the estate assets in the usual way. Since there is not enough to go around, the estate trustee will need to secure the agreement of all creditors to the proposed distribution. It can be difficult to get all creditors to agree. In fact, it is not uncommon for some of the creditors to not respond at all to a proposal. In that case, the executor (estate trustee) may bring a Court Application for an order Giving Directions that sets out the amounts to be paid to each creditor and whether or not any of them have priority over the others.

In some cases a creditor of an insolvent estate may force the estate into bankruptcy. At that point the Trustee in Bankruptcy takes over the administration of the estate. If an executor has acted for the estate prior to the bankruptcy, they can present their claim for executor’s compensation to the Trustee in Bankruptcy.

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Feel free to contact us at any point for assistance or advice with respect to Estate Planning, Estate Administration Services, Estate Litigation or Estate Law. We may be reached at 705.435.4339 or contact us via email.

ESTATE ADMINISTRATION – CPP SURVIVOR’S PENSION

If your spouse contributed to CPP, you may be eligible to receive a CPP survivor’s pension. To qualify you must be the legal or common law spouse of the deceased.

The amount of the pension can be a bit confusing to determine. The following link to the Service Canada Website will help you figure it out.

http://www.servicecanada.gc.ca/eng/isp/cpp/survivor.shtml

CONTACT US

Feel free to contact us at any point for assistance or advice with respect to Estate Planning, Estate Administration Services, Estate Litigation or Estate Law. We may be reached at 705.435.4339 or contact us via email.

ESTATE ADMINISTRATION – WHAT TO DO WITH ALL OF THE DECEASED’S CARDS?

There are different requirements and recommendations relating to the various cards when someone dies – credit cards, health card, Social Insurance Card, etc. – once those cards are no longer needed.

To reduce the risk of identity theft (it does still occur after a person has died), cards should be physically destroyed. The Executor / Estate Trustee should also ensure the cards are returned to the issuer, so identity theft does not result in liability to the estate. Some issuers have forms that need to be submitted with the pieces of the card, although most do not.

Speak to your legal adviser if you are uncertain about what to do in any particular situation.

CONTACT US

Feel free to contact us at any point for assistance or advice with respect to Estate Planning, Estate Administration Services or Estate Law. We may be reached at 705.435.4339 or contact us via email.

NON-CONTINUING POWER OF ATTORNEY FOR PROPERTY

If your Power of Attorney does not specifically indicate that it is a Continuing Power of Attorney for Property or say that it allows the people you name to continue to act for you in the event of mental incapacity, the Power of Attorney will be valid only so long as you are mentally capable.

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Feel free to contact us at any point for assistance or advice with respect to Estate Planning, Estate Administration or Estate Law. We may be reached at 705.435.4339 or contact us via email.

POWER OF ATTORNEY FOR PROPERTY WITH ONLY ONE WITNESS

Prior to 1995 the law did not require 2 witnesses to a Power of Attorney for Property. The law was changed in 1995 to require 2 witnesses.

Provided a pre-1995 Power of Attorney for Property otherwise complies with the Rules which existed at the time, it is not invalid because it only has 1 witness.

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Feel free to contact us at any point for assistance or advice with respect to Estate Planning, Estate Administration or Estate Law. We may be reached at 705.435.4339 or contact us via email.

Estate litigation is becoming increasingly popular in Ontario. Estate litigation relates to many different aspects of an estate including:

• Whether or not the deceased had the capacity to make a Will;
• Whether someone forced the deceased to make changes to their Will which benefited some beneficiaries and not others;
• Whether those who acted under Power of Attorney before the deceased passed away dealt with the assets properly and had accounted for them;
• Whether an executor is properly administering an estate;
• Just about any other aspect of an estate that you can imagine.

Litigation involving estates is extremely expensive, very time consuming and often results in family members never speaking to one another again.

If you have not been involved in estate (or other) litigation before, you will be shocked at its cost. Legal expenses in the range of $50,000-$100,000 can be incurred easily on an estate litigation case, even where the issues are not complicated.

Mediation is a method used to try to settle estate litigation when the warring parties are not able to do so themselves. Mediators are individuals with specific educational and experience qualifications. Many of them are experienced lawyers or retired judges.

To try to cut down on the number of court trials relating to estates, there is a rule that requires all estate litigation in cases in Toronto be submitted to mediation before they can proceed to trial. In other areas of the province, mediation is encouraged but not mandatory.

Since mediation is mandatory on estates in Toronto many lawyers will suggest the combatants try mediation before even commencing court proceedings. The hope is that the mediation will resolve the matter and litigation will not be necessary.

The mediator is impartial and the mediation will typically be held in a neutral location. There will generally be individual “breakout” rooms for each side in the conflict.

It is important to select the mediator carefully. Not all mediators’ styles are suited to the dynamics in a particular lawsuit. If the litigants are particularly acrimonious, you may need a mediator who is prepared to be direct, when appropriate, with the parties. Other files require a mediator with a soft and gentle approach.

If mediation is successful in resolving an estate’s case, a Mediation Agreement will be entered into to clearly define the terms of the resolution.

Due to the ever increasing cost of estate litigation, serious consideration should be given to mediation very early in the process.

CONTACT US

Feel free to contact us at any point for assistance or advice with respect to Estate Planning, Estate Administration or Estate Law. We may be reached at 705.435.4339 or contact us via email.