ch 15 - Planning to Pass on the Estate

Question 1

testator

Answer 1

person making the will

Question 2

Executor / liquidator / trustees

Answer 2

person who settles the estate and distributes the assets

Question 3

intestate

Answer 3

Having not made a will before dying or having an invalid will

Question 4

2 MAIN PURPOSES OF A WILL

Answer 4

• Identify the persons whom the testator wants as beneficiaries.
• Appoint an executor.

Question 5

3 Forms of a will

Answer 5

• Conventional or formal will
• Holograph will
• Notarial will in Quebec

Question 6

codicil

Answer 6

amendment to a will and is technically considered to be a will on its own.

Question 7

HOLOGRAPH WILL

Answer 7

will written and signed entirely in the handwriting of the testator.

Witnesses are not required

Question 8

NOTARIAL WILL

Answer 8

In Quebec, a notarial will is a will that is drafted and attested by a notary.

It is signed by the notary, the testator,
and a witness

Question 9

GIFTS MORTIS CAUSA

Answer 9

deathbed gift made by a dying person

Question 10

GIFTS MORTIS CAUSA 3 CONDITIONS

Answer 10

• It must have been made in contemplation, though not necessarily in expectation, of death.
• It must be delivered to the recipient without any encumbrance.
• It can only be complete and perfect upon the death of the donor.

Question 11

COMPONENTS OF A WILL (5)

Answer 11

• Identity of the testator
• statement revoking all former wills or codicils
• Appointment of the executor
• Instructions to pay all just debts and taxes, as well as funeral and estate-related expenses.
• Identity of the beneficiaries to receive specific assets and the residue of the estate

Question 12

investment discretion clause

Answer 12

executor or trustee is restricted to making only conservative Investments. The clause allows for more flexibility

Question 13

discretionary encroachment clause

Answer 13

gives the executor the discretion to use assets for the benefit of minor beneficiaries until they reach the age of majority.

Question 14

life interest in a specific asset

Answer 14

allows the surviving beneficiary to use, occupy, and enjoy the property during his or her lifetime

Question 15

guardian appointment clause

Answer 15

appoints a friend or family member as guardian (or tutor, in Quebec) of minor children.

Question 16

tax election clause

Answer 16

allows the executor to make various income tax elections on the estate’s tax return, where appropriate and advantageous.

Question 17

survivorship clause

Answer 17

if beneficiary dies before 30 days then will passed on to alternate beneficiaries

Question 18

2 restrictions on Testator

Answer 18

cannot cut a financially dependent family member that is next of kin
They must provide for their spouse

Question 19

executor’s duties

Answer 19

• recover the assets
• pay the debts
• identify the legatees of specific assets and residuary beneficiaries
• divide the property among them

Question 20

characteristics of an executor

Answer 20

• financially stable
• have good judgment
• honesty
• integrity.

Question 21

Compenation of executor based on three factors

Answer 21

• The value and complexity of the estate
• The time spent
• The skill and degree of care

Question 22

What is the usual Executor compensation^?

Answer 22

5% of Estate

Question 23

assets covered by the will

Answer 23

• Assets registered in the sole name of the deceased
• fractional interest of Assets registered as tenancy in common
• Assets registered in the name of the deceased’s Estate

Question 24

assets NOT covered by the will

Answer 24

• Assets for which there is already a named beneficiary
• Assets that have been gifted before death.
• Assets for which the owners are registered as joint tenants with rights of survivorship
• Assets held in an inter vivos trust.
• Business interests covered by a buy-sell agreement.
• Assets covered by a pre-nuptial, cohabitation agreement, or matrimonial regime.

Question 25

What is Probate?

Answer 25

Probate is the legal process by which the courts confirm a person’s will to be his or her valid last will and testament.
Probating a will also validates the authority of the executor.

Question 26

2 Conditions under which a will is valid

Answer 26

• The will has been prepared by a mentally competent person and properly signed and witnessed.
• It has not been revoked by a later will, by marriage, or by destruction of the original document.

Question 27

Certificate of Appointment of Estate Trustee with a Will

Answer 27

court order identifying the executor and declaring that the will is valid

Question 28

Certificate of Appointment of Estate Trustee without a Will

Answer 28

document required if person dies with no will

Question 29

What are probate fees based on?

Answer 29

Total Value of Estate. Debts are not included in the estate except for mortgages

Question 30

assets excluded from the estate for probate fee purposes

Answer 30

• assets held in joint tenancy with right of
survivorship
• Life insurance proceeds
• Registered accounts with named
beneficiaries designated outside the will

Question 31

ways to reduce size of estate (list)

Answer 31

• Transferring ownership of property to someone else during their lifetime
• Transferring assets to an inter vivos trust
• Establishing a spousal trust under the testator’s will
• Holding properties jointly with right of survivorship
• Gifting money or assets to family members or to a charity during the person’s lifetime
• Converting personal debt into mortgage on personally held real estate or corporate debt

Question 32

In Quebec, the liquidator of an estate has the following responsibilities:

Answer 32

• Identify the successors and the property to be partitioned and distributed to each successor
• Recover the succession’s claims and pay its debts
• Distribute assets to the successors
• Prepare a rendering of account

Question 33

Probate process in Quebec

Answer 33

The existence of the will is publicized and the will is deposited in the record of the Superior Court of Quebec.
• It is established that the will appears to be valid.
• Interested parties are then able to obtain certified copies of the original will.
• The applicant (generally, the liquidator of the estate), a notary, or a lawyer completes the probate of the will.

Question 34

notice of inventory

Answer 34

notice identifies the deceased and indicates the place where interested persons may consult the inventory of the estate

Question 35

RENDERING OF ACCOUNT

Answer 35

If the liquidation of an estate lasts more than a year, the liquidator must prepare an account of his or her management to the heirs and creditors at least once per year.

Question 36

Formalities of Power of Attorney (3)

Answer 36

• Naming the donor and appointing the donee
• Specifying the authority being granted
• Signing of the document by the donor in the presence of two witnesses

Question 37

personal care power of attorney

Answer 37

allows the donor to appoint someone to make personal care decisions if the donor becomes mentally incapable.

Question 38

Continuing power of attorney for property

Answer 38

covers the donor’s financial affairs and allows the donee to act for the donor even if the donor becomes incapacitated.

Question 39

Non-continuing power of attorney for property

Answer 39

covers the donor’s financial affairs, but cannot be used if the donor becomes mentally incapable

Question 40

living will

Answer 40

provides instructions on the treatment a person wishes or does not wish to receive in the event of a terminal illness or incurable injury