INHERITANCE LAW IN CANADA

In Canada, inheritance law is not regulated at the federal level, but in each of the provinces and
territories. We can highlight, as an example, the existing regulation in Toronto and Quebec. In
Toronto it is governed by the Succession Law Reform Act of 1990, and contains regulations
similar to that of English Law. When the deceased has not made adequate provision for the
proper maintenance of his dependents, any of them may request the court for a right to alimony
from the inheritance. Specifically, the following are entitled to make such a request: spouse or
de facto partner, ascendants, children or siblings of the deceased, whom the deceased supported
or had a legal obligation to do so immediately before his death. When determining whether this
right to support, its duration and amount, is appropriate, the court must take into account all the
circumstances of the request, including: the applicant's current and probable future income, his
or her ability to support himself alone, his age and state of physical and mental health, his needs
in accordance with his usual standard of living, the duration of the relationship and his
proximity to the deceased, his contribution to the well-being of the deceased, if the applicant in
turn has legal obligation to support another person, agreements between the deceased and the
applicant, assets received during the deceased's lifetime. As for Quebec, the Quebec Civil Code
of 199420, although based on the freedom of will (art. 703) introduces some limitations to the
freedom of will to grant protection to the surviving spouse and minor children: the institution of
family assets and the obligation of maintenance, restricting it to the Civil Code of Lower
Canada of 1865, which included the principles of the legal system. English. The maintenance
obligation subsists upon the death of the provider and is in favor of the spouse, ex-spouse and
direct line parents. Such amounts are deducted from the amount of the inheritance. On the other
hand, the family residence, the assets that occupy them and that are for family use, the motor
vehicles and the benefits accrued during the marriage under a retirement plan are considered
common family assets, with such assets being distributed 50/50. between both spouses. There is
also a compensatory benefit that allows the deceased's spouse to claim an amount of money
with which he or she contributed to the deceased's enrichment.

The Ontario Probate Law Reform Act

Only two witnesses are required for the proper execution of a will, although active duty soldiers
may proceed by writing their will without witnesses.
Ability

In Ontario, we have tools at our disposal to prevent or reverse provisions tainted by disability.
An incapable testator's will can be challenged, or abuse or unnecessary loss can be prevented
with a guardianship application. In ancient Rome, similarly, those individuals who attempted to
give away everything they owned (what we might call a “spendthrift” that the Romans called a
“ prodigy ”) were treated as if they suffered from a mental disorder.

Inheritance taxes

Under Augustus, who was rightly said to have “ made a desert and called it peace ”, a 5%
inheritance tax was introduced (with some restrictions, such as that it applied only to the well-
off). A little over a century later, Emperor Severus increased this inheritance tax to 10%. While
these figures may seem high (or not high enough, depending on where you are), they can be
much lower than inheritance taxes elsewhere, such as in the United States , United Kingdom ,
France, Japan, and Korea. South . In Ontario we don't have an inheritance tax, but there are
similar inheritance taxes, such as capital gains taxes and inheritance taxes.

Give a present

There is a marked difference between Ancient Rome and our common law system regarding
gifts between spouses. Unlike modern Ontario, where couples often use joint tenancy as a tax-
saving estate planning strategy, Roman spouses were prohibited from gifting each other. While
the rationale for this law is debatable, it is likely that it was intended to keep each spouse's
lineage property separate.

Testamentary freedom

The Romans, as well as their civil law descendants today, operated under what has become
known as "forced inheritance," under which testators are legally obligated to give it to their
children. As you point out above, in modern France, a father with a child must give that child
half of his assets. In Rome, the historian Gibbon says that “if the father bequeathed a quarter of
his estate to his son, he removed all cause for denunciation.” This is in stark contrast to common
law, in which testators can plan their inheritances with almost complete freedom .

WILL AND SUCCESSIONS IN ONTARIO

Testamentary and Inheritance Law:
What is a will?

“A person's will is a written document that defines that person's wishes regarding the care
and distribution of his or her estate after his or her death. It comes into effect when the
person dies.”

Inheritance law : law that regulates the assets of deceased persons

Power of Attorney – document authorizing a person to take charge of another person's

financial and healthcare affairs, for example in the event of incapacity

Why do I need a will?

A will allows you to determine who will receive your estate when you die.
A will is a way to limit estate taxes.
A will allows you to determine
who will take care of your minor children
if you die prematurely.

Power of Attorney: A power of attorney is a legal document, often called a “POA,” that
gives another person the right to act on your behalf.

In Ontario there are three main types of powers:

1. Power of attorney for personal care:

“Power that covers personal decisions, such as those related to housing and health care.” ~
Office of the Public Defender and Administrator of the Province of Ontario

2. Continuing Power of Attorney for Property

“Power of attorney that covers financial matters and allows your designated person to act
on your behalf even if you become mentally incapacitated.
~ Office of the Public Defender and Administrator of the Province
from ontario

3. Special power: limited power granted for specific activities for a limited time

What your lawyer needs to know to prepare your will

 Full name, address, occupation, telephone number, place and date of birth, marital
status, citizenship, divorces
 Date of any separation, marriage or cohabitation
 Full names of your intended beneficiaries
 If any of your intended beneficiaries have a disability, then a special provision must
be included in the will (“Henson trust”) so that the grant does not affect government
disability benefits

You can bequeath your assets to any person or entity such as :

 Spouse
 Children
 Brothers/sisters
 Father mother
 Friends
 Charity organizations

Will modifications
The following is a non-exhaustive list of examples of times when the will should be
modified:

 Death or incapacity of executors or guardians.

 Desire to change executors, beneficiaries, guardians, etc.
 If you signed your will when you had no children, you must make a new will when
your first child is born.
 A remarriage revokes your entire will and therefore a new will must be made when
the person remarries.
 Change in the name of you or any person mentioned in the will.
 Disposition of assets specifically mentioned in the will.

Generally, the will should be reviewed every five years with an attorney.

You can modify your will at any time. When you sign a new will, the old one is revoked.

What happens if I don't have a will?

1) Your assets will be distributed in accordance with the Inheritance Law Reform Act, RSO
1990, cS26, which provides that if there is a surviving (or “surviving”) spouse, that spouse
receives the first $200,000.00 of the deceased's estate, while the remainder of the estate is
shared between the surviving spouse and the deceased's children.
2) There is no provision for other family members, friends or organizations to receive
funds.
3) Common Law spouses receive nothing under intestacy.
4) An executor/estate administrator will need to be appointed through the court system,
which often causes delays and unforeseen costs
5) There will be no documentation confirming your wishes regarding guardianship of your
minor children
6) Family conflicts are more likely to arise between beneficiaries

What happens if I don't have a will?

Remember:
Assets with named beneficiaries, such as RRSPs ( Registered Retirement Savings Plans )
and life insurance policies, and jointly owned real estate (including a right of survivorship),
do not go into probate and, Therefore, they cannot be tested. Those assets are left to the
named beneficiaries or surviving joint owners.

What if I don't have a personal care power of attorney?

  If you are married, your spouse would be the first to make necessary health-related
decisions; and then, their adult children.
 There may be people who do not share your values and morals who can make
decisions regarding your health care.
 If there is confusion about who can make health care decisions on your behalf,
unnecessary delays and conflicts may arise between family members and/or friends.
 The Office of the Public Defender and Administrator may be involved.

What happens if I don't have a continuing power of attorney for property?

 No one, not even your spouse, will be able to access your personal financial
information without your prior consent. For this reason, any financial transaction
that requires your consent, such as selling real estate or consulting bank and
investment accounts, cannot be carried out without a court order appointing an
estate attorney. The Office of the Public Defender and Administrator may be
involved.

Excuses for not having a will or granting powers

1) “It costs too much.”
2) “The government will take care of everything.”
3) “If I make a will, I die.”
4) “I still don't have all my personal finances/papers in order.”
5) “I'm afraid that the lawyer will judge me.”
6) “I don't want to cause divisions in my family.”

WHO IS AN HEIR ACCORDING TO THE LAWS OF INTESTACY IN ONTARIO

Most people know that if a person dies without a will, the laws of intestacy govern the division
of their estate. Specifically, it is Part II of the Succession Law Reform Act, RSO 1990, c S.26 (
the " SLRA ") which is titled "Intestate Succession " that comes into play.

The question of who inherits where there is no will is easily answered in some of the following
scenarios:

 Where there is a surviving spouse (limited to married spouses, incidentally), that spouse
is entitled to the entire estate of the deceased (article 45(1));
 When there is a surviving spouse and a child, the spouse receives a preferential share of
the deceased's estate (i.e. $200,000.00 as of today) and if any remains, it is divided
equally between the spouse and child (section 46 ( 1)) ;
 When there is a surviving spouse and two or more children, the spouse is entitled to a
preferential share of the deceased's estate and 1/3 of what remains. The remainder is
then divided between the issue of the deceased (article 46 (2)).

The SLRA further addresses how the division of assets will be carried out when the only
surviving relatives are parents, brothers and sisters, and nieces and nephews (in the respective
order of preference). If the deceased has no surviving parents, siblings or nieces or nephews, the
next of kin provision applies (article 47(6)).
Although the SLRA attempts to clarify the division of one's intestate estate, it appears that
certain situations may arise that would lead to confusion, in the absence of case law providing
any guidance.

In Farmer Estate v Karabin Estate , an executor of a niece who predeceased the deceased
brought an application in respect of her alleged interest in the deceased's estate. The Ontario
Court of Appeal determined that the SLRA is limited to nieces or nephews who do not
predecease the deceased and does not extend to more remote matters. The Court of Appeal
relied on section 47(4) of the SLRA, which is worded as follows:

“Where a person dies intestate with respect to the property and there are no surviving spouses,

descendants or parents, the property shall be distributed among the surviving brothers and

sisters of the intestate equally, and if any brother or sister predeceases the intestate, the share

of the deceased brother or sister shall be distributed equally among their children ." [emphasis

added]
In interpreting this provision, the Court relied on the definitions of "child" and "problem" as
defined in the SLRA , that is, the definition of "child" includes a child conceived before and born
alive after the death of the parent and the definition of “problem” includes an offspring
conceived before and alive after the person's death.

In another matter, Kiehn v Murdoch , the Ontario Superior Court of Justice determined that
great-nieces and great-nephews are excluded from sharing in a deceased's estate under section
47(4).

Unfortunately, in circumstances where a particular scenario arises that has not been clearly
addressed by the SLRA and subsequent case law, an application for directions may need to be
initiated to receive some clarity from the Court as to how a particular intestate estate will be
divided.

TESTAMENTARY INTENTION AND INTESTATE SUCCESSION IN EISSMANNV

KUNZ

Testamentary freedom is a fundamental principle of estate planning in Ontario. In general,

testators are free to set their estate plan to include or exclude whomever they wish. When part or
all of a testator's estate plan fails as a result of intestacy , the Ontario Succession Law Reform
Act (the “ SLRA ”) steps in to provide the parts that will benefit as a result. From time to time,
the principles of testamentary freedom and intention and the laws of intestacy intersect in
peculiar ways. This intersection came to a head in the Eissmann v Kunz decision
In Kunz , the testator, Siegfried Kunz, died leaving no less than four testamentary documents
purporting to be wills, briefly summarized as follows:

1. A will drawn up in 1967, which divided Mr. Kunz's property between his wife and
daughter, Petra;

2. A will drawn up in 1982 in Mr. Kunz's handwriting, which stated that “the beneficiary
after [his] death is Petra”;

3. A will drafted in 2000, again in Mr. Kunz's handwriting, that sought to modify the 1967
will and listed a number of specific bequests to various beneficiaries. Mr. Kunz appears
to have later written about the original bequests to increase the amount of each. Once
again, Petra was listed as the sole residual beneficiary; and

4. A will drawn up in 2009, also in Mr. Kunz's handwriting, stipulated that Petra "would
not receive a single euro of our inheritance." In addition to the 2009 will, Mr. Kunz
expressly indicated that the 2009 will was to be an “amendment” to the 2000 will.

First, the Court was tasked with determining whose will would govern. The Court concluded
that the 2000 will was a valid holographic will, although it noted that subsequent handwritten
amendments had no force and effect as they did not meet the formal requirements for valid
amendments under the SLRA . The Court concluded that the 2009 will instead operated as a
codicil to the 2000 will as it did not dispose of any property on its face and therefore could not
operate as a stand-alone will.

The interaction between the 2000 will and the 2009 codicil is such that a conflict arose
regarding the disposition of the residue of Mr. Kunz's estate. The 2000 names Petra as the sole
residual beneficiary. The 2009 will completely revokes Petra's interest. Therefore, the 2009
codicil created a partial intestacy with respect to the remainder of Mr. Kunz's estate, and the
Court looked to the SLRA to determine who would inherit.

The hierarchy of intestate beneficiaries is set out in Part II of the SLRA . Mr. Kunz died without
leaving a surviving spouse, so the next intestate beneficiaries would be his children, i.e. Petra.
In an ironic twist of fate, the Court concluded that Petra had an exclusive right to all residues of
Mr. Kunz's estate, even though he had intended to expressly disinherit her under the 2009
codicil. The Court refused to give effect to Mr. Kunz's apparent intention to exclude Petra.

Simple estate planning steps, such as naming an alternate beneficiary under the 2009 will, could
have avoided this great irony. Ensure that the effects of your will provisions are properly
understood by taking the time to review your will with an attorney.
WHAT HAPPENS WHEN THE SPOUSE DIES WITHOUT LEAVING A WILL

Our firm recently had a client whose common law spouse of 20 years died without having made
a will. They had two teenage children, but he also had a son from a previous relationship.

Furthermore, the primary residence was solely in the husband's name. They had both
contributed to the upkeep of the property, but he had paid for its purchase before beginning their
relationship.

This is a case of intestacy (without will), the property passes to the three children, one of whom
is not yet of age.

The children's attorney must be involved

We were successful in ensuring our client was able to remain in the property and ultimately
obtain title. But the cost and stress of having a spouse die without a will could have been
avoided.

Property transfer

The problem could also have been avoided if the deceased common law spouse had transferred
the property into both names as joint tenants. This would mean that upon one's death, ownership
would pass to the survivor.

Common law spouses are often reluctant to transfer property, including primary residences, into
the name of a common law spouse because it gives the spouse rights to the property that would
not exist under law.

In any such transfer, each party should consider obtaining independent legal advice. But after
receiving such advice, the decision is theirs.

Common law spouses in a long-term relationship, especially if they have children, should
consider who they wish to leave their estate to. His intentions cannot be carried out without due
will.

If the couple is married and it is their primary residence, the titular spouse cannot dispose of the
property without the consent of the other spouse. But this does not mean that they should not
have a will.

WILLS WITH EFFECT ABROAD

Firstly, according to the Succession Law Reform Act, RSO 1990, c. S.26, that is, the Ontario
Succession Act, section 4. (1) (c), for a will to be valid in addition to being in writing, it must be
signed in its final physical part by the testator and by at least two witnesses, and all must be
present at the place at the same time when the will is signed.
In this sense, it should be noted that the province of Ontario has not modified its legislation
regarding the Doctrine of Substantial Compliance, which has been fruitfully used in cases
presented in Court in other provinces.

Therefore, and to comply with this essential requirement, your lawyer will make an
Affidavit of Execution or Sworn Declaration that will validate the will with respect to the
signature, that is, the presence of the two witnesses who saw the testator when he signed
his will.

This requirement is essential for the validity of the will only in Ontario, and not for it to be held
as irrefutably valid or recognizable in any of our countries, which, in some of them, requires the
presence and signature of three or more witnesses to that a will is valid.

However, there is the Convention that establishes a Uniform Law on the Form of an
International Will, issued by UNIDROIT in October 1973, of which Ecuador is the only Latin
American country that subscribes to this convention, which allows its lawyer to add to its will
meet the requirements that this convention demands so that your will issued in Ontario can be
recognizable in Ecuador from the point of view of the signature requirement.

However, there are specific rules in the Ontario Inheritance Act, already mentioned, regarding
form, formalities, validity and essential effects that both you and your lawyer must take into
account for an effective disposition and preparation of wills in relation to certain assets.

We refer, for example, to section 36.1 which establishes that, for real estate, that is, house, land,
farms, etc., they are governed by the internal law of the place where that property is located.

For movable assets, such as money, vehicles, etc., section 36.2 states that they are governed by
the internal law of the place where the testator resided at the time of his death.

However section 37. 1, establishes that whether they are real or personal property, the will will
be valid and admissible for validation (Probate) in the Court in Ontario, if at the time of its
preparation it complied with: the internal law of the place where the will was made; the testator
was domiciled; the testator had his habitual place of residence; or the testator was a citizen and
the rules governing the wills of its citizens existed in that jurisdiction.

All of these basic principles have been applied repeatedly by the Canadian Courts in different
cases and therefore, given the concurrence and interrelation of different domestic and
international legal norms that may apply in your particular case, if you own assets in your
country of origin, it would be It is advisable, in addition to the will you make for assets located
in this jurisdiction, to make another will, either in your country of origin or at your consulate
here in Ontario, which includes and treats assets located in that other jurisdiction, without them
being mutually revocable and that comply with the rules of the jurisdiction where said assets are
located.
SUCCESSION LAW IN THE CANADIAN PROVINCE OF QUEBEC

Canada is a federal state made up of ten (10) provinces, which have exclusive jurisdiction to
legislate on private law matters within their territory. All of Canada is regulated by the Common
Law legal system of English origin, with the sole exception of the province of Quebec, heir to
French civil law and inspired by the Code of Napoleon. Following the British conquest of New
France, French-Canadians became subjects of the British crown. However, they remained
subject to French law and achieved its continued application under British law. Over time, some
more liberal principles of English law were integrated into the French-based law of the
Province. During the British colonial period, numerous concepts relating to English inheritance
law became part of Quebec law and continued to develop within it. This French law and these
principles adopted from English law were first codified in the Civil Code of Lower Canada of
1865. An acquisition of English law that deserves special attention is the freedom to testate, that
is, the right of a person to make a will for the purposes of disposing of their possessions as they
wish at the time of their death. At first this freedom was absolute. In 1994, the Civil Code of
Lower Canada was replaced by the Civil Code of Quebec (CCQ). This reform led to the
appearance of a few, although not unimportant, derogations from the absolute freedom of will.
Indeed, a person can still dispose of their possessions as they wish, although currently subject to
certain limitations relating to close relatives. Currently, the law provides protection for the
surviving spouse as well as for the children, through the institution of family assets and through
the subsistence of the maintenance obligation. Despite these few restrictions created in recent
years, the freedom of will continues to be an essential principle of Quebec inheritance law.
Succession is regulated by the laws of the deceased's last domicile. It will begin in Quebec, and
Quebec law will apply, when the deceased had been domiciled in this province at the time of
death. Accordingly, the validity of any will will be determined in accordance with Quebec law.
However, in the absence of a will, the division of the estate is determined by law. Intestate
successions When the deceased did not dispose of his last will through a will, the liquidation of
the succession is regulated by the Civil Code of Québec (hereinafter referred to as “CCQ”).
These inheritances are called intestate (without a will). In those cases, the CCQ provides for the
methods of partitioning the deceased's assets. The legal transmission of inheritances benefits the
successors according to the degree of relationship they have with the deceased. It only includes
blood or adoption ties with the deceased. The surviving spouse who married or entered into a
civil union can also claim rights in an intestate succession, unlike the de facto spouse. Indeed, a
de facto spouse does not have the category of legal heir under the CCQ Consequently, if a
person wants his or her common-law spouse to inherit, he or she must provide for legacies of
personal property in a will, in order to avoid the consequences of legal transmission. If a person
dies without making a will, the division of the succession will be carried out among his
legitimate heirs (children or mother and father, brothers and sisters, etc.), as indicated in the
table below. The guidelines for legal transmission in successions are highlighted in the
following table. This table constitutes a brief description of a property division carried out under
civil law. Only the guiding principle is determined, with the understanding that exceptions and
special cases may lead to a different partition. It is necessary to consult a notary or a lawyer to
obtain relevant information for each particular case. Relationship CCQ Article Descendants:
sons, daughters Surviving spouse Privileged ascendants: mother, father Privileged collaterals:
brother, sister Descendants of privileged collaterals: nephews, nieces Ordinary and collateral
ascendants: grandparents, parents, uncles, cousins 666 2/3 1/3 0 0 0 0 667/668/669 100% † 0 0
0 0 672 † 2/3 1/3 0 0 0 673 † 2/3 † 1/3 0 0 671 † 100% † † 0 0 674 † † 1/2 1/ 2 0 0 674/675 † †
100% † 0 0 678 (1) / (2) † † † † 1/2 1/2 †: Does not exist 0: No right to succeed In an intestate
succession, the law favors the descendants of the deceased. In fact, when the spouse also died or
renounced the inheritance, the descendants receive the entire inheritance. Likewise, even in the
event that the surviving spouse participates in the succession, more than half of it is transmitted
to the descendants. If the deceased has no descendants, the division will be shared between the
surviving spouse and the privileged ascendants (mother and father) or, in case of absence,
between the privileged collaterals (brothers and sisters). In both cases, the largest portion is
transmitted to the spouse. Rules that regulate testamentary succession In the division of his
estate, a person can easily cancel the legal transfer by exercising his right to make a will. The
principle of freedom of will constitutes a fundamental aspect of property rights, which provide
that a person can freely dispose of his or her property. This principle adopted by Quebec law
from English law is included in article 703 of the CCQ. Consequently, a testator can make a will
to transfer, by means of a legacy, his assets to whomever he wishes, with almost no restrictions.
However, not everyone can make a will. Indeed, a valid will requires that the testator be legally
capable at the time of making his will. In that case, the will will remain valid even if the testator
eventually becomes incapacitated at the time of his death. Under this rule, a minor's will is
considered null and void. The will of an adult person under protective supervision is also
considered null, but only of relative nullity—its validity can only be challenged by those who
have a legitimate interest in doing so. Under Quebec law, three (3) types of wills are
recognized: 1) Notarial will: Made in front of a notary and at least one (1) witness. This type of
will is regulated by strict formal requirements and executed before a notary acting in his
capacity as a public official. Consequently, it constitutes almost indisputable proof of the
testator's intention. This document is difficult to object to. It is considered an authentic act,
except for the formalities for its approval. Its veracity does not need to be verified since it is
established by its own nature. 2) Holographic will: Completely written by the testator and
signed by him, without any other form requirement. Consequently, the formal conditions of this
document are extremely simple. The will must be unequivocal with respect to the testator's
intention. This constitutes a condition of validity of this will. This subjective quality will be
appreciated by the judge during the validation of the will. 3) Will made in the presence of
witnesses: Called “a will that complies with the formalities derived from English law”, it must
bear the signature of the testator made in front of at least two (2) witnesses of legal age, who
must also sign the will. The will is not required to be written by the testator; It can be written by
someone else. The essential condition is that the testator declares in the presence of witnesses
that the document effectively constitutes his will. A will that does not comply with the
formalities provided by law will be considered void. In Quebec, a will made abroad can be
declared valid if it meets the formal requirements of either: • the law of the place where the will
was made; • the law of the state corresponding to the nationality of the testator; • the law of the
testator's domicile; And the applicable law either: • at the time the will was made; • at the time
of the testator's death. Testamentary Modification & Revocation A will may be modified or
revoked at any time prior to the death of the testator, expressly or tacitly, or even in accordance
with law. The only exceptions to this rule are mortis causa donations made by marriage
contract. Indeed, as long as the parties remain married, the donor cannot revoke a donation
mortis causa, unless the donee gives his consent and the revocation is established by notarial
deed. Property distribution by will and its consequences for heirs and legatees In his will, a
testator can bequeath, at his discretion, the assets within his estate. He is free to bequeath any
property to anyone he chooses. The provision regarding the transfer of assets included in a will
is called a legacy. There are three (3) categories of legacies: 1) Universal legacy (art. 732 CCQ):
A legacy that gives the right to one or more people to take over the entire succession, with the
exception of any property bequeathed by a particular title. For example: "I leave all my assets to
my children, in equal shares between them, and I determine that they are my sole and universal
legatees with full ownership." 2) Bequest in general terms (art. 733 CCQ): A legacy that gives
the right for one or more people to have ownership of an aliquot part of the succession or a
dismemberment of the ownership right of the entirety or an aliquot part of the succession. For
example: I leave to my daughter Claire all the real estate I owned at the time of my death.” 3)
Legacy in a private capacity (art. 732 CCQ): Any legacy that is not universal or universal. For
example: "I leave my son Antonio, in a private capacity, my real estate located in (city, street,
number) free of all mortgage and all other debt." A legatee (whether universal, universal, or
private) has the right to the bequeathed property in the state in which it is at the time of death.
You also have the right to all accessory property. The universal legacy and the universal legacy
create obligations for the legatee who accepts the legacy. Effectively, he is responsible for the
debts related to the property. The universal legatees receive the property but must also assume
the present debts (mortgage, credit, etc.). On the contrary, the legatee in a private capacity
acquires the bequeathed property free of debt unless otherwise provided in the will. When a
bequest provides for the delivery of a specific asset to a specific person (such as: “I leave my
house located at 33 Maple Street to my daughter Claire”), that property is transferred without
mortgage liens. The universal legatees are then responsible for the mortgage. A legacy expires
and is invalid when the legatee dies before the testator, when the legatee is unworthy to receive
it, or when he rejects it. Restrictions on the freedom of will Although at first glance the freedom
of will appears to be absolute in Quebec, some restrictions have been imposed over the years in
order to protect the family's assets and ensure the family's financial support. in case of death.
Below are the three (3) types of restrictions included in Quebec civil law: 1) The subsistence of
the obligation to provide maintenance; 2) The division of the family assets; and 3) The
compensatory benefit. 1) Subsistence of the obligation to provide maintenance Since the
obligation to provide maintenance subsists upon the death of the provider, the person to whom it
is owed can claim it in the succession. The following people can claim maintenance: a spouse,
ex-spouse, and first-degree parents in direct line (mother, father, and children of the deceased).
Amounts awarded as maintenance are deducted from the estate before partition. However, it
should be noted that there are limits to the amounts that can be received from the estate in the
form of maintenance. For example: Marcos divorced Claire. They had two children together,
María and Juan. As part of the divorce decree, the court ordered that Marcos pay alimony in the
form of alimony in favor of Clarie and the two children. After a few years, Marcos marries
Susana again; Their son Alberto is born. However, a few years later, Marcos dies. Claire and
her two children María and Juan can claim the alimony they are owed from Marcos' estate.
Susana and Alberto also have the right to claim alimony in the succession. Once their respective
estate claims are paid, the remaining estate is divided as provided in Marcos' will or, if there is
no will, according to legal transfer. 2) Family assets In 1989, the new institution of family assets
was incorporated into Quebec civil law. This concept aims to compensate for economic
inequalities between men and women within a marriage. Certain specific assets, owned
individually or jointly by the spouses, constitute family assets. Broadly summarized, this
restrictive list includes the following assets: the family residences, the personal property that
they occupy and that are for family use, motor vehicles used for family transportation, and
benefits accrued during the marriage. under a retirement retirement plan. Both spouses retain
equal rights to the net value of the family estate, regardless of the actual ownership of the assets
included therein. Upon the dissolution of the marriage (even after the death of one of the
spouses), the net value of the family estate is divided between the spouses. CCQ provisions that
regulate the division of family assets are public and the spouses cannot renounce this division
under their marriage contract or their will. It should be noted that family property exists
exclusively in a marriage or civil union, and therefore does not apply to a de facto couple. 3)
Compensatory benefit A third restriction is the compensatory benefit, which must be paid by
one of the spouses to the other, by court order issued after the dissolution of the marriage or
civil union (including in the case of death), as compensation for the contribution of one of the
spouses, with goods or services, to the enrichment of the other spouse's assets. This payment
may consist of the granting of a sum of money, payable in cash or in installments, or the
granting of rights over certain assets. For example: Betty worked at Marcos' company
throughout their married life, but she never received compensation for her work. After Marcos'
death, Betty could claim a compensatory benefit from Marcos' estate, given that her unpaid
work contributed to the success of Marcos' company, and consequently to the enrichment of his
estate. The spouse who claims a compensatory benefit has the burden of proving his or her
contribution to the enrichment of his or her spouse's assets. The court that evaluates the benefit
to be paid takes into consideration the overall situation, including the division of family assets.
The claim for compensatory benefits expires one (1) year after the dissolution of the marriage or
civil union. Key principles of Québec Inheritance Law While the deceased has broad powers to
choose the manner in which his estate will be transmitted, certain legal principles govern the
partition procedure itself. These rules apply to all parties to the estate as well as third parties,
regardless of whether the deceased left a will. A fundamental principle of Quebec law is that the
personal liability of the heirs remains limited with respect to the debts of the deceased, even if
they accept the succession. Indeed the estate itself is directly responsible for the debts. Another
fundamental principle of Quebec law is the right of option. An heir has the free option to accept
or reject the succession. If you reject it, you are released from all responsibility. In that case, the
descendants of that heir lose all rights in the succession. (In fact, as we will see later herein, the
descendants of an heir can receive that heir's rights in succession, once he dies or is deemed
unworthy to inherit.) Finally, the third principle of Quebec inheritance law that will be
presented relates to tax issues related to inheritance. Unlike some other states, there is no special
inheritance tax in Quebec. Any other unpaid estate tax debt is paid directly from the estate
before partition, in the same manner as other debts; heirs are not personally responsible for
paying those taxes. 1) Limited liability of heirs The limited liability of heirs and the separate
nature of assets are basic rules with important consequences. The rule regarding limited liability
establishes that the heir who accepts the succession is only considered responsible for debts up
to the value of the assets of the succession. In this way, the assets of the estate are used to pay
debts. If the assets are not sufficient to cover the debts, the heir will not be personally
responsible and cannot be forced to pay those debts with their own assets. The separation of
assets is the corollary of that first basic rule: until the moment in which the succession has been
liquidated, your assets and that of the heirs remain separate. 2) Right of option The person who
has a potential right to inherit is called successor. The successor can be called to inherit, but he
can exercise his right of option: he can choose to accept or renounce the succession. If you
accept, whether expressly or tacitly, or by law, the successor becomes the heir. Acceptance to
succession cannot be revoked. If he renounces the succession, it is understood that he was never
a successor. From that moment on, he is not responsible for the debts of the deceased. In certain
cases, the CCQ provides for the “forced acceptance” of the succession. In particular, it is the
case in which the successor mixes the assets of the succession with his own assets, or when he
refuses to act after the liquidator's failure to carry out the inventory of the succession.
Furthermore, in those cases, the law provides that the heir can be held exceptionally liable for
the debts of the estate beyond the value of the assets he or she receives. However, the creditors
of a person who renounces the succession, to the detriment of their rights, have a measure at
their disposal. Within one (1) year of the waiver, creditors may petition the court to declare that
the waiver cannot be enforced against them, and they may accept the estate in place of their
debtor. In this case, the acceptance only has effects in favor of the creditors who requested it,
and only for the amount of the claim. It has no effect on the person who resigned. Likewise,
Quebec civil law recognizes the principle of representation in an intestate or testamentary
succession. This principle allows a relative to be called to the succession that his ancestor would
have received but cannot do so, due to the fact that he died previously or was declared
unworthy. For example: Juan has two children, Carolina and Esteban. Esteban dies before his
father Juan, leaving his sister Cristina. At the time of the death of her father, Juan, Carolina is
still alive and is the mother of two boys: Julián and Maximiliano. Juan (†) Carolina ½ Esteban
(†) Julián Maximiliano Cristina ½ The application of the principle of representation allows the
descendant (Cristina) to receive the part of the succession that would have been transmitted to
her ancestor (Esteban) if she had not died before Juan . There are no limits, in terms of degree,
to representation in a direct line of descent. Representation does not operate in favor of
ascendants. However, the renunciation of the succession by a successor prevents any possibility
of representation by his descendants. A testator may also prevent the representation of his heirs
by means of an express stipulation to this effect in his will. For example: • Pablo has four (4)
children: Marcos, Silvia, Margot, and Jorge. • Marcos is Susana's father. • Silvia died in the
same traffic accident with her two children. • Guillermo and María are Silvia's grandchildren. •
Margot is single and has no children. • Jorge's only surviving descendant is his great-
granddaughter Katy. • Likewise, Jorge was declared unworthy to inherit from his father for
having destroyed Pablo's will. Pablo (†) Marcos ¼ Silvia (†) Margot ¼ Jorge 0 Susana (†) (†)
(†) Guillermo María (†) 1/8 1/8 Katia ¼ The succession is called to: Marcos, Guillermo and
María ( representing Silvia), Margot, and Katy (representing Jorge). Since Pablo had four (4)
children, the succession is divided into four quarters. Marcos and Margot receive a share equal
to 1/4 of the estate. Guillermo and María participate equally between them in the part that would
have been transmitted to the ascendant that they represent, Silvia. Consequently, each receives a
share equal to 1/8 of the succession. Since Jorge was declared legally unworthy to succeed after
destroying Pablo's will, the representation allows Jorge's great-granddaughter, Katy, to claim
her 1/4 share in the succession. In this case, representation was not interrupted for any
descendant by virtue of a successor's renunciation of the succession. 3) Tax consequences In
Quebec, strictly speaking, heirs do not pay taxes on inheritance assets. Indeed, when the heirs
receive their inheritance, it is already tax-free. In fact, the liquidator pays the tax obligations of
the deceased with the assets of the estate, before the partition takes place. The underlying tax
interpretation is as follows: the deceased is considered to have disposed of his assets at the time
of his death. Consequently, the deceased will be taxed on the capital gain realized after this
(fictitious) disposition of assets. Capital gain is calculated as the difference between the value of
the asset at the time of disposition minus the value at the time of acquisition. 50% of the capital
gain is added to the decedent's other income for that year; the estate is taxed based on that total
income. The liquidator is responsible for paying the income tax owed by the deceased. This
responsibility is important, because the liquidator can be held personally responsible for any
unpaid tax debt. Therefore, it is strongly suggested that the liquidator obtains a certificate from
the tax authorities confirming that the deceased's tax obligations have been discharged in full. It
was already indicated above that the decedent's income tax must be paid from the assets of the
estate before their division to the heirs. When the total value of the estate is not very high, this
process should be simple. However, when the deceased had a high-value estate, paying tax
debts with the assets of the estate can become problematic. As an example of this, let's take this
example: The deceased had shares in the family business. Over the years, these shares increased
in value until reaching $5,000,000. It will be difficult for the heirs to take over the family
business, being informed that the estate must pay the income tax levied against the capital gain
of $5,000,000. In that case, it is likely that the sale of the family business will be requested, for
the purposes of paying income tax. To avoid situations like the above, succession planning is
strongly recommended to reduce the tax consequences of one's death. One of the most used
methods to resolve the issue of paying capital gains tax with estate assets is through the
implementation of an estate freeze. This relatively simple procedure involves the transfer of the
testator's assets during his or her lifetime. Continuing with the previous example: The deceased
could have transferred (sold) his shares in the company to his children some years before
retiring. Consequently, by selling the shares the father benefits with a retirement income, at the
same time that the children, by acquiring the shares before their father's death, can continue
operating the family business after their father's death without worry about paying capital gains
tax on your inheritance. Likewise, by selling the shares earlier, the parent pays less income tax
on the sale, because the capital gain realized at that time is lower. Conclusion Québec is the
only province in Canada that has its own civil law regime derived from French law. However,
the testamentary rules set out in the Civil Code of Quebec had a profound influence from
English law. In Quebec, as in other Canadian provinces, a person enjoys broad freedom of will,
subject to some restrictions. In order to protect the financial security of spouses, the legislator
created three (3) public legal mechanisms: 1) the subsistence of the obligation to provide
support beyond the death of the debtor; 2) the division of family assets with the deceased's
spouse; and 3) the compensatory benefit, which allows the deceased's spouse to claim an
amount of money when he or she contributed pro bono to the enrichment of the deceased's
assets. In the absence of a will (intestate succession), the CCQ establishes the principles for
legal transmission, that is, the way in which the assets of the succession must be divided.
Fundamentally, the assets will be divided according to the degree of relationship of the
successor to the deceased. Intestate and testamentary succession are subject to the principle of
representation. Representation applies when a successor died before the deceased or when he or
she is declared unworthy. In these cases, their own descendants can succeed in their place.
When the succession is opened and they are called to succeed, the successors can decide to
accept or renounce the succession. In the absence of express intention of the successor, the CCQ
provides that it is presumed that he accepted the succession subject to inventory (subject to
knowing the state of the assets and liabilities of the deceased). When an heir accepts an estate
that includes debts, he is not responsible for paying those debts beyond the value of the assets
he would receive from the estate. Effectively, the estate's assets remain separate from the heir's
assets until the estate is settled. The liquidator is responsible for paying the debts of the estate.
Consequently, he is responsible for paying the taxes pending payment by the deceased before
dividing the assets among the heirs. The taxes pending payment by the deceased are calculated
at the time of his death and include the following fiction: it is understood that the deceased
disposed of his assets at their market value at the time of his death. Consequently, the tax debt
of the deceased includes the capital gains tax that is pending payment at the time of the
realization of these assets, which must be paid with the assets of the estate. This alleged
provision can lead to significant consequences for heirs, as the estate may have to sell the
decedent's assets to pay tax debts. In the case of a family business, heirs may have to give up
their ambitions to continue the business operations if financial resources are insufficient. In
these cases, the deceased would have benefited from planning the tax aspects of his or her
succession, including implementing an estate freeze.