Wills and Powers of Attorney in Ontario: A Guide for Business Owners and Families

1. Know what happens if there is no will

When a person dies without a valid will, Ontario calls it an intestacy. The Succession Law Reform Act then decides who inherits and in what shares, and someone has to apply to the court for authority to administer the estate. Ontario’s estate administration guide notes that the heirs are generally the spouse and closest next of kin.

The statutory formula may not match what you would have chosen:

• A surviving married spouse with no surviving children or other descendants receives the property.
• Where there are children, the spouse first receives a preferential share, an amount set by regulation, and then a portion of the remainder: one-half with one child, or one-third with more than one child. The children share the rest.
• A common-law spouse does not inherit under the Succession Law Reform Act, according to Ontario’s guide.
• If there is no spouse or descendant, the Act moves on to parents, then brothers and sisters, then nieces and nephews.

The Act also contains rules for married spouses who are separated at the time of death. Where there are no known next of kin living in Ontario, the Office of the Public Guardian and Trustee may administer the estate as a last resort.

2. Make a will that meets Ontario’s formal rules

To make a will in Ontario you generally must be at least 18 and mentally capable, which Ontario describes as understanding what property you have and what you are doing by making a will. Limited exceptions apply to some younger people.

Under the Succession Law Reform Act, a will must be in writing. A typed or printed will is normally:

• signed at its end by you, or by someone else in your presence and at your direction;
• signed or acknowledged in front of two or more witnesses present at the same time; and
• signed by those witnesses in your presence.

Witnesses can take part using audio-visual technology that lets everyone see and hear each other in real time, but at least one witness must be a licensee of the Law Society of Ontario. A will written entirely in your own handwriting and signed by you, called a holograph will, does not need witnesses.

Choose witnesses carefully: a gift in the will to a witness, or to a witness’s spouse, is generally void, subject to limited exceptions.

Will kits and online tools are available. Ontario’s seniors’ guide to legal matters cautions that some kits and services may not comply with Ontario law and should not replace legal advice.

3. Choose an estate trustee who can do the work

An estate trustee, sometimes called an executor, is the person you choose to manage your estate after your death. They must follow your will and the law. You can name more than one person. Ontario suggests considering each candidate’s age, time, ability to manage property and finances, and location; an estate trustee who does not live in Ontario might have to post a bond when applying for probate.

Talk to the person before naming them, and tell them where your will is kept. A person named in a will is not required to act, so consider naming an alternate. Private businesses also offer estate trustee services.

Business owners should also ask whether the person could work effectively with their accountant, partners and key staff.

4. Appoint an attorney for property

A continuing power of attorney for property lets someone you choose manage your finances, and it can continue to be used if you become mentally incapable. The person you appoint is called your attorney; they do not have to be a lawyer. According to the Public Guardian and Trustee’s Powers of Attorney kit:

• You must be at least 18 and mentally capable of giving the power of attorney. Your attorney must also be at least 18.
• The document gives your attorney authority as soon as it is signed and witnessed, unless you specify otherwise. Ontario notes that you can state that the attorney may act only if you become mentally incapable.
• Two witnesses must be present together when you sign. The attorney, the attorney’s spouse or partner, your spouse, partner or child, and anyone under 18 are among the people who cannot witness.
• Making a new power of attorney for property revokes any earlier one unless the document is changed to say otherwise.
• You do not need to register the document. The kit suggests taking a copy to your bank so questions can be resolved before your attorney needs it.

The kit also warns that an attorney could misuse this significant power. Without an attorney for property, Ontario says your family, including your spouse, cannot automatically step in. They may need to apply to court to become your guardian, and the Public Guardian and Trustee may act only as a last resort.

5. Appoint an attorney for personal care

A power of attorney for personal care lets someone make decisions about matters such as health care, nutrition, shelter, clothing, hygiene and safety if you become mentally incapable. Ontario’s seniors’ guide explains that it takes effect only once you become incapable.

You must be at least 16 to make one, and the person you appoint must also be at least 16, according to the Powers of Attorney kit. Do not appoint someone who is paid to provide you with health care or residential, social, training or support services, such as a landlord or paid caregiver, unless that person is also your spouse, partner or relative. The two-witness rules are similar to those for property.

A living will, also called an advance medical directive, records such wishes but does not appoint a decision-maker. Without an attorney for personal care, Ontario says your family can make some decisions, but not all.

6. Plan for your business as well as your family

Ontario’s estate planning page notes that owning a business is one of the situations where an accountant or financial advisor may help alongside a lawyer. Bring those advisers together so the will, powers of attorney and company documents fit.

Some points to raise:

• Who runs the business if you cannot? An attorney for property manages your financial affairs. Ask your lawyer how that authority will work with your corporation’s records, signing arrangements and any shareholder agreement.
• Which assets pass outside the will? Ontario describes joint ownership and beneficiary designations for life insurance and registered plans as other estate planning tools. Its Estate Administration Tax page leaves property that passes automatically to a joint owner, and plans or insurance with a named beneficiary, out of the estate value. Make sure these arrangements match your plan.
• How will probate costs affect the estate? Ontario’s Estate Administration Tax is calculated on the estate’s value at death, which includes business interests. The same page explains that when a certificate is issued for only one of several wills, only the assets in that will are counted. Ask a lawyer whether a multiple-will approach suits your circumstances.
• Who inherits the company? Consider whether a family member will run it, sell it or need help.

7. Keep your documents current

Review your documents after major family and business changes.

• Marriage: under the current Succession Law Reform Act, a will is revoked by a later will, a properly signed written revocation or destruction with the intention of revoking it. Marriage is not on that list, so a will made before marriage may still stand.
• Divorce and separation: unless the will shows a contrary intention, a divorce revokes gifts to the former spouse and their appointment as estate trustee. The Act applies similar treatment to married spouses who meet its definition of separated at the time of death.
• Powers of attorney: you can revoke one at any time while capable. The Powers of Attorney kit says the revocation must be written, signed, dated and witnessed in the same way, and that you should notify your attorney and financial institutions.
• Business and assets: review your plan when you buy or sell a business, take on partners, acquire property or change beneficiary designations.

Keep originals where the right people can find them. A lawyer can store your will.

8. Understand estate administration basics

After a death, the first step is to find the will. An estate trustee then winds up the person’s affairs, pays taxes and debts, collects assets and distributes what remains, as Ontario’s guide explains.

Probate asks the Superior Court of Justice to appoint or confirm the estate trustee. It is not always required, but an estate normally has to be probated if the person owned real property or assets held by a financial institution. According to Ontario’s probate page:

• With a will, the named estate trustee usually applies. Without one, a spouse or common-law partner usually has the first right to apply, followed by close adult relatives.
• Beneficiaries must be served before filing. A bond may be required, for example when there is no will.
• Estates valued at up to $150,000 can apply for a small estate certificate.

The Estate Administration Tax is $15 for every $1,000, or part of $1,000, of estate value above $50,000. An Estate Information Return must be filed with the Ministry of Finance within 180 calendar days after the certificate is issued.

A surviving married spouse who wants an equalization payment under the Family Law Act instead of their entitlement under the will or intestacy rules must file an election within six months of the death; Ontario recommends speaking with a lawyer first.

9. Featured Ontario provider: Shaikh Law Firm

Shaikh Law Firm is a Mississauga law firm founded by Ali Shaikh. According to the firm’s biography, he was called to the Ontario Bar in 2016 and practises corporate and commercial law, family law, real estate, wills and estates, and civil litigation.

The firm’s wills and estates page describes wills for individuals, couples and families; continuing powers of attorney for property and powers of attorney for personal care; estate planning that includes business succession planning; and help with Certificate of Appointment applications. It says business owners may require planning beyond a standard will and lists primary and secondary wills for private company interests. The page says virtual services are available throughout Ontario, with in-person appointments by prior arrangement.

Ask the firm which documents suit your situation and how fees are charged. You can view Shaikh Law Firm’s PCBO business profile or read about its wills and estates services.

10. Questions to ask a lawyer

Bring a list of your assets, debts, business interests and existing documents, then ask:

• Who would inherit if I died today, and does that match what I want?
• Who should be my estate trustee and attorneys, and who are the alternates?
• Should my attorney for property act now or only if I become incapable?
• How will my documents work with my corporation, partners and any shareholder agreement?
• Which assets pass outside my will, and are those designations consistent with my plan?
• Would multiple wills or a trust make sense for my estate?
• Where will the originals be kept, and when should I review them?
• What will the work cost?

If you do not have a lawyer, the Law Society Referral Service can connect you with a lawyer or licensed paralegal; Ontario’s seniors’ guide describes a free 30-minute consultation.