Legal Question in Wills and Trusts in Canada

Is it true?

I am a married woman and my husband is self employed in a construction company. We both have wills that leave all of our earthly posessions to each other, or to our children in case we both die at the same time. I have heard that I would not receive the company that we own, the government would seize it, if my husband passes away. The company is an incorporated company, not a company limited. Please let me know if this is true or not. Do all of his earthly possessions include the company, or do we have to have the will rewritten to include the company along with all of our other assets? Thank you for your time.


Asked on 11/27/06, 2:01 pm

1 Answer from Attorneys
Johanne Amonson Johanne L Amonson, Q.C. Prof Corp

Re: Is it true?

No.

By the terms of the wills which you have stated, each of you would receive 100% of the other's estate.

Your husband appears to own all the shares in a construction company. Therefore the shares would be transferable to you. Since you appear to qualify as a spouse under the income tax act then the shares could be rolled over to you without any tax being paid on them until you dispose of them. Whatever value that is in the company would be yours. The government cannot appropriate property when a person dies. They have the right to tax dispositions, subject to the relevant exemptions. Whoever told you that is wrong.

However, the term " all my earthly possessions" can be improved upon. The better description of the gift is "all the residue of my estate". It is always wise to have a lawyer skilled in the area of tax planning review your estate planning documents, of which a will is only one. This is particularly true if a corporation is involved.

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Answered on 11/27/06, 2:11 pm


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