ch 15 - Planning to Pass on the Estate Flashcards
testator
person making the will
Executor / liquidator / trustees
person who settles the estate and distributes the assets
intestate
Having not made a will before dying or having an invalid will
2 MAIN PURPOSES OF A WILL
- Identify the persons whom the testator wants as beneficiaries.
- Appoint an executor.
3 Forms of a will
- Conventional or formal will
- Holograph will
- Notarial will in Quebec
codicil
amendment to a will and is technically considered to be a will on its own.
HOLOGRAPH WILL
will written and signed entirely in the handwriting of the testator.
Witnesses are not required
NOTARIAL WILL
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
GIFTS MORTIS CAUSA
deathbed gift made by a dying person
GIFTS MORTIS CAUSA 3 CONDITIONS
- 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.
COMPONENTS OF A WILL (5)
- 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
investment discretion clause
executor or trustee is restricted to making only conservative Investments. The clause allows for more flexibility
discretionary encroachment clause
gives the executor the discretion to use assets for the benefit of minor beneficiaries until they reach the age of majority.
life interest in a specific asset
allows the surviving beneficiary to use, occupy, and enjoy the property during his or her lifetime
guardian appointment clause
appoints a friend or family member as guardian (or tutor, in Quebec) of minor children.
tax election clause
allows the executor to make various income tax elections on the estate’s tax return, where appropriate and advantageous.
survivorship clause
if beneficiary dies before 30 days then will passed on to alternate beneficiaries
2 restrictions on Testator
cannot cut a financially dependent family member that is next of kin
They must provide for their spouse
executor’s duties
- recover the assets
- pay the debts
- identify the legatees of specific assets and residuary beneficiaries
- divide the property among them
characteristics of an executor
- financially stable
- have good judgment
- honesty
- integrity.
Compenation of executor based on three factors
- The value and complexity of the estate
- The time spent
- The skill and degree of care
What is the usual Executor compensation^?
5% of Estate
assets covered by the will
- 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
assets NOT covered by the will
- 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.
