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Wills and Estates
A will is a document in which a person specifies the method in which they would like their estate to be managed and distributed after their death.
Dying without a Will
- Your possessions may be transferred to the Government of Manitoba. When you die without leaving a will, your possessions will automatically go to your next of kin. If your next of kin was failed to be notified of your death, or have passed away, then your possessions become “unclaimed” and will be given to the Government of Manitoba.
- What happens to your estate is determined by the law. Your estate is distributed using the law at that time. What is stated in the current law could be your final wish, but the law is always subject to change and your assets could be distributed differently.
- The wrong person may benefit from your estate. Another one of your family members may unintentionally receive your possessions if your next of kin has passed.
- If you die without a will, you could be causing future strain amongst your family members. Relatives may fight over your possessions, especially if certain items were promised to certain family members.
- Will someone you trust be managing your estate? When you die without a will, you cannot guarantee that your Executor will be someone who will distribute your estate fairly and grant your final wishes to completion.
- Your next of kin will have to pay to post a bond of surety to allow them to manage your estate, which is not only costly, but stressful.
- Your next of kin will need to apply to court to manage certain parts of your estate. They will be in charge of directing funds, and without instructions from your will, they may intentionally or unintentionally be withholding funds from someone who was meant to benefit.
- When you die without a will and have minor children, who will care for them? With no instructions from your will it is ultimately up to the courts.
What is Probate?
Put simply, probate determines whether or not a will is valid. Not only does it determine if a will is valid, but also what the terms of the will actually mean. Once the will is determined valid by the court, a Grant of Probate is administered to the executor, who will then be in charge of handling the deceased’s estate.
To file for a request for probate, the executor must gather all original copies of the will, as well as affidavits of execution, a full inventory of the deceased’s property, and a request for probate with an affidavit in support.
Once they’ve received the Grant of Probate, the executor needs to call in all assets and settle all the debts of the estate, which can take about a year or more. This one year period is often referred to as the Executor’s year.
If applicable, the executor should also apply for Canadian Pension Plan benefits (CPP), which gives a monthly pension to the surviving spouse, monthly benefits for dependent children, and a lump sum death benefit payable to the estate.
A release from the beneficiaries at the time of estate distribution may also be necessary. This release helps avoid extra expenses included in passing the estate’s accounts. This may require an application to pass accounts, which means filing a number of documents that must be served to all persons interested in the estate. This is essentially just the executor accounting for their administration and distribution of the estate assets.
What does the executor do?
The executor essentially collects all of the estate’s assets, pays all of the debts on the estate, and divides the rest amongst the beneficiaries. The executor can also be a beneficiary of the estate.
Application for Administration of an Estate
Dying without a will is called intestacy, and persons interested in the estate of the deceased can apply to the court for letters of administration.
Letters of administration or letters of administration with will annexed must be applied for in order of priority: spouse, child, parent, sibling, or niece/nephew of the deceased. Letters of administration will only be granted to residents of Manitoba.
No distribution of the deceased’s estate can take place until all liabilities have been discharged, including funeral and testamentary expenses.
In accordance with the Trustee Act, a notice of creditors should be published to settle all debts, and if necessary, notices under the Homesteads Act and the Dependant’s Relief Act should also be issued. The administrator of the estate must seek releases from all beneficiaries, just like an executor, at the time of distribution to save time and money.
Remuneration of the Executor/Administrator
Section 90(1) of the Trustee Act states that the executor/administrator is entitled to receive reasonable payment for their time spent on behalf of the estate.
The beneficiaries and the executor/administrator will decide together what is considered reasonable payment. When considering payment, the courts will look at how complex the estate is, and the time the executor (personal representative) spend on the estate. They will also consider if the representative commenced their duties with the benefit of the estate in mind, and if the representative completed a good portion of the work themselves or through a solicitor.
Currently, the court charges a filing fee equal to 0.7 percent of the estate’s net assets for filing probate or administration.
Living Wills/Health Care Directives
A health care directive, also known as a living will, declares your wishes as to medical treatment(s) you do or do not want administered if you are unable to make those decisions for yourself. A health care proxy is highly recommended as they are someone who will make health care decisions for you when you are no longer able to.
You are able to make a health care directive if you are 18 years of age or older. Only if you are unable to communicate your health care decisions will the health care directive become effective.
Your health care proxy can be anyone over the age of 18 who is mentally competent. Be sure to inform your proxy about your health care wishes and make certain that they are someone you trust. You may also want to consider appointing more than one proxy.
If you change your mind regarding your health care directive, you can alter it at any time by creating a new one, or destroying it.
Powers of Attorney
This document allows you to give to someone the power to act in your place, either immediately, or when mental incapacity is certified as described in the document.
General power of attorney gives someone the power to do all things that you can lawfully do. Specific (also known as limited) power of attorney gives someone the power to perform only specific tasks on your behalf. Anyone who is considered mentally competent can act as a power of attorney. You can choose more than one person to act as a power of attorney
Anyone who is 18 years of age or older can give power of attorney as long as they understand the nature and extent of their property and affairs, and can comprehend to whom they are giving the power, and the extent of their power as set out in the power of attorney.
You can change your power of attorney when:
- The mental capacity of the person granting the power of attorney is questionable, unless the document specifically states otherwise;
- The person acting as power of attorney is mentally incapable;
- There is death or bankruptcy on either party;
- The power of attorney is revoked by giving notice to the person named as power of attorney.
Contact Alghoul & Associates’ experienced lawyers for help with your will.