Estate Planning Question Pack - Questions and Answers

Estate Planning 

1. Elliot, a non-status Indian who is a recognized band member but not registered under the Indian Act, dies intestate while living off-reserve. He owned no reserve land but had personal property and a small investment account. His niece applies to Indigenous Services Canada (ISC) for authority to administer the estate. ISC refuses jurisdiction, stating the estate falls outside federal authority. The niece is unsure what to do next.

What is the most accurate statement about jurisdiction in this scenario?

A) The Minister retains jurisdiction because Elliot was a band member at the time of death.

B) The estate falls under provincial jurisdiction because Elliot did not ordinarily reside on reserve nor possess land governed by the Act.

C) ISC must administer all estates of deceased Indians regardless of registration status if they are band members.

D) Federal jurisdiction applies to band members regardless of residence unless they executed a waiver.

Correct Answer: B

Explanation: Under s. 4(3) of the Indian Act, estate jurisdiction applies only to status Indians who ordinarily reside on reserve or Crown land. Being a band member alone is insufficient to invoke federal jurisdiction. In this case, the Superior Court of Justice has jurisdiction.

 

2. Lucas dies owning a jointly held investment account and a life insurance policy designating his spouse, Helen, as beneficiary. Helen files an election for equalization under the FLA, believing she will receive more through that route than under Lucas’s will. The estate trustee calculates that Helen’s net benefit will significantly exceed her equalization entitlement due to the survivorship and insurance proceeds. He argues that the excess must be repaid.

What is Helen’s legal obligation in this situation?

A) Helen must repay all survivorship and insurance proceeds to the estate once her net entitlement exceeds the amount she would receive under equalization.

B) Helen must return only the proceeds of the life insurance policy to the estate but is permitted to retain all joint property received by survivorship.

C) The estate may recover the excess under s. 5(7) of the FLA as a form of dependent’s relief, subject to court approval on fairness grounds.

D) The total value of survivorship and insurance benefits must be set off against the equalization claim, and any surplus must be repaid.

Correct Answer: D

Explanation: S. 6(6)–(7) of the FLA requires setoff of any insurance, pension, or survivorship entitlements against the equalization payment. If the aggregate of such benefits exceeds the equalization amount, the estate is entitled to recover the surplus.

 

3. Samuel’s will leaves $40,000 in trust for his 10-year-old granddaughter, with instructions that it be used for her education. The will also contains a clause permitting the trustee to deliver any portion of the trust “directly to the child’s parent for her benefit.” The trustee is considering a distribution of $20,000 to the child’s mother but is unsure whether this is permitted under the CLRA without a court order. The trustee is reluctant to breach any fiduciary obligation.

What statutory mechanism governs the trustee’s ability to make a direct payment to the child’s parent in these circumstances?

A) The CLRA permits an estate trustee to pay up to $35,000 to a parent or decision-maker for a minor’s benefit without requiring a court-appointed guardianship.

B) A trustee may only make payments on behalf of a minor with the express approval of the Public Guardian and Trustee, as such payments require oversight regardless of amount.

C) Any disbursement exceeding $10,000 to a parent or guardian is strictly prohibited without a formal guardianship order, even if the will authorizes such payment.

D) Before releasing funds for a minor beneficiary, the trustee is legally obligated to constitute a new testamentary trust with a designated trustee who holds fiduciary responsibility separate from the estate trustee.

Correct Answer: A

Explanation: Section 51(1.1) of the CLRA permits an estate trustee to pay up to the prescribed limit (currently $35,000) to the person having decision-making responsibility over the child, provided it is for the child’s benefit. This allows flexibility while preserving the trustee’s discharge under s. 51(3).

 

4. Clara, a friend of the deceased, challenges a will on the basis of suspicious circumstances surrounding execution. The will left the bulk of the estate to a neighbour who helped the deceased with errands. Clara has no blood relationship to the deceased but insists she was a named beneficiary in a prior will. She files a notice of objection, but the estate trustee claims Clara has no standing.

What must Clara establish to proceed with her will challenge?

A) She must show that she was named as estate trustee in the earlier will and had some role in its drafting or intended execution.

B) She must present evidence suggesting undue influence was likely and materially affected the deceased’s testamentary decision-making.

C) She must demonstrate that the neighbour lacked legal capacity to receive testamentary gifts under the Succession Law Reform Act.

D) She must show that she has a financial interest in the estate or a right that would be affected if the current will is set aside.

Correct Answer: D

Explanation: Rule 75.06 requires that a person bringing a will challenge have a financial interest in the estate. This can include status as a beneficiary under a prior will or entitlement on intestacy.

 

5. Nathan is the estate trustee of his late wife Maria’s estate. They were married and cohabiting at the time of her death. Maria’s will divides her estate equally between Nathan and their children, but contains no express clause allowing Nathan to take both under the will and under the FLA. Nathan calculates that his equalization entitlement would be modestly higher than his share under the will. He wants to preserve his executorship and the estate gifts, while still benefitting from the higher equalization figure. His lawyer reminds him of the legal consequences of electing under the FLA.

How does Nathan’s election under the Family Law Act affect his entitlement?

A) Nathan forfeits the gifts under the will, but retains executorship as that role does not depend on beneficial entitlement.

B) Nathan must disclaim his gifts but can retain all fiduciary roles if the court permits.

C) Nathan is deemed to have predeceased Maria, and consequently forfeits both gifts under the will and his appointment as executor.

D) Nathan must forfeit all testamentary gifts but can retain gifts under other written instruments unless revoked.

Correct Answer: C

Explanation: Under s. 6(8) of the FLA, a surviving spouse who elects for equalization is deemed to have predeceased the testator for the purposes of interpreting the will. The result is loss of all testamentary gifts and disqualification from acting as executor unless the will explicitly provides otherwise.

 

6. Omar is seeking to be appointed guardian of the person for his elderly aunt. He files a notice of application under the standard procedure and prepares an affidavit detailing her inability to manage personal care decisions. He also includes a guardianship plan and his own signed consent to act. The application is uncontested. At the hearing, the judge inquires whether Omar is requesting full or partial guardianship. Omar is unsure what the distinction is.

What should the court consider before granting the requested order?

A) Whether Omar is a qualified medical professional or health care provider.

B) Whether Omar holds title to the aunt’s current residence or personal property.

C) Whether the aunt is incapable in all areas of personal care or only in specific categories.

D) Whether the Public Guardian and Trustee has consented to the guardianship application.

Correct Answer: C

Explanation: Under s. 45 and ss. 59–60 of the SDA, the court must determine whether the person is incapable in respect of all, or only some, of the categories of personal care. Full guardianship may be granted only where the person is incapable in all relevant categories. Otherwise, partial guardianship applies.

 

7. Reena creates an alter ego trust at age 67, transferring her principal residence and investment account into the trust. She is the sole income and capital beneficiary during her lifetime. The trust will distribute assets to her children upon her death. Reena's objective is to avoid probate and maintain privacy. However, she expresses concern about capital gains taxes on the trust’s assets after her death.

What is the most accurate tax consequence of using the alter ego trust in this scenario?

A) The trust avoids capital gains entirely by virtue of being an inter vivos structure and is not subject to any deemed disposition provisions.

B) A deemed disposition of all trust assets will occur every 21 years, resulting in tax being triggered periodically throughout the trust’s existence.

C) Upon Reena’s death, the trust is deemed to dispose of its assets at fair market value, as if she had personally held them.

D) The trust allows all assets to transfer to Reena’s children on a tax-free basis without triggering any capital gains on death.

Correct Answer: C

Explanation: An alter ego trust defers capital gains taxes until the settlor’s death. At that point, the trust is deemed to dispose of its assets at fair market value. This triggers the same tax consequences as if the assets were held personally, but avoids probate on those assets.

 

8. Tamara dies in October. Her estate is immediately distributable, and the only income earned between her date of death and final distribution is $150 in bank interest. Her trustee plans to distribute the estate without filing a T3 return. The beneficiaries have agreed to report the income on their own personal returns. The CRA later raises concerns about non-filing.

Is the trustee’s decision not to file a T3 return legally supportable?

A) The CRA always requires trustees to obtain a clearance certificate, even when no trust return has been filed or income appears minimal.

B) All estate trustees must file a T3 return regardless of amount earned or the number of beneficiaries receiving income from the trust.

C) CRA policy permits no T3 filing if income is under $500, each share is below $100, and all beneficiaries are Canadian residents.

D) Beneficiaries are prohibited from reporting trust income on personal returns under any circumstance, regardless of amount or agreement.

Correct Answer: C

Explanation: CRA policy provides administrative relief for small estates where total income is less than $500, each beneficiary’s share is under $100, and there are no non-resident beneficiaries. In such cases, trustees may forgo filing a T3, provided the income is properly reported by the beneficiaries.

 

9. Julianna’s cousin Diego passes away, leaving a will that names his long-time caregiver as sole beneficiary and estate trustee. Julianna, who was close to Diego and visited frequently, suspects undue influence, as Diego had recently become dependent and confused. She files a notice of objection before the application for probate is submitted. Weeks later, she receives a notice to objector and misses the 20-day deadline to respond with a notice of appearance. The estate trustee obtains the certificate without opposition. Julianna wants to revive her challenge, claiming she did not understand the importance of the deadline.

What is the legal effect of Julianna’s failure to respond?

A) The objection remains on the record, but the court may disregard it if no appearance was filed within the applicable timeline under the Rules.

B) The objection was automatically removed, and probate proceeded as though the notice of objection had never been filed with the court.

C) The court is required to reopen probate if she can now produce medical evidence of Diego’s cognitive decline near the time the will was executed.

D) Julianna may file a new application under Form 75.1 to initiate a fresh objection even after the original objection has lapsed procedurally.

Correct Answer: B

Explanation: Under r. 75.03(5), failure to serve and file a notice of appearance within 20 days after receiving a notice to objector results in automatic removal of the objection by the registrar, and the application proceeds as if the objection was never made.

 

10. Rachel dies intestate, leaving reserve land she held under a certificate of possession. Her closest living relative is her nephew, who is not a member of the band but lived with her on reserve for several years. The Minister initiates intestate administration under s. 48 of the Indian Act. The nephew applies to receive the land under the intestacy scheme.

How should the Minister respond to the nephew’s request to inherit the reserve land?

A) The Minister may approve the transfer if the nephew demonstrates sufficient ties to the reserve community.

B) The nephew may inherit the land if he meets the statutory definition of an “Indian” under the Act.

C) The nephew cannot inherit the land because he is not a band member and does not have a right to possession on the reserve.

D) The Minister must transfer the land to the First Nation council, which will determine the rightful heir according to custom.

Correct Answer: C

Explanation: Under s. 50 of the Indian Act, reserve land held under a certificate of possession can only be inherited by individuals entitled to reside on the reserve. Non-members cannot inherit such land; it must be sold to eligible members or revert to the band.

 

11. Marcus is a professional trustee administering an estate with multiple overseas beneficiaries. He seeks to sell the estate’s commercial property. One beneficiary objects, saying the market is too low. Marcus does not want to wait and offers to purchase the property himself at appraised value. The objecting beneficiary refuses to consent.

What must Marcus do to proceed with purchasing the property from the estate?

A) File a summary judgment motion under the Succession Law Reform Act (SLRA) and seek a declaration authorizing the transaction despite the objection.

B) Prove that delay would prejudice the estate’s interests and that at least one of the beneficiaries is willing to consent to the proposed sale.

C) Obtain court approval by showing full disclosure, independent valuation, and that no better offer is available despite the lack of unanimous consent.

D) Request authorization from the Public Guardian and Trustee to override the objection and approve the transaction on behalf of the dissenting beneficiary.

Correct Answer: C

Explanation: A trustee wishing to purchase estate property must obtain court approval under r. 14.05(3)(f). The court must be satisfied that the price is fair, disclosure is complete, and the sale is in the estate’s interest despite lack of unanimous consent.

 

12. During a routine will planning session, a client tells the lawyer they wish to leave their entire estate to a close friend, bypassing their financially dependent adult son. The client believes the son will be “fine” and does not want to involve him in the will. The lawyer makes no notes about the son’s financial situation and does not warn the client about the potential for a dependent's support claim under the SLRA.

Which of the following best describes the lawyer’s duty?

A) The lawyer must notify the son to ensure he can challenge the will if needed.

B) The lawyer must include the son as a beneficiary because he is financially dependent.

C) The lawyer must warn the client that the son could bring a claim under the SLRA.

D) The lawyer is entitled to ignore dependants not mentioned in the instructions.

Correct Answer: C

Explanation: Lawyers must advise clients of statutory limits on testamentary freedom, including Part V of the SLRA. Dependants who are financially supported may apply for support from the estate, and the testator’s intention to disinherit them will not prevent the court from intervening.

 

13. Lorraine is appointed guardian of the person for her brother, who suffers from chronic mental illness. A year later, she asks the court for directions on whether she may consent to an experimental medical treatment on his behalf. The statute does not clearly address this specific question. Lorraine's lawyer files a motion seeking guidance.

Which statutory provision allows the court to issue such directions?

A) Section 70 of the SDA, which deals with procedural matters in guardianship disputes.

B) Rule 14.05 of the Rules of Civil Procedure, which governs originating motions for declaratory relief.

C) Section 68(1) of the SDA, which permits the court to give directions on guardianship questions.

D) Section 77 of the SDA, which applies to summary disposition of uncontested guardianship applications.

Correct Answer: C

Explanation: Section 68(1) of the SDA permits guardians of the person to apply to the court for directions in managing the personal care of an incapable person or any other question arising from the guardianship. This includes complex or novel questions about substitute consent, financial decisions, or compliance with the guardianship plan.

 

14. Sophie is a single mother who dies unexpectedly, leaving behind a minor daughter. In her will, Sophie names her sister Julia as the person to have “custody” of her daughter. The will is well-drafted but was prepared before the 2021 amendments that replaced the term “custody” with “decision-making responsibility.” After Sophie’s death, the child’s estranged father asserts his parental rights, claiming that the testamentary appointment is invalid. Julia applies to the court seeking recognition of her role as the child’s legal guardian under the will. The court must now determine whether the testamentary appointment carries legal weight and what limitations apply.

Under what circumstances will a testamentary appointment of decision-making responsibility be legally effective?

A) When the testator had sole responsibility or died at the same time as the other parent.

B) When the surviving parent’s rights are automatically overridden by the testator’s appointment.

C) When the will uses “custody,” even if that wording predates recent legislative changes.

D) When the surviving parent consents to the appointment named in the will.

Correct Answer: A

Explanation: Under s. 61(4) of the Children’s Law Reform Act, a parent can appoint a person by will to have decision-making responsibility for a minor child, but the appointment is only effective if the testator was the sole decision-maker at the time of death or if both parents with joint responsibility died simultaneously. A surviving parent retains their right unless it has been terminated by court order.

 

15. Karla dies intestate, leaving behind her spouse Joel and two adult children. Joel receives advice that he must choose between his rights under the Succession Law Reform Act (SLRA) and making an equalization claim under the Family Law Act. He is concerned about the potential forfeiture of any intestate share if he makes the election. The estate consists of a jointly held home, registered retirement income fund (RRIF), and personal savings. Joel considers pursuing an equalization claim but wants to understand what exactly he would forfeit by doing so.

What is the legal effect of Joel electing to claim under the Family Law Act?

A) Joel forfeits all rights under intestacy and may also forfeit survivorship rights unless there are express designations stating otherwise.

B) Joel keeps any RRIF or survivorship benefit designated in his favour, even if he gives up his entitlement under the SLRA when making the election.

C) Joel forfeits his SLRA entitlements but retains jointly owned property unless it was purchased using funds earned during the marriage.

D) Joel’s election affects his entitlement under intestacy only where the estate contains Ontario real estate subject to equalization rules.

Correct Answer: A

Explanation: Under s. 6(9) of the FLA, a spouse who elects for equalization forfeits all rights under Part II of the SLRA, and unless otherwise designated, must also set off against their equalization entitlement any property received by survivorship or as beneficiary under life insurance or pension plans.

 

16. Rachel is appointed by court order as guardian of the property of her niece, a minor who recently inherited $100,000 from her late parents. The order is made under s. 47 of the CLRA after notice to the Children’s Lawyer. In her own will, Rachel wishes to ensure that her brother, whom she trusts, will manage the child’s property if Rachel dies. She includes a clause in her will making this appointment. After Rachel’s unexpected death, her brother seeks confirmation that he may act.

What is the legal effect of Rachel’s testamentary appointment of her brother as successor guardian?

A) It takes immediate and permanent effect upon Rachel’s death without court approval.

B) It is invalid because only a parent may be appointed as a guardian of property for a minor.

C) It is effective only if the Children’s Lawyer consents to the appointment in writing.

D) It is effective for 90 days following Rachel’s death, during which her brother must apply to continue as guardian.

Correct Answer: D

Explanation: Under s. 61(2) and (7) of the CLRA, a court-appointed guardian of property may make a testamentary appointment of a successor guardian. That appointment is effective for 90 days after becoming effective, during which the appointee must apply for court confirmation to extend the guardianship.

 

17. Janice, the surviving spouse of deceased testator Bill, files an election for equalization under s. 5(2) of the FLA within the six-month statutory period. Two months later, a later will surfaces that leaves Janice the entire estate. She wishes to revoke her election and take under the will. The estate trustee objects, noting that revocation is not expressly contemplated in the FLA. Janice applies to court seeking permission to revoke.

What is the current legal position regarding Janice’s ability to revoke her election?

A) Once filed, an equalization election is final and cannot be revoked under any circumstance permitted by the Family Law Act or common law.

B) Courts have limited discretion to allow revocation in exceptional cases where fairness requires it, though appellate authority remains unsettled on the issue.

C) Revocation may occur only where the election was tainted by fraud, duress, or a material factual misunderstanding known at the time of filing.

D) If the newly discovered will gives the spouse a greater benefit than equalization, revocation is automatic and does not require court involvement or approval.

Correct Answer: B

Explanation: While the FLA does not explicitly provide for revocation, courts may exercise residual discretion to allow revocation where warranted, as seen in Iasenza v. Iasenza Estate. However, appellate guidance is lacking, and caution is advised in relying on this relief.

 

18. Tariq applies to be appointed guardian of his mother’s person. His application includes the required notice, affidavit, guardianship plan, and his signed consent to act. He also serves all parties under s. 69, including the PGT and specified relatives. The matter proceeds to hearing uncontested. The judge grants the order, but at the request of the PGT, adds a clause requiring Tariq to pass accounts within one year.

What is the source of the court’s authority to impose this condition?

A) The judge relied on Rule 38.07 of the Rules of Civil Procedure to make the order.

B) The condition is based on powers granted under the Public Inquiries Act.

C) The court may impose conditions on a guardianship order if it considers them appropriate.

D) There is no legal authority to require accounting in uncontested guardianship matters.

Correct Answer: C

Explanation: Section 58(2)(b) of the SDA allows the court to include any conditions in the judgment that it considers appropriate. Requiring a newly appointed guardian to pass accounts within a specified period is a common condition in uncontested guardianship orders.

 

19. Elias files an application under r. 14.05(3)(a) and (d) for advice and direction regarding an ambiguous clause in his aunt’s will. The clause leaves “a gift to those of my siblings’ children who reach maturity before my death.” One niece turned 18 two months before the aunt’s death. Another turned 18 two months after. The estate trustee is unsure whether one or both qualify.

What is the best way for the court to address the ambiguity?

A) Commence a motion in the Superior Court under r. 75.06 for directions on partial intestacy.

B) Ask the court to decide whether “maturity” is assessed at the death, at age 18, or another logical point.

C) Deliver a statement of claim and proceed to discoveries.

D) File a claim under the Children’s Law Reform Act to clarify the age of majority.

Correct Answer: B

Explanation: Applications for interpretation under r. 14.05(3)(a) and (d) require questions that allow the court to provide an opinion. Drafting possible interpretations as “yes/no” questions allows the court to clarify the settlor’s intent without entering merits-based litigation.

 

20. A lawyer prepares mirror wills for a couple and includes a bequest of $10,000 to a close family friend in each will. The clause reads: “To my friend Julie, the sum of $10,000.” Both clients die in a car accident, and it is unclear who died first. Julie claims both bequests. The estate trustee asks whether she is entitled to receive a total of $20,000.

How should the estate trustee assess Julie’s entitlement under the mirror wills?

A) The trustee should treat both bequests as lapsed since the wills mirror each other.

B) The trustee should allow both bequests if there is no survivorship clause limiting duplication.

C) The trustee should deny both bequests because simultaneous death voids gifts to non-relatives.

D) The trustee should treat the second bequest as void due to the presumption against double gifts.

Correct Answer: B

Explanation: Without language to prevent duplication (e.g., halving the legacy or providing that it only be paid once), Julie may receive both legacies if both estates are administered separately and there is no contrary intention. Lawyers should clarify this issue when drafting mirror wills.

 

21. Simon, a registered Indian and band member, dies without a will. He leaves a surviving spouse, two children, and an estate valued at $92,000. The Minister assumes jurisdiction over the intestacy. The spouse and children disagree over the division of property. The spouse insists she is entitled to the entire estate.

Which of the following best reflects the intestacy rules under the Indian Act?

A) The spouse receives the first $50,000 and the balance is divided equally with the children.

B) The spouse receives the entire estate regardless of its value.

C) The spouse and children share equally, but the spouse retains exclusive rights to any reserve land.

D) The spouse receives the first $75,000 and one-third of the remainder, with the rest divided among the children per stirpes.

Correct Answer: D

Explanation: Under s. 48 of the Indian Act, the surviving spouse receives the first $75,000 of an intestate estate. If more than one child survives, the spouse receives one-third of the remainder, with the rest distributed among the children per stirpes.

 

22. Sandra applies to court under the FLA s. 7 for unequal division of NFP following her spouse’s death. She alleges her spouse made multiple transfers to a third party in the final year of life to defeat her equalization claim. The estate trustee responds that those transfers were valid and irrevocable gifts. Sandra has no evidence of legal ownership remaining in the estate.

How can Sandra best challenge the validity or effect of these transfers?

A) Sandra may rely on s. 8 of the FLA to trace the property automatically, regardless of whether it remains within the estate at the time of death.

B) She may invoke the presumption of resulting trust from Pecore v. Pecore to establish that the transfers were ineffective and should be returned to the estate.

C) If the third-party gifts were made in good faith without evidence of retained interest, the court cannot revisit them under the FLA framework.

D) Although the FLA has no clawback, Sandra may allege fraudulent conveyance or seek unequal division for deliberate asset depletion.

Correct Answer: D

Explanation: The FLA lacks clawback provisions, but fraudulent conveyances may be set aside under separate legislation. Alternatively, s. 5(6) allows unequal division where one spouse has deliberately depleted assets to frustrate equalization.

 

23. Thomas, a 72-year-old retired teacher, signs a continuing power of attorney for property naming his adult son as attorney. The document includes a clause that it only takes effect upon Thomas’s incapacity. However, it does not specify how incapacity is to be determined. Years later, his son attempts to use the document at a bank, but is told it cannot be accepted without a formal assessment of incapacity. He seeks clarification from a lawyer.

What mechanism applies in the absence of a specified incapacity test in the document?

A) The attorney must obtain a capacity assessment under the SDA or the Mental Health Act.

B) The attorney can provide a sworn affidavit from a family member confirming incapacity.

C) The power of attorney is invalid due to vagueness and cannot be relied upon.

D) The attending physician must certify incapacity under the procedure set out in the Wills Act.

Correct Answer: A

Explanation: Where no method of establishing incapacity is set out in the power of attorney, s. 9(3) of the SDA provides that incapacity must be confirmed by a designated capacity assessor or under the Mental Health Act. Without such confirmation, the document remains ineffective.

 

24. An inter vivos trust earns $35,000 in interest and capital gains annually. The trustee wants to distribute all net income equally among the beneficiaries. However, one of the beneficiaries is a minor, and the trust does not permit advance payments to minors. The trustee holds back the minor’s share and reports only the adult beneficiaries’ income. CRA questions the allocation, particularly given that the trust deed entitles all beneficiaries to equal shares.

What is the proper tax treatment of the minor’s income share?

A) The trust must pay tax on the full $35,000 of income since it failed to make an actual distribution to all entitled beneficiaries.

B) The trustee is permitted to withhold the minor’s entitlement without creating a tax liability at the trust level for the retained portion.

C) CRA will treat the entire income amount as retained by the trust and assess tax under s. 104(13.1) regardless of any equal entitlement clause.

D) The minor’s share is considered payable and taxable to the minor, even if retained, based on the entitlement created by the trust deed.

Correct Answer: D

Explanation: If the trust deed entitles a minor to income, that income is considered “payable” under s. 104(24), and is taxed to the minor even if not distributed. The trust is allowed a corresponding deduction under s. 104(6), avoiding double taxation.

 

25. During a proceeding to prove a lost will, the estate trustee files an affidavit attaching a photocopy and swears that all beneficiaries consent. One distant cousin, whose interest is affected, has not responded to repeated attempts at contact. The trustee wants to proceed without further delay.

How should the estate trustee proceed in the absence of full beneficiary consent?

A) File an ex parte application under r. 74.13 and continue the proceeding without notifying the unresponsive cousin.

B) Bring a motion to dispense with consent and request default judgment as if the cousin had waived their right to object.

C) Apply under r. 75.06 for directions regarding notice and ask for leave to proceed without the cousin’s consent.

D) Start a separate civil action under the Limitations Act to confirm legal entitlement and clarify the cousin’s potential status in the estate.

Correct Answer: C

Explanation: Under r. 75.06, courts may give directions regarding notice and procedural steps in contested or irregular matters. If full consent is not available, directions are necessary to proceed with proving a lost will.

 

26. Elaine, a 76-year-old widow, meets with her lawyer to make a new will leaving her estate equally to her two daughters. One daughter lives with Elaine and often assists her with meals, finances, and transportation. During the meeting, this daughter insists on staying in the room while Elaine gives instructions. The lawyer notes that Elaine appears frail and deferential during the meeting, hesitates before answering questions, and looks to her daughter for approval. The lawyer is concerned but is also under time pressure to complete the will due to Elaine’s recent hospitalization. The daughter’s presence is not documented in the lawyer’s file.

Which of the following is the most significant risk in this scenario?

A) That the will may be challenged based on improper execution.

B) That the daughter’s presence raises an undue influence concern.

C) That the estate may require a double probate proceeding.

D) That the lack of asset details could result in the will being void.

Correct Answer: B

Explanation: Where a family member exerts visible influence or is heavily involved in the process, the risk of undue influence is high. The lawyer should have insisted on seeing the testator alone and made careful notes to rebut any future claim of undue influence. Failing to do so may compromise the will's validity under the doctrine established in Vout v. Hay.

 

27. Michael is a Canadian citizen who owns property in both Ontario and Florida. He appoints his sister, who lives in Toronto, as his attorney under a continuing power of attorney for property. While managing his Ontario affairs proceeds smoothly, she encounters resistance from banks and land offices in Florida. Michael’s Florida lawyer informs him that the Ontario power of attorney may not be valid in that jurisdiction.

What is the most appropriate advice for Michael to follow?

A) He should ask the Canadian consulate to validate the Ontario document for use in Florida.

B) He should assume that the Ontario power of attorney governs all assets, including those in the U.S.

C) He should have his attorney apply for guardianship in Ontario to enforce the document abroad.

D) He should sign a Florida-compliant power of attorney to handle property located in that state.

Correct Answer: D

Explanation: Ontario powers of attorney are not guaranteed to be recognized in foreign jurisdictions. Michael should obtain a local power of attorney that meets the legal and formal requirements of Florida to ensure his attorney can act effectively with respect to his U.S. assets.

 

28. Samuel's brother Jerome died leaving a will that names their estranged cousin as estate trustee. Samuel suspects that a newer will exists. By the time he files a notice of objection, the certificate has already been granted. Samuel obtains an order for return of the certificate, which is served on the trustee. He takes no further action for over 30 days. The estate trustee now seeks to have the certificate reinstated.

What is the estate trustee permitted to do after Samuel’s inaction?

A) The objection is deemed revived automatically after 30 days unless the estate trustee files a responding motion with supporting affidavit evidence.

B) The court must schedule a hearing to assess whether the certificate should be reinstated or remain withdrawn based on fairness and delay.

C) The estate trustee may move without notice for re-release of the certificate if no further action is taken within 30 days after service.

D) Once a certificate is returned, it becomes permanently void unless replaced by a new certificate issued after full court review and adjudication.

Correct Answer: C

Explanation: Rule 75.05(6) permits the estate trustee to apply without notice for release of the certificate if no motion for directions is brought within 30 days after the return order. If granted, the estate trustee resumes full authority.

 

29. Mark is acting as attorney under his mother’s continuing power of attorney for property. She is incapable due to advanced dementia. Mark begins making annual donations to charities his mother supported for years. However, he also makes a $30,000 loan to himself, citing her previous generosity toward him. His sister objects and requests court intervention.

What rule governs the propriety of the loan to Mark?

A) Loans and gifts are allowed if they align with the grantor’s past generosity and established habits.

B) Loans under $50,000 are automatically permitted for family members under the SDA framework.

C) A loan to the attorney is improper unless authorized in the document or court-approved.

D) A loan is valid if the attorney gives written notice to the Public Guardian and Trustee.

Correct Answer: C

Explanation: Section 37(3)–(4) of the SDA limits gifts and loans from an incapable person’s property. Attorneys must act in the grantor’s best interests and cannot benefit personally unless authorized. A $30,000 loan to the attorney without specific authority is a misuse of power and subject to challenge.

 

30. Gabriel is acting as the estate trustee for his late aunt, who died in August. She owned a GIC that accrued interest semi-annually, set to mature the following February. Gabriel receives the interest payment in full the next year but is unsure how to allocate it between the terminal return and the estate’s T3 return. He consults a tax advisor who explains that the CRA will expect an apportionment based on a daily accrual. Gabriel is confused because during his aunt’s life she had always reported GIC interest on a cash basis, and no interest had yet been paid when she died.

What is the appropriate method for allocating GIC interest for tax purposes in the year of death?

A) In the year of death, interest on the GIC is deemed to accrue daily, and the amount up to the date of death is reported on the T1 terminal return, with the remaining post-mortem portion taxed to the estate on its T3 return.

B) GIC interest, regardless of death, is only taxable in the year it is actually paid out, so the full amount is included in the estate’s T3 return when received.

C) Since the estate received the full interest payment after death, the entire sum is treated as income to the estate, without any allocation to the terminal return.

D) Income from GICs is excluded from the terminal return under the Income Tax Act, as it is considered non-reportable if unpaid at the time of death.

Correct Answer: A

Explanation: Under ITA s. 70(1)(a), periodic income like GIC interest is deemed to accrue daily in the year of death, even if previously reported on a cash basis. The portion up to the date of death must be included in the deceased’s terminal return, and the remaining post-death portion belongs to the estate’s T3 return.

 

31. As part of a standard procedure application for guardianship of property, Jacob prepares the affidavit required to support his application. He includes his observations about his father’s recent forgetfulness and mismanagement of bank accounts, but also attaches a physician’s letter stating a formal diagnosis of dementia. The letter is signed but not sworn, and the court criticizes Jacob for relying on it. Jacob’s lawyer points out that there is no statutory requirement for a medical affidavit in the SDA.

How do courts typically treat medical evidence in standard guardianship applications?

A) Courts do not require sworn medical evidence in property guardianship applications.

B) A doctor’s letter is valid even if it is not sworn or formally commissioned.

C) Courts expect a capacity assessment or affidavit to confirm the person’s incapacity.

D) Medical evidence is needed only when the court proceeds by summary disposition.

Correct Answer: C

Explanation: Although the SDA does not require a medical affidavit in the standard procedure, courts generally expect reliable and admissible evidence of incapacity. A capacity assessment or affidavit from a physician, rather than hearsay statements in the applicant’s affidavit, is preferred to support a finding of incapacity.

 

32. Naomi, a status Indian and member of a First Nation in Ontario, dies while ordinarily residing on reserve. Her will is found among her papers, written in her handwriting, signed, and dated. It divides her estate equally between her two children and includes a clause transferring her certificate of possession in reserve land to a non-band-member cousin who cared for her in her final years. The Minister reviews the will and expresses concern regarding this gift. The rest of the will is uncontroversial and consistent with Naomi’s family structure.

Which of the following best reflects the Minister’s statutory authority with respect to Naomi’s will?

A) The Minister must approve all wills made by status Indians on reserve and can reject any gift that violates local custom.

B) The will is presumptively valid, but the gift of land requires court approval under the Indian Estates Regulations.

C) The Minister may approve the will but has authority to override the devise of reserve land if the recipient is not eligible to possess it.

D) The Family Homes on Reserves and Matrimonial Interests or Rights Act governs all reserve land transfers and supersedes any testamentary instructions.

Correct Answer: C

Explanation: While wills made by Indians who ordinarily reside on reserve may be valid without court probate, the Minister retains the discretion under s. 49 to approve or disallow transmission of possessory interests in reserve land. Gifts to non-members may be rejected even if the rest of the will is upheld.

 

33. Thomas is administering an estate where the testator owned a valuable stock portfolio that appreciated significantly during her lifetime. The will leaves the portfolio to a specific niece. Upon death, the portfolio is deemed sold at fair market value, generating a large capital gain. Thomas uses estate funds from the residue to pay the taxes triggered by the deemed disposition. A residual beneficiary challenges the distribution, arguing that the niece should bear the tax burden.

How should the tax liability for the capital gain on the gifted shares be allocated under applicable estate law principles?

A) When specific property is gifted in a will, the tax from its deemed sale is paid from the residue unless the will expressly states that the recipient must bear it.

B) Tax on capital gains realized at death must be distributed evenly across all beneficiaries regardless of the nature of the gift or the will’s wording.

C) A beneficiary who receives specific property that triggers capital gains is automatically liable for the related tax unless otherwise directed by the executor.

D) The CRA determines who pays the tax based on how many individuals inherit from the estate and their respective entitlements under the will.

Correct Answer: A

Explanation: Under general estate administration principles, taxes arising from the deemed disposition of specific gifts (e.g., appreciated securities) are typically paid out of the residue, unless the will provides that the recipient must bear the associated tax. The ITA does not assign tax liability based on the nature of the bequest.

 

34. Marta dies owning a $500,000 RRSP, which names her adult daughter Olivia as the beneficiary. Olivia receives the entire RRSP amount directly from the plan administrator. A few months later, the CRA issues a Notice of Assessment to the estate for the entire RRSP amount, stating that it must be included in the deceased’s terminal return. Olivia assumed that she would not owe any tax since the money came directly to her, and the estate’s trustee is now seeking indemnity from her to cover the taxes.

How is Olivia’s tax liability for the RRSP proceeds determined under the Income Tax Act?

A) Because the RRSP was paid directly to Olivia as beneficiary, the estate alone is responsible for the tax, and she cannot be asked to reimburse any part of it.

B) Olivia bears no tax liability for the RRSP since it passed outside the estate and was never part of the deceased’s probate assets.

C) The full tax must be paid by the estate, and the trustee has no legal recourse to recover it from Olivia as a third-party recipient.

D) Olivia is jointly and severally liable for the RRSP tax because she received the proceeds directly upon her mother’s death.

Correct Answer: D

Explanation: RRSP proceeds payable to a named beneficiary are still included in the deceased’s income under s. 146(8.8) of the ITA. Under s. 160.2(1), recipients of RRSP proceeds are jointly and severally liable for the related tax, even if the estate pays first, unless a spousal or dependant rollover applies.

 

35. Adriana lived with her partner, Samir, for 10 years. They never married but referred to each other as spouses and shared all expenses. Samir executed a will before their relationship began, leaving everything to his parents. He died without ever updating his will. Adriana wants to know whether their relationship revoked Samir’s earlier will.

What is the correct legal effect of Samir’s common-law relationship on his earlier will?

A) The will remains valid because Ontario law does not treat common-law unions as revoking previously executed wills.

B) A pre-existing will is revoked only if a cohabitation agreement is made between the partners.

C) Long-term common-law spouses are treated the same as legally married spouses for revocation purposes.

D) The will was automatically revoked when Samir entered a long-term conjugal relationship with Adriana.

Correct Answer: A

Explanation: Prior to 2022, marriage revoked a will under s. 15 of the SLRA. However, common-law relationships have never had that effect. Further, the 2022 repeal of s. 15 ended automatic revocation upon marriage, reinforcing that only express revocation clauses or a new will override earlier ones.

 

36. Natalie grants a power of attorney for personal care to her longtime friend Dana, who is also her personal support worker and provides daily care. Upon learning this, the long-term care facility refuses to recognize Dana’s authority under the SDA, claiming she is not permitted to act as attorney. Dana insists the document is valid and that Natalie had full capacity when it was signed.

What is the legal effect of appointing a paid caregiver as attorney for personal care?

A) A caregiver may act only if a court appointment confirms the power of attorney.

B) The attorney can act if their employer consents to the appointment in writing.

C) The appointment is valid if it was signed before the grantor entered formal care.

D) A caregiver cannot act unless they are related to the grantor by family or marriage.

Correct Answer: D

Explanation: Section 46(3) of the SDA prohibits persons who provide care for compensation from acting as attorney for personal care unless they are the grantor’s spouse, partner, or relative. The restriction is designed to avoid conflicts of interest and undue influence.

 

37. Marlene is the estate trustee for her father’s estate. Before applying for a CRA clearance certificate, she distributes most of the estate to the beneficiaries, retaining only a small reserve. Months later, the CRA reassesses the terminal return and issues a demand for unpaid taxes. Marlene cannot pay the full amount from the reserve and is worried about her personal liability.

What is the legal effect of Marlene distributing estate assets without first obtaining a clearance certificate?

A) The CRA must provide Marlene with formal advance notice before asserting any personal liability for unpaid taxes owed by the estate.

B) Marlene is only exposed to personal tax liability if she also received a share of the estate as a beneficiary under the will.

C) CRA must first attempt to recover outstanding tax amounts from the beneficiaries before it may proceed directly against Marlene as estate trustee.

D) Marlene becomes personally liable for the unpaid tax up to the value of the estate property she distributed without first obtaining a clearance certificate.

Correct Answer: D

Explanation: A personal representative who distributes estate assets without obtaining a clearance certificate assumes personal liability for any unpaid taxes, interest, and penalties under s. 159(3). This personal liability is limited to the value of the property distributed.

 

38. Dana dies intestate, leaving her spouse and two children. Her estate includes a registered investment portfolio and a valuable rental property. The executor proposes using a testamentary spousal trust to defer tax on the deemed disposition of the rental property. The surviving spouse will receive all income for life and no other party will receive any benefit during that time. The trust will vest indefeasibly within 24 months. However, the will contains a clause terminating the spouse’s interest if the spouse remarries.

Which of the following most accurately describes the tax treatment?

A) The rollover will apply as long as the spouse receives all trust income and the trust vests within 36 months.

B) The remarriage clause is irrelevant to the rollover because the spouse is entitled to income until remarriage.

C) The clause causes the trust to fail as a qualifying spousal trust, disqualifying the rollover under s. 70(6).

D) The clause renders the spouse’s interest defeasible, thereby invalidating the rollover despite all other conditions being met.

Correct Answer: D

Explanation: For a trust to qualify as a testamentary spousal trust under s. 70(6), the spouse must have an indefeasible right to receive all income for life. A clause terminating income rights upon remarriage creates a defeasible interest, disqualifying the trust from rollover treatment.

 

39. Clara executes a continuing power of attorney for property and also has a will that leaves her home to her niece. Years later, Clara becomes incapable, and her attorney sells the home to pay for long-term care. Upon Clara’s death, the niece seeks to enforce her entitlement under the will. The estate trustee refuses, claiming the home was validly sold during Clara’s incapacity.

What legal remedy, if any, is available to the niece?

A) The gift is adeemed and the niece is not entitled to compensation from the estate.

B) The niece may claim the proceeds of the sale unless the will says otherwise.

C) The niece must bring an application for guardianship to enforce her rights under the will.

D) The niece must ask the court to assess Clara’s capacity at the time the property was sold.

Correct Answer: B

Explanation: Section 36 of the SDA prevents ademption when property specifically bequeathed in a will is sold by an attorney acting under a valid power of attorney. The intended beneficiary is entitled to the proceeds of disposition, subject to the will expressing a contrary intention.

 

40. Deanna is administering her brother’s estate and discovers he held a joint account with his adult daughter, Isabel. Isabel claims the account is hers by right of survivorship, but the will suggests that the estate includes the account proceeds. Deanna is unsure whether to treat the asset as part of the estate or passing outside it. There is no express gift language in the bank documents. Isabel contributed none of the funds and was added to the account during the brother’s illness.

How should Deanna treat the joint account in administering the estate?

A) The presumption of advancement applies in parent–child relationships, so the account passes to Isabel unless clear evidence proves otherwise.

B) The account passes outside the estate by default, but Deanna must still include it in the inventory for estate administration purposes.

C) The right of survivorship applies automatically, and the account is excluded from the estate regardless of how or when Isabel was added.

D) A presumption of resulting trust applies, and Isabel must prove that her father intended to gift her the right of survivorship.

Correct Answer: D

Explanation: In Pecore v. Pecore, the Supreme Court held that when a parent transfers property to an adult child jointly, a presumption of resulting trust arises. The adult child must rebut this presumption by proving the parent intended to make a gift of the right of survivorship.

 

41. Marjorie, a long-time client, advises her lawyer that she has been separated from her husband for 15 years under a formal separation agreement. She now wishes to leave her entire estate to her sister, and nothing to her estranged spouse. The lawyer does not review the separation agreement and drafts a will accordingly. After Marjorie’s death, her spouse claims entitlement under the separation agreement and files an equalization claim under the Family Law Act.

What is the most appropriate step the lawyer should have taken?

A) The lawyer should have confirmed whether spousal rights were waived.

B) The lawyer should have filed a divorce certificate with the completed will.

C) The lawyer should have made the gift conditional on the spouse’s death.

D) The lawyer should have placed the assets into joint names with the sister.

Correct Answer: A

Explanation: A separation agreement may limit or extinguish rights under the FLA, including equalization claims. The lawyer must review such documents when taking instructions, especially where there is an exclusion of a legal spouse, to properly advise on risks and constraints on testamentary freedom.

 

42. Kevin dies without a will, leaving behind a 12-year-old son and a modest estate. The child’s mother predeceased Kevin. Kevin’s brother, who has helped raise the child, wants to be appointed both as decision-maker and guardian of the child’s modest inheritance. However, the will appoints a third party, an accountant, as estate trustee. The brother is concerned that without court intervention, he will have no authority over the child’s property and that the accountant may be required to pay the child’s share into court.

How should the child’s property be managed in the absence of a court-appointed guardian?

A) Unless a guardian is appointed, the child’s share must be paid into court by the estate trustee.

B) The estate trustee may transfer the inheritance to a family member without seeking court approval.

C) The funds can be held jointly by the child and a co-signer until the child reaches age eighteen.

D) A close relative is automatically authorized to act as guardian of the child’s inheritance.

Correct Answer: A

Explanation: Under s. 47 of the CLRA, only a court-appointed guardian of property may receive and manage a child’s inheritance. In the absence of such an appointment or express authority in the will, the estate trustee must pay the funds into court.

 

43. Samantha files a guardianship of property application under the summary disposition procedure. She has a capacity assessment from an assessor and a second statement from a family friend who knows the alleged incapable person. The friend’s statement indicates frequent contact but no opinion about the person’s mental capacity. The registrar accepts the filing, but the judge declines to make a summary order and instead sets the matter down for a hearing.

Why is the judge’s decision procedurally correct?

A) Only the Public Guardian and Trustee may decide whether summary disposition should proceed.

B) A summary disposition application cannot move forward unless all close relatives sign waiver forms.

C) A valid application must include a physician’s certificate rather than a general capacity assessment.

D) The second statement must give an opinion on incapacity, or the judge may require a full hearing.

Correct Answer: D

Explanation: Under s. 72(1) of the SDA, if a non-assessor provides a statement, it must confirm both personal contact and an opinion on incapacity. Without this opinion, the judge may require a full hearing to ensure proper evidentiary support for the appointment.

 

44. Teresa dies and her will appoints her sister to have decision-making responsibility for her 3-year-old child and to act as guardian of the child’s property. The will is silent on whether a formal application to the court must be made. After Teresa’s death, her sister takes custody of the child and begins using estate funds for the child’s care without applying for court approval. The estate trustee expresses concern and contacts the Children’s Lawyer.

What is the legal effect of the testamentary appointment made in Teresa’s will?

A) The will’s appointment provides the sister with full and continuing legal authority to act as guardian and make decisions on behalf of the child without further court involvement.

B) The sister’s authority under the will is valid for up to 90 days, after which she must apply to the court to continue in the role or the appointment lapses.

C) The appointment has no legal force unless the sister has also been named as the estate trustee and authorized to control estate property.

D) The sister cannot act on the child’s behalf unless the paternal grandparents are notified and give their express consent under the Family Law Act.

Correct Answer: B

Explanation: All testamentary appointments of decision-making responsibility or guardianship of property are temporary under s. 61(7) of the CLRA. They expire after 90 days unless the appointee applies for court confirmation within that timeframe.

 

45. Daniel is acting for a client under a summary disposition application for guardianship of property. The client provides capacity assessments from two assessors, both of whom met with the alleged incapable person within the past three months. However, only one of the assessors includes the opinion that it is necessary for someone to be appointed to make decisions on the person’s behalf. Daniel proceeds to file the application and asks the registrar to forward the materials to a judge under s. 77 of the SDA.

How should the registrar handle the application in light of the conflicting capacity assessments?

A) The registrar must forward the application to the judge without reviewing whether guardianship is necessary.

B) The registrar may refer the file only if one assessor confirms that guardianship is necessary.

C) The registrar must schedule a hearing if the second assessor disagrees with the need for an appointment.

D) The application cannot proceed unless both assessors reach the same conclusion about incapacity.

Correct Answer: B

Explanation: Section 77(2) of the SDA allows the registrar to submit the application to a judge without a hearing only if at least one assessor’s statement affirms that guardianship is necessary. If that condition is not met, the matter should not proceed without a hearing.

 

46. Jasper and Emily are married with two children. Each makes a separate will appointing different individuals to have decision-making responsibility for the children if both parents die. Jasper appoints his brother and Emily appoints her sister. Tragically, both parents die in a common car accident. A dispute arises between the appointed relatives about who should care for the children. The will clauses are uncoordinated and name different people. The court must now interpret the conflicting testamentary appointments under the CLRA.

How will the court resolve the conflict between the testamentary appointments?

A) The appointment in the more recent will automatically overrides the earlier one.

B) If the parents die at the same time, only appointments that appear in both wills will take effect.

C) Both appointments are accepted, and the court will presume joint authority unless one party withdraws.

D) All testamentary appointments are void when two conflicting ones exist for the same child.

Correct Answer: B

Explanation: Under s. 61(5) of the CLRA, when parents with joint decision-making responsibility die in a common disaster, only appointments that are common to both parents’ wills are effective. Conflicting appointments cancel each other out unless the same person (or persons) is appointed in both wills.

 

47. Leo dies intestate after living with his common-law partner, Jordan, for 14 years. Jordan contributed to the household financially and cared for Leo during a terminal illness. Jordan is left out of the estate entirely, which passes to Leo’s siblings. Jordan is advised to consider an unjust enrichment claim.

What must Jordan establish to succeed in a claim for unjust enrichment?

A) That there was a mutual agreement to divide their property equally.

B) That Jordan was named as a joint holder of specific estate assets.

C) That Leo was enriched, Jordan was deprived, and no juristic reason justifies the benefit.

D) That Leo’s will failed to acknowledge Jordan’s role and the estate has limited funds.

Correct Answer: C

Explanation: The test for unjust enrichment is threefold: (1) enrichment of the defendant, (2) corresponding deprivation of the claimant, and (3) absence of juristic reason. Property contributions, caregiving, or financial interdependence may satisfy these elements if adequately evidenced.

 

48. Jacob, a mentally incompetent band member, resides on reserve in a group home. His family applies to the Ontario Superior Court of Justice for guardianship over his assets. The court declines jurisdiction, advising them to contact Indigenous Services Canada. Jacob owns reserve land and a trust account held by ISC.

Which of the following best explains the jurisdictional outcome?

A) The Minister has exclusive jurisdiction under s. 51 of the Indian Act to administer the property of a mentally incompetent Indian ordinarily resident on reserve.

B) Jurisdiction lies with the court under the Substitute Decisions Act because Jacob resides in Ontario.

C) The provincial court and ISC must share jurisdiction concurrently in all capacity cases.

D) Jacob’s family must apply under the Family Homes on Reserves and Matrimonial Interests or Rights Act for a co-decision-making order.

Correct Answer: A

Explanation: Under s. 51 and s. 4(3) of the Indian Act, the Minister has exclusive jurisdiction to administer the property of a mentally incompetent Indian who ordinarily resides on reserve. Provincial guardianship law is ousted in this context.

 

49. Veronica names her best friend Lila in her will to assume decision-making responsibility for her minor child in the event of her death. Lila is flattered but unsure whether she wants the responsibility. After Veronica’s death, Lila receives notice of her appointment and is asked to assume care of the child immediately. She has not yet agreed and wants to consider her options. Veronica’s brother also steps forward, intending to make an application to the court for decision-making responsibility.

What condition must be met before the testamentary appointment can take effect?

A) The appointment takes effect immediately and blocks all competing applications.

B) The appointment has no force unless the named person agrees to accept the role.

C) The estate trustee is automatically granted interim care pending court direction.

D) The Office of the Children’s Lawyer must be consulted in all disputed cases.

Correct Answer: B

Explanation: Under s. 61(6) of the CLRA, no testamentary appointment of decision-making responsibility is effective unless the person appointed consents. If Lila does not consent, the appointment fails, and another person (including Veronica’s brother) may apply to the court under s. 21 of the CLRA.

 

50. Alicia, a 79-year-old widow, visits her lawyer to update her continuing power of attorney for property. She owns several income-generating properties, a substantial investment portfolio, and two bank accounts. Alicia intends to appoint her two children jointly but is unclear about whether they must act together or separately. Her lawyer explains that the default under the SDA is joint decision-making unless specified otherwise. Alicia prefers that either of her children be able to act independently if necessary but does not want to use language like "joint and several." The lawyer offers to draft clear wording reflecting this intention.

Which of the following best reflects the correct drafting approach under the SDA?

A) The lawyer should include language such as “either of whom may act alone” to clearly provide that the attorneys may exercise authority independently of one another.

B) The lawyer should rely on the phrase “joint and several,” which is commonly used to authorize multiple parties to act individually and together.

C) The lawyer should assume the attorneys are permitted to act separately unless the document contains specific language requiring them to act jointly.

D) The lawyer should explain that only guardians appointed through a formal court process are ever permitted to act on their own without the consent of others.

Correct Answer: A

Explanation: Section 7(4) of the SDA states that multiple attorneys must act jointly unless the power of attorney document expressly provides otherwise. The phrase "either of whom may act alone" is clear and effective; using "joint and several" is inappropriate, as it applies to liability, not authority.

 

51. Patricia and Leslie cohabited for nine years and had one child together. Leslie died without a will. Patricia wishes to claim a share of the estate and believes she should be entitled to at least the preferential share. Leslie’s estranged brother has filed for probate and asserts full entitlement.

What is Patricia’s legal entitlement in this situation?

A) Patricia qualifies for the preferential share because of the length of the relationship and their child.

B) Patricia may split the estate with Leslie’s brother due to her parenting contributions.

C) Patricia is entitled to equalization as if married under the Family Law Act.

D) Patricia cannot inherit on intestacy but may seek support under s. 57 of the SLRA and may apply as estate trustee.

Correct Answer: D

Explanation: Common-law spouses have no right to inherit under Ontario’s intestacy laws, regardless of duration of relationship or shared children. However, they may qualify as dependants under the SLRA and may apply to act as estate trustee.

 

52. Alec’s will leaves his entire estate to his surviving spouse in trust. The trust provides that she is to receive all the income for life, but capital may only be distributed to her if she remains unmarried. Upon Alec’s death, the estate trustee claims a rollover for the transfer of assets to the trust. The CRA denies the rollover on audit, stating that the trust fails to qualify as a spousal trust.

Why is the CRA’s denial of rollover treatment legally valid?

A) The capital condition based on remarriage renders the spouse’s interest defeasible and disqualifies the trust under the spousal rollover provisions.

B) The CRA refuses to allow rollover unless the trust includes a registered charity as an alternate or residual beneficiary under the terms of the will.

C) A trust cannot qualify for rollover treatment unless it has first obtained formal judicial approval confirming its structure as a valid spousal trust.

D) CRA policy requires that the spouse be named as sole trustee of the trust in order for the rollover provisions under the Act to apply.

Correct Answer: A

Explanation: A qualifying spousal trust must meet the test in s. 70(6)(b): the spouse must be entitled to all income for life, and no other person may access income or capital during the spouse’s lifetime. A clause terminating capital rights upon remarriage creates a defeasible interest, preventing the rollover.

 

53. Kevin contributes a portfolio of blue-chip stocks to an inter vivos trust established for the benefit of his minor nephew. The trust permits the trustees to distribute income at their discretion but prohibits any capital distributions until the child turns 25. Kevin receives no consideration for the transfer and remains the sole trustee. Two years later, CRA audits the trust and attributes the investment income back to Kevin. He disputes the reassessment, arguing that the income belongs to the trust.

Why is the CRA likely justified in attributing the trust income back to Kevin?

A) Income from property transferred to a trust is attributed to the transferor if they retain control over distributions, even when not a beneficiary.

B) Attribution cannot apply in trusts for extended family unless the recipient is a spouse or minor child of the transferor under the applicable tax rules.

C) So long as the trust does not permit the settlor to benefit directly from trust property, attribution rules are inapplicable regardless of other retained powers.

D) Attribution applies only to amounts actually received by the transferor and does not cover retained control where no benefit has been realized.

Correct Answer: A

Explanation: Section 75(2) applies when the settlor retains the power to determine how trust income or capital is used, even if the settlor is not a beneficiary. In this case, Kevin is both settlor and sole trustee, and retains control over distributions. The trust income is therefore attributed to him, regardless of actual payments.

 

54. Theo and Fiona, a married couple, meet with a lawyer to prepare mirror wills. They agree to leave everything to one another, and then to their children equally. During the consultation, Theo asks whether Fiona could change her will after his death to exclude one of their children. Fiona is silent. The lawyer explains the difference between mirror wills and mutual wills but does not document the discussion or suggest a domestic contract. Ten years later, Fiona remarries and changes her will, disinheriting the child Theo was concerned about.

What legal doctrine could the child attempt to invoke?

A) The child could rely on mutual wills if there is evidence of a binding agreement not to revoke the original plan.

B) The child could rely on the rule in Saunders v Vautier to demand early distribution of estate property.

C) The child could rely on resulting trust to argue the estate was not intended to benefit the new heirs.

D) The child could rely on testamentary lapse to challenge the validity of the updated will.

Correct Answer: A

Explanation: The doctrine of mutual wills arises when two individuals agree not to revoke their wills after one has died. Courts require clear evidence of a binding agreement. In the absence of written confirmation, such claims may fail, but can sometimes succeed based on surrounding circumstances.

 

55. Julia was in a conjugal relationship with Keith for five years before his death. He had previously been married and was separated from his wife at the time of death. Keith died intestate. Both Julia and his separated wife apply for control over the estate. The estate includes a home Julia shared with Keith, held solely in Keith’s name.

How should Julia’s legal position be assessed under Ontario estate law?

A) Julia cannot inherit the estate but may challenge the spouse’s appointment as trustee.

B) Julia may claim half the estate based on the length and nature of the relationship.

C) Julia is treated equally under s. 43.1 of the SLRA and can inherit as a spouse.

D) Julia may seek dependant support and apply to be trustee, but the separated wife may still inherit.

Correct Answer: D

Explanation: Under the SLRA, a separated spouse is excluded from inheritance under s. 43.1 if certain criteria are met. However, unless legally divorced, a separated spouse may still inherit if those conditions are not satisfied. Julia, as a common-law spouse, may not inherit but may seek support and act as trustee.

 

56. Vanessa is a co-trustee for her sister’s estate, along with a bank’s trust division. She disagrees with the bank’s decision to retain a volatile equity position and wants to liquidate the shares to diversify the estate portfolio. The trust company refuses, citing its investment committee’s review. Vanessa considers unilateral action but is unsure of her rights.

What governs Vanessa’s ability to act in this situation?

A) Estate trustees must act unanimously unless the will explicitly permits majority action or gives one the authority to act independently.

B) Trustees may make independent decisions if the will is silent, provided there is no clause expressly requiring consensus between co-trustees.

C) As a professional fiduciary, the bank has veto power over contested investment decisions to ensure prudent management of estate capital.

D) A dispute between co-trustees must be resolved by applying to court or referring the matter to arbitration under the Trustee Act.

Correct Answer: A

Explanation: At common law, estate trustees must act unanimously unless the will authorizes decisions by majority or specific trustees. Vanessa cannot act unilaterally unless the will provides for that authority. A disagreement among trustees may require legal advice or court intervention.

 

57. Ismail meets with his lawyer to draft a will leaving his family cottage to his two adult sons. One son has been living in the cottage full time and the other lives out of province. The will leaves the property “to my sons jointly.” The lawyer does not discuss whether the property is to be held in joint tenancy or tenancy in common, nor is any co-ownership agreement proposed.

What legal complication is most likely to arise after Ismail’s death?

A) The cottage may trigger capital gains liability depending on the increase in its assessed value.

B) The will may be challenged for uncertainty if the gift lacks sufficient clarity and precision.

C) The sons may dispute how to share and use the cottage if ownership is not clearly specified.

D) The lawyer may be criticized for not advising Ismail to transfer the property during his lifetime.

Correct Answer: C

Explanation: When multiple beneficiaries inherit real property, failure to clarify ownership as joint tenancy or tenancy in common can lead to disputes. A co-ownership agreement or clear instructions in the will can mitigate future conflict and define use, expense-sharing, and exit mechanisms.

 

58. Greg, an 83-year-old man with limited English skills, attends his first will-drafting appointment accompanied by his adult son. The lawyer does not speak Greg’s first language and relies on the son to interpret. The will leaves the entire estate to the son and excludes Greg’s other children. The lawyer makes no inquiries about potential dependents, support obligations, or foreign property. No independent interpreter is used, and the lawyer does not confirm Greg’s understanding of the will's contents. The son arranges for a signing appointment the next day.

What is the primary legal concern with how the will instructions were obtained?

A) That the lawyer failed to confirm Greg’s land ownership first.

B) That the lawyer failed to file the will with the court office.

C) That the lawyer relied on the son to interpret without safeguards.

D) That the lawyer failed to account for Greg’s foreign property.

Correct Answer: C

Explanation: Relying on a family member for interpretation undermines the lawyer’s ability to assess capacity and identify undue influence. Independent interpretation is required where language barriers exist. This ensures the client understands their instructions and can communicate freely without interference.

 

59. Ravi and Nina lived together in a conjugal relationship for 12 years but never married. Ravi died unexpectedly, leaving a will that left his entire estate to his parents and excluded Nina. Nina was financially dependent on Ravi and relied on him for housing and daily needs. She now wishes to challenge the will, asserting that she was treated unfairly.

What is Nina’s appropriate legal remedy in these circumstances?

A) Nina may bring an application for dependent support and is not barred merely because she was omitted from the will.

B) Nina’s remedy lies under the FLA’s equalization provisions for surviving spouses.

C) Nina may only claim against the estate through the intestacy provisions available to relatives.

D) Nina’s only option is to challenge the will’s validity on the basis of undue influence by the parents.

Correct Answer: A

Explanation: Under s. 58–62 of the SLRA, a dependent, including an unmarried spouse as defined under s. 57, may apply for support even if excluded from a will. The dependent support regime operates independently from entitlement under the will or intestacy.

 

60. Rajiv executed a continuing power of attorney for property in 1992 under the old Powers of Attorney Act, including a clause stating it would remain effective during his incapacity. He recently became incapable and his daughter, the named attorney, seeks to use the document to manage his financial affairs. A financial institution refuses to recognize the document, claiming it is outdated and not compliant with the Substitute Decisions Act, 1992. Rajiv’s daughter contacts legal counsel to confirm its validity.

Which of the following statements best reflects the legal effect of this document?

A) The power of attorney is invalid because it predates the Substitute Decisions Act.

B) The power of attorney must be re-executed under the current legislation to be valid.

C) The power of attorney is valid under s. 14 of the SDA if it meets the required criteria.

D) The power of attorney is valid only if witnessed by a commissioner of oaths.

Correct Answer: C

Explanation: Section 14 of the SDA preserves the validity of continuing powers of attorney executed before October 3, 1995, under the prior legislation, as long as they expressly state they are to remain effective during incapacity. Such documents are recognized as valid under the SDA.

 

61. Damien dies intestate after cohabiting with his partner Maria for 17 years. They had no children together, though Maria helped raise Damien’s son from a prior relationship. Damien left no will, and his only surviving relatives are two siblings. Maria is shocked to learn she has no automatic right to inherit and asks whether she is entitled to any portion of the estate as his common-law spouse. She believes their long relationship and her financial contributions should entitle her to something.

What is the proper legal path for Maria to seek support or involvement in the estate?

A) Maria may claim a preferential share of the estate as a common-law spouse under s. 43.1 of the SLRA.

B) Maria may elect to receive equalization under the FLA but has no right to act as estate trustee.

C) Maria has no entitlement under intestacy but may apply for dependent support under the SLRA if she meets all statutory criteria.

D) Maria cannot claim under intestacy but may apply for support as a dependent under s. 57 of the SLRA and may apply to act as estate trustee under s. 29 of the Estates Act.

Correct Answer: D

Explanation: A common-law spouse has no statutory entitlement on intestacy under ss. 43–45 of the SLRA. However, s. 57 allows a common-law spouse to seek dependent support if they cohabited for three years or more (or in a relationship of permanence with a child). Section 29(1)(a) of the Estates Act permits common-law spouses to apply to be estate trustee.

 

62. An estate earns $20,000 of investment income during its first taxation year but does not distribute any of it to the beneficiaries. The beneficiaries each receive a T3 slip showing no income. CRA audits the estate and finds that no preferred beneficiary election was made, and no amount was designated as payable. The trustee argues that the income will eventually be distributed and should be taxed in the beneficiaries' hands.

How will the investment income be taxed in these circumstances?

A) Unless the income is paid or payable in the year, or a preferred beneficiary election is filed, the estate must report and pay tax on the full amount.

B) So long as the income is distributed at any point during the estate administration period, CRA will permit the beneficiaries to report it as their own income.

C) T3 slips are issued at the trustee’s discretion and are not required unless the trust intends to deduct amounts paid to the beneficiaries for tax purposes.

D) Investment income earned by an estate is automatically attributed to beneficiaries unless the estate elects to retain it for capital accumulation or later distribution.

Correct Answer: A

Explanation: Under s. 104(6) and (24), a trust or estate may deduct income that is paid or payable to beneficiaries in a taxation year. If income is retained and no preferred beneficiary election is filed, the income is taxed in the estate.

 

63. Charles, a lawyer, is acting as both counsel and co-estate trustee for his late aunt’s estate. The other estate trustee is a family member with no legal training. During administration, Charles makes several key distribution decisions and instructs his co-trustee on execution. The co-trustee routinely defers to Charles, believing that his legal expertise gives him final say. A beneficiary later challenges a discretionary distribution made to another family member.

What responsibility does the co-trustee bear for the discretionary distribution?

A) Co-trustees must delegate discretionary authority to the most qualified trustee when circumstances require professional expertise for timely administration.

B) Charles’s status as a lawyer grants him added discretion, and his legal role supports deference from the co-trustee on discretionary matters.

C) Co-trustees share joint responsibility and cannot avoid liability by deferring to another trustee’s legal knowledge or professional background.

D) The co-trustee is not liable for any outcome as long as Charles’s legal advice was followed honestly and without knowledge of any potential breach.

Correct Answer: C

Explanation: Estate trustees act jointly and are each personally responsible for discretionary decisions. Legal expertise does not override fiduciary equality. The co-trustee cannot defend negligence by citing reliance on a co-trustee’s legal background, and blind deference is no defence against breach of fiduciary duty.

 

64. Vivian and Leo live together for seven years and plan to marry. Leo dies before the wedding, having named Vivian as estate trustee in his will but leaving the residue to his sister. Vivian believes she should be entitled to a share of the estate and is considering whether she can benefit from the FLA.

How should Vivian’s legal rights be assessed in light of her common-law relationship with Leo?

A) Vivian may apply for equalization under the FLA because they planned to marry.

B) Vivian may proceed under both the FLA and SLRA if either route provides relief.

C) Vivian may rely on her appointment as estate trustee to claim an interest.

D) Vivian has no claim under the FLA but may seek support and continue as trustee if not conflicted.

Correct Answer: D

Explanation: Only legally married spouses may claim under the FLA. A common-law spouse has no election rights under s. 6. However, she may seek support under the SLRA and can remain estate trustee if not conflicted by a personal claim.

 

65. Carla sets up a trust for her adult child and transfers $500,000 of publicly traded shares into it. She receives no payment in return. The CRA deems a disposition at fair market value and imposes a capital gains tax on Carla. Carla argues that because the trust was created for a family member and she received no payment, the transaction should be tax-neutral.

How should Carla’s transfer to the trust be treated for tax purposes?

A) Gifts to family members are excluded from capital gains tax, so related-party transfers are automatically exempt from recognition of accrued gains.

B) The transfer is deemed to occur at fair market value unless the trust qualifies for a specific rollover, such as a spousal or alter ego trust.

C) Since Carla does not benefit from the trust, attribution rules apply and the capital gain is ignored under the provisions of s. 75(2) of the Act.

D) The transaction is treated as a tax-deferred gift under attribution rules, and no immediate gain is realized when the property is transferred into the trust.

Correct Answer: B

Explanation: Transfers to a trust are dispositions under s. 69(1), unless a rollover applies (e.g., spousal, alter ego, joint partner). Gifts to other trusts trigger tax on accrued gains at the time of transfer. The CRA presumes that related-party transfers are not at arm’s length.

 

66. Oliver is considering filing an equalization claim as surviving spouse. He owns property jointly with a third party that he purchased before marriage. The third party is not a family member. Oliver believes this joint tenancy will not affect the equalization analysis. His lawyer explains that the FLA has special rules about such joint tenancies.

How is Oliver’s joint tenancy interest treated under the Family Law Act?

A) The property is deemed to pass into the estate and is excluded from Oliver’s net family property because he holds it with a non-family third party.

B) Oliver is required to include the full value of the joint property in his net family property, regardless of how ownership was acquired or held.

C) If Oliver were the deceased spouse, his joint interest would be included in his NFP unless it was a matrimonial home subject to deemed severance.

D) The joint tenancy interest has no bearing on equalization unless the surviving co-owner is also the spouse entitled to claim under the FLA.

Correct Answer: C

Explanation: If the deceased spouse held property in joint tenancy with a third party, that interest is included in the NFP calculation on the day before death. If it is a matrimonial home, deemed severance under s. 26(1) ensures the spouse's share remains part of the estate.

 

67. Derek dies owning a farm property that he operated for many years. He leaves the property to his son, who resides in Ontario and continues to use the land for farming. The will contains no tax-specific language. The executor is unsure whether capital gains must be triggered on death or whether a rollover is available.

What tax treatment applies to the transfer of the farm property from Derek to his son?

A) To qualify for rollover treatment, the child must purchase the farm from the estate at fair market value and re-register title in their own name.

B) The intergenerational rollover is restricted to family farms held by corporations and does not apply to personally owned agricultural land.

C) A rollover of farm property is permitted only where the child inheriting the land is under 30 years old and is actively engaged in farming activities.

D) An intergenerational rollover applies if the farm becomes indefeasibly vested in a resident child within 36 months and is used for farming purposes.

Correct Answer: D

Explanation: The ITA allows for a rollover of qualifying farm or fishing property to a child if the property becomes indefeasibly vested in a resident child within 36 months and was used in a farming business immediately before death. No sale is required.

 

68. Lucinda files a dependent support claim under Part V of the SLRA six months and five days after probate is granted. She receives notice that the estate’s residue has been distributed in full. Her claim relates to expenses for her disabled child, who was not named in the will. She seeks leave to proceed.

What limits apply to Lucinda’s ability to advance her claim?

A) She may proceed only against the portion of the estate that remained undistributed on the date she commenced her application for support.

B) She may not proceed unless the estate trustee provides written consent to revive or extend the claim beyond the six-month statutory window.

C) She may advance her claim against all estate assets if she shows that the delay in filing was made in good faith and caused no prejudice.

D) The delay bars her application entirely unless the trustee agrees to reopen administration and voluntarily claw back distributed estate property.

Correct Answer: A

Explanation: Under s. 61(2) of the SLRA, the court may extend the time for bringing a dependent support claim, but only as against estate property that has not been distributed as of the date the application is commenced.

 

69. Ella is an estate trustee and receives a claim from a creditor two weeks after publishing a notice to creditors. The deadline in the notice expired three days earlier. She is unsure whether to honour the claim. The estate has already been partially distributed. The creditor insists the delay was due to a clerical error and threatens to sue the beneficiaries.

How should Ella respond to the creditor’s late claim?

A) Ella may be protected under the Trustee Act, but the claim may still be enforced against beneficiaries if brought within the applicable limitation period.

B) The estate is required to pay any creditor claims submitted within 30 days after the published deadline, regardless of notice wording or distribution status.

C) Ella must reject the claim in full because the notice deadline is binding and leaves no discretion once distribution has occurred.

D) The creditor must obtain a court order before pursuing recovery, and Ella is fully shielded until such an order is granted by the court.

Correct Answer: A

Explanation: Under s. 53(1) of the Trustee Act, an estate trustee who properly gives notice and waits the required period before distributing assets is protected from personal liability for later claims. However, the claim may still be enforceable against beneficiaries who received distributions, provided the limitation period has not expired.

 

70. Leo is the estate trustee of his uncle’s estate, which includes securities held with several institutions. He begins the process of selling the securities to generate liquidity but is unsure whether he must first transfer the shares into his name as estate trustee. Some transfer agents request original probate documents, while others ask for notarized copies and a power of attorney.

What course of action is available to Leo before selling the securities?

A) Leo may sell the securities directly as long as he is authorized to do so under the terms of the will and can provide proof of appointment.

B) A letter of direction is sufficient to authorize the sale of securities if the will includes express authority to liquidate estate assets as part of administration.

C) Leo must complete a declaration of transmission and provide a proper endorsement or power of attorney before selling each security.

D) An executor’s authority under the will overrides the requirements of individual transfer agents and permits sale without completing additional documentation.

Correct Answer: C

Explanation: Securities must be transferred to the estate trustee before sale, unless the transfer agent accepts alternative arrangements. A declaration of transmission and appropriate power of attorney or endorsement are standard requirements, even when the will authorizes liquidation.

 

71. Ainsley is creating a long-term estate plan and wishes to establish a trust to provide ongoing support to her adult son, who has a developmental disability and receives government disability assistance. She wants to ensure that the trust funds are available for his needs without disqualifying him from the Ontario Disability Support Program (ODSP). Her lawyer proposes drafting a discretionary trust in which the trustees have full authority to decide whether, when, and how much income or capital is distributed to the son. Ainsley is concerned that this level of discretion might reduce her control as settlor.

What legal rationale best explains the lawyer’s recommendation?

A) Providing trustees with broad discretion ensures ODSP eligibility because the income is considered to vest but remains inaccessible to the beneficiary.

B) A fully discretionary trust ensures the son has no enforceable right to demand trust assets, preserving ODSP eligibility while enabling flexible support.

C) Any access to trust capital will result in ODSP treating the entire trust as an available asset and revoking disability assistance.

D) Structuring the trust as a fixed-income fund with regular distributions prevents attribution under the ITA and is more appropriate for ODSP recipients.

Correct Answer: B

Explanation: A Henson trust is a discretionary trust where the beneficiary has no enforceable right to demand income or capital. This structure ensures that trust assets are not considered "available assets" for ODSP means-testing, preserving the beneficiary’s eligibility. The trade-off is reduced control by the settlor, which is mitigated by careful trustee selection and a detailed letter of wishes.

 

72. Maureen is seeking to become the court-appointed guardian of property for her elderly uncle, who has recently shown signs of financial mismanagement. She commences an application under the standard procedure, prepares the required application record, and personally serves the notice of application on all statutory respondents, including the alleged incapable person and the Public Guardian and Trustee. However, Maureen forgets to mail the application materials to the incapable person’s adult children, who live out of town and were unaware of the proceeding. One of the children later challenges the appointment, claiming lack of proper notice.

What procedural error, if any, did Maureen make in her application?

A) She failed to send the application materials by mail to close family members who were entitled to receive notice.

B) She erred by mailing the materials only to the PGT when all parties must be personally served.

C) She was entitled to rely on the court’s power to waive notice to family members who live outside the jurisdiction.

D) She should have published a formal notice in the Ontario Gazette prior to filing the application.

Correct Answer: A

Explanation: Under s. 69(6) of the SDA, certain relatives, including adult children, parents, and siblings, must be served with the application record by ordinary mail, even though they are not statutory respondents. Failing to serve these relatives properly may render the process vulnerable to procedural challenges.

 

73. Martin was appointed estate trustee without a will and proceeds to inventory the estate assets. The estate includes a home with a $300,000 mortgage, a TFSA with a designated beneficiary, and $50,000 in cash. When calculating the estate administration tax, Martin is uncertain how to value the real property and whether to include the TFSA. The estate has no known debts beyond the mortgage.

How should Martin calculate the estate administration tax in this scenario?

A) The home’s value is reduced by the mortgage, and the TFSA is excluded if there is a valid beneficiary designation in place.

B) The full value of both the home and TFSA must be included in the tax calculation regardless of encumbrances or designations.

C) Only the portion of the estate exceeding $50,000 is subject to estate administration tax, without regard to asset type or ownership structure.

D) Mortgages cannot be deducted from real property value, and designated accounts are automatically included in the taxable estate value.

Correct Answer: A

Explanation: Under the Estate Administration Tax Act, 1998, encumbrances on real property (e.g., mortgages) can be deducted when calculating tax. Designated-beneficiary accounts such as TFSAs pass outside the estate and are excluded from the value used to calculate estate administration tax if properly designated.

 

74. Miriam is the sole estate trustee of her late father’s estate. She discovers that her father owned a rental property with tenants still occupying the premises and a valuable art collection stored in an offsite facility. She is unsure whether she needs a certificate of appointment before taking steps to secure the assets. The will names her as estate trustee and authorizes the sale of assets for administration. She wants to change the locks and notify the insurer but is concerned about liability. Her lawyer reminds her of the distinction between actual authority and practical necessity.

What is the scope of Miriam’s authority in this situation?

A) Without a court-issued certificate, Miriam is legally prohibited from taking any steps to control or administer estate property in any capacity.

B) A named trustee derives authority from the will and may act immediately unless a third party requires court confirmation before accepting instructions.

C) Miriam’s authority to deal with estate property is suspended until the probate process is complete and a certificate has been formally issued by the court.

D) She must first obtain signed consent from all beneficiaries before taking possession or control of estate assets to avoid liability or potential objection.

Correct Answer: B

Explanation: Under the Estates Administration Act, s. 2, a named estate trustee derives authority directly from the will and may act immediately upon death. However, third parties (e.g., insurers, banks) may require a certificate of appointment before accepting such authority. Securing and insuring assets are duties that may be discharged even before probate, unless court confirmation is required.

 

75. An estate trustee distributes estate assets during the five-month period following the testator’s death, believing that the surviving spouse has waived all family law claims in a domestic contract. However, six months after the death, the spouse files an equalization claim, arguing the domestic contract is invalid due to lack of independent legal advice. The trustee had not obtained court authorization for the interim distributions. The estate now faces a shortfall in liquidity.

What is the trustee’s liability in these circumstances?

A) The trustee is not liable for any shortfall because the domestic contract created a valid presumption that no equalization claim would be made.

B) The trustee is personally liable only for the portion of the estate that remained undistributed when the equalization claim was formally submitted.

C) The trustee is not liable if the spouse had not filed an election with the court prior to the date of the distributions being made.

D) The trustee is liable for any shortfall caused by distributing assets within six months without court order or written consent from the surviving spouse.

Correct Answer: D

Explanation: Under s. 6(14)–(15) and s. 6(19) of the FLA, no estate distributions may be made within six months of the deceased spouse’s death unless authorized by court or consented to by the surviving spouse. A trustee who violates this may be personally liable for any resulting shortfall.

 

76. Eliza, the widow of a deceased band member, lived with her husband in a house located on reserve but was not listed on the certificate of possession. The will left the property to their son. Eliza, a non-band member, now faces eviction. She learns about the Family Homes on Reserves and Matrimonial Interests or Rights Act (FHRMIRA) and wishes to assert her rights.

Which of the following best reflects her available legal remedy?

A) Eliza may inherit the possessory interest under the Indian Act as a surviving spouse.

B) Eliza may apply for exclusive occupation of the matrimonial home and for equal division of the property’s value.

C) Eliza has no claim because she was not listed on the CP and is not eligible to reside on reserve.

D) Eliza must elect under the Family Law Act and waive any claims under federal statutes.

Correct Answer: B

Explanation: FHRMIRA grants surviving spouses, including non-members, rights to exclusive occupation and division of the value of the matrimonial home on reserve. This applies even where the survivor has no CP interest or is not entitled to reside on the reserve under the Indian Act.

 

Case 1

Maya, a retired physiotherapist, prepared a will in 2018 appointing her friend Denise as executor and leaving her entire estate to her brother, Leo. In 2021, Maya began cohabiting with her partner Thomas, and by 2023 they shared ownership of a home, joint bank accounts, and contributed equally to expenses. Maya developed early cognitive decline and signed a power of attorney for property in favour of Denise, who began managing her finances. Maya later attempted to update her will by handwriting changes in the margins of the original 2018 document, indicating that Thomas should receive the house. After Maya’s death, Denise applied for probate and sought directions from the court about the handwritten changes. Thomas claimed a constructive trust in the home and applied for support as a dependant. Leo opposed, arguing that Thomas was never a legal spouse and the 2018 will remained valid. Denise suspended distributions until she could obtain judicial guidance. The court must now address the enforceability of the marginal notes, Denise’s authority as attorney and executor, and the competing claims over Maya’s estate.

 

Questions 77 to 80 refer to Case 1

77. How should the court treat Maya’s handwritten notations altering the 2018 will?

A) The notes are irrelevant unless incorporated into a new will with proper formalities and attestation.

B) They may be admitted as a codicil if clearly authored by Maya and express testamentary intent.

C) The court will treat them as invalid since Denise, not Maya, administered the property at the time.

D) They must be disregarded unless there is proof that Thomas was aware of the changes and relied on them.

Correct Answer: B

Explanation: A handwritten codicil is valid in Ontario if it is entirely in the testator’s own handwriting, signed, and shows clear testamentary intent. The codicil does not need to be witnessed. Handwritten notes in the margins of a will may be admitted as a valid codicil if these requirements are met.

78. What was the scope of Denise’s authority under the power of attorney for property?

A) Her authority ended at Maya’s death and did not extend to any estate-related decision-making.

B) It included acting as executor and overriding the instructions in the 2018 will where necessary.

C) It allowed her to revise Maya’s beneficiary designations to reflect changes in circumstances.

D) She was required to obtain court confirmation before making any decisions after Maya’s incapacity.

Correct Answer: A

Explanation: A continuing power of attorney for property ceases to have any legal effect at the moment of the grantor’s death. After death, only an estate trustee has authority to deal with the deceased’s property.

79. What duty does Denise owe as estate trustee in the current circumstances?

A) She must seek written submissions from the beneficiaries and divide the estate equally to avoid delay.

B) She can allocate the home to Thomas if she believes Maya's intentions were clear and credible.

C) She must preserve estate assets until the court resolves the entitlement dispute.

D) She is required to act in Leo’s favour because he is the named residuary beneficiary under the will.

Correct Answer: C

Explanation: An estate trustee must preserve the estate and act impartially when a dispute arises among claimants. The trustee must not favour any party and should refrain from distributing property until the matter is resolved or the court provides direction.

80. Which legal theory gives Thomas the strongest claim against Maya’s estate?

A) He may claim as a dependent seeking support and argue unjust enrichment via constructive trust.

B) He may assert legal spousal status based on joint contributions and shared domestic life.

C) He qualifies for automatic equalization because he co-owned the home and shared expenses.

D) He inherits under the handwritten codicil since Maya’s cognitive decline was not yet advanced.

Correct Answer: A

Explanation: A common-law spouse may apply for dependent's relief under the Succession Law Reform Act if the deceased was providing support or was under a legal or moral obligation to do so. In addition, the claimant may seek an equitable remedy such as a constructive trust if contributions were made to shared assets.