Estates, Successions and Trusts

A legatee is a person who is entitled to receive a legacy (ex. money/property/assets/etc…) from a person who has died. The legatee can be:

• • A legatee by general title
• • A legatee by universal title OR
• • A legatee by particular title
• .

A legatee by general title is entitled to receive all or part of the entire estate.

A legatee by universal title is entitled to receive all or part of a particular part of the estate.

A legatee by particular title is entitled to receive certain specifically designated property, money, or assets.

An heir is either a legatee by general title or a legatee by universal title. An heir is NOT a legatee by particular title.

Legacies by particular title are generally supposed to be paid before legacies of general title or legacies of universal title.

Yes. If you believe there is a problem with how the Estates/Trusts are being managed, we suggest that you consult a lawyer immediately. This will allow you to determine what your rights are and how to best obtain what you’re looking for. With Estates/Trusts, time is of the essence and it is important to solve problems quickly to prevent any further losses or damage.

Executors/Trustees have significant discretion to manage Estates and Trusts. However, this discretion is not unlimited. Beneficiaries have rights to the following:

• • Information on how the Estates and Trusts are being managed
• • To be treated fairly
• • To have their concerns addressed
• .

If a beneficiary is being treated unfairly, they have several options at their disposal. We recommend that negotiation be considered before pursuing more aggressive options. A successful negotiation often enables a beneficiary to get all that they are entitled to and allows them to avoid the substantial amounts of time, money and stress involved with litigation. Additionally, the New Code of Civil Procedure requires all parties to consider all ADR options before going to Court and litigating.

Unfortunately, negotiation is not always successful. If necessary, beneficiaries can use litigation in order to obtain all that they are entitled to. In extreme cases, they can also use litigation in order to remove the Executors/Trustees and seek damages from them.

Yes. Depending on the nature of the issue, the solution may be different.

If the issue is that the will does not provide the beneficiary with what they were expecting:

• • The beneficiary may contest the will (if there are grounds to do so) OR
• • The beneficiary may claim support from the Estate/Trust
• .

If the issue is that the beneficiary and the Executor/Liquidator/Trustee do not agree on how the will should be interpreted:

• • An agreement must be reached on how the will should be interpreted OR
• • A Court must decide how the will should be interpreted
• .

If the issue relates to how the Executor/Liquidator/Trustee is managing the Estate/Trust:

• • A solution must be negotiated with the Executor/Liquidator/Trustee OR
• • An action must be taken against the Executors/Liquidators/Trustees themselves

In order to be valid, a will must:

• • Be the last will and testament of the person who wrote it (the most recent one)
• • The form must respect Québec’s legal requirements
• .

The main grounds for a contesting a will are in the following non-exhaustive list:

• • The person who wrote it didn’t have the mental capacity or understanding required to make their will
• • The person was coerced into making their will
• • The person was tricked into making their will
• • The will doesn’t meet the form requirements of any of Québec’s valid forms of will (notarial, will before witnesses, or holographic).
• .

This is not an exhaustive list. These are simply the main grounds upon which the validity of a will can be challenged.

No. All legatees have the right to decide whether or not they wish to accept their inheritance or bequest. Heirs of an Estate whose debts are greater than its assets will generally wish to refuse their inheritance so as to avoid becoming liable for the debts of the Estate.

If a legatee has concerns that their inheritance or their bequest may carry significant liabilities, they should obtain legal advice prior to deciding whether or not to accept the inheritance or bequest. Refusing an inheritance is a severe decision that is almost impossible to revoke. When contemplating refusal a legatee should seek advice ASAP in order to avoid missing any delays.

Québec Estates, Successions, and Trust Law are the rules that are applicable to Estates, Successions, and Trusts in the province of Québec. The rules themselves are outlined in the Civil Code of Québec. The rules regarding the use of the Courts to resolve any issues relating to Estates, Successions, and Trusts are outlined in Québec’s Code of Civil Procedure.

It is also important to be aware of private international law. Sometimes, a Québec Court may have jurisdiction over a case (the right to hear a case), but the rules of another province or country may apply. Other times, a Court outside of Québec will have jurisdiction over a case, however Québec law will apply. While private international law does not affect most Estates, it is still vital to ensure that Québec laws apply before making any decisions based upon Québec Law.

A will is a document drawn up regarding the assets of a single person (the testator) which describes how all or part of their assets will be dealt with after their death and to which people or organizations those assets will be given. There must always be one testator per will.

A single will made by more than one person (commonly referred to as a joint will) is invalid in Québec. However, this does not mean that a person cannot get help from several advisors when making their will or that a person cannot have a will that is drafted by their advisors. This only means that a single will cannot be drafted to describe how the assets of more than one testator will be dealt with.

A will can be:

• • Holograph
• • A will before witnesses OR
• • Notarial will

The legal term for dying without a will is dying intestate. If a person dies intestate, their estate is dealt with according to the rules of the Civil Code of Québec and divided accordingly to the formulas that the Civil Code provides. This is rarely preferable because the person who died intestate has no control over how their assets will end up divided. Dying intestate also often denies the Estate and the beneficiaries the many tax and succession planning advantages that are available to people who make a will.

A trust is created by a person who gives certain assets or property (legally referred to as the settlor). This property is then administered by the people named as Trustees for the benefit of the people named as beneficiaries. A trust can be set up for a personal, social, or private purpose. Trusts can be created by will, by contract, by law or by a judgment of a Court.

Once a trust is established, the property of the trust does not directly belong to the settlor, the trustee, or the beneficiary. It is extremely important to note that the rules and legal nature of trusts under Québec Civil Law are different from the rules and legal nature of trusts under common law.

ADR is always worth exploring because many of these methods can help our clients avoid the significant costs, delays, and wasted time associated with going to Court. Additionally, the New Code of Civil Procedure requires all parties to consider all ADR options before going to Court and litigating. It is often easier to negotiate a favourable settlement than it is to litigate. However, these methods are not guaranteed to work in every case. When it is impossible to negotiate reasonably with other parties, we recommend turning to litigation to resolve matters successfully.

Ultimately, ADR is not a replacement for litigation. It is a method to ensure that the costs and delays associated with litigation are incurred only when necessary.

A liquidator/Executor is the person or a part of the group of people responsible for the following:

• • Accounting for the assets and debts of the estate
• • Settling the debts
• • Managing the assets
• • Dealing with the assets according to what the will requires them to do
• .

Sometimes the will requires a person to transfer the assets of the estate into a trust and to then administer the trust according to the terms of the will. Other times, a will requires a person to make specific payments to specific people at specific points in time.

It is CRUCIAL to carefully read the will and the dispositions of the Civil Code of Québec in order to understand exactly what is expected of a liquidator/trustee. We generally recommend that a liquidator/trustee obtain legal advice surrounding their rights and obligations prior to acting as a liquidator/trustee.

A trustee is the person who administers the assets of the trust. There can be a single trustee or several trustees. However, if the settlor or a beneficiary is a trustee, there must also be another trustee who is neither a settlor nor a beneficiary.

No. A person is entitled to refuse their nomination if they do not wish to act as Liquidator/Executor.

Yes. However, Executors/Liquidators/Trustees are not liable for every mistake or bad decision that they may make. They are generally only held liable when they are guilty of at least one of the following:

• • Deliberate wrongdoing
• • Highly reckless
• • Significantly negligent and damages are caused as a result of their behaviour

Consult with a lawyer immediately. Executors/Liquidators/Trustees should be proactive, from the very first sign that there may be a problem. While it may not be best to get a lawyer directly involved from the get-go, it is important for Executors/Liquidators/Trustees to obtain legal advice on how they should handle any difficulties. The right approach will depend largely upon:

• • The nature of the difficulty
• • The amounts at stake
• • The role of the Executor
• • The ultimate aims of the beneficiary
• .

By being proactive, Executors/Trustees can take steps to attempt to prevent a problem from occurring. Ideally, the problem will be successfully prevented or resolved. However, if the problem is not resolved, this will ensure that the Executor/Liquidator/Trustee is in a strong position to defend their actions. Being proactive also helps Executors/Trustees to avoid costly mistakes that can be exploited by other parties later on.

An Executor/Liquidator/Trustee should defend claims made against the Estate/Trust and attempt to successfully resolve them. An Estate/Trust is just as liable for debts as an ordinary person. Claims may severely reduce the funds of an Estate/Trust if they are not properly dealt with. Accordingly, the Executor/Liquidator/Trustee must take steps to protect the Estate/Trust by defending the interests of the Estate/Trust.

Wherever possible the Executor/Liquidator/Trustee should try to successfully resolve matters through ADR. This is in accordance with the New Rules of Civil Procedure. ADR, when successful, allows the Estate/Trust to avoid the substantial time and costs of litigation. However, when it is impossible to negotiate reasonably with other parties, we recommend turning to litigation to resolve matters successfully.

Yes, absolutely. Any person who wishes to act as an Executor or Trustee may resign. However, this resignation will not forfeit their responsibility for any acts or omissions made prior to their resignation.

When resigning, the Executor/Liquidator/Trustee should ensure that they have completed all the formalities required to make their resignation official. This ensures that they will not have any future responsibility. This will also ensure that they can avoid claims by anyone alleging that they believed that the Executor/Liquidator/Trustee was still the Executor/Liquidator/Trustee.

We suggest that any Executor/Liquidator/Trustee contemplating resignation obtain legal advice so that they understand the consequences of their resignation and the best way to resign.

The Executor/Liquidator/Trustee should immediately hire an attorney if a will is being contested. An Executor/Liquidator/Trustee has a duty to defend the wishes of the Testator. Accordingly, an Executor/Liquidator/Trustee must actively represent the Testator’s wishes. When a will is contested, it happens in a formal judicial proceeding. This proceeding has many formalities, potentially severe consequences, and rapid delays. An attorney will ensure that the Estate meets all of the procedural formalities and delays.

Whenever possible, the Executor/Liquidator/Trustee should resolve a will contestation in a manner that is consistent with the testator’s wishes and acceptable to all the parties involved. However, if this is not possible, an Executor should defend the will of the testator in Court.

A testator is a person who writes a will. The will describes how part or all of their assets will be dealt with upon their death.

• • The will should be very clear and specific as to what each beneficiary will receive as well as how and when they should receive it
• • The will should attempt to anticipate which items or issues may cause disputes and attempt to put in place a specific plan to avoid those disputes
• • A significant amount of thought should be placed into who will manage the Estate (Executors) and all of the Trusts (Trustees). (See the next question for what makes an ideal Executor/Liquidator/Trustee)

The ideal Executor/Liquidator/Trustee has the following characteristics:

• • Fair
• • Firm
• • Acts with integrity
• • Can/will manage competently
• • Treats everyone fairly
• • Is able to withstand any emotional/other pressure that the beneficiaries might attempt to bring
• • Experience/knowledge to manage the assets and to deal with any strategic/financial decisions that need to be taken to retain the value of the Estate and Trusts
• .

While none of these elements can absolutely guarantee to prevent all disputes, these measures can significantly reduce the likelihood of disputes.

This is a very common problem which can be successfully resolved. Many businesses are extremely dependent on their owners. However, with careful planning and attention to detail, strategies can be put in place to ensure that both the business and the beneficiaries are protected. The strategies will depend on the following factors:

• • The nature of the business
• • The beneficiaries of the will
• • The responsibilities of the owner within the business
• • The management structure of the business
• .

These strategies will often involve a combination of several different solutions, including: insurance, tax planning, and business plans. It is important that strategies be customized to the specific needs of the business and the specific purposes of the owner’s will.

Yes. A will can be modified by a codicil which makes changes to the will without revoking it. In addition to being modified, a will can also be revoked either tacitly or expressly. A tacit revocation is a gesture that enables someone to comprehend that a person no longer wishes for their current will to be valid. An express revocation is a specific statement by the person that they wish to revoke their previous will.

Revoking a will is extremely easy. It can be done tacitly or expressly.

A tacit revocation is a gesture that enables someone to comprehend that a person no longer wishes for their current will to be valid. Examples of this include:

• • Destroying the only copy of the will
• • Making a new will
• .

An express revocation is a specific statement by the person that they wish to revoke their previous will. This is often done with a clause in the new will which states that all previous wills are revoked.