The “Why” behind the answer


Written on March 22, 2013 – 5:43 am | by Elaine Blades

1. A beneficiary cannot act as executor of your Will. This is False.  There are few restrictions with respect to who can act as executor and beneficiaries are frequently appointed to the role.

2. Under federal and provincial law, common law and legally married spouses are now treated equally for all purposes.  This is False.  Here’s one example:  in Ontario, only legally married spouses are entitled to share on an intestate distribution.

3.  In Ontario, marriage revokes a Will.  This is True, unless the Will is made “in contemplation of the marriage”.  This is not however the case in all provinces.  See Laura West’s recent entry – Revocation of a Will by Marriage - for additional detail. 

4.  In Ontario, divorce revokes a Will.  This is False.  Although the Will is not revoked, it is read as if the ex-spouse predeceased the testator.  As a result, an appointment as executor is revoked and any gifts to the ex-spouse invalidated.

5. A Power of Attorney for Property can only be used in the event the grantor is declared mentally incapable.  This is False (see #6). 

6. A Power of Attorney for Property is effective when signed.  This is True.  Unless otherwise stated in the document, a Power of Attorney for Property is effective upon execution (signing).

7. The capacity threshold for marrying is lower than the capacity threshold for making a Will.  This is True.  In order meet the capacity threshold for marriage, about all one needs is a basic understanding of the nature of the contract of marriage.  By contrast, the test for testamentary capacity is rather stringent.  For more on this interesting juxtaposition see The Will vs. The Altar.

8. Alter-ego and joint partner trusts offer a legitimate way to reduce probate fees.  This is True.  Assets held in the trust at the time of settlor’s death, are not subject to probate fees (i.e. do not need to be included when calculating the Estate Administration Tax, or other provincial equivalent).

9. An executor residing outside the Commonwealth may be required to post a surety bond in order to act.  This is True.  (See section 6 of Ontario’s Estates Act).

10. Canadians are taxed on the basis of citizenship.  This is False.  Under Canada’s tax system, liability for income tax is based on a person’s status as a resident (or non-resident) of Canada.  A person who is a resident of Canada is subject to Canadian income tax on their world wide income.

Next time, I’ll provide commentary for Part II of the quiz.

Thanks for reading.

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