Frequently Asked Questions
Wills & Estates
What does the term “probate” mean?
The Certificate of Estate Trustee with a Will, formerly known as “Probate” is the process of applying to the Ontario Superior Court of Justice to certify that the Will attached to the Application for Probate is in fact, the Last Will and Testament of the Deceased. Once certified by the Court, the person named in the Will as the Executor/Estate Trustee has legal authority to manage or distribute the Estate.
“Probate Fees”, properly known in Ontario as “Estate Administration Tax” is calculated using a specific formula. On average, this works out to be approximately 1.5% of the value of the Estate.
If someone dies without a Will, provisions of the Estates Administration Act combined with the Succession Law Reform Act and the Rules of Civil Procedure create a scheme by which the property of a person who died wholly or partially intestate is to be distributed.
Should I specifically name my young children in my Will?
Generally, we do advise to specifically name your young children in your Will. In saying this, a couple things to consider are whether you are planning to have more children and if you wish to disinherit a child.
When naming beneficiaries in your Will, make sure to be as clear and precise as possible. This will help the people who are carrying out your final wishes better understand who you want to receive your property and help avoid potential mistakes.
When naming people as beneficiaries, make sure to use their full legal names. It can also be beneficial to add the person’s relation to you (e.g., spouse, father, sister). If two beneficiaries have similar names, be sure to distinguish between them in some way (“my father, John Smith and my brother, John Smith Jr.”).
You should be aware that until those children become 18 years old, they will not directly receive any assets you designate for them. The assets you leave to minor children will need to be put into a Trust (which you can establish in your Will) and will be managed by the Trustee of that Trust, who may be your already designated Trustee, the child’s Power of Attorney for Property or the Public Guardian and Trustee. In this way, minor children can receive the benefits of distributions from the Trust but will not themselves control those distributions. Many people choose to set an age over 18 years (such as 21 or 25) as the age when a child will have full control over their inheritance. This can be done in a Will.
What is “joint tenancy”?
Joint Tenants and Tenants in Common are the two most common forms of real property co-ownership in Ontario.
Joint tenants have one and the same interest and an equal right to enjoyment of the property during their lifetimes. Joint tenants benefit from the right of survivorship. This means that the survivor of two joint owners would automatically inherit the entire and sole ownership of the property in question, upon the death of the other joint owner.
Tenants in common own their respective shares of the property separately. Each tenant in common holds an undivided interest in a property. When a tenant in common dies, his or her interest in the property would pass to the beneficiaries named in his or her will o (as opposed to passing to the surviving tenant in common owner). Property passing to the beneficiaries of a deceased tenant in common will be subject to estate administration and Estate Administration Tax or probate tax. How you hold title to a piece of property is an important consideration in estate planning.
What is Land Transfer Tax? How much will I have to pay?
The Province of Ontario requires a purchaser of real property to pay land transfer tax on the registration of any Transfer/Deed. It is paid to the province (or the municipality, in some instances) by the buyer of a property; sellers never pay this tax. Certain metropolitan areas will have a higher Land Transfer Tax due to the fact that there is a provincial portion and a portion charged by the municipality. Homebuyers in Toronto, for example, will pay double what their counterparts in Ottawa pay.
You can use our land transfer tax calculator to calculate land transfer tax in Ontario (outside of the GTA).
I am a first-time home buyer. What benefits does the government have for me?
First-time homebuyers of an “eligible home” may be entitled to a refund of all or part of the land transfer tax. To claim this refund, a purchaser must be at least 18 years of age, a Canadian citizen or permanent resident, and cannot have owned a home or an interest in a home anywhere in the world. The purchaser’s spouse cannot have owned a home or interest in a home anywhere in the world while being the purchaser’s spouse.
Beginning January 1, 2017, the maximum amount of the refund is $4,000.00. The refund will be reduced if one (or more) of the purchasers is not a first-time homebuyer.
The Canada Mortgage and Housing Corporation (CMHC), is a Crown Corporation that is also offering a “First-Time Home Buyer Incentive”. This new incentive helps qualified first-time homebuyers to make homeownership more affordable. Refer to https://www.cmhc-schl.gc.ca/en/nhs/first-time-home-buyer-incentive for more details.
What are the benefits of incorporating my business?
There are generally two things that will drive a decision to incorporate; tax planning and liability. From a tax perspective, the benefit of incorporating will be best determined by an accountant who can review your personal circumstances. Small business corporations in Canada can receive significant tax advantages so it is worth looking into, especially if you are not spending everything that you earn in your business and you can afford to retain some money in the corporation for expansion or other investment.
From a liability perspective, incorporating your business is one of the best ways you can protect your personal assets. A corporation can own property, carry on business, incur liabilities, and sue or be sued. As a separate legal entity, a corporation is responsible for its own debts. That means creditors of a corporation generally can seek payment only from the assets of the corporation and not from the personal assets of shareholders, directors and officers. In effect, that means business owners can conduct business without risking their homes, cars, savings, or other personal property. Owners of a sole proprietorship or partnership, on the other hand, face unlimited liability for both business and personal assets. There are exceptions to this asset protection strategy, particularly when it comes to government remittances like income tax, HST and payroll remittances, which should be discussed with legal counsel.
Is it really necessary to have a lawyer review a commercial lease before I sign it?
A commercial lease is a complex legal document and is often one of the largest and longest financial commitments an individual or corporation will make. Further, most commercial leases are not in a standard form and can vary substantially based upon the landlord and the situation.
In addition to the usual but important commercial provisions such as the term of the lease and monthly rentals, there are numerous other commercial and legal provisions and terms that may significantly increase costs or may otherwise adversely affect your business. It is necessary to ensure that important provisions that will allow a tenant to protect the way they do business should be included, and that the rights and obligations of both landlord and tenant should be set out as specifically as possible to ensure all parties understand their commitments.
Additional provisions to be mindful of: personal guarantees, excessive common area maintenance fees, ability to sublease and assign, whether or not a competing business can move in next door, options to renew and dispute resolution options (this is not an exhaustive list).
A Construction Lien was registered against my property. What do I do?
The law governing construction liens in Ontario is the Construction Act. A construction lien is, in essence, a charge or security on a property in favour of a person or business that contributed to the enhancement or improvement of that property. Construction liens are generally designed to protect contractors and subcontractors from the risk of not being paid for services rendered due to the parties higher on the construction tree becoming insolvent. The lien provides the lienholder with priority in payment over many other types of creditors if the property is sold through court ordered proceedings. If the claim involves an amount of $25,000.00 or less, the Construction Act provides that the parties can proceed through Small Claims Court.
If a property owner is served with a construction lien claim as a defendant, they have a time limit from the date of service in which to deliver a Statement of Defence, a Cross-claim, a Counterclaim or a Third-Party claim. The property owner should not ignore the claim. If you do not file a Statement of Defence, there are a number of consequences including the potential of the full amount of the claim being proven against you without notice.
The property owner has the option of either posting security for the lien and having the lien vacated, or paying the lien claimant an amount satisfactory to settle the lien in exchange for a discharge from title.
I received a Statement of Claim. What do I do now?
To determine how to respond to the Statement of Claim, you will need to read the documents thoroughly and decide which parts of the claim you agree with and which parts you disagree with, if any. It could be that the issue was caused by a third party and that in your opinion, you are not liable for anything. If you do not completely agree with the claim for any reason, you will need to draft and file a Statement of Defence within twenty calendar days of being served with the Statement of Claim. Alternatively, you can serve and file a Notice of Intent to Defend which extends the timeline for delivering a Statement of Defence by an additional ten days. Furthermore, you will want to consider whether to cross-claim against another defendant, issue a third-party claim against a defendant that is not already a party, or counterclaim against the Plaintiff for relief that you believe you are owed.
Your Statement of Defence must be served on every other party in accordance with the Rules of Civil Procedure, within the prescribed time limits. You must also file a copy of the Statement of Defence with the court.
You should not ignore the claim. If you do not file a Statement of Defence, you may be noted in default which has a number of consequences including the potential of the full amount of the claim being proven against you without notice.
A lawyer is in the best position to advise you on how you should respond to a Statement of Claim, and which documents must be served and filed with the court.
What is a prenup or marriage contract?
A “Prenup” or Prenuptial Agreement in Canada is a legally binding contract entered into before marriage. In some provinces and territories, the term Prenuptial Agreement is commonly referred to as a Domestic Contract or a Marriage Contract.
Two persons who intend to marry may enter into an Agreement which sets out their respective rights and obligations under the marriage or upon separation or termination of the marriage. The Agreement must be in writing, signed by the parties and witnessed. When drafting a Prenuptial Agreement or Marriage Contract, full and frank financial disclosure is imperative. These Agreements may deal with a broad range of matters, including the ownership or division of property, support obligations and “any other matter”. However, issues concerning custody of or access to children are not included in the Prenuptial Agreement or Marriage Contract.
It is strongly advised that you have your lawyer review these types of Agreements before you sign them.
What is required if I am separated and travelling outside of the country with our children?
It is strongly advised that if your children are minors, you have a Consent Letter drafted, executed and witnessed (by a Commissioner or Notary Public). We recommend that the letter be signed by every non-accompanying person or organization with the legal right to make major decisions for the child. Further, it is recommended that the letter be signed by any non-accompanying parent who has access to the child. The travel itinerary of the child should be included in the letter.
If you have a custody order or agreement, make sure that it permits the child to travel outside Canada. Travelling abroad with the child without the legal right to do so may result in legal or criminal consequences. Canadian custody orders are not automatically recognized or enforceable in other countries without going to court.
You should also contact the embassy or consulate of each country you plan to visit to check their entry requirements.
Mediation and Arbitration
What’s the difference between mediation and arbitration?
The main difference between arbitration and mediation is that in arbitration, the arbitrator hears evidence and makes a decision. Arbitration is like the court process as parties still provide testimony and give evidence similar to a trial but it is usually less formal. In mediation, the process is a negotiation with the assistance of a neutral third party. The parties do not reach a resolution unless all sides agree.
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