Author: Amanda Lamers

If You Think You Don’t Need a Will, Think Again

Written by Amanda Lamers on November 17, 2022. Posted in Estate Planning.

We likely know that it’s a good idea to have a will. We might remember seeing those TV advertisements in the 1990s and early 2000s for the Canadian Legal Will Kit, which tried to suggest that making a will was as easy as a trip to the local drugstore. We did not know why a will was important; we just knew that we should have one before we die.

Not only is having a will important, but it’s also something that should be put in place long before we’re ready to think about actually needing it. Even though we shudder to think about death, we can’t typically predict how much time we have on Earth, and life is not always like the movies – we may not be able to quickly “get our affairs in order.”

November is ‘Make A Will Month’ in Ontario, and that’s because it’s so important for Ontarians to have wills in place long before they are necessary. Estate planning lets you decide what happens to the things that matter to you most, instead of someone else making those decisions for you.

Here are some of the most frequently asked questions about wills and estate planning to help put your mind at ease:

Why is it important to have a will?

Think of a will as being your ‘final say.’ There are a set of laws known as the ‘intestacy rules’ that determine what happens if you die without a will, and who should inherit your assets and property based on their position in your family. The problem with those rules is that they do not contemplate your actual relationships, such as an estranged sibling, or a special person you wish to recognize.

If your assets are left to the rules of intestacy, the estate settlement process can take longer and be more expensive, with results potentially out of line with what you want. For example, if you have dependents, you may want to ensure they have more than minimum entitlements; also, you will want to ensure they are left in the care of the person(s) you select. A will is a clear expression of your wishes that your executor can easily follow in order to protect or recognize the persons that matter most.

When should I make my will?

The short answer is – now! There are many joyous life events that should trigger you to put a will in place or to update your existing estate plan. Some occasions that should cue you to this are:

Marriage
Buying a home or piece of property
Having children
Separation or Divorce
Owning a Business
Owning valuable heirlooms
Family member alienation

Interestingly, until recently, the law in Ontario provided that marriage would invalidate an existing will. That law has now changed to protect against potential predatory marriages; however, other questions (and likely delays in settling the estate) may arise related to the entitlements of spouses in the absence of a domestic agreements (pre-nups). The bottom line: consult a lawyer to make and update your will as circumstances change.

Your priorities may change over the course of a lifetime, but consider your will as an integral estate planning tool that requires ongoing maintenance (review approximately every 3-5 years or upon the happening of one of the events listed above) – it’s not necessarily a “last testament”.

You also want to ensure that there will be no questions later about whether you were of sound mind when creating your will. Ideally, this is why a will should be undertaken before sickness or advanced age can get in the way of clear thinking. Generating your will with a lawyer can be helpful in establishing mental capacity and, of course, ensuring that the will is properly executed, avoiding terms that may later be susceptible to dispute.

What happens if I am still alive but cannot make decisions?

There are situations where, due to illness or injury, you may still be living but do not have the capacity to make your own decisions about your affairs. Along with your will, there are two additional documents that will usually be drafted: a Power of Attorney for Property, and a Power of Attorney for Personal Care.

People often use the term ‘power of attorney’ loosely, but the actual intent of these documents is for a trusted relative or friend to make decisions about your property (finances, assets, real estate, etc.) or about your personal care (medical and health care decisions) when you are unable to make those decisions yourself.

These documents ensure that someone YOU choose makes these important decisions regarding your health and finances in accordance with your wishes.

Can I make my own will?

The short answer is yes, but proceed with caution. One way to do this is with a ‘holographic will,’ which must be written completely by hand, signed, and dated. A holographic will should spell out your wishes and list an executor. But because such wills do not have to be witnessed like a lawyer-drafted will, their validity can be easier to dispute later with questions of authenticity, capacity, undue influence or duress. If there are serious questions about a holographic or do-it-yourself will, a court can declare the will invalid.

If your family finds an old piece of paper on your desk with some wishes scrawled on paper, it is very difficult to prove to a court that this represents your last wishes and that you were mentally competent at the time you wrote the document. Similar problems can arise with do-it-yourself will kits or online tools. A fill-in-the-blank format can be problematic; or, perhaps you inadvertently select a template that does not conform to legal requirements in your province.

Although you may think you need only a basic will, using a lawyer will help you ensure your bases are covered and you will likely be asked to think of things that would not otherwise occur to you – a will kit cannot provide advice fitted to your specific circumstances. There is no “one-size-fits-all” when it comes to proper estate planning. And, perhaps more importantly, the time you spend now may save time and money later.

Who keeps a copy of my will?

Your lawyer can keep a copy of your will, but you should hang on to the original. Of course, that means that your will is one of the most important documents in your home, and you should treat it as such.

Your will should be stored in a safe and secure place that protects it from the elements, such as a fire-safe box or safe. You should also make sure that a person you trust knows where your will is, preferably your executor, and how to access it in case you should pass unexpectedly.

Who makes the decisions about my estate after I’m gone?

One of the core benefits of making a will is deciding who makes these decisions on your behalf. The pattern for decisions without a will mentioned earlier can leave things to relatives that you may not have a close relationship with, or even distant relatives if you have no surviving immediate family.

When you make your will you can appoint an executor, who will be left in charge of distributing your assets and winding up all of the financial matters in your estate. This involves a fair bit of work, so it is crucial to pick somebody responsible and trustworthy who understands the responsibility. Moreover, your executor does not need to be a relative; you can appoint a close friend or even a trust corporation (and it’s always a good idea to have at least one alternate).

This is just scratching the surface. You have more questions, and I am always happy to provide more answers. Contact Lamers Law today to set up a no-obligation consultation to discuss your current estate plan, and what documents you can put in place today to make sure that your last wishes are honoured in the future.

Debating Getting Married? Read this first

Written by Amanda Lamers on November 1, 2022. Posted in Prenuptial Agreements.

Whether you’ve been married once before, or just don’t see the need for a big ceremony, more and more partners are choosing today to cohabitate without legally getting married. Recent statistics show that almost 25% of Canadian couples who live together are unmarried – the highest of any G7 nation.

The truth is that, even if the stigma is gone, cohabitation and legal marriage are not the same thing at law. There are some aspects where marriage and common-law are similar (support payments) and others that contain significant differences (property). Here’s a quick walk through of how it works, and some things to be aware of:

What are cohabitation and common-law, legally speaking?

There’s a common misconception that if you’ve lived with your partner for long enough, then legally you’re as good as married. That’s simply not true.

In Ontario, if you have been living with someone in a conjugal relationship for three years then you are legally considered common-law. If you have a child with that partner and have a ‘relationship of some permanence’, whether through birth or through adoption, the time period shortens to one year. While common-law does have some legal protections, it is not a marriage.

To be legally married, you need to go through a civil or religious ceremony with your partner (sex and gender are irrelevant) by someone who is legally allowed to perform marriages – a judge, justice of the peace or city clerk, or a religious official. A friend can perform a backyard ceremony, but it is not legally binding without a separate, legal ceremony performed by any of the above.

How are common-law and legal marriage similar?

There are certain things that don’t change whether you’re in a common-law marriage or a legal marriage.

The primary responsibility that does not change is support. Whether you are obligated to pay spousal support or child support, your financial duty to your dependents (spouse, children) exists whether or not you were legally married. The law treats these relationships similarly.

Along with child support obligations comes access – parenting time and decision-making responsibility for any children that you share. Your rights as a parent do not change depending on whether you were legally married or not – you still have the same right to access (now known as parenting time) and to custody (decision-making responsibility), unless you agree otherwise in a Separation Agreement.

How are common-law relationships different?

When you end a common-law “marriage,” there is no formal separation and divorce process like there is in a legal marriage. It also means that your property is not divided in the same way, and this usually comes into play when it comes to the home that you both share.

In a legal marriage, the value of the matrimonial home is calculated and usually divided evenly between the parties, whether one spouse buys out the other’s interest to let them keep the home, or whether they sell the home and divide the profits. In a common-law marriage though those requirements simply do not exist.

That does not mean that someone leaving a common-law relationship needs to leave empty handed; it just makes things a bit more complicated…

What is a constructive trust?

Even though common-law relationships do not trigger an automatic division of property, this does not mean that the role of former partners in acquiring or maintaining their property goes unrecognized by the law, and that they should not ultimately benefit from their contributions.

There is a legal remedy known as a ‘constructive trust’; for example, where a former common-law spouse can prove that their contributions enriched the couple’s property to their own personal detriment, or enriched the value of their home, the court can award that former partner either money or a portion of the value of the home.

The legal tests for trusts can be hard to meet, but even if a case does not meet these specifically, a lawyer can still argue what is called ‘unjust enrichment.’ In other words, your efforts during the relationship improved the other person to your detriment (e.g., by working to put them through school or staying at home with the children) and you could potentially reclaim the value of your contribution.

The courts will also look at whether you and your partner were engaged in what is known as a ‘joint family venture.’ As a common-law spouse you have no legal obligation to help support your partner, so the law recognizes what you may have done on behalf of your family, and can be applied to ensure that you don’t walk away empty-handed.

Why do I need a cohabitation agreement?

If you are not legally married, then you simply do not have the same default rights to division of property that you would if you were married and then separate. You can, though, protect your interests with a cohabitation agreement.

A cohabitation agreement can work like a marriage contract (they actually become marriage contracts if you get married) where you work together to look at what you would like to cover such as property division, support, any inheritances, and any joint property. You’ll also need to fully disclose your finances with each other to determine what to include.

To do a cohabitation agreement properly, both you and your partner will need individual counsel. A lawyer will review the document thoroughly to ensure that you’re getting what you’re entitled to, and that you’re not signing an unfair deal. No one can pressure either of you into signing a document, so each of you seeking independent advice is the way to go.

Even though you don’t want to think about a happy relationship ending, a cohabitation agreement is meant to protect you in the long run, and can make sure that your happy relationship does not someday place you in danger financially.

You want to make sure you know your rights before you sign, and that any agreement can withstand the test of time. It’s critical to seek assistance for careful drafting to ensure fairness to both parties, and so you can have the peace of mind to focus on what matters most – your relationship.

Contact Lamers Law today to set up a no-obligation consultation and learn more about how to best protect you and your relationship under the law.

The Five Documents You Need To Have

Written by Amanda Lamers on September 11, 2022. Posted in Contracts & Negotiations, Estate Planning, Prenuptial Agreements.

Lawyers are notorious for loving paperwork, and it’s not that far off from the truth. Even in a paperless firm like Lamers Law, there are still countless digitized documents that make up a client’s file – each one of them with their own story to tell.

Documents are important, of course, but if you’re trying to keep things simple then it’s important to prioritize what documents you have and when. While legal advice is required for any specific situation, here’s a general overview of the 5 most important documents that you need to have in your life (in no particular order).

Cohabitation Agreement

If you decide to move in with a partner, whether that’s before marriage or even if you decide not to marry, you should have a cohabitation agreement in place. A cohabitation agreement sets out what happens during the time that you are together. For example, if you live with someone long enough to be in a common-law marriage but do not have an agreement, there are laws around what happens to the property that you acquire together, and even your debts that you acquire while living together.

A cohabitation agreement (sometimes called a “cohab”) lets you effectively call the shots. You can decide what happens to your property, especially after the relationship ends. While anyone can enter into a cohabitation agreement, they can be extremely useful if you have a lot of assets coming into the relationship that you wish to protect.

Marriage Contract

If you have a cohabitation agreement and then later get married, your agreement becomes your new marriage contract. However, if you are not yet living together, then a marriage contract, also commonly known as a “prenuptial agreement” or simply a “prenup”, is key. Already married but without a pre-nup? You may still wish to consider a marriage contract, commonly called a postnuptial agreement.

While popular culture has given pre and post-nuptial agreements a bad image, they are highly effective tools for setting out the rights and obligations of each partner during a marriage. No one wants to start off their marriage by thinking about what happens if it ends. However, your lawyer can help you determine some major issues in advance, such as how you will organize the finances in your relationship, which could ultimately lead to a more peaceful union. Financial issues are often one of the most stressful topics for couples to deal with. And, should the worst happen, a marriage contract can set out how things like property will be divided or any spousal support obligations.

A marriage contract cannot control everything – for example, it cannot cover issues surrounding children, such as decision-making responsibility (formerly known as custody), parenting time (formerly known as access), or child support. But a marriage contract could help protect your most important asset – your home. Without a marriage contract, the matrimonial home is shared equally upon separation, regardless of whether one or both spouses are listed on the title or who paid for it – even if you owned the home before you got married. In the event of separation, a marriage contract can help prevent a long, drawn out or even ugly process. Having a contract in place that is filed with the courts can make any disputes simpler, or even avoidable, from the outset.

Employment Contract

Whether you are an employer or an employee, you should have a written employment contract in place. The reality is that every employee has an employment contract even if it was never made on paper. The basis for that contract is usually the governing employment law – either the Employment Standards Act for most employees, or the Canada Labour Code in certain federally-regulated industries (banks, travel, etc.).

While the law may serve as the foundation (and a contract cannot offer anything below the legal minimums), it does little to protect employers and it does not offer employees much clarity. An employment contract can spell out the exact terms of work including salary, bonuses, overtime, vacation, benefits, confidentiality, conflicts of interest, etc.

Operating without a written employment contract can be a costly mistake for employers because it does not restrict what employees are owed if their employment is terminated. For employees, a contract can offer a sense of certainty and security, and provides clear expectations of what they need to do to succeed in their role.

Will

There’s a common misconception that a will is only for older people. We remember commercials with people in their 70s and 80s talking about how to divide their estates. The truth is that none of us can predict the future, but a will helps us control the direction so that the things in life we love the most are cared for.

A will is more than just a will as we think of it. Depending on your circumstances you may have multiple wills that can dictate both your business and your personal affairs. A will can also include various forms of trusts, which can protect the inheritance you wish to pass on t minors, or someone incapable of handling their own affairs. Creating your will with a wills lawyer can make sure that all your bases are covered, and gives you the right peace of mind.

Power of Attorney

A will is for what happens after you pass away, but there may be a time before that where illness or injury prevents you from making your own decisions. This is unfortunately common with the very elderly, but can happen at any time due to a sudden illness or an unexpected injury. In those cases your decisions are made by a ‘power of attorney.’

A power of attorney is actually made up of two key documents – one for your property (including real estate, finances, and anything else that you own) and the other is for your personal care, i.e. medical decisions. The person that you name in these documents has the power to make key life decisions on your behalf, according to your wishes.

Without these documents, you could potentially have people that you don’t want making major decisions about what’s most important to you, so having them in place alongside a will can help you live how you want – even when you’re not the one in control.