In Ontario, bequests are gifts left to individuals or organizations through a Will. Bequests are revocable and can be changed or amended as long as the gift-giver is alive and has the minimum mental capacity required to create a Will. Bequests can be revoked by the creation of a subsequent Will or Codicil, or a written declaration of revocation.
Types of Bequests in Ontario
Different types of bequests exist in Ontario. These include:
- Specific Bequests: Gifts of specific items or amounts of money (e.g., jewelry, money, artwork, etc.).
- Residual Bequests: Gifts of the remainder of the Estate’s assets after all specific bequests, debts, taxes, and expenses are paid. This can be gifted through a percentage or share structure to individuals, classes of individuals, charities, and other organizations.
- Percentage Bequests: Divides the assets in the Estate to beneficiaries on a percentage basis.
- Contingent Bequests: Gifts that depend on certain conditions being met (e.g., if someone predeceases another; if a charity shuts down and there is a secondary charity the person wants to donate to).
Considerations for Bequests
When outlining bequests and determining how you would like your assets divided upon your death, it is important to remember the following:
- Minor Beneficiaries: While you can leave specific monetary bequests to children under 18, there are specific laws in place that outline who holds onto the assets until the child becomes of age. This age can also be amended in the terms of the Will if you are uncomfortable with the thought of an eighteen-year-old coming into large sums of money!
- Charitable Bequests: Many people also like to leave bequests to their favorite non-profits, organizations, and charities. These donations made by the Estate can be claimed on the T3 Trust Income Tax and Information Return, potentially leaving the Estate with residual income tax benefits.
Importance of Legal Assistance
It is advisable to have a Will created by a lawyer to increase the likelihood that your final wishes will be fulfilled and properly followed. Without a validly executed Will, your wishes may not be followed, and you may not be able to leave money or gifts to your loved ones, favourite charities, or organizations.
Benefits of a Lawyer-Drafted Will
- Compliance with Legal Requirements: Lawyers will be able to advise you on the best way to draft your Will so that it complies with Ontario’s legal requirements, in addition to optimizing Estate Administration Tax (Probate Tax) and Capital Gains Tax liability.
- Customized Solutions: Having a lawyer create your Will may aid in outlining specific provisions you would like to include, including complex and diverse interests, protection of family businesses, and protecting children from a previous relationship.
- Clarity and Precision: A Will drafted by a lawyer often reduces the likelihood of disputes among beneficiaries by ensuring your wishes are clearly understood and customized solutions are used to address unique situations and preferences.
Legal Requirements for Binding Bequests
There are specific legal requirements that need to be followed for bequests to be binding. These include:
- Proper Execution: The Will must be signed by the testator in the presence of two witnesses who are not beneficiaries or the spouses of beneficiaries.
- Capacity: The testator must have the mental capacity to understand the nature of the bequest and its implications.
- Intent: The testator must intend for the document to be their final Will.
Call HGR Graham Partners LLP to meet with one of our experienced Wills and Estates lawyers to discuss the creation of your Will and how to ensure that your wishes are followed!
This article is intended for general information purposes only and is not intended to provide legal advice. Readers with concerns about how this affects situations or transactions should obtain the independent review and advice of legal counsel.