All About Estates

Ontario Residents with Quebec assets

Today’s blog was written by Douglas Buchmayer, partner with the Ottawa office of Gowling WLG (Canada) LLP

A common issue facing estate planning practitioners in Eastern Ontario is the Ontario resident client owning Quebec assets, often the family cottage, which need to be dealt with in a Will. Where a couple (or either of them) owns assets in Quebec it generally makes sense to have distinct Quebec Wills dealing with those assets, but ironically, not so important for an individual.

In the case of most Ontario couples who prepare Wills where everything goes to the other it is generally the Will of the second to die that needs to be probated and not the first. This is largely because of beneficiary designations and the rest of their assets being held jointly, the latter relying on the common law principle of the right of survivorship which sees jointly held assets immediately becoming owned by the survivor. The idea is that the assets of the first spouse to die do not pass through their Will but rather go directly to the survivor by other means. Assuming there are no other assets remaining in the name of the first to die, their Will is not required to transfer assets and therefore normally also does not require being probated.

But this depends on the right of survivorship being applicable to all jointly held assets. “Jointly” in a civil law jurisdiction like Quebec does not come with the common law principle of a right of survivorship. In Quebec, if one joint owner of assets dies, their share must be dealt with through their Will or through legal devolution and does not immediately become solely owned by the survivor. Joint ownership in Quebec is more akin to “tenants in common” in Ontario.

Possibly only because of the Quebec assets, the Will of the first joint owner to die may need to be probated (either in Ontario or Quebec) just to enable dealing with such assets, which is a process that most Ontarians strive to avoid. The good news is that it can be avoided if the deceased owner has a Quebec Will, usually only dealing with their Quebec assets.

Where the Quebec Will in question is a Notarial Will, that is, one prepared by a Quebec Notary, such a Will is considered to be an “authentic act” of the Notary who prepared it and probate is thus avoided (for Quebec purposes) as are the costs and delays associated with that process. Since the Notary keeps the original Will and registers it in the Registres des dispositions testamentaires et des mandats du Québec, there is little risk that it will be misplaced or overlooked. There will also be less risk of a Wills challenge since this form of Will, as an authentic act, is more difficult to challenge in court.

And now for the irony, if the prospect of an Ontario resident’s Will having to be probated is inevitable, a distinct Quebec Will is not as important to have because an Ontario probated Will is normally acceptable in Quebec to facilitate the transfer of most Quebec assets without the need for a resealing by the Quebec court.

However, it may not always be a correct assumption that the need to probate a person’s Will is inevitable. There are a variety of probate planning techniques including the settling of trusts that aim to preclude the need to probate a Will.

And regardless of probate concerns, sometimes it may be prudent to have a Quebec Notary address the various nuances and differences between the laws of Ontario and those of Quebec just to be sure that unique, uncommon or more sophisticated devolutions of assets occur as intended. When done properly, a Quebec Notarial Will will complement rather than conflict with the Ontario Will where it is limited to Quebec assets and does not revoke the Ontario (or any other) Will.

Ontario clients who own assets in Quebec (or for that matter any jurisdiction outside of Ontario), should consult counsel (in the case of Quebec, often a Notary) qualified to practice in that jurisdiction in the preparation of Wills to seek advice on how to best deal with those “foreign” assets.

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