1. Estate Planning – Ontario Perspective
The Bank of Nova Scotia Trust Company
Estate Planning – Ontario Perspective
Christine Brunsden
Estate and Trust Consultant
__________, 2017

2. Ontario Intestacy Rules
* Surviving spouse receives preferential share ($200,000.00) Remainder divided depending on children surviving
Intestacy is a combination of per stirpes and per capita distribution
Common-law spouses are not considered a spouse in relation to intestacy division

3. Two forms of Wills considered valid in Ontario
Will Formalities
Two forms of Wills considered valid in Ontario
Formal Will – signed at the bottom by the testator, and witnessed by two or more people in the presence of the testator
Holograph Will – written entirely in the testator’s handwriting, signed by the testator at the bottom (no witnesses are required)

4. Marriage and Marital Breakdown
Certain events can have unexpected results on one’s Will
Marriage: automatically revokes a Will in Ontario, unless made in contemplation of marriage
Separation: has no effect on testamentary gifts
Divorce: revokes any testamentary gifts to the ex-spouse, and revokes their appointment as an Executor, but does not revoke the Will itself (the testator is treated as having survived the ex-spouse)

5. Family Law Act (FLA) and Dependant’s Relief
A legally married spouse has the option to take under the Family Law Act (as if for a marriage breakdown) vs their entitlement under the Will
Certain individuals, including spouses, children, grandchildren, and siblings who were dependent on the testator may make a claim for support from the Estate under the Dependant’s Relief section of the Succession Law Reform Act (SLRA)
As common-law spouses do not have a right to make a claim under the Family Law Act, Dependant’s Relief is often the only remedy available to them

6. Income Tax Consequences on Death:
General rule is that an individual is deemed to have disposed of all of his/her assets upon death
This may result in significant tax liability (income inclusion of full proceeds of RRSPs/RRIFs, triggering of unrealized capital gains, etc)
Certain assets are exempt from taxation, including but not limited to:
1) Principal residence
2) Tax-Free Savings Accounts (TFSAs)

7. Income Tax Deferral Opportunities
Rollover of RRSPs/RRIFs to surviving spouse/ common- law partner’s RRSP or RRIF
Rollover to capital property to spouse/ common-law partner or a trust for spouse/common-law partner
Rollover of RRSPs or RRIFs to financially dependent minor child or grandchild*
Rollover of RRSPs/RRIFs to mentally or physically infirm, financially dependent child or grandchild*
Rollover of RRSPs/RRIFs to Registered Disability Savings Plan (“RDSP”) for a disabled child or grandchild*
Rollover of RRSP/RRIF proceeds to a lifetime benefit trust for a mentally infirm spouse/common-law partner/child/grandchild*
* Subject to certain eligibility criteria

8. Certificate of Appointment (“Probate”)
Obtaining Probate is the process of authenticating the authority of the Executor with the provincial Estate Courts
Benefits to obtaining Probate:
Limiting liability of the Executor
Provides proof to third parties that the executor has the authority to deal with the estate assets

9. Estate Administration Tax (“Probate fees”)
Ontario levies a provincial tax on the value of the assets that flow into the Estate, which is paid to obtain Probate
The schedule is as follows:
0.5% on the first $50,000 of Estate assets
1.5% on the value of Estate assets in excess of $50,000

10. Strategies to Minimize Estate Administration Tax
Many strategies exist to minimize Estate Administration Tax (a.k.a. Probate Fees) payable. Some of the most common are:
Holding property as joint tenants with right of survivorship (JTWROS)
Designated beneficiaries on registered plans and insurance policies
Multiple Wills
Trusts – Such as Alter Ego or Joint Partner Trusts

11. Two types of joint ownership of property in Ontario:
Joint Accounts
Two types of joint ownership of property in Ontario:
Tenants in Common (TIC) – each individual owner owns a respective interest (may not be equal), which they can deal with as they see fit during their lifetime or upon death
JTWROS – Each individual owner is considered to have an equal interest; upon death, their interest passes by operation of law (outside the Estate), to the surviving joint owner(s) equally *
* Subject to intention

12. Potential Pitfalls of Joint Accounts
When considering making property joint, one should be aware of the potential pitfalls, which may include:
Creditor claims
Marital claims
Income tax considerations
Estate litigation (based around intention of transferor)

13. Multiple Wills in Ontario
Having multiple Wills is a strategy in which an Estate is divided between assets that require Probate and those that do not
The main benefit is Estate Administration Tax savings (i.e. a $1 million Estate would pay approximately $15,000 in Estate Administration Tax)
Some examples of assets that could be included in a Will that does not need to be Probated (i.e. a Secondary Will) are:
Private corporate shares
Personal effects
Certain trust interests
Certain forms of real estate

14. Executor Compensation
No legislated Executor fee in Ontario
However, a tariff system has evolved in the courts that leads to a general rule of 2.5% on receipts and 2.5% on disbursements
The courts have been willing to adapt this based on a 5-factor model, which looks at the following criteria:
Size of Estate
Care, responsibility and risks undertaken
Time spent by the Executor managing the Estate
Skill and availability demonstrated by Executor in managing Estate
Results reached by the Executor in managing the Estate

15. Trust Basics
What is a trust?
A relationship between three parties – settlor, trustee and beneficiary. Separation of legal and beneficial ownership
Two main types of trusts:
1) Testamentary trusts
2) Inter-Vivos trusts

16. Inter Vivos Trust
Set up during your lifetime
Avoids Probate
Speeds up the distribution time upon death
Not a public document
Sets plan in place now, in case of your subsequent incapacity
Allows for income splitting
Can address the claw back issues
Corporate Trustee offers professional asset management

17. Alter Ego and Joint Partner Trusts
Alter Ego- Individual
Joint Partner- Spouses/Common Law Partners
Differences from Standard Inter Vivos Trusts
Must be 65 years of age or older
Alter Ego - Settlor is the only person entitled to receive the capital and income during his/her lifetime
Joint Partner - Settlor & Settlor’s spouse are the only ones entitled to receive the capital and income during his/her lifetime
Assets transferred into the trust do not trigger a capital gain upon transfer providing

18. Reasons for Creating a Trust
Blended families
Spendthrift beneficiaries
Disabled/vulnerable beneficiaries
Minor beneficiaries
Income and Probate Tax Planning
Long-Term Charitable Gifting
Capacity Planning

19. Scotiatrust’s Service Offerings
Estate Administration
Trust Management
Power of Attorney for Property
Personal Office
Estate Assist
Philanthropic Advisory Services
Institutional Custody

20. Individuals who could benefit from our professional services:
Complex family situations
Subsequent marriage
Blended family
Disabled child
Complex asset situations
Large estate with varied assets
Operating companies
Assets in foreign jurisdictions
Compliance / Regulatory issues
Non-resident beneficiaries
Non-resident executor/trustee
Foreign tax-reporting requirements
Wishing to include long-term trusts
Spousal
Henson
Philanthropic
Multi-generational

21. Question & Answer Session
Questions?

22. Not intended to provide legal advice
The Bank of Nova Scotia Trust Company
Thank You!
Not intended to provide legal advice
These are the rules at present time, subject to future legislative changes