There are several things to consider when creating or updating your will. Numerous problems can arise as you carry out your wishes. If you do not think about the different scenarios that may occur or make careful preparations, there is a lot within your will that could break down or go wrong.
Debt and Quantum Meruit Claims
People sometimes leave a debt to someone unpaid in their will, but other times, the debt is not settled this way. Creditors have other options for getting their money.
Claims can be made against a deceased person’s estate. These claims include a fixed amount owed, such as a debt claim. Other claims are for fair and reasonable compensation for services rendered, but the amount is not fixed.
These are also quantum meruit claims, referring to the amount of fair and reasonable compensation that a court will determine.
If the deceased fails to pay money to a creditor, the creditor can file a debt claim against the estate. If a debt claim is filed, it takes priority over all transfers of assets and must be paid in full before anyone inherits from the estate.
If an estate trustee fulfils the role properly, they will not be liable for the debts of the deceased. However, if they fail to pay off the deceased’s debts before dividing their assets amongst the beneficiaries, they will be personally liable to pay off those debts. Because of this, estate trustees are highly motivated to resolve any debts of the deceased before they distribute the balance of their assets.
If a spouse or child was due child support or spousal support in life, that debt is to be paid off by the estate trustee so that the spouse or children can get the available assets of the estate.
If there are no children to inherit and there are supposed child support debts, then the creditor can file a claim against the estate, and the estate trustee must pay to settle the claim.
Gifts and Dispositions Before Death
In some cases, the estate is much smaller than expected because the deceased has ‘given away’ assets before death.
If a gift was clearly intended and made without any improper action, then the gift is very likely to stand.
Estate beneficiaries can trigger a “notice of intention to contest gift” process if they believe the deceased party has made a gift with certain characteristics.
Shortly before death, these include transfers of money or property to “special relationships” (such as children, family caregivers, and family foundations).
For example, if you give $100,000 to your child two months before your death, and he thinks you were ill and stressed during that time and this might have influenced your decision, he can initiate a process by which he can challenge the gift on the grounds that you did not intend to make it.
The estate trustee is responsible for carrying out the deceased’s wishes and distributing their assets to the beneficiaries. It is up to you to make sure the trustee knows exactly how to carry out your wishes, and for them to be as certain as possible about what you intended.
You must have a careful and detailed discussion with your estate trustee about your intentions to avoid problems in the future.
Get an estate planning attorney to help you avoid any issues that usually arise during the will planning. Ontario Wills is one of the best in the industry. Get in touch with us.