Will Substitutes

Advantages of Estate Planning Beyond a Will

A will is just one of several ways an individual may transfer their estate upon or before their death. There are certain advantages to not simply leaving assets in a will. Some examples are:

  • Income taxes that would otherwise be owed are either eliminated or minimized.
  • Estate administration taxes are either eliminated or minimized.
  • The assets in question will not belong to the estate and, therefore, cannot be claimed against by any potential creditors.

However, it should also be noted that certain mechanisms outside a will may immediately trigger income tax payments or other financial consequences. As with most situations in law, the answer is almost always, “It depends.”

Inter Vivos Gift

The phrase “inter vivos” is Latin, meaning “while alive.” The simplest and most accessible form of a will substitute is to gift the asset during the lifetime of the testator. One example is elderly parents transferring titles to their homes to their children while they are still alive. However, this effectively makes the child(ren) the owner(s) of the house. If they remove their parent from the property, they would technically be within their rights. Further, they can place mortgages against the property with the original owner’s consent, etc. Such a gift effectively removes the original owner’s control over the property.

Donatio (gift) Mortis Cause

“Donatio Mortis” roughly translates to a “deathbed gift.” Certain requirements must be satisfied for the gift to come within this definition:

  1. It has to be personal property, not real estate.
  2. It has to be made in contemplation of the donor’s death, though not necessarily expectation.
  3. Even though the gift passes before the donor’s death, its ultimate effect depends on whether or not the donor died, as they can revoke it at any point before that.

Inter Vivos Trust

Understanding the Role and Responsibilities of Trustees in a Trust

A trust is a legal mechanism whereby the beneficial property owner is not necessarily entitled to control it. Depending on the terms of the trust agreement, the trustee may only control or monitor the trust property for the benefit of the beneficiary. This means they cannot use the assets for their own benefit or deny the beneficiary any entitlements outlined in the trust agreement. Most trust agreements have some stipulation about the ultimate end or termination of the trust.

Example of an Inter Vivos Trust: Grandparent to Grandchild

A common example is an elderly parent placing money in trust for a grandchild, with another adult relative as a trustee. The trustee may use the trust funds to pay for the child’s care, school supplies, braces, etc., while the child is still a minor. The trust will usually have some clause allowing the grandchild to take full control of the trust for their own benefit upon turning a certain age, often in their late 20s or early 30s.

Joint Interests

Where property is registered in joint names of multiple individuals, this will usually trigger so called “rights of survivorship” provisions. A right of survivorship is a legal entitlement to own the entirety of an asset upon the death of other property owners. Since the property passes to the surviving owner by a legal right of survivorship, the property does not form a part of the estate. This can be beneficial since it avoids probate fees and other legal hurdles that would arise with different ownership structures. The most common example of this is the joint tenancy that most married couples have on their matrimonial homes. In most cases, the surviving spouse only visits a lawyer to register the property in their name.

Designation of Beneficiaries

Certain types of assets or investments for which a beneficiary may be specifically named. These include, but are not limited to, life insurance policies, retained savings plans, annuities and pensions. The designation is usually made with the specific institution holding the said financial instrument. However, it can also be made in the will, though it has to refer either specifically or generally to it. For example, “X gifts the proceeds of any life insurance policies they may hold upon their death to Y.” It is important to note that if there is any dispute between the designations on the instrument and the will, the once named in the will usually wins out.

This blog post does not constitute legal advice and was written solely to provide information. If you would like to consult with a lawyer about the issues raised in this post, please contact Empel Law Professional Corporation at 416-500-1937.

Scroll to Top

Usługi prawnicze Empel

Kancelaria adwokacka Empel Law P.C. zapewnia swoim klientom najwyższą jakość reprezentacji prawnej pobierając za nią niewygórowane honorarium. Jeżeli Państwo kupują lub sprzedają nieruchomość, potrzebuje sporządzić testament, spisać kontrakt lub wszelkie inne potrzeby prawne, nasza kancelaria jest gotowa zrobićwszystko aby zabezpieczyć i wyegzekwować Państwa prawa.

Nasza kancelaria zapewnia swoim klientom indywidualną obsługę prawną. Jesteśmy łatwo dostępni i zawsze mamy czas dla naszych klientów. Na bieżąco informujemy naszych klientów o stanie ich spraw,ponieważ wierzymy, że powinni oni znać prawa, które im przysługują. Uważamy, że nasi klienci powinni mieć wszystkie informacje potrzebne do podjęcia ważnych decyzji życiowych w sprawach będących przedmiotem naszej reprezentacji.

Arkadiusz J. Empel urodził się w Katowicah. Jako dziecko emigrował do Kanady, razem z rodziną, lecz wrócił jako student aby ukończyć Pracę Magisterską w Krakowie. Przez swoją pracę z polonią w okolicy Toronto utrzymał władność w swojim języku ojczystym. Jeżeli Państwo życzy się skonsultować prosto z adwokatem Polski, proszę przedzwonić na numer 416-500-1937.