Essential elements of a successfull estate planing

Cathy Duval |

Essential elements of a successfull estate planing

Estate planning is a process by which you are called to make important decisions regarding the disposition of your property upon your passing, so that the liquidation of your succession is carried out without complications for your loved ones and in an organized fashion that is in line with your priorities and wishes. It is therefore important to devote some time to planning the transfer of your wealth to your heirs. The cornerstone of the process is your will: it is the key to guaranteeing the fair distribution of your wealth in accordance with your objectives, needs and wishes.


1. Make an inventory of your property

Making an inventory of your property entails listing all your assets and liabilities as well as where they reside (bank accounts, credit cards, investments, safety box, insurance policies, retirement plans...). Ask your advisor to provide you with a copy of the inventory of assets form that will help you make a complete list of all your assets. Furthermore, it is important to consider the repercussions of your matrimonial regime, family patrimony and gift s under a civil union or marriage contract, if applicable, along with their tax consequences at time of death.


Doing so will allow you to not only grasp the extent of your net value, but it will also help you plan properly to minimize the tax consequences of transferring your estate.This inventory should be updated regularly in order to reflect your current financial situation. It is especially crucial in time of an insurance claim, critical illness or accident, disability or death.


2. Establish your objectives

 Take some time to determine who would take care of you and your property in the event you are unable, mentally or physically, to express your wishes. Also think about your objectives and priorities upon your passing as well as when and how you wish your estate to be distributed. 

1. Make an inventory of your property

2. Establish your objectives

3. Provide for your protection and well-being in the event of incapacity

4. Evaluate your options

5. Review your plan regularly

6. Provide for the liquidation of your succession


3. Provide for your protection and well-being in the event of incapacity

There are numerous causes to incapacity, whether temporary or permanent. The Civil Code of Québec has provided for several mechanisms to ensure that individuals who can no longer handle their affairs are protected. Once declared, an incapacity prevents a person from fully exercising their civil rights. As long as you are in full possession of your faculties, you can draw up a mandate seeking to protect yourself in the event of incapacity, and therefore avoid having to be subjected to the tutorship and curatorship rules as well as the public


Curator supervision.

If you do not have a protection mandate, the Civil Code of Québec provides a form of protective supervision (tutorship or curatorship), depending on the degree of the incapacity, and a court procedure must be undertaken. As previously mentioned, the protection mandate allows you to express your wishes, designate the individual(s) who will see to your moral and physical well-being as well as to the administration of your property if you are unable to do so, and lay down the rules that will need to be observed in managing your person and your wealth.


The protection mandate is therefore much more personalized, as it allows you to create a customized plan by taking into consideration your personal situation, needs and interests. You can include, for instance, provisions regarding: home and health care; end-of-life treatment; consent to care; the management of your company; how to care for your loved ones; the designation of a tutor for your minor children.


To be enforced, the mandate must be probated by the court once you have received medical and psychological evaluations regarding your incapacity. It is best to have your mandate notarized to ensure greater security. A notarized protection mandate is difficult to dispute. It will be kept in a safe place by the notary and can easily be traced because it is registered with the Registres des dispositions testamentaires et des mandats de la Chambre des notaires du Québec. It also allows you to gain valuable expert advice regarding the decisions you will have to make in this matter.


Duties of the administrator

Whether the administrator is acting in the context of a tutorship, curatorship or a protection mandate in anticipation of incapacity, his or her tasks are numerous and complex, and should therefore not be taken lightly. Furthermore, the administrator is personally liable for his or her actions. In most cases, tutorship and curatorship require that the administrator report regularly to the public Curator and tutorship council, or provide a guarantee of his or her administration.


4. Evaluate your options

To reach your objectives in accordance with your financial circumstances, you can consider several ways to protect and distribute your wealth: writing a will, making a living donation or creating a trust to allocate your assets over time. Here’s how these instruments can help you:


The Will

Writing your will and testament can bring you peace of mind and save your loved ones many troubles down the road. It will also ensure that your wealth is distributed to your heirs in accordance with your wishes.In Quebec, there are three types of will:

1- Holograph;

2- Before witnesses



If your will is not notarized, it will have to be probated by the court or a notary at time of death. In return, a notarized will is enforced immediately upon death, without requiring any additional procedures. A notarized will is, without a doubt, a key element of a judicious estate plan. Enlisting the services of a notary to draw up your will provides you with valuable expert advice to ensure that your wishes are clearly expressed. It also brings you an added layer of security, since it will be stored in a safe place and kept confidential, be difficult to contest and be easily traced as it will be registered with the Registres des dispositions testamentaires et des mandats de la Chambre des notaires du Québec.


Your will is revocable and can be amended at any time, in part or in full, as often as you wish as long as it is done in accordance with the law. It is therefore useful for testators to periodically review their will to ensure that the dispositions are current and in line with your wishes, namely when there is a change in your personal situation (divorce, birth of a child, etc.).


If you have a marriage or civil union contract, it may contain a testamentary provision pertaining to the rights of the surviving spouse. This allows your spouse to be your residuary heir by universal title at time of death, and it bears the same legal weight as a notarized will. It is also possible to indicate whether you wish to make a donation to your spouse and/or children in your marriage or civil union contract, which would take effect at the time of your death. When a person dies without a will, the property will be distributed according to the laws of the Civil Code of Québec.

Who are your legal heirs?

If you die without having made testamentary provisions for your property, the Civil Code of Québec will determine who will inherit your assets and in which proportion. Depending on your situation, your property will be divided as follows:



In general, there are many ways to distribute your property. Each depends on whether you wish to distribute it while living or at time of death, and if you want to provide instructions regarding its use. Creating a trust can be a great way to achieve your objectives in this regard.A trust is a legal instrument by which you transfer part or all of your assets, while living or upon death, to another patrimony that your trustee accepts to hold and administer in accordance with your predetermined objectives. When you create a trust, whether inter vivos or testamentary, you also create a new autonomous patrimony by appropriation and distinct from your patrimony, and in which neither you nor your beneficiaries or trustees have real rights.


The relevance of a trust depends on your personal and financial circumstances. An inter vivos trust can be appropriate when, for example, it is a matter of reorganizing your corporate structure, protecting certain types of assets against possible creditors or personal or professional liability lawsuits, or if the assets are to benefit charitable, philanthropic or educational organizations.


The trust can be created by contract, judgment or the law. When it is drawn up by contract, it takes effect the moment the document is signed and the acceptance of the trustee. A testamentary trust, for its part, is very useful if you intend to include several beneficiaries successively, control how your assets are distributed or spread their distribution out over time, protect your beneficiaries and ensure their financial security, or prevent your capital from being quickly squandered. It is created by testament and takes effect upon the testator’s death.


The trustee

The trustee – or fiduciary – is at the centre of the trust. In addition to being responsible for managing the assets contained in the trust, the trustee is tasked with overseeing its distribution and administration. When transferring your assets under this management framework, you must ensure that they are administered by a competent trustee. Because of its many roles, the trustee must possess considerable legal, financial, accounting and tax knowledge.


Administering a trust is a complex undertaking!

Administering a trust is a complex task, which requires a diverse set of skills. National Bank Trust can be designated as trustee of your trust to professionally manage it if the assets exceed $500,000 or may act as an agent of your trustee to take on specific tasks and duties regarding its administration. By transferring your assets under this framework and ensuring that they are administered by a team of professionals at National Bank Trust, you can enjoy the benefits of active management combined with the strength, discipline and performance of a recognized manager.


This individual must adhere to the provisions of the trust deed and all applicable regulations as well as make all decisions to the extent of the powers assigned to him or her. Furthermore, the trustee must act with integrity, caution, diligence, impartiality and objectivity. In all cases, selecting a trustee is a decision that should not be taken lightly. After all, this person will need to manage and administer your trust. It is therefore important that you choose a person who not only has the competencies, experience and availability to do so properly and in compliance with the law, but someone who is also honest and loyal.


Creating a trust, whether inter vivos or testamentary, requires a preliminary analysis, customized and conscientious planning, and expert legal and fiscal knowledge in order to properly identify the challenges, potential risks and tax consequences. Prudent individuals should consult professionals before using this tool. a liquidator, the law provides for all heirs to act as liquidators, as one entity. They can designate a liquidator by majority vote, which could be one or several of them together, or they can name an individual who is not a legatee.


To do so, legal counsel is highly recommended. The person designated as liquidator by the testator can choose to accept or renounce the responsibility at any time. In such a case, he or she will be substituted by the replacement liquidator provided for in the will. If the will does not provide for a replacement or if the replacement liquidator also renounces the responsibility, the heirs can then designate a liquidator, by a majority of votes, or if this is not possible, the court may do so in their place. The powers and duties of a liquidator are outlined in the Civil Code of Québec, but the testator can customize them in the will, as necessary.


5. Review your plan regularly

Changes in your financial or personal situation, or amendments to laws and regulations can have consequences on your planning strategies. It can therefore be useful to occasionally revise your documents to ensure that they are up to date and that they continue to reflect your wishes.


6. Provide for the liquidation of your estate

Liquidating an estate is a long, complex and delicate process that too often entails intricate legal, administrative and fiscal matters, and requires great availability. The Civil Code of Québec imposes numerous rules and formalities that should be respected in order to minimize risk exposure and avoid compromising the rights of heirs.


The liquidator (sometimes also referred to as estate executor or administrator) can be viewed as the estate liquidation’s conductor, having to make the right calls and take the required steps to ensure your wishes are carried out adequately.In Quebec, the liquidator is normally designated by the testator (deceased) in his or her will. In the absence of a will or in the event that the testator has not designated.

Source: National Bank Trust