Questions. What should be in my Will? What is not covered by my Will? Can I make my own Will?
Should I use a do-it-yourself will package? What if I change my mind after my Will is made? What happens if I die without a Will? Can I leave my money to whomever I want in my Will? If I own a business, does my Will need anything special to cover that? If I get divorced, what happens to my Will? If I get married, what happens to my Will? What is a trust and how can I use one? Can I make a list of personal items I want to leave to certain people? Is putting my kids’ names on the title to my house a good idea? Where should I keep my Will after it is signed? Do beneficiaries have the right to know what is going on with an estate? Who should I name as my Executor? Can my Executor also be a beneficiary of my Will? Who keeps an eye on what Executors do? How much does an Executor charge? What does “Probate” mean? Do all Wills have to be probated? Is probate expensive? I’m an Executor – now what do I do? What does a lawyer do to help me if I’m an Executor? Do I have to act as Executor if I don’t want to? Can I contest a Will if I’ve been left out of it? Disclaimer The information on this web page is for your general information only and is not intended as legal advice. Reading this and other material can not take the place of a full discussion about your specific situation with a lawyer. We recommend that you use the
information on this page as a starting point and that you discuss your questions with an experienced Wills and Estates lawyer. What should be in my Will? In your Will, you must: • Name an Executor • Name a guardian for any minor children • Give instructions as to who should inherit your estate • Give your Executor the power to do the things you’ve asked him or her to do Depending on your circumstances and your wishes, in your Will you might also: • Leave instructions for burial or cremation • Set up trusts so that children receive their shares at an age other than 18 • Set up trusts for elderly parents or other loved ones • Give money to charities or set up scholarships in your name • Give specific items (such as family heirlooms) to specific people • Make special financial provisions for a handicapped child • Clarify anything that might cause confusion in the future, such as whether you wish to include illegitimate, adopted or step-children in the Will. Every Will is different, because everyone’s life and circumstances are different. If you talk over your wishes with a lawyer who is experienced in Will drafting, you will likely be surprised at the creative solutions that are available to you. Top What is not covered by my Will? In general, any property, whether real estate or personal property, that is held in joint names will not be covered by your Will. In cases like this, the person who survives will usually automatically own the property when the other person dies. (For more on this topic, see Is putting my kids’ names on the title to my house a good idea? below). Any instrument that names a beneficiary, such as life insurance, RRSPs and segregated funds will not be covered by your Will. There are exceptions, such as buying a life insurance policy and naming your Estate as the beneficiary. Top Can I make my own Will? In Alberta, you can legally make your own Will without the help of a lawyer if: • You are 18 years of age or older (or you may be younger than 18 if you are married or serving in the military); and • You have mental capacity to make a Will; and
Your Will is written down; and Your Will is signed and dated.
A handwritten Will must be 100% in your own handwriting. This is called a holograph Will. A holograph Will must be signed and dated, but does not require any witnesses. This is a legal Will in Alberta. Common mistakes that people make when preparing their own Wills include typing it on the computer and then just signing it, having someone else with tidier penmanship write it out for them and just signing it, or using a form and filling in the blanks. None of those qualify as “100% in your own handwriting”. If you prepare any kind of Will other than a proper holograph Will, you must follow the signing formalities set out in the Wills Act of Alberta. The signing formalities set out requirements for number of witnesses, who may not be a witness and how the Will must be signed. If the proper signing formalities are not followed, the Will is invalid. When you have a Will prepared by a lawyer, the lawyer will attach an Affidavit to the Will proving that all of the formalities of signing, and the other requirements of the law (such as mental capacity) were followed. Please remember that only your most recent Will is in effect. If you make a new Will, and it contains a revocation clause, your old one is revoked. Top Should I use a do-it-yourself will package? Do-it-yourself Wills packages can be dangerous. Sometimes people prepare their own Wills and then have a false sense of security that they have their affairs in order. When people make their own Wills, making a mistake is easy and happens frequently. Some of the mistakes people commonly make when using do-it-yourself packages include: • Describing people in such a way that it is unclear (for example, family members of different generations, such as fathers and sons, often have the same first and last names); • Describing assets in a way that leads to confusion (such as saying “my ring” when they own more than one ring); • Neglecting to properly provide for those that they have a legal obligation to provide for; • Giving away only part of their Estate, leading to a partial intestacy; • Failing to understand how an Estate works in terms of debts being paid and Executors being paid, leading to an unintended uneven distribution among beneficiaries; • Neglecting to do any tax planning, leading to extra taxes being paid and less money going to the beneficiaries; • Failing to follow the proper signing formalities.
When you see a lawyer to have a Will made, the lawyer should be giving you advice about how best to plan your Estate, not simply preparing a document that states your wishes. An experienced lawyer is able to spot potential problem areas and help you deal with them to ensure that the division and distribution of your assets is not done by a judge, but by you. Top What if I change my mind after my Will is made? Changing your mind does not necessarily mean you need a new Will. If the change you want is simple or small, such as changing your choice of Executor, you may make an amendment to your existing Will called a Codicil. Codicils are usually only one or two pages long and are stapled into the back of your Will so that the documents will be read together after your death. Codicils are quicker and cheaper than preparing new Wills. Please note that you can also revoke your Will completely by destroying it. Top What happens if I die without a Will? If you do not have a Will, the Intestate Succession Act of Alberta determines who receives your assets. Your debts must be paid before the beneficiaries receive any of your assets. It is commonly believed that a spouse will automatically inherit everything left by their deceased spouse, but this is not necessarily the case. Any assets that are jointly owned by a husband and wife will pass by right of survivorship to the remaining spouse. Assets that name the spouse as beneficiary, such as life insurance and RRSPs, will also pass directly to the spouse. However, any assets that are not jointly held or specifically designated are subject to the Intestate Succession Act. Under the Act, upon the death of a spouse, the surviving spouse will inherit the entire Estate only if there are no children. If there is one child of the couple, the surviving spouse will inherit the first $40,000.00 of the deceased spouse’s estate (not counting joint assets or assets that designate the spouse as beneficiary), and one-half of the rest. The other half will go to the child, even if the child is over 18. If there is more than one child of the couple, the surviving spouse will inherit the first $40,000.00 of the deceased spouse’s estate, and one-third of the rest. The other twothirds will go to the children.
If you do not have a spouse or children, the Act sets out who is entitled to inherit your estate. The best way to ensure that your Estate goes to those you choose is to have a Will prepared. Top Can I leave my money to whomever I want in my Will? There are some people you must support by law. They are: • Your spouse or Adult Interdependent Partner; • Your children who are under 18; and • Your children who are over 18 but unable to earn a living due to a handicap. If you make a Will that does not leave any of these people adequate support, they may make an application to the court under the Dependants Relief Act of Alberta for a greater share of your Estate. This will cause delays to the distribution of your Estate and it is quite likely that your Estate will also end up paying legal costs for the person who brings the application, if they are successful. It is possible to leave your spouse out of your Will if he or she is not dependent on you financially, or if you believe you have already made adequate provision for him or her by way of jointly owned property. If you are in that situation, you should discuss it with your lawyer to ensure that you are fully aware of your obligations before making a decision. If your lawyer agrees that it is acceptable to exclude your spouse, the lawyer will probably want to include a clause in your Will that addresses why your spouse has not been included in the Will. In certain circumstances, you may have made promises to a person that you would leave them something in your Will, perhaps in exchange for help they gave you during your lifetime. You should be extremely cautious about excluding a person from your Will if you have in fact raised this kind of expectation, and you should discuss the situation with your lawyer. Most parents leave their Estates equally to their children (once both parents have passed away). However, if your children are all over the age of 18, there is no law that says that you must leave them an equal share, or any share at all. This is a tradition and most children expect to inherit an equal share. You should discuss your reasons for not wanting to include some or all of your children with your lawyer, who will know how to set up your Will to withstand a possible challenge by your children. For more on this topic, see Can I contest a Will if I’ve been left out of it? below. Once you have taken care of your legal obligations, you are free to leave your Estate to whomever you wish, including charities, churches, friends or family members, in the proportions you wish.
Top If I own a business, does my Will need anything special to cover that? Will your business carry on after you are deceased, or will it be wound up? Many private corporations or small services businesses are dependent on the deceased person to operate it and must be wound up on the person’s death. If this is the case with your business, it will be your Executor’s job to operate the business while it is being wound up, sell or dispose of its assets, sell or dispose of shares etc. This can be quite a complicated job, depending on the size and nature of the business. You should ensure that your Will authorizes your Executor to do all of things necessary to achieve a winding up of your company. Special attention should also be paid to the powers given to an Executor where a private corporation is owned by someone who belongs to a profession (such as law or medicine) where a personal corporation can only be operated by a member of that profession. If your Executor is not given adequate powers to vote shares, sell business assets (including real estate), renew leases or other matters that are required to be done, your Estate could end up in the courts as your Executor asks the court to expand his authority. This will result in additional costs and delays in the administration and distribution of your estate. If you are a business owner, it is strongly recommended that you have your Will prepared by an experienced Wills lawyer. Top If I get divorced, what happens to my Will? Nothing will happen automatically to your Will if you get divorced. A Will that you made during your marriage will continue to stand until you revoke it. If your Will names your former spouse as a beneficiary and this is no longer your wish, it is up to you to have a new Will prepared. Top If I get married, what happens to my Will? Marriage automatically revokes your Will. The only exception to that rule is to include a clause in your Will stating that the Will is being made in contemplation of your marriage to a certain person. If you marry that person, your Will is still valid. If you marry anyone else, the Will is not valid.
The new Adult Interdependent Relationships Act of Alberta creates an “equal-tospouse” status for people who live together, regardless of whether they are same or opposite sex partners. Top What is a trust and how can I use one? A trust is a legal arrangement where someone (a “trustee”) holds money or property for the benefit of someone else (a “beneficiary”). The trustee does not have the right to use the money for their own benefit. In estate planning, trusts are used in many different situations, but some of the most common purposes are: • • Holding money or property for someone who is under the age of 18 and therefore not legally old enough to receive it. Spreading out your children’s inheritance so that they do not receive all of it on their 18th birthday. You could, for example, use a trust that would pay a portion of the inheritance on your child’s 18th birthday, a further portion on their 21st birthday and the rest on their 25th birthday. Setting aside a sum of money that would help support your elderly parents after your death, with any part they don’t need being put back into your Estate. To hold on to a family lake cottage or other special property for a set period of time, together with enough money to pay its expenses and upkeep, so that your family members may continue to use the property. To set aside a sum of money for a child who has a handicap that will prevent him or her from earning their living. To protect a beneficiary who has a problem or addiction that might cause them to waste or throw away their inheritance, or who is simply a spendthrift. To give someone the right to use property (such as a house) during their lifetime, while retaining the right to decide who gets the property after that person has died. To split income among a number of beneficiaries.
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There are innumerable variations on the basic trust model and you will likely hear some of them discussed during your estate planning sessions with your lawyer. Top Can I make a list of personal items I want to leave to certain people? You can make a list of names outside of your Will and next to each name state which personal items you would like that person to inherit on your death. Your list could include things such as jewelry, sentimental items, artwork, ornaments, tools, furniture,
books, musical instruments or many other items. What is not commonly known about such lists is that they do not have the force of law the way a Will does. This means that your Executor might not give out your personal items according to your list, unless all of the beneficiaries agree. There are alternatives to making your own list. There are risks and benefits to making a list, and to the alternatives as well. It is a good idea to discuss with a lawyer what the risks, benefits and costs might be so that you can make an informed decision. Top Is putting my kids’ names on the title to my house a good idea? There is very often a huge risk involved in putting additional names (that is, other than you and your spouse) on the title to your home. Often this is done because individuals wish to avoid probate costs, believing that the probate process is expensive. (For more information on probate costs, see Is Probate Expensive? below). The idea behind putting another name on the title, usually that of one of your adult children, is that on your death, the title to the property will automatically and inexpensively pass to the child. This is good reasoning as far as it goes, but before making the decision to add someone as an owner of your home, you should consider the following: Your child might get divorced, and their spouse might claim half of your child’s assets. Your home might be one of those assets if your child’s name is on the title. Your child might cause a car accident that results in damage to other people in excess of the amount of insurance your child carries, such as an accident where someone is seriously injured. Your home might be one of the assets claimed to satisfy the law suit that will follow the accident, if your child’s name is on the title. Your child might start a business or join a partnership, and be required to give a personal guarantee. This is common when seeking bank financing. If the business fails and leaves debts, you could lose your home, if your child’s name is on the title. You may wish to sell your home. If your child’s name is on the title to your house, you will not be able to sell it without their signature. Your child might not agree to the sale, perhaps because they feel the market is down, or because they are hoping to have the house for their own family one day. You will have lost control over what may be your largest personal asset. If you are considering putting someone else’s name on the title to your home, you should talk this over with a lawyer first. Top Where should I keep my Will after it is signed?
The best place is usually your safety deposit box at your bank. This is often the first place that your Executor or family members will look for your Will after your death, and banks are familiar with what to do when an Executor approaches them. If you do not have a safety deposit box, another good place to keep your Will is in your lawyer’s vault. Many firms will store your Will in a fire-proof safe at no charge to you. The worst place to keep your Will is among your regular household papers, where it is vulnerable to fire, loss, damage or theft. Top Do beneficiaries have the right to know what is going on with an estate? Everyone who is a beneficiary under a Will that is being probated, or a beneficiary where someone is applying to become an Administrator of an estate, must receive a notice by registered mail. The notice, which is sent out by the Executor or Administrator before the court receives the application for a Grant of Probate (or Administration) sets out what the beneficiary is entitled to receive from the estate. A person who is entitled to inherit all or some of the residue of an estate, and a person who inherits where there is no Will, will also receive a full copy of the Application for Probate (or Administration) along with their notices. The application includes a full inventory of all estate assets and debts and a list of who the beneficiaries are. Someone who is inheriting only a specific item or a set sum of money is not entitled to receive the full information about the Estate assets and debts. For more information, see Who keeps an eye on what Executors do? below. Top Who should I name as my Executor? Your Executor should be someone who: • Has attained the age of majority • You trust • Is your generation or younger • Is geographically accessible • Will be able to devote the time and energy necessary to do the job • Has the expertise and ability to properly administer the assets of your estate For most people, the first choice for Executor is their spouse. Alternatives to your spouse could be your adult children, siblings, family friends, a trust company or professionals with whom you have had a long association.
Top Can my Executor also be a beneficiary of my Will? Yes, although you should watch for potential conflicts of interest. Top Who keeps an eye on what Executors do? It is the responsibility of the residuary beneficiaries of an Estate to oversee the actions of an Executor. Where there are certain kinds of beneficiaries involved in an Estate (such as minors, missing beneficiaries or dependent adults whose trustee is the Public Trustee), the Office of the Public Trustee, which is a branch of the Alberta Government, oversees the Executor’s decisions that affect those specific beneficiaries. This means, for example, that the sale of land from the Estate of a deceased person to a third party must be approved by the Office of the Public Trustee. Top How much does an Executor charge? Executors can charge for their time, trouble and skill in acting as Executor, unless the Will states otherwise. This means that Executors can be paid compensation over and above being reimbursed for out-of-pocket expenses. However, the amount they should be paid is not specified in the Alberta Rules of Court. To determine how much the Executor of an Estate may be paid, you should first look at the Will. If the Will states an amount (either a dollar amount or a percentage of the Estate), that is the appropriate amount for the Executor to charge. If the Will does not state how much may be charged, the Executor will have to ask the residuary beneficiaries of the Estate for their approval of the amount he or she believes to be appropriate. The usual rate is between 1% and 5% of the gross value of the Estate. It is always a good idea for Executors to keep receipts for expenses, record mileage, and keep track of time spent and tasks done, as often it is necessary to back up a claim for Executor’s compensation with documentation. (For more information, see “Who keeps an eye on what Executors do?” above). If the Will does not specify how much compensation should be paid, and the beneficiaries do not approve of the Executor’s request, the last resort is to ask the court to set the amount of compensation. Again, records and receipts should be produced to back up a claim for compensation.
In most cases, the Executor takes his compensation in one lump sum when the Estate is almost fully completed. An Executor should not pay compensation to himself unless it is authorized by the Will, the beneficiaries or the court. If the Executor does so in advance of obtaining such approval then he or she may be required to repay the Estate, sometimes even with interest. A factor which might influence an Executor’s decision about claiming Executor’s fees is that such fees are taxable. Top What does “Probate” mean? Probate is the process of submitting the Will of a deceased person to the court and asking the court to issue an order (called a Grant of Probate) stating that the Will is valid and confirming the appointment of the Executor. The Will is accompanied by supporting information about the deceased’s family, assets and debts and a breakdown of the beneficiaries and their respective gifts. Top Do all Wills have to be probated? No. There are a number of factors that will determine whether a Will needs to be probated, including the type of assets the deceased person held. Where there is real estate held in the deceased person’s name alone, you will have to obtain a Grant of Probate to transfer the land. With other assets, sometimes obtaining a Grant of Probate is not necessary, depending on the dollar value or other factors. Other situations may require that a Grant of Probate (or Grant of Letters of Administration) be obtained. For example, if you wish to commence a lawsuit on behalf of someone who was killed in an accident, you would have to have legal authority to act on the deceased person’s behalf. This would likely involve obtaining a Grant. If the validity of the Will is in issue, it will be necessary to apply for a Grant of Probate to have the court determine its validity. An Executor may want to obtain a Grant of Probate to protect himself or the estate against liability. As every situation is different, the best idea is to take the Will to a lawyer who will assist you to review the situation as a whole and determine whether or not you should apply for a Grant of Probate. Top
Is probate expensive? Alberta has the lowest probate (court) fees of any province in Canada. The amount you pay to the court depends on the net value of the estate of the person who has died. Net value means the value of all assets left after debts are paid. If the net value is $10,000.00 or less, the probate fee is $25.00. If the net value is over $10,000.00 but not more than $25,000.00, the fee is $100.00. If the net value is over $25,000.00 but not more than $125,000.00, the fee is $200.00. If the net value is over $125,000.00 but not more than $250,000.00, the fee is $300.00. If the next value is over $250,000.00, the fee is $400.00. Top I’m an Executor – now what do I do? The following is a general list of what Executors normally have to do on any estate. As every situation is different and this list is quite general, you should always seek advice from a lawyer that is experienced in this area of the law to determine what needs to be done for any particular estate. • • • • • • • • • • • • • • • dispose of the deceased’s remains determine what assets the deceased owned, and find out their value determine what debts the deceased had review the Will with a lawyer to ensure that it is valid make sure that all estate property is secure and insured notify financial institutions, government pension plans, insurance companies and any attorneys under powers of attorney of the deceased’s death apply for any pensions, death benefits and life insurance that are payable to the estate take possession of cash, securities, jewelry and other valuables arrange for interim management of any business owned by the deceased retain a lawyer to advise on the administration of the estate review the Will to determine who the beneficiaries are deal with any litigation that involves the estate apply for a Grant of Probate, if necessary advise surviving joint tenants of the death of the deceased advise any beneficiaries who are designated under a life insurance policy, RRSP or pension of their interests
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set up an Executor’s bank account to collect estate assets, pay bills and earn interest on estate funds, if necessary review leases and arrange for collection of rents decide whether to advertise for creditors and claimants decide whether claims against the estate are legitimate pay the bills for the deceased and the estate file income tax returns and pay any tax owing obtain a Tax Clearance Certificate from Canada Customs and Revenue Agency administer any trusts under the Will prepare an accounting for beneficiaries obtain Releases from beneficiaries transfer assets to beneficiaries
As this list shows, acting as an Executor can be complex and time-consuming, perhaps even overwhelming. If you are an Executor, you should not hesitate to call on experienced professionals such as accountants, financial advisors, realtors, appraisers and lawyers for assistance. Top What does a lawyer do to help me if I’m an Executor? A lawyer usually assists an Executor by doing the following tasks: • • • • • • • Giving the Executor information and advice on all matters in connection with the administration of the estate Reviewing the Will or the provisions of the Intestate Succession Act with the Executor. Obtaining details of all the property and debts of the deceased for the purposes of an application to the court. Preparing all documents needed to apply for a grant of Probate or a grant of Administration. Preparing notices to all beneficiaries and arranging for service of the notices. Making application to the court for the Grant, payment of fees and dealing with the clerk of the court. Advising the Public Trustee of the application, if necessary, and dealing with them on any matters that might arise.
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Preparing documents to advertise for claimants, arranging for advertising and obtaining affidavit of publication. Preparing declarations of transmission and powers of attorney for stocks, bonds and land transferable under the Alberta grant. Advising the Executors on any trusts created by the Will. Submitting Executors' financial statements for approval to the beneficiaries on an informal basis. Preparing releases. Advising the Executor as to the compensation that they are entitled to receive. Providing advice to the Executor to ensure that all necessary steps are taken by them in the administration of the estate, to protect the Executor from incurring personal liability for a failure to properly administer the estate and its trusts.
Top Do I have to act as Executor if I don’t want to? No, you can not be compelled to act as an Executor, so long as you have not already taken any action that can be interpreted to mean that you intend to act as Executor (such actions are called “intermeddling”). If you are named as an Executor and you do not wish to act as Executor, you should decide that before doing anything on behalf of the estate. You may then renounce your appointment as Executor. Once you have taken steps on behalf of an estate, you may not be released as Executor without the court’s permission. Top Can I contest a Will if I’ve been left out of it? “Contesting a Will” is a general term that encompasses a number of different potential legal actions, all of which involve striking down or changing the terms of a Will. None of these actions should be started without a lot of forethought , careful consideration and proper legal advice. Occasionally a person who has been left out of a Will or has received less than they were expecting may wish to challenge the Will to obtain a greater share of the estate. A person contemplating this kind of challenge to a Will should be careful to ensure that they really do have a “right” to inherit from an estate.
Persons who may have the right to apply to the court for part of, or a greater share of, an estate include: • • • • a legally married spouse, common law spouse or adult interdependent partner who did not inherit enough to adequately support him or her a minor who did not inherit enough to adequately support them an adult who has a handicap that prevents them from earning a living and who is financially dependent on the deceased a person who was promised a certain asset (such as land) by the deceased, and in the expectation of inheriting that asset put in time, effort, work or money toward improving the land, or toward assisting the deceased
If you are an adult and are not financially dependent on your parents, your parents do not have to leave you any part of their estate. It is commonly thought that parents must treat their children equally, but this is simply a tradition and not the law. The courts in Alberta are cracking down on individuals who make applications for a larger share of an estate where there is no real legal basis for their position. Such people are being assessed significant costs by the courts, and may be required pay not only for their own lawyer, but for the estate’s lawyer as well. If you believe that you may be entitled to a share of an estate for one of the reasons above, or for any other reason, you should consult a lawyer. Top Do you have questions about Wills and Estates you’d like answered? Is there a topic you would like to see covered on this page? If so, click here to send your question to a Wills and Estates lawyer. If you would like one of our Wills and Estates lawyers to contact you, click here to provide contact information. To download our questionnaires for your own use, click here. To learn more about our firm and our lawyers, click here.