mkc

I’m an Executor. What do I do First?

Fri, 12 Jun 2026 16:37:06 GMT

Grief vs. Administrative Work: A Busy First Month

The period immediately after a death is difficult: grief, uncertainty and the weight of responsibility when you are named as executor all hits at once. Grief is accompanied by the practical responsibilities of an executor that cannot be left for later. When you are named as executor, your first few steps matter.

Funeral arrangements often come first. For many estates, the executor has control of, or very often will be involved in decisions regarding the deceased’s funeral. If you experience uncertainty about who has decision-making authority, or if family members disagree with the executor’s decisions, legal advice should be obtained promptly.

1. Secure the Home, Assets, and Immediate Risks

The first practical priority should be to secure the deceased’s home and assets. A useful starting point is to photograph or video the contents of the home, the contents of the deceased’s wallet / purse, the safe contents and any other particularly important or valuable assets. This creates a basic record of the deceased’s personal property and household effects. It may also help later if questions arise about what was in the home at the date of death or whether particular items are missing. The executor should also begin gathering key documents and financial information, including:

bank and investment statements;
property records (a Deed, any Bills of Sale, etc.);
insurance policies;
tax records;
vehicle ownership documents;
business records, if applicable; and
information about debts, credit cards, loans, and recurring payments.

At this early stage, the goal is not to have a complete inventory. The immediate goal is to understand what exists, where the risks are and what needs attention. A basic early picture of the estate assets reduces the chance that assets, liabilities, or deadlines will be missed.

Practical risk management is also important. If the home will be vacant, the insurer should be notified promptly. Vacancy almost assuredly affects house insurance coverage. The insurer should confirm whether vacancy coverage is required and available. If you suspect that others have access to the home (duplicate keys, knowledge of the door codes, etc.), the executor has a duty to secure the assets and should immediately consider whether locks, alarm codes, garage access, or keys need to be changed.

Immediate liability and safety risks should also be addressed. Firearms should be secured and dealt with properly – legal advice relating to firearms should be immediately sought. Prescription medications and controlled substances should be removed or safely disposed of. Obvious hazards on the property, such as a broken step, loose railing, or icy walkway, should be dealt with before someone is injured.

Other urgent matters may include caring for pets, checking vehicles, removing perishable food, arranging for snow removal or lawn care, and ensuring the home is visited regularly.

2. Locate the Will and Other Key Documents

Another early priority is locating the decedent’s Will. Where to look? The starting point would be with the decedent’s lawyer. Many lawyers keep vaults where they store their clients’ Wills and Powers of Attorney. If you don’t know the identity of the lawyer, you could start with a cursory look around the deceased’s home: Wills are often kept in filing cabinets, home safes or safety deposit boxes. They can also be found in less obvious places. If the deceased’s lawyer does not have the Will, the search at the deceased’s home should be thorough. Check anywhere important papers may have been stored, hidden, or set aside.

Provided you locate a Will, you need to be aware that it may not be the deceased’s final Will. Seek legal advice, especially where a third party alleges that they are in possession of a final Will. Earlier Wills, draft Wills, unsigned documents, handwritten notes, electronic records, or codicils can create uncertainty and there is statutory authority to potentially ratify unsigned or incomplete documents so that what appears not to be a Will, becomes the final Will.

If a Will cannot be found but there is reason to believe one exists, there are ways to search the community in which the deceased lived at the time you believe a Will was completed. Contact your lawyer to discuss in more detail. Once found, the Will should identify the executor and may contain important directions for the administration of the estate.

Other essential documents should also be gathered early. These may include death certificates, government-issued identification, insurance documents, banking records, investment records, property documents, business records, and information about pensions or benefits. It will also be important to secure the deceased’s mail, which could include forwarding the mail to a secure address to which the executor has access.

3. Consider Who to Notify, and When

Notifying the appropriate authorities and institutions is an important early step. Many funeral homes offer a service where they will assist with certain administrative matters. This can include applying for the CPP death benefit, cancelling OAS, cancelling the driver’s license and many other useful administrative steps. Beyond that, notifications should be handled carefully. Some organizations should be contacted early. Others are easier to deal with once the executor has gathered basic information about the deceased’s assets, liabilities, income sources, automatic payments, subscriptions, and insurance coverage. And still others may need to wait until the executor has the Certificate of Appointment approved by the Court (where applicable).

Before contacting financial institutions, insurers, government agencies, pension providers, service providers, or creditors, the executor should try to understand what accounts and obligations exist. This makes the process more efficient and reduces the risk of missed information or unnecessary complications.

Mail, identification, and sensitive personal information should be secured as soon as possible. Redirecting mail where appropriate, safeguarding passports and other identification, and identifying important online accounts can help protect the estate and reduce the risk of fraud.

Acting as an executor is an exercise in good record-keeping. The executor should maintain a written record of steps taken, people contacted, documents gathered, and expenses paid and keep all of those records in a safe and secure place. If the executor pays estate expenses personally, detailed receipts and records should be kept to support reimbursement from the estate later.

It may be useful to manage beneficiary expectations early. Estate administration often takes longer than beneficiaries expect. Even a straightforward estate can involve delays with institutions, tax filings, asset sales, probate, or missing information. Clear communication about timing can reduce confusion and help avoid unnecessary tension. Managing beneficiary expectation will always be an important job of the executor. If you are uncertain about the expected timing, your lawyer can assist you in establishing a reasonable timeline to communicate to the beneficiaries.

4. The First Month Matters

The first month after a death is usually both emotional and administrative. The executor does not need to solve everything immediately. However, a few foundational steps should be taken early: secure the home and assets, locate the Will, address immediate risks, gather key information, and approach notifications in an organized way. The role of executor can feel overwhelming. It becomes more manageable when handled step by step. Early attention to the practical details helps protect the estate, reduce risk, and support the proper administration of the deceased’s wishes.

- Ian Keay

I Just Added Someone to Title to Qualify for a Mortgage: Do They Own My House Now?

Fri, 05 Jun 2026 16:24:51 GMT

A Presumption of Resulting Trust Might Save the Day

A recurring real estate law dispute arises where a person (we'll call them “Chris”) is added to title to real property to assist with mortgage financing but does not contribute to the purchase price, mortgage payments, or ongoing expenses, and later asserts an ownership interest in the property. The dispute is whether Chris’s assumption of the mortgage liability constitutes consideration sufficient to defeat the presumption of resulting trust. In Ontario, the jurisprudence is clear that the mere assumption of mortgage risk arising from co-signing a mortgage and remaining liable thereunder does not, without more, amount to valuable consideration.

Accordingly, where an individual is added to title solely to assist the owner in obtaining mortgage financing and remains liable under the mortgage, but does not contribute to the property's acquisition, mortgage payments, maintenance, or carrying costs, that transfer will generally be characterized as gratuitous. In such circumstances, the presumption of resulting trust applies. Using the example, Chris would be presumed to hold legal title to the real property in trust for the owner, absent evidence demonstrating a contrary intention.

The Presumption of Resulting Trust

Traditionally, resulting trusts arise in two principal contexts:

A gratuitous transfer of property from one person to another; and

A contribution by one party toward the acquisition of property held in the name of another.

In both circumstances, the transfer is considered gratuitous because the recipient has provided no consideration corresponding to the beneficial interest acquired. The leading Canadian authority is Pecore v. Pecore, 2007 SCC 17 , in which the Supreme Court of Canada confirmed that a gratuitous transfer gives rise to a presumption of resulting trust unless the evidence establishes that the transferor intended to make a gift.

Rebutting the Presumption

Where a transfer is found to be gratuitous, the burden rests on the transferee (or the party seeking to uphold beneficial ownership in the transferee) to rebut the presumption of resulting trust by demonstrating that a gift was intended.

The applicable standard is proof on a balance of probabilities. The evidence must demonstrate that the Transferor intended to divest themselves of beneficial ownership and confer that interest upon the Transferee when the transfer occurred. Failing such evidence, the presumption operates and the beneficial interest is deemed to remain with the Transferor.

The critical inquiry is the Transferor's intention at the time of the transfer. While evidence arising after the transfer may be admissible insofar as it sheds light on that intention, courts approach such evidence with caution to guard against self-serving testimony or evidence reflecting a subsequent change of intention rather than the Transferor's contemporaneous state of mind.

Married Spouses and the Presumption of Joint Tenancy

Section 14 of Ontario's Family Law Act modifies the application of the presumption of resulting trust between married spouses. While the presumption of resulting trust remains applicable to transfers between spouses, it does not apply where the spouses hold title as joint tenants. In such cases, a presumption arises in favour of joint tenancy, and the party challenging joint ownership bears the burden of rebutting that presumption. To do so, the challenging party must adduce sufficient evidence to establish that the transfer of the joint interest was gratuitous and was not intended as a gift of beneficial ownership. As with resulting trust claims generally, the determinative issue remains the Transferor's intention at the time of the transfer.

Absent the contemporaneous documentation of the parties’ intentions, the Ontario courts often infer intention from the circumstances, including the parties' financial arrangements, contributions to the purchase and maintenance of the real property, conduct before and after the transfer and the overall context in which title was structured.

Conclusion

Legal title does not equate to beneficial ownership all of the time. Ontario courts continue to emphasize that the critical inquiry is whether the transfer was supported by consideration or was intended as a gift. Ultimately, the central questions are whether consideration was provided for the transfer (money) and whether the transferor intended to confer beneficial ownership (intention). Disputes of this nature are rarely resolved by looking at legal title alone. As with most resulting trust claims, the answers will depend on the particular facts and the quality of the evidence available.

Why Where You Live Matters for Estates Law

Fri, 05 Jun 2026 16:21:37 GMT

The Importance of Where You Are Domiciled

When someone dies, one of the first questions that may need to be answered is: Where was this person legally considered to live? In legal terms, this is called a person's domicile.

A domicile is more than just where someone happens to be living. It is the place that is considered their true, permanent home. It’s common for a person to own homes in different places, spend time in several provinces or countries, and even have residences in more than one jurisdiction. However, at any given time, they can have only one domicile.

Many estate administrators assume a person's domicile is obvious and move on without giving it much thought. However, in today's world, people often divide their time between multiple locations, making the issue more complicated than it once was. Determining a person's domicile at the time of death can be very important. For example, it may determine:

Whether a will is legally valid
Which province's or country's estate laws apply
How assets are distributed if the person died without a will

Ontario's Succession Law Reform Act uses the concept of domicile in several situations, but it does not define the term. As a result, courts rely on legal principles that have developed over time.

Types of Domicile

There are two main types of domicile that arise in estate matters:

1. Domicile of Origin. Every person receives a domicile of origin at birth. This is usually based on their parents' domicile.

2. Domicile of Choice. Later in life, a person may establish a domicile of choice by making a new place their permanent home.

How Does Someone Change Their Domicile?

The law assumes that a person's domicile of origin continues unless there is clear evidence that it has been replaced. To establish a new domicile of choice, two things must be shown: (1) Actually living in the location, and (2) A settled and fixed intention to make the location their permanent home - see Taylor v. Taylor, 1929 CanLII 65 (SCC) .

The first requirement is usually straightforward. The second is often much harder to prove. Courts look at the person's overall circumstances to determine whether they genuinely intended to settle permanently in the new location. No single factor decides the issue. Evidence may include:

Statements the person made about where they considered home;
How long they lived in the new location;
Whether they kept or sold property in their former home jurisdiction;
Whether they bought or rented a residence in the new location;
Their immigration or residency status;
The reasons they moved.

Someone who relocates for a temporary work assignment may not necessarily have changed their domicile. Or moving a loved one to a care facility in a different county or province could be a move dictated by circumstance. What if there is an intention to return? Compare those situations to someone who moves, establishes connections to the new community and their stay in the new location is indefinite with no plans to leave – they may have acquired a new domicile even where they continue to own a property in the place they just left. Maintaining ties to a former domicile does not automatically prevent a change of domicile.

Can a Domicile Be Abandoned?

Yes. A person can abandon a domicile of choice, but changing their mind is not enough. They must actually leave the jurisdiction where that domicile exists. If a domicile of choice is abandoned and no new domicile of choice has been established, the person's original domicile generally comes back into effect.

Why Does This Matter?

For estate planners, understanding a client's domicile can be important when preparing wills that involve assets in multiple provinces or countries. For estate trustees and lawyers handling estates, determining domicile may be essential to ensuring the correct laws are applied and that the estate is administered properly. As people increasingly live, work, retire, and own property in multiple jurisdictions, questions about domicile are becoming more common—and more important—in estate administration.

- Ian Keay

Do I Need Title Insurance When Buying a Home?

Fri, 29 May 2026 12:25:23 GMT

But my lawyer searches title, right?

Buying a home is one of the largest financial commitments most people will ever make. During the closing process, your lawyer will review documents, explain closing costs and may recommend that you title insure your purchase.

A common question from clients is: If my lawyer is already checking title, why do I need title insurance? The answer is that title insurance protects against certain title problems that even the most careful title search may not uncover.

1. What Is Title Insurance?

Title insurance is a policy that protects both homeowners and mortgage lenders against losses arising from title problems the could affect ownership of a property. Unlike car or home insurance, which protects against future events, title insurance primarily protects against issues affecting title that exist at or before closing and that are unknown at the time the property is purchased. The policy is purchased at the time of closing, with only a one-time premium paid, and generally remains in place for as long as you own the property.

2. What Does Title Insurance Cover?

While coverage varies depending on the insurer and policy, title insurance commonly protects against:

Real estate fraud, including fraudulent mortgages or transfers of title
Errors in land registry records
Certain undisclosed liens, encumbrances or claims
Boundary disputes and survey problems
Encroachments; i.e. structures like a fence, garage or shed crossing over a property line
Unpaid property taxes or certain utility charges that were not discovered before closing
Missing signatures, forged documents, or other defects affecting ownership

Many policies will also cover legal fees incurred in defending your ownership rights if a covered issue arises.

Title insurance does not cover every problem that may arise with a property. Coverage is subject to the terms, conditions and exclusions contained in the policy. For example, issues that are known to the purchaser before closing or matters specifically excluded by the policy may not be covered.

3. Doesn't My Lawyer Already Search the Title?

Yes. Your lawyer will always search title – it is an important part of a real estate transaction. Your lawyer reviews title documents and municipal documents to identify issues that may affect a buyer’s rights. However, a title search can only reveal information that appears in the public record. Some problems may not be discoverable through a standard title search, including:

Forged or fraudulent documents
Administrative or recording errors in land registry records
Survey inaccuracies
Certain unregistered interests affecting the property

Title insurance affords protection against these hidden risks. In many cases, title insurance can also make the closing process more efficient by allowing certain minor title issues to be insured rather than requiring lengthy and expensive corrective work before closing.

4. Is Title Insurance Required?

Title insurance is not required by law. However, if you are obtaining a mortgage, your lender will almost always require title insurance to protect its interest in the property. It is common for buyers to purchase an owner's title insurance policy at the same time as the purchase of a mortgagor’s title policy so that both the lender and the homeowner are protected.

5. What does Title Insurance Cost?

The cost of title insurance depends on the value of the property and the type of coverage being purchased. For most residential purchases, the premium is usually a few hundred dollars and is paid once at closing. There are no annual premiums or renewal fees – only a one-time, up-front cost. Be aware that when an owner refinances their property, a new lender can demand a new mortgagor’s title policy.

6. Is Title Insurance Worth It?

Title insurance provides peace of mind at a modest cost. Although serious title problems are uncommon, when they do occur they can be expensive and time-consuming to resolve. A title insurance policy can help protect you from unexpected expenses and losses arising from covered title issues.

7. Final Thoughts

A title search and title insurance serve different purposes. Your lawyer's title search helps identify known issues before closing, while title insurance protects against certain risks that may not be discovered until after you take ownership of the property. If you have questions about title insurance, speak with your real estate lawyer. They can explain the coverage available and help you decide whether it makes sense for your purchase.

- Ian Keay

Latent Defects, Negligent Misrepresentation and Real Estate Litigation

Tue, 24 Feb 2026 15:21:41 GMT

Caveat Emptor vs. A Well-Drafted Contract

Purchasing a home is quite often the largest financial commitment a person will make in their lifetime. While Ontario real estate transactions are traditionally governed by the doctrine of caveat emptor (“ buyer beware ”), that principle has clear limits. Where a seller makes misleading representations, actively conceals defects, or is willfully blind to serious issues, the courts will intervene. The Ontario Superior Court of Justice’s decision in Austin v. MacFarlane, 2026 ONSC 463 (" Austin ") provides a concise and instructive roadmap for understanding how latent defects and negligent misrepresentation operate in modern real estate litigation.

A Post-Closing Discovery of Serious Defects

In Austin , the purchaser acquired a home in North Bay, Ontario. The transaction was typical: real estate agents were involved, a home inspection was conducted, and no direct communication occurred between buyer and seller. Shortly after closing, water seeped up through the basement floor when a piano was placed on it. Further investigation revealed:

Significant foundation cracking
Long-standing water infiltration
Mould behind basement walls
Evidence of prior drywall removal and repairs

The repairs cost the purchaser more than $119,000. The purchaser sued the vendor for breach of contract and negligent misrepresentation, alleging the vendor either knew of the defects or was willfully blind to them.

Latent Defects and the Limits of Caveat Emptor

The first principal is whether the defects were, or at least ought to have been, obvious or not. Ontario law distinguishes between:

Patent defects – discoverable through reasonable inspection
Latent defects – hidden and not discoverable through ordinary diligence

A vendor is generally not liable for patent defects – the purchaser ought to have discovered these. However, caveat emptor does not protect a seller who:

Conceals defects,
Makes misleading representations, or
Is wilfully blind to serious problems

The court affirms limits to home inspections: structural defects hidden behind finished walls or obscured by decks may not be discoverable. The fact that the purchaser had an inspection performed does not insulate a vendor from liability for latent defects about which the vendor had actual knowledge.

A Well-Drafted Contract: Warranties That Survive Matter

A key feature of Austin was the language in the contract. The Agreement of Purchase and Sale contained warranties that:

The building suffered no damage since the purchaser’s inspection; and
The vendor’s warranties would survive closing

The existence of the warranties combined with the fact that the warranties survived closing was significant. The default rule in contract drafting is that warranties and representations merge on closing. In Austin the warranties did not merge due to some sound drafting. The fact the warranties survived closing strengthened the purchaser’s contractual and negligent misrepresentation claims. For vendors, this case is a reminder that surviving warranties materially increase post-closing exposure. For purchasers, warranties that survive closing provide a legal foundation for recourse in the event defects emerge later.

The Test for Negligent Misrepresentation

The Court applied the established five-part test:

A duty of care arising from a special relationship
An untrue, inaccurate, or misleading representation
Negligence in making the representation
Reasonable reliance by the purchaser
Resulting damages

Ontario courts recognize that a special relationship exists between vendor and purchaser in a real estate transaction. In Austin , the MLS listing described the home as “very well maintained” and in “move-in condition.” The vendor’s representations were found to be misleading considering the defects were long-standing. The court in Austin concluded that the vendor was, at minimum, wilfully blind to serious water infiltration issues and therefore negligent in her representations

Credibility and Circumstantial Evidence

Latent defect cases often turn on credibility and circumstantial proof. In Austin , the court relied on:

Drywall date stamps inconsistent with the vendor’s testimony
Inconsistent insulation and vapour barrier repairs
Physical evidence suggesting prior remedial work

There was no direct proof of concealment. There was, however, evidence that supported an inference that the vendor had knowledge of the defects or else was willfully blind to same.

Damages: Repair Costs and Beyond

The Court awarded the purchaser:

$119,595.75 for repair costs
$10,000 for inconvenience and mental distress

The purchaser was found to have mitigated damages by acting promptly and remaining in the home during repairs. Notably, insurance proceeds did not reduce the damages award consistent with Ontario’s private insurance exception. Punitive damages were sought but denied. While the vendor’s conduct was criticized, it did not rise to the exceptional level required for punitive relief.

Key Takeaways for Real Estate Litigation

For Sellers:

Marketing language such as “move-in ready” can have legal consequences
Cosmetic work does not shield against findings of concealment
Surviving warranties significantly increase liability risk

For Purchasers:

A home inspection does not eliminate claims for latent defects
Including warranties in the contract and having them survive closing can be critical
Repair costs, mitigation efforts and disruption may all be compensable

For Counsel:

Credibility findings are central
Circumstantial construction evidence can be decisive
Failure to challenge damages in evidence (not just submissions) can be costly

Conclusion

Austin reinforces that caveat emptor is not a licence that allows a vendor to mislead. Where latent defects are concealed or ignored—and particularly where warranties survive closing—Ontario courts will hold vendors accountable. For those involved in real estate transactions or disputes, the decision underscores a central truth of modern real estate litigation: representations matter, documentation matters, and silence in the face of serious defects can result in substantial liability.

- Oliver Cooper

Joint Tenancy vs. Tenants in Common

Wed, 11 Feb 2026 22:28:54 GMT

How to navigate co-ownership of real property.

When two or more people buy property in Ontario, they must decide how they will hold title. That choice is often made quickly during a purchase, but it has important consequences for estate planning, family law, and taxes. The two main options are joint tenancy or else tenancy in common.

Joint Tenancy

In a joint tenancy, each owner holds an equal interest in the entire property. The key feature is the right of survivorship. When one co-owner dies, their interest passes automatically to the surviving owner(s). The deceased co-owner’s interest in the real property does not form part of the deceased’s estate and does not pass under their Will.

Joint tenancy is the common option for spouses. A joint tenancy simplifies matters on death because the real property transfers automatically and avoids the Estate Administration Tax (also known as “probate fees”). A joint tenancy overrides the deceased co-owner’s Will, even where they purport to deal with their co-ownership interest. Clients must be careful that their choice of tenure aligns with broader estate planning goals or where the co-owners have contributed unequally to the purchase of the real property.

Tenancy in Common

Tenancy in common offers greater flexibility, but no survivorship. Owners can hold unequal shares, often based on how much value each person contributed toward the purchase. While each owner has a defined share, all have the right to use and occupy the entire property.

Without survivorship, a deceased co-owner’s share passes into their estate and is subject to their Will (or Ontario’s intestacy rules if there is no Will). This preserves control over who inherits the interest. Estate Administration Tax will almost certainly apply.

Tenancy in common is often appropriate where:

Owners contribute different amounts
Co-owners are not spouses (or do not intend to benefit their co-owner on death)
The property is primarily an investment
One co-owner wants their interest to pass to someone other than the other co-owner

Because co-owners may have different goals or timelines, a written co-ownership agreement is advisable. Such an agreement can address expense sharing, mortgage obligations, use of the property, and how disputes or buyouts will be handled. Without one, disagreements can lead to court proceedings under the Partition Act (Ontario), which may result in a forced sale.

Changing Ownership Structure

A joint tenancy can be converted into a tenancy in common by “severing the joint tenancy”. This can be accomplished by agreement of the co-owners. But more often than not, one co-owner takes unilateral steps to terminate the joint tenancy.

Moving from tenancy in common to joint tenancy requires the co-owners to agree.

Choosing the Right Approach

There is no universal solution. The right structure depends on factors such as:

Who should inherit each co-owner’s share
How much each co-owner is contributing
Estate planning and probate considerations
Family law implications
Whether a co-ownership agreement is needed
Long-term plans for the property

While these issues are best addressed at the time of purchase, ownership can be restructured later if circumstances change. Co-owning property can work well — but only if the legal structure aligns with the owners’ financial and estate planning objectives. Careful planning at the outset can prevent unintended consequences later.

- Ian Keay

Gifting Farm Property: A Tax-Driven Strategy

Tue, 10 Feb 2026 19:40:20 GMT

When you want to keep the farm in the family.

The Rollover Provision

The Income Tax Act (Canada) (the “ ITA ”) provides special rollover rules for farmers when transferring property. “Qualified farm property” can be transferred by the farmer to a child on a tax-deferred basis, either during the farmer’s lifetime or on death. Subsection 73(3) of the ITA permits a rollover of qualified farm property to a child at the parent’s cost base rather than at fair market value provided specific conditions are met. These conditions include:

1. the property is situated in Canada;

2. the child receiving the property is a resident of Canada immediately before the transfer; and,

3. the property was used principally in a farming business in which the farmer, their spouse, their child, or their parent was actively engaged on a regular and continuous basis (See Section 73(3) ITA; see also CRA, Intergenerational Transfers of Farm Property , RC4060).

When these conditions are satisfied, the transfer does not trigger an immediate capital gain for the farmer and the child receives the property with the same adjusted cost base as the farmer.

So how can a farmer use this rollover provision under the ITA when developing their estate plan?

Ex. The farmer wants to leave the farm to the child who is actively farming. In an effort to equalize between the farmer-child the non-farmer-child, the farmer could sever land from the farm and rely on Subsection 73(3) to convey the severed lot to the non-farmer-child at the farmer’s cost base. This is typically done in an effort to make up for the fact that (A) the farm land is valuable, and (2) the farm land will be bequeathed to the farmer-child.

The advantages of the Section 73(3) rollover are significant. From the farmer’s perspective, the transfer can be completed without incurring immediate income tax. From the child’s perspective, the land is received without having to pay fair market value. Given current land values, this strategy can be very valuable.

Be Careful: The Anti-Avoidance Rule

One important consideration: the anti-avoidance rule found at Subsection 69(11) of the ITA. The non-farmer-child cannot sell the severed lot within 3-years of the transfer. Otherwise, the farmer must pay retroactive income tax at fair market value that would be assessed in the year of transfer.

This rollover provision is a useful tool for farm succession planning. It is assistive when trying to keep farmland within the family, minimizing tax exposure and equalizing between farming/non-farming children. It is important to involve a tax-professional early on when attempting to develop a meaningful estate plan.

- Ian Keay

Understanding Henson Trusts in Ontario: A Plain-Language Guide for Families

Tue, 03 Feb 2026 14:13:57 GMT

When a loved one collects government benefits, there is a risk that receipt of an inheritance could result in disqualification. Families want their loved one to live a safe, comfortable life—without accidentally causing the loss of vital government benefits. In Ontario, an effective legal tool for protecting a disabled loved one is by including a Henson Trust in the Will.

1. When Helping is Actually Hurting

Many people with disabilities receive government support, such as:

i. ODSP (Ontario Disability Support Program)

ii. Subsidized housing supports

iii. Prescription / medical benefits

(the “ Benefits ”)

Qualification for and receipt of the Benefits are often based on the applicant’s financial eligibility. In simple terms: If the applicant has too much money / resources / assets in their own name, they may not qualify / lose access to the Benefits. So how do family members (often parents) leave an inheritance for their disabled loved one? A badly drafted Will can result in an inheritance that risks the recipient's disqualification from the Benefits.

2. A Solution: The Henson Trust

A Henson Trust is a special type of trust purposefully designed to help a person with a disability receive financial support without owning the assets personally. A Henson Trust provision is written directly into a Last Will & Testament. A key feature of a Henson Trust is that it is a fully discretionary trust. The Will-drafter (parent) appoints the trustee of the Henson Trust in their Will. The parent also identifies the beneficiary (disabled child). The important concept for a Henson Trust is that the trustee has sole and absolute discretion:

i. whether to make payments to the beneficiary

ii. how much or how little to pay or whether to make a payment at all

iii. when to pay

iv. what the money can be used for

The beneficiary does not have the legal power to demand the money. The trustee has total authority over the Henson Trust. The term “fully discretionary” references that it is the trustee that has total discretion in all decisions surrounding payments out of the trust to the beneficiary.

3. How Does a Henson Trust Protect Access to the Benefits?

When a Will includes a Henson Trust clause, it requires the inheritance to be set aside for the disabled beneficiary. The "setting aside" is what prevents the disqualification. This is because the fully discretionary nature of the Henson Trust means whatever inheritance lands inside the Henson Trust can never be considered to be owned by the disabled beneficiary:

i. The trust owns the inherited assets

ii. The trustee controls the inherited assets

iii. The beneficiary receives only whatever help from the trust that the trustee decides in their sole discretion

Only once a payment is made from the trust to the beneficiary does the beneficiary own that property, but only in the amount of the payment that is actually advanced. The goal of the Henson Trust is to ensure the trustee only makes payments in amounts that keep the disabled beneficiary qualified.

4. The Trustee – Tell Me More

These are the important considerations when creating the Henson Trust. In particular, who should be named as the trustee. Factors to consider are:

i. The trustee is in charge of the disabled child’s inheritance

ii. The trustee will:

a. manage the money

b. make investments

c. keep statements / records

d. ensure the rules governing the Benefits are not breached during the management of the Henson Trust

iii. Who should be trustee?

a. a sibling

b. a trusted family member

c. a trusted friend

d. a trust company

e. a lawyer

f. an accountant

iv. Should I appoint multiple trustees?

5. How is a Henson Trust Created?

In this context, a Henson Trust is created in a Will. If parents have a disabled child who collects ODSP, then the parents make an appointment with their lawyer to draft their Wills. In the Will, the lawyer prepares a clause that causes the share of the estate destined for the disabled child to be placed in the Henson Trust rather than go directly to the disabled child. By doing so, the parent is taking the correct steps to protect their disabled child’s qualification for their Benefits.

6. Important Considerations

i. ODSP in particular has rules about income / gifts received during a disabled person’s qualification – not following the rules will result in disqualification

ii. Whomever is appointed trustee must be reliable – a poorly managed Henson Trust can result in all kinds of different problems, not the least of which is disqualification from the Benefits

iii. Registered Disability Savings Plan (RDSP) is an investment that could be used by the Trustee – but is not typically used instead of a Henson Trust

iv. If a person has a family member who:

a. receives ODSP (or might in the future)

b. is or could be financially vulnerable (i.e. susceptible to influence or exploitation)

c. makes poor / questionable financial decisions

d. requires support

then a Henson Trust may make sense in those circumstances.

7. Final Thoughts on Henson Trusts

A Henson Trust is about more than the money. It’s created by someone who wants to provide an inheritance to a vulnerable person in order to:

i. preserve dignity

ii. provide stability

iii. provide necessary supports

iv. avoid interruption of government supports

v. ensure that the support provided endures for years and decades

The best time to set up a Henson Trust is before the crisis occurs – you do not want to die and leave your executors / beneficiaries scrambling. A well-crafted estate plan will protect both your estate assets and your vulnerable loved one.

- Ian Keay

Draft Wills, Digital Files, and When Validation Can’t Help

Tue, 03 Feb 2026 14:13:57 GMT

Ontario’s Will validation rules are meant to prevent unfair outcomes where a person clearly intended a document to be their final Will, but the signing formalities weren’t perfect. However, there are limits — especially when the only “Will” is an unsigned draft that exists as a digital document only. A recent Ontario case, Madhani v. Fast, 2025 ONSC 4100, is a reminder that an unsigned electronic draft generally cannot be validated under Ontario law.

The common scenario:

lawyer takes instructions to draft a Will for Client
lawyer prepares draft Will
a signing appointment is booked
the client dies before the Will is signed
Will was not printed out - it exists in digital form only

In Madhani , the draft Will was never printed and never executed. The draft existed only as an electronic file.

Can the Court “validate” the draft anyway?

Ontario’s validating provision is found at Section 21.1 of the Succession Law Reform Act (“ SLRA ”). Section 21.1 allows the Court to validate a document that does not comply with execution formalities provided it reflects the deceased’s testamentary intentions. In Madhani , the Court held Section 21.1 cannot be used to validate a Will that exists only in electronic form.

Why not?

Another piece of Ontario legislation, the Electronic Commerce Act, 2000 (“ ECA ”) explicitly limits the Court’s validating power. Section 31 of the ECA excludes Wills from electronic recognition. Section 21.1(2) of the SLRA explicitly makes Will validation subject to the exclusion under Section 31 of the ECA. In short: Ontario law still requires a physical testamentary document for validation to even be possible.

Testamentary intention still matters

Nevermind the “electronic draft” problem, which is significant on its own. There must also be evidence before the Court that supports that the digital draft was a valid reflection of the deceased Client’s fixed and final intention. Did the Client read the final draft? Did the Client sign the final draft? What evidence can be produced that shows what was drafted is an accurate reflection of the Client's "fixed and final intention"?

Ontario courts often use the “deliberate, fixed and final intention” test drawn from George v. Daily, 1997 CanLII 17825 (MB CA). In Madhani , the draft Will was to be reviewed and confirmed at the signing meeting — only the signing meeting never happened – which means no evidence could be produced to decide whether the draft Will reflected the deceased Client’s fixed and final intention. The Court was not reasonably satisfied in Madhani .

How this differs from other validation cases

Ontario courts have validated Wills with execution defects where the document was physical and clearly authentic, for example:

Cruz v. Public Guardian and Trustee , 2023 ONSC 3629
Vojska v. Ostrowski , 2023 ONSC 3894

But those cases involved paper documents that were physically present and clearly connected to the deceased’s fixed and final intention.

Practical takeaways

The Madhani case is a caution for both lawyers and families:

print important drafts (especially when a signing meeting is imminent)
try to obtain direct confirmation from the client (not only through intermediaries)
digital drafts on devices may not be legally usable as Wills in Ontario

Bottom line

Madhani confirms that Ontario’s Will validation paradigm under Section 21.1 SLRA is helpful — but it is not a workaround for electronic-only drafts. Until legislation changes, a Will must exist in physical form before Ontario’s courts can consider validating the unsigned draft under SLRA s. 21.1.

Could an Inheritance Disqualify your Child’s ODSP Eligibility?

Tue, 03 Feb 2026 14:13:57 GMT

In Ontario, ODSP recipients are generally not permitted to hold more than $40,000 in non-exempt assets without risking their benefit qualification. As a result, receiving an inheritance—especially an unexpected one—can be stressful and confusing. Many recipients are left wondering whether the inheritance will reduce or interrupt their ODSP support.

When families don’t know whether their intended-beneficiary collects ODSP or not, it can lead to the preparation of a Will that includes no planning to structure the gift properly-to protect the recipient's qualification for ODSP benefits. When that happens, the recipient (or, if they are incapable, their legally appointed representative) must consider whether there are ways to protect the intended beneficiary’s qualification.

The ODSP $40,000 asset limit applies to non-exempt property and funds. However, certain exempt assets are not counted when determining ODSP eligibility. If an inheritance is not planned properly, a recipient who wants to remain eligible can consider whether enough of the inheritance can be transferred into exempt assets. This would mean that their non-exempt total stays within the allowable $40,000 limit.

Examples of exempt assets under ODSP include:

An interest in a principal residence
One motor vehicle
Funds held in a Registered Disability Savings Plan (RDSP)
A trust created by the ODSP recipient using inherited funds, provided the trust capital does not exceed $100,000
A pre-paid funeral
Household goods and furnishings required for the reasonable enjoyment of a home

There are a number of planning tools available to skillful Wills practitioners to assist in protecting a beneficiary’s entitlement to ODSP - a prime example is a Henson Trust. If you are preparing your Will and you have a family member collecting ODSP benefits, getting good advice early is crucial.

- Ian Keay