The farther away your executor is, the harder it is for your estate

We live in a very mobile society. Many of us have parents, siblings, or children who live in different provinces or different countries. For many aspects of our daily lives, it doesn’t make much difference, other than the difficulty in having regular visits. For estates, however, it makes a huge difference.

In Ontario, the courts have the right, at any time, to require an executor to pay a bond – basically, an insurance policy – to cover up to twice the value of the estate, in order to ensure that the beneficiaries are protected in the event that the executor disappears with the estate money. In practice, courts rarely ask for an estate to be bonded when the executor lives in Ontario. The further away the executor lives, however, the more difficult it gets.

If your executor lives in another province in Canada, usually they’ll be okay. If they live in a Commonwealth country, maybe they’ll be okay. If they live anywhere else – and that includes the United States – they will almost certainly be required to get a bond. This will result in increased costs to your estate, and will also make the entire administration take significantly longer.

If you have no one else, then by all means, pick an executor who lives further away. But if you have options, it is always better to pick Ontario resident executors.

Selling with a power of attorney

If you need to be away when your house is for sale, or if you become incapacitated or physically unable to sign paperwork, it is possible to sign by way of a power of attorney.

If you have an existing Continuing Power of Attorney for Property, this can be used to sell your home. If not, you can either create a new one, or sign a Limited Power of Attorney for Property that deals just with the specific property you are selling.

Either way, the power of attorney is registered in the local Land Registry Office so that it can be referenced on the sale document. You will need the original power of attorney; a copy will not do. Your lawyer will also likely want to talk to you, or to a doctor if you are incapable, to be sure that it is being used appropriately.

If done properly, powers of attorney can make a sale go much more smoothly in difficult situations.

Want to help the government pay its bills?

Then don’t do a will. In fact, don’t get any professional advice at all.

I regularly see issues in the way clients have things set up – whether that is how they are on title to real estate, beneficiary designations on investments, etc. Even if it’s just a matter of a will making it easier to avoid having to go through the probate process, if you have a will, you are likely to pay less in estate taxes.

Get a will, In the long run, you’ll save money.

Ontario vs Canada

If you’re looking at incorporating a business, you will have to decide whether to incorporate that business in Ontario or in Canada. But Ontario is a part of Canada, how does that make any sense?

It does make sense because corporations that are incorporated in Ontario fall under the Ontario Business Corporations Act. You can read the whole Act here if you would like.

Incorporating as an Ontario corporation means that you can do business within the province. This is typically chosen if you don’t expect your corporation to grow beyond the province or you’re only planning on doing business within the province. Your corporation’s name will be protected from registration by another business in Ontario.

Incorporating federally in Canada means that your corporation would fall under the Canada Business Corporations Act. You can read the whole Act here if you would like.

Incorporating as a Canadian corporation allows your corporation to do business across Canada and internationally. You must file ‘extra provincial’ registrations for any province that you will be conducting business in (for an additional fee). You will also have to pay an annual fee if you incorporate federally. Your corporation’s name will be protected from registration by another business across Canada.

The differences between incorporating in Ontario or Canada will have an impact on your business. If you are thinking of incorporating, either as an Ontario corporation or as a Canadian corporation, you should consult a lawyer. A lawyer will be able to take you through the whole process and ensure the execution of all the proper documents, whether you wish to incorporate in Ontario or Canada.

Celebrate Good Times

For many people, a major change in your life is a time for celebration. Maybe you recently got married or had a child or won the lottery. First of all, congratulations! Secondly, while this is a time for celebration, it is also an important time to check your will. You might not think to do so, but many major events in your life can impact your will.

A change in your marital status can significantly impact your will. If you get married, any existing will that you have has now been revoked (unless that will specifically states that the will is made in contemplation of your marriage to that individual). This means that your existing will is treated as though it no longer exists. Similarly, if you get divorced, any existing will that you have has now been revoked. Separation from a spouse does not revoke a will, meaning that your spouse can inherit under your will and could still be appointed as your executor.

It is also important to keep track of your assets in case those substantially change. If this is the case, your will might have to be updated to reflect these changes.

So if you just went through an exciting major change in your life, celebrate it, but also get your will updated if its necessary.

A secured credit line is still a mortgage

Be aware. If you’re selling, and you have a credit line that you borrowed against your house, this must be paid off. Factor it in to your bottom line so that you’re not shocked when the closing date comes around. And if you’re buying, be prepared to see it get registered against your new home – you get that nice low interest rate because your house is security. Legally speaking, it’s a mortgage, and the bank will treat it as such.

Where is your will?

Florence Griffith Joyner was a famous and highly decorated Olympic athlete. She made a will. She told everyone that she made a will. She figured that she had done what she needed to do.

The problem was, she didn’t tell anyone where that will was.

When she died, no one could find the will. It’s entirely possible that it’s still sitting in a lawyer’s office, or that she locked it away in a safety deposit box at a bank she used for nothing else. And in the end, after a years-long fight between her husband and her mother, a third party was appointed as the executor.

It doesn’t matter whether you’ve made a will if your executor and beneficiaries can’t find it.

What does title insurance do?

In a recent real estate post, I discussed the need for a survey and why, often, it’s not as critical as it once was. The main reason for this is because of title insurance.

Title insurance, in a nice syllogism, insures your title. Basically, it protects you against issues that could come up to affect your ownership of the property that you did not or could not have found out about before your bought it – things like unregistered easements on your property, or encroachments from your neighbour’s property, or a prior owner doing work without a permit that would have normally not been permitted by the municipality. It also covers for fraud, in the event that someone impersonates you and puts a fake mortgage on your property or tries to sell it.

If you are getting a mortgage, you will almost always be required to get title insurance. Even if you aren’t, it’s usually a good idea – it’s low cost, and can give you peace of mind.

Fraud by Power of Attorney

A few weeks ago, two people were charged with defrauding an elderly woman in Clearview Township. They managed to commit the fraud through an abuse of a power of attorney.

There is a specific Criminal Code offence of theft by power of attorney. Section 331 of the Code states:

“3 Every one commits theft who, being entrusted, whether solely or jointly with another person, with a power of attorney for the sale, mortgage, pledge or other disposition of real or personal property, fraudulently sells, mortgages, pledges or otherwise disposes of the property or any part of it, or fraudulently converts the proceeds of a sale, mortgage, pledge or other disposition of the property, or any part of the proceeds, to a purpose other than that for which he was entrusted by the power of attorney.”

If you sign a power of attorney, it is very important to choose the right person to act for you. While none of us can control what that person ultimately does, the most important first step is picking someone who will always keep your best interest in mind – and not treat your money as their bank account, or decide to take what they consider their inheritance a little early.

Common law is not married

Period. End of story. In Ontario, common law spouses may be able to sue an estate for support, but they have no automatic right whatsoever to inherit if there is no will. It is harsh, but it is the law. If you are not legally married and most assets are not in your name, your partner needs a will or you will be left out in the cold.