Jun 4, 2024
In the realm of estate planning, the importance of having a will cannot be overstated. A will ensures that your wishes are carried out after your passing, providing clarity and direction to your loved ones during a difficult time. However, the process of creating a will can often seem daunting, leading many individuals to turn to will kits as a cheap, accessible, and quick solution. Will kits are documents that can be purchased online or in-store, which walk the user through the process of writing a will (often, this is done in a fill-in-the-blanks type format). But as with any DIY approach, there are both benefits and drawbacks worth considering when relying on a will kit for your estate planning needs.
The Good
There are several reasons why someone may choose to rely on a will kit.
- Cheap(er): Hiring a lawyer to draft a will incurs costs. In comparison, a will kit can be found online or in-store for a fraction of the price, leading many to believe that a using a will kit is the more cost-effective choice.
- Accessible: Since will kits can be found online and printed at home, they offer a way for people to write a will from the comfort of their own home. This consideration becomes especially important for those having trouble with mobility.
- Quick: People with busy schedules or urgent needs to create a will may opt for a will kit due to time constraints. They might see it as a quicker way to get their affairs in order without having to schedule appointments with a lawyer.
The Bad
The bad news is that will kits are not as great as they seem.
- A one-size-fits all approach: A major drawback of using a will kit is the lack of customization. Every individual and family situation is unique, and a one-size-fits-all approach may not adequately address specific needs or circumstances. Without personalized legal advice, important considerations or opportunities for tax optimization may be overlooked.
- Error-prone: DIY wills are more susceptible to errors and ambiguities, which can lead to legal challenges or disputes among beneficiaries after the testator’s death. These errors are highly likely because will kits do not offer the legal guidance necessary to navigate complex issues such as estate taxes, trusts, or guardianship arrangements. Without professional advice, individuals may inadvertently make decisions that have unintended consequences for those around them.
…and the Ugly
Mistakes in wording or failure to comply with legal formalities prescribed by Ontario’s laws can make the will difficult to interpret or render it invalid.
- Your will kit could lead to litigation: Ontario’s laws governing wills and estates are precise and may require specific formalities to ensure the validity of a will. DIY will kits may not adequately educate individuals on these legal requirements, leading to the inadvertent omission of crucial elements or failure to comply with formalities such as witness signatures. A will that does not meet the legal requirements could be challenged in court, potentially leading to litigation to determine its validity. In addition, inadequately drafted wills have the potential to create tension among family members, especially if beneficiaries feel unfairly treated or if the testator’s intentions are unclear. This can strain relationships and lead to costly and emotionally draining litigation to resolve disputes.
- Your will kit could be invalidated: Ontario’s laws regarding wills and estates are intricate and subject to change. Using a will kit without proper legal oversight increases the risk of creating a document that does not comply with current legal requirements. For example, a missing signature or a partially typed will may be deemed invalid. Even seemingly minor discrepancies or omissions can result in the will being declared invalid by the courts.
Takeaway:
When drafting a will, whether through a will kit or a lawyer, it is vital to return to your core goals and values. Do you want to ensure that your assets are distributed in a specific manner? Is your goal to provide for loved ones, or safeguard against unwanted outcomes and beneficiaries?
While a will kit may offer a quick and accessible solution, it may not provide the level of customization and expertise necessary to address your individual needs. In addition, while a will kit may be the cheaper option outright, you may be signing your loved ones up for spending thousands of dollars in legal fees later down the road (even if the matter is resolved amicably).
Ultimately, estate planning is about more than just filling in blanks or checking off boxes—it is about crafting a document that reflects your values, priorities, and desires for the future. After all, the decisions you make today will shape the future for you and your loved ones tomorrow.
Diana Begaliyeva
Nothing contained in this post constitutes legal advice or establishes a solicitor-client relationship. If you have any questions regarding your legal rights or legal obligations, you should consult a lawyer.
May 23, 2024
When you retain a lawyer, you will often hear the terms “Trust Account” or “In Trust”, but what exactly does that mean? A trust account is a specialized bank account that lawyers use to hold funds received on behalf of a client or a third party in a regulated matter. As stated on the Law Society of Ontario website, the most common type of trust account is a mixed trust account which pools money for multiple clients. Any interest earned is remitted to the Law Foundation of Ontario.
As for the term “In Trust”, this specifies that the funds are meant for this account.
Why Does a Lawyer Have a Trust Account?
Lawyers have trust accounts to manage client funds responsibly and safely, as part of their fiduciary duty. These accounts ensure the protection and safekeeping of client funds.
The Security of a Trust Account
Trust accounts are strictly regulated by law societies to ensure the secure and ethical handling of client funds. In Ontario, trust accounts follow stringent rules set by the Law Society of Ontario. These regulations guarantee the security of client funds and ethical management of the account. Law firms are closely monitored to ensure compliance with these rules and regulations.
Why Would my Money be in a Trust Account?
Below are a few examples of when funds would be deposited into Trust:
- Retainers: As specified in a Retainer Agreement, when a client chooses to be represented by a lawyer, a retainer fee is often required to secure the lawyer’s services. The retainer funds are held in the firm’s trust account and used for future legal billings.
- Court-Ordered Funds/Settlement: Funds awarded by the court can be deposited into a trust account before being distributed to the client or third parties.
- Third Party Disbursements: During the course of a proceeding, various costs may arise, such as payments for court reporters, mediations, and expert opinions. Payments for these expenses can be managed through the trust account.
Lawyers are required to maintain a client trust ledger for each client with funds in the trust account, recording all transactions that come in and out of the account. Clients can ask to view this ledger at any time to see the flow of funds.
For more information you can follow this link to the Law Society of Ontario website: https://lso.ca/lawyers/practice-supports-and-resources/topics/managing-money/trust-accounts
We “trust” that you find this post a helpful tool in understanding the importance and security of trust accounts!
Emilia Szczepkowski
Nothing contained in this post constitutes legal advice or establishes a solicitor-client relationship. If you have any questions regarding your legal rights or legal obligations, you should consult a lawyer.
Apr 18, 2024
As someone who considers themselves to be creative, whether that’s painting nail art or finding the right outfit, it all boils down to having the right color, fit, and the perfect pair of shoes to get the job done.
The same can be said about being a law clerk at Casey & Moss. Over the last 6 years, I have learned the following formula for a happy working environment:
Passion/Interest: Enjoying the work you do and being motivated to do it goes a long way. It allows you to not only do the work but also find joy in doing it. It also impacts the quality of your work you provide to clients when you have a genuine interest in the task at hand.
Organization and Planning Ahead: “If you fail to plan, you plan to fail”—at least that’s what they always say. Keeping track of court dates, deadlines, and limitation periods along with your everyday tasks can pile up and overwhelm you if they are not carefully organized. Set priorities for your tasks, make a to-do list, and find a work plan that helps you get through your files. One thing I aim to do is skim through my emails at the start of the day, delete any junk or promotional emails, and move emails that do not have a task attached. For emails that do have a task, I determine if it will take one minute (saving a document or a simple reply) or if it might take 30 minutes (drafting an affidavit and supporting documents).
A Little Creativity: Sometimes the task at hand requires a little creativity or a new approach. Start by discovering new ways to operate the software and programs that your firm currently uses to improve your productivity and quality of work. When I first started, I had no idea how to use a MacBook, but not only did I learn the basic functions to get the work done, but I also found shortcuts, quick keys and steps that made what I needed and wanted to do much easier.
Expect the unexpected and adapt to change: Life is unpredictable, and so is work. A last-minute court date, a new file with a fast-approaching limitation period or a settlement can change the plan for the file. Sometimes things happen that change the course of the work that we have already started and learning to adapt to that change and work to accommodate the new plan helps to alleviate potential stress. My motto when I have a heavy workload for the week or even the month is “take one step at a time” and “thank you, Jesus.” It reminds me that I’m human and gives me peace.
Take a Break: In everything, there should be balance and burnout is real, so take a break. Use your vacation days and relax. When you leave work, remember to enjoy your life, go to the gym, go to the movies, take a nap, go swimming, go to church, and clock out and have fun. Life is all about balance; remember to find it.
These are just a few things that have worked for me in the past and still work now. Happy clerking.
Olesya Johnson
Nothing contained in this post constitutes legal advice or establishes a solicitor-client relationship. If you have any questions regarding your legal rights or legal obligations, you should consult a lawyer.
Apr 1, 2024
Dying with Dignity Canada is a charitable organization that is 100% funded by private donations. The work of their national chapter is probably best known. It engages in advocacy, in particular to expand access to Medical Assistance in Dying (MAID). However, Dying with Dignity’s local chapters are committed to community education on a variety of topics related to end of life, including how to access care, what the available options are, what questions to ask and what information to consider in decision making. This is practical, accessible information that can be of real use to families faced with tough decisions. As a starting place, their website has a variety of information and educational resources.
Local chapters run lunch and learn sessions and other educational seminars, and will respond to enquiries for private sessions geared towards a specific audience. Their sessions can educate attendees on palliative care and practical tips for individuals and their families trying to get the best care that will meet their goals, whatever those may be and in their individual circumstances.
Laura Cardiff
Nothing contained in this post constitutes legal advice or establishes a solicitor-client relationship. If you have any questions regarding your legal rights or legal obligations, you should consult a lawyer.
Mar 25, 2024
Before placing title to your home, bank account or investments into joint ownership with another person, it’s important to understand the financial and legal risks involved. These transactions are regularly the subject matter of costly litigation, particularly when the recipient does not contribute financially in exchange for receiving the interest – a ‘gratuitous transfer’. When these disputes reach court, a key question for the judge is the transferor’s reason for making the gratuitous transfer.
Why might you want to gratuitously transfer ownership of an asset into joint tenancy?
1. As a Gift
On your death, ownership can go directly (by right-of-survivorship) to the surviving joint-tenant – for example your spouse or child – without passing through your estate. This means probate fees are avoided, as well as the inconvenience and delay of estate administration.
The gift has two varieties[1]: a “True Joint Tenancy”, where you confer upon the recipient immediate ownership rights that are equal to yours and the “Gift of the Right of Survivorship” where you maintain exclusive control of the asset during your lifetime[2]. In either case, what remains (if anything) of the asset upon your death becomes the sole property of the recipient, by right of survivorship.[3]
2. For Convenience
The gratuitous recipient is placed on title to assist you with managing the asset, but has no true, or beneficial, ownership rights. If you die first, the recipient becomes the sole owner in name (by right-of-survivorship), but he or she is obligated, as a trustee, to return the asset to the beneficial owner – your estate.
Somewhat bewilderingly, the legal documents giving effect to these transfers (e.g. real estate conveyancing documents, bank account opening paperwork) usually fail to specify whether beneficial ownership rights are being conferred. In other words, there’s no way of telling from the official documents what the transferor’s reason was for creating the joint tenancy – gift, or convenience[4]. This ambiguity about ownership creates a foothold for future litigation. Often the dispute arises years or decades later, when the transferor dies and his or her heirs proceed to challenge the ownership of the surviving joint tenant (to whom title has passed by right of survivorship), on the basis that the deceased never intended a gift, such that the asset really belongs to the deceased’s estate. I call this scenario the ‘fight of survivorship’.
There is need for reform in both commercial practices and the law, but until then, what can you do to minimize the risk of future problems when making a gift using joint ownership? Simply put, never make such a transfer for the second reason mentioned above (i.e. for convenience), as that is precisely what powers of attorney are for. The attorney for property has an obligation to manage your asset (or finances generally, depending on the scope of the power of attorney) in your best interests, but granting a power of attorney carries no possible suggestion that ownership rights have been affected.
A gift is the only good reason for making a gratuitous transfer into joint tenancy. Your gift intent should be clearly documented at the time you establish the joint tenancy. In your will (or a codicil thereto) you should specifically state that you want your jointly-held interest to pass by right of survivorship, and not to form part of your estate. Or you could instead write a letter expressing your desire to make a gift, and have the letter held in safekeeping by your lawyer, or by the transferee, who could produce the letter should his or her ownership ever be disputed[5]. Whatever method you use to document your intent, always be clear whether you intend a “Gift of the Right of Survivorship” or a “True Joint Tenancy”.
Though a gift is the only good reason for making a gratuitous transfer into joint tenancy, this doesn’t mean that joint tenancy is necessarily the right way to make a gift. On a $1,000,000 asset passing by right-of-survivorship, your estate would save roughly $15,000 in probate fees, compared to the same gift made by will. But a gift in a will can be undone or changed at any time prior to your death (if you still have the necessary mental capacity), whereas a gift made using joint ownership is irrevocable[6]. And with joint ownership, there are financial risks, like your jointly held interest being exposed to the claims of creditors of the recipient joint tenant, or abuse by the recipient who could potentially drain all the funds in a joint bank account or encumber a joint property without your consent[7]. Finally, as explained above, litigation tends to loom over gratuitous transfers into joint tenancy – but with the information and tips contained in this blog post this risk can be greatly reduced.
Greg Miller
Nothing contained in this post constitutes legal advice or establishes a solicitor-client relationship. If you have any questions regarding your legal rights or legal obligations, you should consult a lawyer.
[1] Kennedy v Smith, 2022 BCSC 1622 outlines the types of joint tenancies that can result from a gratuitous transfer.
[2] In Pecore v Pecore 2007 SCC 17, the Supreme Court established that the Gift of the Right of Survivorship, although appearing testamentary in nature, is really an immediate inter-vivos gift to the gratuitous transferee consisting of what remains, if anything, of the subject matter of the gift upon the gratuitous transferor’s death, if the gratuitous transferee survives the transferor (at para 48).
[3] If the recipient should predecease you, his or her ownership interest is extinguished, and you once again become the sole owner.
[4] However, RBC Dominion Securities offers both a True Joint Tenancy investment account, and a Gift of the Right Survivorship investment account (using their own nomenclature). Providing a choice of joint accounts, with clear descriptions of the rights of the parties during their lives and upon the death of the first joint tenant, makes great sense and reduces the risk of future litigation.
[5] See Feldman J.A.’s helpful description of the options for documenting a gift intention at para 83 of Saylor v Madsen Estate 2005 CarswellOnt 5896
[6] See Pecore, supra note 2 at para 56. Although these gifts are irrevocable, they can be effectively ‘defeated’ if the transferor depletes the asset prior to his or her death (for example by draining a bank account to a $0 balance).
[7] In a True Joint Tenancy there might be nothing improper about this, since both joint-tenants have equal rights to the asset (and each joint-tenant is considered to own 100% of the whole). With a Gift of the Right of Survivorship, though the recipient is not meant to be able to exercise control during the transferor’s lifetime, there is still a risk this could happen since the recipient is on title.
