STEP Diploma for Canada Sample Document: Will Containing Testamentary Trust

Transcription

1 STEP Diploma for Canada Sample Document: Will Containing Testamentary Trust Provided courtesy of Brian Cohen, B.A., LL.B, TEP and his firm Borden Ladner Gervais LLP

2 I, John Doe, of the City of Toronto, in the Province of Ontario, declare this to be my Will. 1. REVOCATION I revoke all Wills and Codicils previously made by me. 2. DEFINITIONS AND INTERPRETATION The following definitions and rules of interpretation apply to this Will: (a) (b) (c) (d) (e) (f) (g) References to my "Estate Trustee" in this my Will shall include each Estate Trustee, Executor and Trustee of this my Will, of my estate or of any portion thereof who may be acting as such from time to time, whether original or substituted, whether one or more and whether a natural or a corporate person. Each person who is appointed as my "Estate Trustee" shall discharge the functions of executor and, if appropriate in the circumstances and context, trustee of any trusts created by this Will. A "beneficiary" is a person entitled to benefit under this my Will. Unless expressly indicated otherwise, any reference to a "sibling" of the grandchild of a person shall include only those siblings of such grandchild who have a common parent who is or was a lineal descendant of such person. Any direction in this my Will to divide any part of my estate in a certain manner shall also entail its payment in accordance with the scheme of division, unless the context dictates otherwise. Any authority in this my Will to encroach on the capital of any share in my estate that is from time to time held by my Estate Trustee in trust for a beneficiary of mine shall, unless this my Will otherwise provides, include the authority to encroach to the full extent of such capital notwithstanding that doing so may adversely affect the interest of a beneficiary or beneficiaries of mine who have a succeeding entitlement to such capital and notwithstanding that such encroachment would, but for this provision, constitute a failure by my Estate Trustee to maintain an even hand between classes of beneficiaries. References to a statute, regulation or rule in this my Will mean the statute, regulation or rule as it shall be from time to time amended and include a Page 2 of 15

3 successor (in law or in function) to a statute, regulation or rule that has been repealed. (h) My Estate Trustee may, in the exercise of an unfettered discretion, consider a beneficiary as being under a "disability" or "legal disability" in any one of the following circumstances, which are not exhaustive: (i) (ii) (iii) (iv) (v) If the beneficiary has a statutory or court-appointed guardian of property pursuant to Ontario's Substitute Decisions Act, 1992, or a comparable substitute decider appointed pursuant to comparable legislation of another jurisdiction; If the beneficiary's property is being managed on his or her behalf by an attorney acting under a continuing power of attorney and the attorney proves to my Estate Trustee's satisfaction that the beneficiary is incapable of managing property. I further declare that my Estate Trustee's decision that the beneficiary is incapable of managing property shall be final and binding on all persons concerned; If an application for the appointment of a guardian of property to manage the beneficiary's property has been brought but not yet determined; If my Estate Trustee has reason to believe that the beneficiary is mentally incapable of dealing with him or her and has requested that the beneficiary undergo an assessment of mental capacity (performed by a health practitioner acceptable to my Estate Trustee) and the beneficiary has refused to undergo or complete the assessment or has completed it and been found incapable; or If the beneficiary has not yet attained the age of eighteen (18) years. (i) (j) (k) (l) (m) (n) This my Will shall be read with such changes of gender or number, or both, as the context may require. "My wife" means my wife, Jane Doe. "My children" means my children, James Doe and Jessica Doe. "Issue" means a person's lineal descendants to the remotest degree. "My issue" means my children and their respective issue. "Division Day" means the thirtieth (30th) day after my death. Page 3 of 15

4 (o) "Personal effects" refers to the contents of, or property (such as a car) kept about any residence of mine and that it is reasonable to consider I own more for personal use than for investment. Unless the context dictates otherwise, the cost of delivering any of my personal effects to the person to whom they are given is to be borne by my estate. My Estate Trustee may accept a receipt and release with respect to any of my personal effects from any person who receives them, even if that person may be under a legal disability. 3. ESTATE TRUSTEE (a) (b) I appoint my wife, Jane Doe, to be the Estate Trustee of this my Will. If my wife, Jane Doe, shall have predeceased me or shall survive me but die before the trusts hereof shall have terminated or shall be unable or unwilling to act or to continue to act or shall resign or be removed as such Estate Trustee, whether or not a Certificate of Appointment of Estate Trustee shall have been granted to my said wife, then I appoint my brother, Jonah Doe, to be the Estate Trustee of this my Will in the place and stead of my wife. 4. CUSTODIAN AND GUARDIAN (a) (b) If my wife predeceases me, and if I die before any child of mine has attained the age of majority, I appoint my brother, Jonah Doe, if he is alive on my death, to have custody of each such child. It is my wish that before the expiration of ninety (90) days from the date of my death, the said Jonah Doe shall apply to have permanent custody of the person of such child, pursuant to Ontario's Children's Law Reform Act, and the cost of the application shall be paid out of my estate. If my wife predeceases me, and if I die before any child of mine has attained the age of majority, to the extent that I am capable of doing so, I appoint my brother, Jonah Doe, if is alive on my death, to be guardian of the property of each such child. It is my wish that before the expiration of ninety (90) days from the date of my death, the said Jonah Doe shall apply to become the permanent guardian of the property of each such child, pursuant to Ontario's Children's Law Reform Act, and the cost of the application shall be paid out of my estate. The said Jonah Doe shall not be required to furnish security for acting in this capacity. Page 4 of 15

5 5. TRANSFERS TO ESTATE TRUSTEE I give all my property wheresoever situate, including any property over which I may have a general power of appointment, to my Estate Trustee upon the following trusts: (a) Personal Effects (i) (ii) (iii) To transfer and deliver all my personal effects to my wife if she is alive on the Division Day. Notwithstanding any provision of my Will to the contrary, from the date of my death until the Division Day, my wife shall have the use of all personal effects belonging to me at my death. If my wife is not alive on the Division Day, my Estate Trustee shall allow my children who are alive on the Division Day to divide my personal effects between themselves and, failing agreement between my said children or if any of my said children is under a legal disability, my Estate Trustee shall divide the said personal effects between them as equally as is practicable. My Estate Trustee may, in the exercise of an unfettered discretion, dispose of some or all of my personal effects and add any proceeds of sale to the residue of my estate or may hold some or all of my personal effects until the beneficiary on whose behalf they are held is, in my Estate Trustee's unfettered judgment, old enough to make use of them. Any articles not disposed of pursuant to this paragraph shall fall into, and form part of, the residue of my estate. (b) Debts and Death Taxes To pay out of and charge to the capital of my general estate my just debts, funeral and testamentary expenses and all income taxes, estate, inheritance and succession duties or taxes, whether imposed by or pursuant to the law of this or any other jurisdiction whatsoever, that may be payable in connection with any property passing (or deemed so to pass by any governing law) on my death or in connection with any insurance on my life or any gift or benefit given or conferred by me, either during my lifetime, by survivorship or by this my Will or any Codicil hereto, and whether such duties or taxes be payable in respect of estates or interests which fall into possession at my death or at any subsequent time; and I hereby authorize my Estate Trustee to defer, commute or prepay any such taxes or duties. This direction shall not extend to any such taxes that may be payable by a purchaser or transferee in connection with any property Page 5 of 15

6 transferred to, or acquired by, such purchaser or transferee upon or after my death pursuant to any agreement with respect to such property. (c) Conversion and Retention of Assets My Estate Trustee shall use his or her discretion in the realization of my estate, with power to sell, call in and convert into money any part of my estate not consisting of money, at such time or times, in such manner and upon such terms, and either for cash or credit or for part cash and part credit as my Estate Trustee may in the exercise of an unfettered discretion decide, or to postpone such conversion of my estate or any part or parts thereof for such length of time as my Estate Trustee may think best. My Estate Trustee shall have a separate and substantive power to retain any of my investments or assets in the form existing at the date of my death, at my Estate Trustee's unfettered discretion without responsibility for loss, to the intent that investments or assets so retained shall be deemed to be authorized investments for all purposes of this my Will. No reversionary or future interest shall be sold prior to falling into possession and no such interest not actually producing income shall be treated as producing income. (d) Residue Wife is Alive on Division Day OPTION 1 - outright to spouse (i) (ii) If my wife is living on the Division Day, my Estate Trustee shall pay or transfer the residue of my estate to her. Notwithstanding any provision of this my Will to the contrary, from the date of my death until the Division Day, my Estate Trustee may pay to or for my wife such amount or amounts out of the income and capital of the residue of my estate as my Estate Trustee, in the exercise of an unfettered discretion, considers advisable, without her estate being bound to the repayment thereof under any circumstances. Page 6 of 15

7 OPTION 2 spousal trust (i) (ii) If my wife is alive on the Division Day my Estate Trustee shall set aside the residue of my estate for my wife (the Spousal Trust ) and my Estate Trustee shall keep the Spousal Trust invested and re-invested and, during my wife s lifetime, shall pay to her, or apply for her benefit, the annual net income derived therefrom, together with so much of the capital thereof as my Estate Trustee, in the exercise of an unfettered discretion, shall determine to be appropriate considering that it is my intention to ensure that my wife shall continue to live after my death in a manner and style of life as near as is practicable to that in which she lived during my lifetime and that I intend to make generous provision for her well-being both personal and financial. I declare that, notwithstanding any other provision of this my Will, during my wife s lifetime no person other than my wife shall be entitled to receive or otherwise obtain the use of any of the income or capital of the trust. Without restricting the generality of the foregoing, I declare that any transaction (for example, lending or borrowing) that affects the income or capital of the Spousal Trust shall be on such terms as would be negotiated between commercially sophisticated parties acting at arm s length. I further declare that my Estate Trustee shall administer the Spousal Trust with regard only to my wife s interest whether personal or financial and without regard to the interest of any succeeding beneficiaries in interest (so that my Estate Trustee need not keep an even hand between my wife s interests and those of succeeding beneficiaries) to the extent that my Estate Trustee may pay or transfer all of the capital of the Spousal Trust to my wife during her lifetime. In this subparagraph 5(d)(ii) of this my Will, Extension Period means the period following the death of my wife until the earlier of, A. the end of the three (3) year period following my wife s death, and, B. such shorter period following my wife s death as my Estate Trustees shall, in the exercise of an unfettered discretion, determine in writing. Following my wife s death, and until the end of the Extension Period, my Estate Trustee shall keep the Spousal Trust invested and re-invested and in each year shall divide the net annual income of the Spousal Trust among my children from time-to-time alive as my Estate Trustee shall Page 7 of 15

8 determine to be appropriate (and not necessarily equally) and shall pay same to or apply it for the benefit of such one or more of my children together with so much of the capital of the Spousal Trust as my Estate Trustee, in the exercise of an unfettered discretion, determines to be appropriate. At the end of the Extension Period, the Spousal Trust shall be dealt with pursuant to the provisions of the immediately following sub-paragraph 5(e) of this my Will, provided that each reference to the division day in that sub-paragraph 5(e) shall be read and applied in relation to the Spousal Trust or any part thereof as though it were a reference to the day on which the Extension Period ends. (e) Residue Wife Not Alive on Division Day (or at end of extension Period) If my wife is not alive on the Division Day (or at the end of the Extension Period, as the case may be), my Estate Trustee shall divide the residue of my estate in equal shares between those of my children who are then living; provided that if either of my children is not then living, but has left surviving issue then living, my Estate Trustee shall pay or transfer the share which would have been paid or transferred to such deceased child had he or she been then living to his or her surviving issue then living in equal shares per stirpes; provided that where any such share or part thereof would be payable to a child or grandchild of mine before he or she attains age twenty-five (25), same shall be dealt with in accordance with subparagraph 5(f) of this my Will. (f) Trust For Issue Under 25 My Estate Trustee shall hold and keep invested and re-invested each share or part thereof (hereinafter, the "Portion") directed to be set aside for a child or grandchild of mine pursuant to paragraph 5(e) of this my Will and shall, until such child or grandchild (hereinafter each such child or grandchild referred to for the purposes of this paragraph 5(f) as a Beneficiary ) attains the age twenty one (21) years, from time to time pay to him or her, or apply for his or her benefit, so much of the annual net income derived therefrom and so much of the capital thereof as my Estate Trustee, in the exercise of an unfettered discretion, considers appropriate, and my Estate Trustee shall accumulate any net income not so paid or applied in a year and add it to the capital of the Portion at the end of that year. When such Beneficiary attains age twenty-five (25), my Estate Trustee shall pay or transfer to him or her the balance of the Portion then remaining. If such Beneficiary dies before receiving the whole of the Portion, leaving surviving issue, my Estate Trustee shall pay or transfer the Portion, or the part thereof remaining on the death of such Beneficiary, to his or her surviving issue in equal shares per stirpes; provided that if such Page 8 of 15

9 Beneficiary should leave no surviving issue, my Estate Trustee shall pay or transfer the Portion, or the part thereof remaining on the death of such Beneficiary, to such Beneficiary s surviving siblings in equal shares per capita or, if such Beneficiary should leave no surviving siblings, then to my issue alive on the death of such Beneficiary in equal shares per stirpes; provided further that any part of the Portion so accruing to any other Beneficiary of mine while under twenty-five (25) shall be added to, and dealt with as part of, the Portion set aside for such grandchild pursuant to the terms of subparagraphs 5(e) and 5(f) of this my Will. (g) Ultimate Distribution If at the death of the last survivor of my wife, my issue and me (the "ultimate date of division"), any portion of my estate remains undisposed of after giving effect to the foregoing provisions of this my Will, my Estate Trustee shall divide the residue of my estate, or the amount thereof then remaining, as follows [CLIENT INSTRUCTIONS - CHARITIES OR OTHER FAMILY MEMBERS ARE COMMON] 6. LIMITATION ON INCOME ACCUMULATION Notwithstanding anything to the contrary hereinbefore contained, in each year following the end of the maximum period, if any, authorized by law for the accumulation of income, the net income derived from a beneficiary's share in that year shall be paid or transferred to such beneficiary in that year. 7. POWERS OF ESTATE TRUSTEE In order to carry out the trusts of this my Will, I give my Estate Trustee the following powers, to be used in the exercise of an absolute discretion at any time: (a) Investments (i) Whenever it becomes necessary for my Estate Trustee to invest any moneys held in connection with my estate, my Estate Trustee shall not, in making such investment, be limited to investments authorized by law for trustees but may invest in any investment that in an unfettered discretion he or she considers advisable and my Estate Trustee shall not be held responsible for any loss that may be occasioned by any such investment made in good faith, provided that if a trust company is appointed as my Estate Trustee, such trust company shall not be held Page 9 of 15

10 responsible for any loss that may be occasioned by any such investment made by it in good faith and in accordance with the standard of care expected of a person in the business of managing the property of others. Without limiting the generality of the foregoing, my Estate Trustee and any investment counsellor or portfolio manager retained by my Estate Trustee may invest moneys of my estate in any mutual fund (including a private mutual fund), or a mutual fund, segregated fund, variable deferred annuity, or any comparable investment product offered for sale by an insurance company in Canada, common trust fund or pooled fund; and if a trust company shall be appointed as my Estate Trustee or as an agent of my Estate Trustee, I specifically authorize my Estate Trustee to invest in any mutual funds or pooled investments, including one or more of the common trust funds administered by such trust company or by an affiliated company of such trust company for the collective investment of moneys belonging to estates and trusts in its care. I further declare that any such trust company may also from time to time deposit with itself or with any affiliate any cash balances in my estate or in any trusts and shall not be accountable for any profit earned thereon. (ii) I hereby authorize my Estate Trustee to retain such investment counsellor or portfolio manager, including, where a trust company is appointed as my Estate Trustee or as an agent of my Estate Trustee, an affiliate of such trust company, as my Estate Trustee in the exercise of an unfettered discretion considers advisable, and to delegate to such investment counsellor or portfolio manager the authority to direct, in the unfettered discretion of such investment counsellor, portfolio manager or sub-adviser, the purchase and sale of securities for my estate. (b) Distribution in Specie My Estate Trustee shall make any division, distribution or allocation of the assets of my estate in kind and at such valuations as my Estate Trustee in the exercise of an unfettered discretion considers appropriate. In determining such valuations, my Estate Trustee may consider such future expectations for such assets as my Estate Trustee in the exercise of an unfettered discretion considers appropriate, including any tax liability or credit. Any decision of my Estate Trustee in this regard shall be binding on all persons concerned, notwithstanding any fluctuation in market value and notwithstanding that my Estate Trustee may be beneficially interested in the property so valued or in any part thereof. Page 10 of 15

11 (c) Income and Capital My Estate Trustee shall have full power and discretion to determine what portion of the annual proceeds of my estate shall be capital and what portion shall be income. Whenever the word "capital" appears in this my Will, it shall mean such part of my estate as my Estate Trustee may in the exercise of an unfettered discretion designate or treat as capital. Whenever the word "income" appears in this my Will, it shall mean such receipts, additions and other accretions arising from, or accruing to, my estate as my Estate Trustee may, in an unfettered discretion, treat as income. (d) Employment of Agents My Estate Trustee may engage a trust company or any corporation or person to carry out some or all of the directions in this my Will. My Estate Trustee may employ such corporation or person and may pay compensation out of my estate, all as my Estate Trustee considers appropriate. (e) Professional Advisers My Estate Trustee may employ and pay out of my estate such professional advisers as my Estate Trustee deems necessary in the discharge of his or her duties and act upon such advice and opinions as my Estate Trustee may receive from any such professional advisers so employed and my Estate Trustee shall not be liable or responsible for any loss that may be occasioned to my estate by reason of so doing. (f) Settlement of Claims Without the consent of any person interested under this my Will, my Estate Trustee may assert, compromise, settle, compound, abandon, submit to mediation, arbitration or another form of dispute resolution, or waive any claim at any time due to or by my estate and may make any agreement with any person, government or corporation which shall be binding upon all persons interested in my estate. (g) Elections I authorize my Estate Trustee to make or refrain from making, in the exercise of an unfettered discretion, any elections, determinations, and designations permitted by any statute or regulation enacted by the Parliament or government of Canada, by the legislature or government of any province of Canada, or by any other legislative or governmental body of any other country, province, state or territory. Such exercise of discretion by my Estate Trustee shall be conclusive and binding upon all the beneficiaries hereof. My Estate Trustee shall not be liable to any person, whether beneficiary or otherwise, by reason of any loss, claim, tax or other cost experienced or Page 11 of 15

12 incurred by any such person or by my estate resulting from any election, determination, designation or exercise of discretion, including any preferred beneficiary election, entered into by my Estate Trustee in good faith. (h) Securities My Estate Trustee may deal with any securities, shares or other interests of any corporation which is held by my estate, to the same extent as if I were alive. My Estate Trustee may take up new or further shares or other interests, may join in any reorganization, may exchange shares or other interests, and may give or accept and exercise options. My Estate Trustee may pay out of my estate any moneys which may be necessary for any of these purposes. (i) Real Property I authorize my Estate Trustee to sell, partition, exchange or otherwise dispose of the whole or any part of my real property in such manner, at such time and upon such terms as to credit or otherwise as my Estate Trustee, in the exercise of an unfettered discretion, considers advisable, with power to accept a purchase money mortgage or mortgages for any part of the purchase or exchange price. My Estate Trustee shall also have the power to mortgage or lease for any term the real or leasehold property forming part of my estate, subject to such covenants and conditions as my Estate Trustee shall think fit; to accept surrenders of leases and tenancies; to expend money in repairs, alterations, rebuilding and improvements, and generally, to manage any such property. My Estate Trustee shall also have the right to renew and keep renewed any mortgage or mortgages upon any real estate forming part of my estate or any part thereof; to borrow money on any such real estate upon the security of any mortgage or mortgages, and to pay off any mortgage or mortgages which may be in existence at any time forming part of my estate. I also give to my Estate Trustee power to execute and deliver such deeds, mortgages, leases or other instruments as may be necessary to effect such a sale, mortgage, lease or other disposition. The power of sale herein is discretionary and not mandatory. 8. DEFINITION OF RELATIONSHIPS (a) Unless otherwise specifically provided, any reference in this my Will or in any Codicil hereto to a person in terms of a relationship to another person determined by blood or marriage shall not include a person born outside marriage nor a person who comes within the description traced through another person who was born outside marriage, provided that any person who has been legally adopted shall be regarded as having been born in lawful Page 12 of 15

13 wedlock to his or her adopting parent, and provided further that any person who was born outside marriage but whose parents subsequently married one another shall be regarded as having been born in lawful wedlock to his or her parents, and provided still further that any person in respect of whom his or her natural parent has, in the absolute discretion of my Estate Trustee, demonstrated a settled intention to treat such person as a child of his or her family shall be regarded as having been born in lawful wedlock to such natural parent. (b) (c) I declare that a child who is en ventre sa mere at any particular time and who would, if then alive, be entitled to an interest in my estate under this my Will shall, if he or she is born alive within ten months following that time, be deemed to have been alive at that time. I declare that any person whose parents have initiated the process of adopting him or her and who would, if the adoption were complete at any particular time, be entitled to an interest in my estate under this my Will shall, if the adoption is completed within one year after that time, be regarded by my Estate Trustee as though he or she were legally adopted at that time. 9. EXCLUSIONS FROM NET FAMILY PROPERTY I declare that the income arising from any interest passing to a beneficiary under this my Will shall be excluded from such beneficiary's net family property, pursuant to Ontario's Family Law Act. 10. PROTECTION FROM LIABILITY My Estate Trustee shall be fully protected in exercising any discretion granted to my Estate Trustee in this my Will and shall not be liable to the beneficiaries or their respective heirs or personal representatives by reason of the exercise of such discretion. My Estate Trustee shall exercise the powers, authority and discretion given under this my Will in what my Estate Trustee deems to be in the best interest, whether monetary or otherwise, of the beneficiaries, whether or not such exercise may have the effect of conferring an advantage on any one or more of the beneficiaries or would, but for the foregoing, be considered as being other than an impartial exercise of my Estate Trustee's duties hereunder or as not being maintenance of an even hand among the beneficiaries. Any such exercise of my Estate Trustee's powers, authority and discretion shall be binding upon all of the beneficiaries and shall not be subject to any question or review by any person, official, authority, court or tribunal whatsoever or whomsoever. Page 13 of 15

14 11. PROFESSIONAL EXECUTORS Any Estate Trustee of this my Will being a solicitor, accountant or other person engaged in any profession or business, shall be entitled to charge and be paid all usual professional fees and other charges for business transacted, time expended and acts done by him or his firm in connection with the administration of my estate and the trusts of this my Will, in the same manner and in all respects as if he were not one of my Trustees, including acts which an Estate Trustee not being in any profession or business could have done generally. 12. GOVERNING LAW The interpretation of this my Will shall be governed by, and my estate shall be administered in accordance with, the laws of the Province of Ontario. IN WITNESS WHEREOF I have to this my Will, written upon this and the ( ) preceding pages, subscribed my name this day of, SIGNED by the testator, JOHN DOE, as his Will, in the presence of us, both present at the same time and who, at his request, in his presence and in the presence of each other, have hereunto subscribed our names as witnesses. ) ) ) ) ) ) JOHN DOE Page 14 of 15

15 SIGNATURE Name: Address: Occupation: SIGNATURE: Name: Address: Occupation: Page 15 of 15