Situation at death

Have you written a will?

In the absence of a will or a testamentary clause in your marriage contract, the provisions of the Civil Code of Quebec stipulate the following:

Children or grand-children
Father and mother or either of the two
Brothers and sisters or nephews and nieces
Nephews and nieces

It should be noted that common law spouses are not recognized under the Civil Code of Quebec, so the spouse mentioned in the chart refers to the legal, married or civil union spouse. The sections in dark grey mean there are no heirs in this class. So if you take the first line for example, since the "Spouse" class is in dark grey, it means that without a surviving spouse, the children or grand-children would inherit the whole estate. The parents, siblings, nephews or nieces of the deceased would not inherit anything.

In addition to the risk that our assets will not be given to the people and in the proportions that we choose, an intestate succession is usually more complicated and takes longer to settle. Consider, for example, the case of successions involving minor heirs, a situation that demands the intervention of the Public Curator and, in some cases (insolvent estate, sale of a building, etc.), the creation of a "family council" or the submission of a request to the courts to obtain certain authorizations.

We strongly urge all adults to draw up a will.

Types of will

The Civil Code recognizes three types of wills:

  • Notarized will
  • Holograph will
  • Witnessed will

Notarized will

A notarized will is executed by a notary as a deed en minute, with one or sometimes two witnesses.

Holograph will

A holograph will is entirely written and signed by the testator, using non-technical means.

Witnessed will

A witnessed will is written by the testator or by a third party. The testator must recognize the will in the presence of two witnesses who also sign the will.

Probating of holograph and witnessed wills

In Quebec, only notarized wills are excused from the formality of probate. Section 772 of the Civil Code of Quebec stipulates that a holograph or witnessed will must be probated, at the request of any interested person, in the manner described in the Code of Civil Procedure. A holograph or witnessed will is probated by submitting a request to this effect to the Superior Court in the legal district where the testator last lived or, if not domiciled in Quebec, to the Superior Court in the legal district where the testator died or where property was left.

To expedite the probate process, the law now allows notaries to act in the place of the Superior Court Clerk for almost all of the procedures related to the probate of a will. It is therefore possible for the parties to choose between the conventional procedure (request prepared by a notary or lawyer to be presented to the Superior Court Clerk) and a new procedure in which the notary, as a public official, acts on behalf of the Clerk.


Has your will been updated recently to ensure that your assets will really go to the people you wish to protect?

Your will should be updated every time a change occurs in your situation, such as a marriage, the birth of a child, etc. You should also update your will every five years to ensure it still meets all your objectives.


Do you know if your assets, combined to your life insurance protection, would be sufficient to maintain your family's cost of living in the event of your death?

To answer these questions, you need to prepare and analyse an estate balance sheet. This balance sheet should include all of your assets and liabilities, including taxes payable on death. Then you have to evaluate the amount of cash that will be left in the estate. Calculating the cash position of the estate fulfils three objectives:

  • Determine whether the cash position of the estate (life insurance, cash and near-cash assets in the estate) is sufficient to cover existing debts (mortgage, line of credit, personal loans, taxes, etc.) and costs resulting from the death (taxes, funeral costs and settlement of the estate)
  • Determine, if applicable, the family income available to the heirs (when there are a surviving spouse, dependent children or other dependents)
  • Determine, if applicable, the additional capital needs to generate the required annual income determined by the client; this need can be met by life insurance

In other words, an estate balance sheet is an important tool that your financial planner uses to help you plan your estate or ascertain whether you can achieve your estate objectives.

Studies show that for a family to maintain the same standard of living after the death of an adult, it needs to maintain about 80% of the family expenses. In other words, about 20% of the family's expenses are no longer necessary if one of the adults dies. If the cost of living includes a mortgage payment and the mortgage will be paid off in the event of the death of one of the adults, then the cost of mortgage payments should also be subtracted from the required cost of living.

Here is a simple example of how to calculate life insurance needs:

Income after taxes and other deductions
Less savings
Cost of living
Less 20% (expenses of the deceased)
Less mortgage payments
Equals the cost of living required to maintain the standard of living after the death of one of the adults
$46 000

Then we consider the income the surviving spouse will continue to receive after the death of the first spouse. For example, in our case above, if the man died, the woman would have a shortfall of $6000, as shown below.

Death of:
Available income required to maintain survivor's standard of living
Surviving spouse's available income, after savings

This shortfall may be partly made up by the QPP survivor's pension. Note that this pension currently exists, but that its continuation, especially as a life-time pension, is not certain.

Both members of the couple should have enough life insurance on the other to make up the income shortfall for however long this assistance is required.

Your financial planner can help you evaluate your life insurance needs.


If you are the owner of an incorporated business, have you taken the necessary steps to ensure the survival of your business in the event of your death?

In addition to the answer below, we refer you to the answer to the question  Have you set up a business succession plan? in the tax section.

When entrepreneurs take the time to plan the succession of their business and prepare for the company's future, there is a better chance that the business will survive the entrepreneur and pass to the next generation.

One essential tool for successful estate and post-mortem planning is the will.

In addition to providing all the conditions for the transferral of the business, a well-written will allows the liquidator (executor) to make certain tax elections that help achieve substantial tax savings.

For the client's estate plan, the financial planner has to carefully evaluate the tax burden triggered by the death of the incorporated business owner. At the death of a shareholder, the estate inherits the shares of the corporation. The estate can sell the shares acquired by inheritance either to the surviving shareholders or to the corporation. Each of these options will generate different tax consequences.

If an entrepreneur feels that the available post-mortem cash will be insufficient to pay the resulting tax bill, forcing the heirs to sell the company, he or she can purchase enough life insurance to cover the taxes payable on death. The entrepreneur can also purchase life insurance with the corporation as the beneficiary, to cover debts or finance the shareholder agreement. The life insurance proceeds can then be used by heirs and surviving shareholders to purchase the shares of the other heirs, or it can be used by the corporation to redeem the shares of the deceased.


Is your will designed to reflect the provisions of your shareholders agreement?

Usually, a shareholders agreement spells out how a shareholder's shares will be redeemed in certain specific situations. Death is one of the main situations where this type of clause is applied. When the shareholders agreement stipulates that the shares of a deceased shareholder are to be redeemed, the redeemed shares should not be listed as a legacy in the shareholder's will. An incorporated entrepreneur should give a copy of the signed shareholders agreement to the legal expert who is preparing his or her will, so its terms can be reflected in the will. Otherwise there may be contradictions between the shareholders agreement and the will, which could lead to serious consequences.

For more details on the use and value of shareholders agreements, please refer to the question Do you have a shareholders or partners agreement? Does it still reflect your situation? in the Risk management section.

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