Estates and Trusts: Wills, Intestacy, Probate, and Trustee Duties
What the Exam Tests in Estates and Trusts
The Estates and Trusts domain tests the Succession Law Reform Act (SLRA), will formalities, intestate distribution, probate procedure, dependant support, and trustee duties under the Trustee Act. Questions often turn on the validity of a will, the effect of marriage or divorce, and the priority of claims against an estate.
Core Rules and Concepts
- Will formalities. A will must be in writing, signed by the testator at the end, and signed by two witnesses present at the same time (SLRA s. 4). A holograph will is valid if wholly in the testator's handwriting and signed.
- Revocation. Marriage revokes a will unless made in contemplation of marriage (s. 15). Divorce revokes provisions for the former spouse. A later will revokes an earlier one to the extent of inconsistency.
- Intestacy. Under s. 45-47, the spouse receives the preferential share (currently $350,000) plus a share of the residue; children share the remainder. The spouse's share of residue depends on the number of children.
- Probate. An estate certificate is required to deal with certain assets. The estate trustee's authority derives from the will or, on intestacy, from the certificate. Probate fees (estate administration tax) are payable on the value of the estate.
- Dependant support. Part V of the SLRA permits dependants to claim support from the estate where the will or intestacy does not make adequate provision.
- Trustee duties. Trustees must act personally, prudently, and in the beneficiaries' best interests, and must avoid conflicts. The Trustee Act governs accounts and compensation.
Worked Example
A testator dies intestate survived by a spouse and two children. The spouse receives the preferential share of $350,000, then one-third of the residue (with two children, the spouse takes one-third of the remainder and the children share two-thirds). If the estate is $650,000, the spouse receives $350,000 plus one-third of $300,000 ($100,000) = $450,000, and the children share $200,000.
Traps That Cost Marks
- Forgetting that marriage revokes a will unless made in contemplation of marriage.
- Applying the preferential share without accounting for the residue split.
- Assuming a holograph will needs witnesses.
- Missing that dependant support can override the will.
- Confusing probate with the validity of the will.