Avoiding Estate Litigation: Challenges that May Arise

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Ali Ahmari Moghaddam /
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Avoiding Estate Litigation: Challenges that May Arise

It is essential to have a properly drafted estate plan that covers all of your assets and various parts of your estate. Once you visit an estate lawyer, they can review all of your personal information regarding your assets, and how to effectively bequest and how to transfer your assets to manage your expectations regarding estate issues.

There are two processes that a deceased’s assets can go through following death, probate or non-probate distribution. It is important to note that probate transfers of assets are subject to estate tax, and form part of the value of the estate during the probate process when making the necessary application for a Certificate of Appointment of Estate Trustee with or without a Will. However non-probate transfers are assets that can be transferred without court approval, and would include transfers such as your life insurance proceeds, transfers of registered retirement savings programs (“RRSPs”), registered retirement income funds (“RRIFs”), tax-free savings accounts (TFSAs), provided that if you have designated a beneficiary thereof in the policy or plan itself. Real estate property held as joint tenants, can also be transferred to the surviving joint tenants listed on title to the real estate without the need to go through the probate process.

It is important to understand the implications of including some assets in your will which will have to go through the probate process, and the assets that can go through non-probate transfers and are passed down to your beneficiaries more easily.

There are some challenges that can occur when it comes to creating bequests in a will, and ensuring there will be effective transfers in accordance with the testator’s wishes after your death. Estate litigation can often arise from disputes regarding what the testator actually intended. Potential issues can include confusion as to whom the testator wanted to receive a specific asset, and whether or not someone was included or excluded from will intentionally or unintentionally. If there is an interested party that feels as though they are disinherited, they may contest the will with the court to have the will provisions challenged partially, or have the will completely revoked and deemed invalid. This is why it is essential to be clear as clear as possible with intentions and instructions as a testator when preparing a will to ensure that you have made adequate and enforceable arrangements with your estate plan. It is also important to make frequent and regular reviews and revisions to your estate plan and estate planning documents, which can reflect ongoing changes in life such as marriage, divorce, having children, and other major life changing events. Frequent reviews of the non-probate property containing beneficiary designations should also be conducted, and to ensure said assets are designated to be given to the appropriate named individual.

Estate litigation can also arise by reason of challenges to the capacity of the testator at the time the will was prepared, and to question whether the testator possessed the requisite capacity to make an estate plan and corresponding will. It is paramount to address issues dealing capacity at the outset of the process, for example if an individual is known for having some memory issues or early stages of a medical condition that render them sometimes incapacitated, a formal medical assessment may be required to confirm capacity. There are tests that lawyers and doctors can conduct to see if an individual is lucid, and a lawyer must make this determination to conclude capacity, prior to beginning the drafting of the testators estate plans in their will.

Another challenge that is faced in estate litigation is whether a will has been validly executed and enforceable. It is essential to ensure that your estate documents are properly prepared by an lawyer, and follow the guidelines and formal requirements according to the law where the will is being prepared. For example, in Ontario there are a set of formal requirements for a will to be legally valid, which includes: a will being created by a person, being of sound mind, and over the age of majority in Ontario, and must be signed in the presence of two valid witnesses (there are also specific rules about who should and should not act as witness). This is important because interested parties can challenge your will if it is not executed validly, which could result in the wishes of the testator not being followed following death. There is an exception to the valid will requirement, which allows holographic wills to be made by an individual in their own handwriting, without a witness. However, this must be completely written in the testator’s own handwriting, signed and dating, and will still be subject to scrutiny. They are accepted in emergency situations such as when a testator is experiencing a life-threatening situation, and would like to express their wishes. Ultimately, for a Holographic will to be valid, it must be proven that it was written by the testator, and they had the requisite capacity to express their wishes in regards to the distribution of their estate. Ultimately, it is essential that you contact an experienced wills and estates lawyer to assist you in the planning of your estate in order to avoid any estate, trust and capacity litigation.

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