When we present to study clubs (as we just did last week), we often ask dentists to identify why they need to have a Will (and perhaps even a corporate / non-corporate Will if you have a professional corporation). They invariably say things like: so the government doesn’t get my stuff, to save taxes, to exclude the black sheep from getting anything, and to make specific gifts to specific people. I wanted to shed some light on these and other issues, as there is often lots of confusion around them.
1. So the Government Doesn’t Get My Stuff
If you don’t have a Will or if you have a Will but all your beneficiaries are unable/unwilling to receive their inheritance, then there is a legislative order of individuals who receive all or some of your estate. Just check out Myth #1 in this article I previously wrote in Ontario Dentist magazine. Only if all these individuals (e.g. spouse, children, grandchildren, parents, siblings, nephews/nieces, etc.) are unable/unwilling to receive their inheritance will the government get it. This is pretty rare.
2. Save Taxes
When you die, your Estate Trustee may be required to submit your Will to probate to prove that they have the legal authority to deal with your property and administer your estate. As part of the probate process (now called “getting a Certificate of Appointment of Estate Trustee With a Will”), an ESTATE ADMINISTRATION TAX (about $14,500 on the first $1-million) is required to be paid. By having a corporate Will and a non-corporate Will, you can actually have your estate avoid paying those taxes on the value of your corporation’s shares. You can read more about this in Myth #6 in this previously mentioned article. Keep in mind that there are various ways in which your estate can pay less INCOME taxes – such as by transferring property to your spouse or dependant children or dependant grandchildren through your Will or taking advantage of the lifetime capital gains exemption on the sale of shares of a small business corporation. You are assumed to have sold off all of your assets on the date of your death.
3. Exclude the Black Sheep of the Family
You may want to give your spouse nothing in your Will. But you need to remember that, under family law (which trumps Wills and estates laws), your spouse can elect to receive what they are entitled to under the Will (i.e. nothing) or what they would be entitled to under family law (which, absent a marriage contract or prenup agreement, is 1/2 of the increase in net worth of the couple during the course of their marriage). Also, if you had a legal obligation to support a dependant at the time of your death and your Will did not provide for their adequate maintenance and support, then they can challenge your Will and receive an inheritance from your estate through the courts (by applying under section 58 of the Succession Law Reform Act).
4. Naming Someone to Care For Your Minor Children
You can name someone to be the custodian for your minor children and guardian of their property in your Will. This person can act in those capacities for up to 90 days after you pass away but will need to apply to the court for that formal recognition. While someone other than that person may also attempt to apply for that position, the courts will generally look at what is in the best interests of the minor child and give consideration to your final wishes in your Will.
5. Make Specific Gifts
That’s right: without a Will, you CANNOT make specific gifts of property to specific individuals or organizations (like a Charity). Your estate simply gets divided as per the legislative breakdown discussed in point #1 above. This means that your property may not go to the person(s) you wished to receive them.
Bottom line: you need a Will now. You need one before you travel, go in for surgery, or after you experience a significant change in your family or financial situation. If you’d like to get started creating your Will, just contact DMC today.
