Miscellaneous Drafting Provisions
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In this presentation, FMC's Doris Bonora outlines some popular provisions to consider when drafting a will. The presentation includes the following topics: - Survivorship Rules - Revocation of Will - Alleged Advances - Divorce and the End of the AIP - Waiver Under Section 77 & 78 Living in the House for 6 Months - Designation of Beneficiary Under Plans Section 71
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Miscellaneous Drafting Provisions
- 4. Survivorship Rules •In the event that my spouse and I die at the same time or in circumstances rendering it uncertain which of us has survived, I direct my Trustees shall deem my wife to have survived me for the purpose of determining the ownership of the joint assets I own with my spouse 4
- 5. Revocation of Will •Section 23: Will is not revoked on marriage nor on entering into an AIP agreement •Applies to all wills after the WSA is proclaimed •May not want gift to a spouse unless she actually becomes the spouse 5
- 6. Revocation of Will •Drafting: I direct that the appointment of Marry Dee as my Personal Representative and all bequests made to Marry Dee are conditional upon our marriage being solemnized prior to the date of my death. If the marriage is not solemnized, I revoke the appointment of Marry Dee as my Personal Representative and direct that all bequests shall lapse. My will shall be read as though Marry Dee had predeceased me. 6
- 7. Alleged Advances •Section 109 deals with court applications respecting alleged advances •Section 110 abolishes the presumption of advancement •Many parents make loans or gifts to children and they must decide at the drafting stage if these loans or gifts are to be collected or forgiven •We must recommend that they deal with it 7
- 8. Alleged Advances •The court can consider the interpretation of the will OR other evidence such as oral and written statements made by the deceases or an beneficiary ‐ section 109(3) •Draft around this so that the will is the sole determinant of these “advances” 8
- 9. Alleged Advances •Forgive loans and gifts: I have made loans and gifts to my children during my life and I direct all such loans are to be forgiven and that all such loans and gifts shall not be taken into account in calculating each child’s share of my estate. 9
- 10. Alleged Advances •Collect Loans: I have made loans to my children during my life and the records of such loans are in my papers. I direct my Trustee to calculate each child’s share of my estate by deducting the outstanding loan from such child’s share. This shall be the case even though the loan may not be enforceable in law. The loan is to be treated as an advance on my child’s share of my estate. If my child predeceases me, I direct that the advance shall be deducted from the amount that may be paid to my child’s children as a result of the death of my child. 10
- 11. Alleged Advances •Determine Amount: If the amount of the loan is unclear or uncertain, I direct my Personal Representatives shall have the authority to determine the value of the loan or advance and their determination shall be final and binding upon all persons having an interest in my estate. In the event that any child challenges the determination of my Personal Representative, I direct that the legal costs to defend the challenge shall be deducted from such challenging child’s share of my estate regardless of the determination of costs as awarded by the court. 11
- 12. Alleged Advances •Treat advance as a gift: I direct that I have transferred assets and money to my children during my life and I confirm that such transfers shall be treated as gifts and my Personal Representatives shall not calculate these gift as part of my child’s share of my estate. These gifts shall not be treated as an advance on my child’s share of my estate. 12
- 15. Divorce and the End of the AIP •The bequests I have made to my spouse are conditional on my spouse and I being married and living together at the time of my death. In the event that we are not married or not living together or both, I direct that all bequests to my spouse are revoked and for the purpose of interpreting my will, my spouse shall be deemed to have predeceased me. 15
- 16. Divorce and the End of the AIP •The same can apply to gift to inlaws •Drafting: I direct my Personal Representative to pay to my daughter‐in‐law the sum of $50,000 provided she is living with and married to my son at the date of my death. 16
- 17. Waiver Under Section 77 and 78 Living in the House for 6 Months • Spouse or AIP can waive right to live in house for 6 months • Must be done in a separate agreement • Drafting: My spouse and I have entered into an agreement with respect to the use of my residence following my death. I direct my personal representative to follow the provisions of such agreement and take such steps and expend such funds (including all legal fees) as are necessary to enforce the agreement. 17
- 18. Designation of Beneficiary Under Plans Section 71 • May designate a beneficiary of a plan (pension, annuity RRSP) in the will • May do so “generally or specifically” • Drafting: I revoke all designations of beneficiary that I have made in respect of my Registered Retirement Savings Plans, Tax Free Savings Accounts and pension and hereby direct that all such funds shall be paid to my estate to be distributed as part of the residue of my estate. 18
- 20. The preceding presentation contains examples of the kinds of issues people dealing with estate planning could face. If you are faced with one of these issues, please retain professional assistance as each situation is unique.