t- Chapter 13 3;UCCESSIONS AND WILLS COQer> OBJECTIVES Thi. uapter was prepared to enable you to achieve the following objectives: 1, To identify the difference between a testamentary succession and an intestate succession. 2. To learn the rules by which a person is included or excluded from a succession. 3. To understand how a family tree is constructed within the rules of the Civil Code. 4. To identify the rules for the distribution of the assets of an intestate succession. 5. To explain the three kinds of wills that are valid in Québec. INTRODUCTION Section 13.1 13.1.1 Description In order for our legal system to function effectively, it is essential that all property have an owner. Merely because we do not know, at a particular moment, who the owner is, does not change the fact that everything movable or immovable (with minor exceptions) is owned by someone. Upon death, the ownership of all the property a person owned at that time is immediately transferred or passed along to one person or to many people. Recipients may be natural persons or institutions (churches or hospitals), organizations (universities, clubs, or orchestras), or companies. If there is no one who seems entitled to the property of a deceased person, it will be taken over and will belong to the Government of Québec. Succession refers to the whole collection of things, property, and rights owned by a person at the moment of death. A person’s succession will “devolve” (be given ‘Scanned with CamScanner300 cHaprer THIRTEEN over) to others, in accordance with the rules of the place where the person was domiciled at the time of death. Even though the deceased person died in some other city or country, his or her succession will still be governed by the law of the place where the individual was domiciled. 13.1.2 Types of Successions The Civil Code states that a succession may be distributed in one of two ways, or in.a combination of the two. __Inva testamentary succession, the property is distributed in accordance with the wishes of the deceased. These wishes are expressed in a valid will (testament), a written document in which a person states how and to whom his or her belongings are to be distributed after death. : If a person does not leave a will, a set of rules in the Civil Code must be followed in order to distribute the deceased’s property. The succession is then referred to as an intestate succession. _Our law considers it most important to follow the wishes of the deceased as far as possible. If there is a will, its provisions must be followed. If there is a will that does not provide for the distribution of all of the property of the succession, it must be followed as far as it can be and then the rules of law are used to determine how to distribute the balance of the succession. For example, Marco left a will which stated: I leave my house to my wife and the cash in my bank account to my daughter. When Marco died, his assets included the house, a car, $10,000 in his bank account, and some bank shares. Tn this situation, the house would be transferred to Marco’s wife, the cash given to his daughter, and the other assets would be distributed according to the rules of intestate successions. Thus, this is an example of a combination of the two types of tules. 13.1.3 The Heirs 13.1.3.1 Description Heir refers to any person who receives all or part of a succession under either of the two systems. Legatee refers to someone to whom the deceased left only specific things. In order to inherit, a person must “exist” at the time of the death of the person whose succession is to be distributed. This means that, at the very least, the person must by that time have been conceived, and must subsequently be born viable (alive). 13.1.3.2 Unworthy The right to inherit can be lost if a potential beneficiary has been convicted of attempting to take the life of the deceased. This right may also be lost by someone who has acted badly toward the deceased or has hidden or tampered with the will of the deceased. Such matters would ‘Scanned with CamScannerSUCCESSIONS AND WILLS “404 be decided! by a court, In these cases, the heir who loses the right 10 inherit is said to have become “unworthy.” 13.1.3.3 Acceptance When a person is entitled to inherit from a deceased person, itis important to that the inheritance includes not only the assets of the succession, but also the liabilities (i.e, the debts). (One measure of protection against liability is provided by the law in that the heirs cannot be held responsible for any debts that are greater than the value of the assets in the succession. Since it may take some time before the amounts of both the assets and the liabilities are known, the law states that an heir has the right to accept or renounce (ie, to refuse) the inheritance. If it is accepted, the heir takes all or a percentage of the assets (whatever that person is entitled to) after the debt is deducted or the entire inheritance along with the debts, If the succession is renounced, the heir takes none of the assets, and is then not responsible for payment on any of the debts. In order to give the heir(s) an opportunity to decide whether to accept or renounce, the law allows a period of six months within which an inventory is made of the assets and liabilities. It is important to note that the heir has only this six month period to reject or accept. However, an exception to this time limit is possible ifthe heir can demonstrate a right to an inheritance discovered within ten years from the opening of the succession, For instance, the discovery of another will granting the heir a succession previously not accorded. ‘An heir may accept a succession expressly or tacitly. Express acceptance is made when the heir formally declares acceptance, and advises other people of the acceptance. Taeit aeceptance is made when the heir takes some property from the succession and uses it for personal benefit, Acceptance of a succession confirms that the heir owned the property inherited from the moment of the death of the deceased. 13.1.3.4 Renunciation Renunciation of a succession can only be express. It must be in writing in a document signed before a notary, or by a declaration of renunciation made under oath in court. When a person renounces, that person’s share goes to increase the share of any other heirs. An heir is likely to renounce after finding that the liabilities are greater than. the assets. In this case, the heir takes nothing and owes nothing. The government will then treat the succession as a bankruptcy. The assets will be sold by auction, and the proceeds will be used to pay off as much of the debts of the succession as possible. 13.1.4 The Family Tree In the Civil Code, the relationship between members of a family is based on “degrees” of relationship. Each generation forms one degree. Thus, you are related to your parents in the first degree and to your grandparents in the second degree. You are related to your children in the first degree and to your grandchildren in the second degree. ‘Scanned with CamScanner302 + CHAPTER THIRTEEN These are all relationships in the direct line—all the people in this line are descended from one another. The number of degrees in the direct line is equal to the number of generations between the persons concerned. The direct line ascending connects a generation with its ancestors; the direct line descending connects a generation with its descendants. The relationship between other members of a family falls under what is called the collateral line. Here, the persons are not descended from each other but from a common ancestor. For example, to establish the degree of relationships between a brother and sister, trace from child to parents and then to sibling. Thus, a brother and sister are related in the second degree. Using the same method, a person is related to a sibling’s children in the third degree. A person’s relation to an aunt or uncle is also in the third degree (from individual to parents, from them to their parents—the individual’s grandparents—and then to the aunt or uncle). The collateral line includes all uncles, aunts, cousins, and their descendants. INTESTATE SUCCESSION Section 13.2 ‘When a person dies without a will (intestate succession) the property of the deceased is distributed to the surviving members of the family according to the rules of law in the Civil Code. The first step is to establish who these people are. An important restriction to keep in mind is that no relative beyond the eighth degree is entitled to inherit. In order to understand whether this is a really serious restriction, use the diagram of the Table of Relationships and see how far you can identify members of your family. You may find it difficult to locate living relatives beyond the fourth or fifth degree. It would be quite unusual for anyone to know someone who is related to them in the eighth degree and is still alive. The Table of Relationships is found in Appendix “13-A”. ‘The surviving relatives are now separated into six categories: 1. the surviving spouse (the husband or wife of the deceased) the descendants (children, grandchildren, etc.) the privileged ascendants (the father and/or mother) ee the privileged collaterals (the brothers, sisters and their children, ie., nieces and nephews) 5. the ordinary ascendants (grandparents, great-grandparents, etc.) 6. the ordinary collaterals (the aunts, uncles, and all their children) The following table shows the six categories of family members. On each line, an “X” represents which category has surviving members. The figure beside the “X” pe what portion of the succession of the deceased those people will be entitled to inherit. ‘Scanned with CamScannerSUCCESSIONS AND WILLS “303 EXAMPLE | COD. | SPOUSE | DESCENDANTS | PRIVILEGED | PRIVILEGED | ORDINARY | ORDINARY ARI = hilren ‘Ascendants | Collaterals | Ascendants | Collaterals + grande * faterand | + bth ‘© grandparents | + uncles nephew # niece 666 X=28 ~_[x=0 667 X= 100% X=0 3 on 7 672 | X=28 X=18 X=0 3 O73 | X=23 X=1B 6 6741 x= X=12 7 674-2 X= 100% 3 6142 X= 100% 9 678-1 10 678-2 * Closest degree excludes others ** This changes if there are descendants of privileged collaterals. Two principles guide the decisions made by the legislators in setting up these ules of intestate succession. The first is to use the estate for the benefit of those persons for whom it is presumed the deceased would have had the greatest concern. Thus, if there is a surviving spouse and children, they would inherit the entire estate to the exclusion of anyone else in the family. Only when there are no children does the law allow other members of the family to share in the estate. The second principle is to avoid dividing the estate into many small parts. If this were done, most heirs would probably receive very little. The succession is divided in fairly large portions, e-g., one-third or one-half or 100 percent. Thus, the inheritance has much more value to the recipient. If there are no surviving members of the family of the deceased who are elated up to the eighth degree, the property goes to the government of the province of Québec. The relevant articles of the Civil Code follow. + 617. Natural persons who exist at the time the succession opens, including absentees presumed to be alive at that time and From the Civil Code of Quebec 613. The succession of a person opens by his death, at the place of his last domicile. The succession devolves according to the prescriptions of the law unless the deceased has, by testamentary provisions, provided otherwise for the devolution of his property. Gifts mortis causa are, in that respect, testamentary provisions. children conceived but yet unborn, if they are bom alive and viable, may inherit. 620. The following persons are unworthy of inheriting by operation of law: (1) a person convicted of making an attempt on the life of the deceased; ‘Scanned with CamScanner304 + CHAPTER THIRTEEN (2) a person deprived of parental authority ‘over his child, with the exemption for the child from the obligation to provide support, with respect to that child's succession. 621. The following _ persons declared unworthy of inheriting: (1) a person who has subjected the deceased to ill treatment or who has otherwise behaved towards him in a seriously reprehensible manner; may be (2) a person who has concealed, altered or destroyed in bad faith the will of the deceased; (3) a person who has hindered the testator in the drawing up, amendment or revocation of his will. 622. An heir is not unworthy of inheriting nor subject to being declared so if the deceased knew the cause of unworthiness and yet conferred a benefit on him or did not modify the liberality when he could have done so. 625. The heirs are seized, by the death of the deceased or by the event which gives effect to a legacy, of the patrimony of the deceased, subject to the provisions on the liquidation of successions. Subject to the exceptions provided in this Book, the heirs are not liable for the obligations of the deceased in excess of the value of the property they take, and they retain their right to demand payment of their claims from the succession. 626. A successor is entitled to have his heirship recognized at any time within ten years from the opening of the succession to which he claims to be entitled or from the day his right arises. 630. Every successor has the right to accept or to renounce the succession. The option is indivisible. However, a successor called to the succession in several ways has a separate option for each. 632. A successor has six months from the day his right arises to deliberate and exercise his option. The period is extended, by operation of law, by as many days as necessary to afford him 60 days from closure of the inventory. is recordec During the period for deliberation, no judgment may be rendered against the successor as an heir unless he has already accepted the succession. 637. Acceptance is express or tacit. It may also result from the law. Acceptance is express where the successor formally assumes the title or quality of heir; it is tacit where the successor performs an act that necessarily implies his intention of accepting. 642. Mere conservatory acts and acts of supervision and provisional administration do not, by themselves, entail acceptance of the succession, The same rule applies to an act rendered necessary by exceptional circumstances which the successor performs in the interest of the succession. 643. The distribution of the clothing, private papers, medals and diplomas of the deceased and family souvenirs does not by itself entail acceptance of the succession if it is done with the agreement of all the successors. Acceptance by a successor of the transmission in his favour of a site intended for a body or ashes docs not entail acceptance of the succession. 644. If a succession includes perishable property, the successor may, before the designation of a liquidator, sell it by agreement or, if he cannot find a buyer in due time, give it to charitable institutions or distribute it among the successors, without implying acceptance on his part. He may also alienate property which, although not perishable, is expensive to preserve or is likely to depreciate rapidly. In this case, he acts as an administrator of the property of others. 645. Acceptance confirms the transmission which took place by operation of law at the time of death. 646. Renunciation is express. It may also result from the law. Express renunciation is made by notarial act en minute or by a judicial declaration which ‘Scanned with CamScanner647. A person who renounees is deemed never to have been a successor. 652, The creditors of a successor who renounces may, if the renunciation is prejudicial to their rights, apply within one year to the court for a declaration that the renunciation may not be set up against them, and accept the succession in the place and stead of their debtor, 653. Unless otherwise provided by testamentary dispositions, a succession devolves to the surviving married or civil union spouse and relatives of the deceased, in the order and according to the rules laid down in this Title. Where there is no heir, it falls to the State. 656. The degree of relationship is determined by the number of gene: each forming one degree. The series of degrees forms the direct line or the collateral line. 657. The direct lin isthe series of degrees between persons descended one from another. The number of degrees inthe direct line is equal to the number of generations between the successor and the deceased. 658. The direct line of descent connects a person with his descendants; the direct line of ascent connects him with his ancestors. 659. The collateral line is the series of degrees between persons descended not one from another but ftom a common ancestor. In the collateral line, the number of degrees is equal to the number of generations between the successor and the common ancestor and between the common ancestor and the deceased, 666. If the deceased leaves a spouse and descendants, the succession devolves. to them. The spouse takes one-third of the succession and the descendants, the other two-thirds. 667. Where there is no spouse, the entire succession devolves to the descendants. 670, The father and mother of the deceased are privileged ascendants. ‘The brothers and sisters of the deceased and their descendants in the first degree are privileged collaterals, SUCCESSIONS AND WILLS F305 671. Where there are neither descendants, privileged ascendants nor privileged collaterals, the entire succession devolves to the surviving spouse. 672. Where there are no descendants, two- thirds of the succession devolves to the surviving spouse and one-third to the privileged ascendants. 673, Where there are no descendants and no privileged ascendants, two-thirds of the succession devolves to the surviving spouse and one-third to the privileged collaterals, 674, Where there are no descendants and no surviving spouse, the succession is partitioned equally between the privileged ascendants and the privileged collaterals. Where there are no privileged ascendants, the privileged collaterals inherit the entire succession, and vice versa. 677. The ordinary _ascendants and collaterals are not called to the succession unless the deceased left no spouse, no descendants and no privileged ascendants or collaterals. 678. If the ordinary collaterals include descendants of the privileged collaterals, these descendants take one-half of the succession and the other half devolves to the ascendants and the other collaterals. Where there are no descendants of privileged collaterals, the entire succession devolves to the ascendants and the other collaterals, and vice versa. 682. If there are no relatives within the degrees of succession in one line, the relatives in the other line inherit the entire ‘suocession. 683, Relatives beyond the eighth degree do not inherit. 696. Where the deceased leaves no spouse ‘or relatives within the degrees of succession, ‘or where all the successors have renounced the succession, or where no successor is known or claims the succession, the State takes, by operation of law, the property of the suecession situated in Québec. Any testamentary provision which would defeat this right without otherwise providing for the devolution of the property is without effect. ‘Scanned with CamScanner306 cHaprer THIRTEEN TESTAMENTARY SUCCESSION - WILLS Section 13.3 In general, anyone over the age of 18 can prepare a written document stating how his or her property is to be distributed after death. Such a document is called a will. Our Civil Code provides for three different kinds of valid wills: © notarial will * holograph will + will made in the presence of witnesses. There are different rules for each of these and since a will is a document made by one person (the testator), it is different from a contract. Whereas a contract produces legal effects generally from the moment each party gives consent to it, a will produces no legal effects until after the testator has died, Because of this, a testator may change a will as often as he or she wants. The only will that is important is the very last one made. Ina will, a person gives away all his or her belongings. Therefore, in order to make a will, a person must have legal capacity, ie., be legally capable of giving consent to a document. This means that a minor or a person under protective supervision is not capable of making a will, unless, in exceptional circumstances, itis examined and approved by a court. If a person makes a will before being placed under protective supervision, however, the will is generally considered valid because a person’s legal capacity is considered relative to the time the will was made. ‘A notarial will is prepared by the notary following the instructions given by the testator. Once prepared, it is read by the notary to the testator and signed in the presence of a witness. The notary must not be the spouse of the testator or related up to the third degree or by marriage. ‘A holograph will is one that is written and signed entirely in the handwriting of the testator. It is not valid as a holograph will if it is prepared on a typewriter, computer, audio or video recording, or any other mechanical means. It is not necessary to have any witnesses to this form of will. A sample holograph will is found in Appendix “13-B”. The will made in the presence of witnesses can be prepared by the testator or by any other person who follows the testator’s instructions. It may be handwritten, typed, or printed, but it must be on paper. This is the type of will that lawyers make for their clients, After the will is prepared, the testator states before two witnesses that it is his or her will, and signs it while the witnesses watch. The witnesses then sign the will also. After the death of a testator, if the will is holograph or made in the presence of witnesses, it must be proven before a court. This is called probate. The will is presented to the court together with affidavits from someone who knows the handwriting of the testator or from one of the witnesses. All the known heirs are notified of the date the will is to be presented in court and they may be present at that time. They may also contest the validity of the will if they have reason to do so. A notarial will, being an authentic act, does not require probate. ‘Scanned with CamScanner‘SUCCESSIONS AND WEES OS SUT In order to ensure that the assets of the testator are distributed in accordance with the instructions in the will, a liquidator is appointed. The liquidator may be named in the will by the testator or, if no one is named, the liquidator is chosen by the heirs. The liquidator may be one of the heirs, any other person over 18, or a company such as a trust company. The liquidator is responsible for having the will probated, if required. ‘The liquidator then prepares an inventory of the assets and liabilities of the succession. If there are more assets than debts, the liquidator pays all the creditors, prepares the income tax retum for the deceased up to the time of death, and then distributes the remaining assets according to the terms of the will, or according to the rules of intestate successions if there was no will. The Civil Code contains many detailed rules regarding the handling of successions and how they are to be liquidated. A brief selection of these articles of the Code follows. From the Civil Code of Quebec Chapter 111 Chapter I Forms of Wills The Nature of Wills 712. The only forms of will that may be 703. Every person having the required made are the notarial will, the holograph capacity may, by will, provide otherwise than as by law for the devolution upon his death of the whole or part of his property. 704. A will is a unilateral and revocable juridical act drawn up in one of the forms provided for by law, by which the testator disposes by liberality of all or part of his property, to take effect only after his death. Inno case may a will be made jointly by two or more persons. Chapter IT The Capacity Required to Make a Will 706. No person may... renounce his or her right to make a will, to dispose of his or her Property in contemplation of death or to revoke the testamentary provisions he or she has made. 707. The capacity of the testator is considered relatively to the time he made his will. 708. A minor may not dispose of any part of his property by will, except property of little value. 711. A tutor, curator or adviser may not make a will on behalf of the person whom he represents or assists, either alone or jointly with that person. will and the will made in the presence of witnesses. 713. The formalities governing the various kinds of wills shall be observed, on pain of nullity. However, ifa will made in one form does not meet the requirements of that form of will, itis valid as a will made in another form if it meets the requirements for validity of that other form. 714. A holograph will or a will made in the presence of witnesses that does not fully meet the requirements of that form is valid nevertheless if it meets the essential requirements thereof and if it unquestionably and unequivocally contains the last wishes of the deceased. Division II - Notarial Wills 716. A notarial will is executed by a notary, en minute, in the presence of a witness or, in certain cases, two witnesses. he date and place of the making of the will shall be noted on the will. 717. Annotarial will is read by the notary to the testator alone or, if the testator chooses, in the presence of a witness. Once the reading is done, the testator shall declare in. the presence of the witness that the act read contains the expression of his last wishes. ‘Scanned with CamScanner308% CHAPTER THIRTEEN The will is then signed by the testator, the witness or witnesses and the notary, in each other's presence. 723. In no case may a notarial will be executed by a notary who is the spouse of | the testator, is related to the testator in either direct or the collateral line up to and luding the third degree, or is connected to ‘extent by marriage or a civil union to ator, A witness called upon to be present at - «waking of a notarial will shall be named + and described in the will. Any person of full age may witness a notarial will, except an employee of the officiating notary who is not himself a notary. Division III - Holograph Wills 726. A holograph will shall be written entirely by the testator and signed by him, without the use of technical means. It is subject to no other formal requirement. Division IV - Wills Made in the Presence of Witnesses 727. A will made in the presence of witnesses is written by the testator or by a third person. The testator then declares in the presence of two witnesses of full age that the document he is presenting is his will. He need not divulge its contents. He signs it at the end or, if he has already signed it, acknowledges his signature; he may also cause a third person to sign it for him in his presence and according to his instructions. The witnesses sign the will forthwith in the presence of the testator. 728. Where the will is written by a third person or by technical means, the testator and the witnesses initial or sign each page of the act which does not bear their signature. The absence of initials or a signature on each page does not prevent a will made before a notary that is not valid as a notarial will from being valid as a will made in the presence of witnesses, if the other formalities are observed. 729. A person who is unable to read may may make a will in the presence of witnesses, provided the will is read to the testator by one of the witnesses in the presence of the other. The testator, in the presence of the same witnesses, declares that the document read is hhis will and signs it at the end or causes a third person to sign it for him in his presence ‘and according to his instructions. 730. A person who is unable to speak but able to write may make a will in the presence of witnesses, provided he indicates in writing, otherwise than by technical ‘means, in the presence of the witnesses, that the document he is presenting is his will. Chapter 1V Testamentary Dispositions 736. Property left by the testator for which he made no provision or for which the provisions are without effect remains in his intestate succession and devolves according to the rules governing legal devolution of successions. 750. A legacy also lapses where the legatee refuses it, is unworthy to receive it or dies before the fulfilment of the suspensive condition attached to it, if the condition is of a purely personal nature. 757. A condition that is impossible or that is contrary to public order is deemed unwritten. Thus, a clause limiting the rights of a surviving spouse in the event of a remarriage or new civil union is deemed ‘unwritten. 759. A legacy made to the notary who executes a will or to the spouse of the notary of to a relative in the first degree of the notary is without effect; this does not affect the other provisions of the will. 760. A legacy made to a Witness, even a supernumerary, is without effect, but this does not affect the other provisions of the will The same is true for that part of the legacy made to the liquidator or to another administrator of property of others designated in the will which exceeds his remuneration, if he acts as a witness. ‘Scanned with CamScannerSUCCESSIONS AND WILLS “309 [761.4 director y made to the owner, a ‘1 an employee of a health or social Services establishment who is neither the spouse nor a close relative of the testator is Without effect if it was made while the testator was receiving care or services at the establish A legacy made to a member of a foster family while the testator was residing with that family is also without effect. 762. A legacy of property of another is Without effect, unless it appears that the intention of the testator was to oblige the heir to obtain the bequeathed property for the legatee by particular title. 763. Revocation of a will or of a legacy is, express or tacit, 764. A legacy made to the spouse before a divorce or the dissolution of a civil union is revoked unless the testator manifested, by means of testamentary provisions, the intention of benefitting the spouse despite that possibility. Revocation of the legacy entails revocation of the designation of the spouse as liquidator of the succession. The same rules apply if the marriage or civil union is declared null during the lifetime of the spouses. 765. Express revocation is made by a subsequent will explicitly declaring the change of intention. Chapter VI Proof and Probate of Wills 772. A holograph will or a will made in the presence of witnesses is probated, on the application of any interested person, in the manner prescribed in the Code of Civil Procedure. The known heirs and successors shall be summoned to the probate of the will unless an exemption is granted by the court. TITLEV LIQUIDATION OF SUCCESSIONS 776, The liquidation of an intestate or testate succession consists in identifying and calling in the successors, determining the content of the succession, recovering the claims, paying the debts of the succession, whether these be debts of the deceased, charges on the succession or debts of support, paying the legacies by particular title, rendering an account and delivering the Property. 779, Where the succession is manifestly vent, the heirs may, by mutual agreement, liquidate it without following the prescribed rules for liquidation. As a result of this decision, they are liable for payment of the debts of the succession ftom their own patrimony, even where the debts exceed the value of the property they take. 783. Any person fully capable of exercising his civil rights may hold the office of liquidator. A legal person authorized by law to administer the property of others may hold the office of liquidator. 785. The office of liquidator devolves by operation of law to the heirs unless otherwise provided by a testamentary provision; the majority of the heirs may designate the liquidator and provide the ‘mode of his replacement. 786. A testator may designate one oF several liquidators; he may also provide the mode of their replacement. 789. The liquidator is entitled to the reimbursement of the expenses incurred in fulfilling his office. He is entitled to remuneration if he is not an heir; if he is an heir, he may be remunerated if the will so provides or the heirs so agree. 802. The liquidator acts with respect to the property of the succession as an administrator of the property of others charged with simple administration. 803. The liquidator shall make a search to ascertain whether the deceased made a will, If the deceased made a will, the liquidator causes the will to be probated and takes all the necessary steps for its execution. 819. Liquidation is complete when the known creditors and the known legatees by particular title have been paid or when payment of their claims and legacies is otherwise settled or assumed by heirs or legates by particular title. It is also complete when the assets are exhausted. ‘Scanned with CamScanner310 ‘CHAPTER THIRTEEN APPENDIX “13-A” TABLE OF RELATIONSHIPS qe | cones “eee a ‘TABLE OF RELATIONSHIPS ‘AND ORDER OF SUCCESSION INTHE CIVIL LAW OF QUEBEC ‘Scanned with CamScannerSuccessions ANO wns 344 APPENDIX “13-B” HOLOGRAPH WILL SAMPLE. athena wy Oe: Zo tahern it mary tontten, T, Beajernin Raymond Musterion doterraplic, Ling at wae rue De Aifaits, ty St-Lauint, Dasher, bers of Aoind rind, do Lentley brgutatly Py wile Pita Wncderion, a Giraley alin, shasta SD 22 Des APlaieee ing St hoursust, Qealase, wrk oft lan Qurnites, SS the Dae eal Ys Aen of Soty Riorcraud Aetlars (£40,008) iw may Reesunt at He Carciee Popelbice , Nanclay 32-/93-26. begescarh Aosta. Masterson, alt 2 ae tee, oud the F i deters ($15;000) Wm Canadien SeQihy daport ‘A baequentle off orion gerbe, humeitena ov puspety cued ley ue, Yorees defe- wr. mad with e aby arevien AES bebo ay palo ots 4 eg aes ng ene 2 Dnete Caneel dud woke ober wil A Tusa ig wall, ohio, a ay Qanadranitin sacl fe eens qo ‘Scanned with CamScanner312% cHapTeR THIRTEEN LEGAL TERMS In your reading, you came across the following terms. Be sure thal You can explain each, to ensure your understanding of the material you ear ioe f uncertain as to the meaning of any term, review bd f information of disci the clarification. If necessary, consult a dictionary for further " seem(s) with your instructor, devolve testamentary heir legatee unworthy renounce inventory express acceptance tacit ae degrees direct line ascendant descendants collateral seas Mire ivileged ascendants _holograph will egal pMgalgaiiets aes liquidator privileged collaterals probate REVIEW QUESTIONS -ssi0l 1. What is the difference between testamentary succes succession? yn and an intestate 2. When Albert died his will stated, “I leave all my property {© My ak His son Jerome is married and has two children, Alex and Beatie ae — Karen is married, has one child, Carmen, and is pregnant with her see a Donald. His other son Leon is not married at the time of Aloat’s a (he ws married two years later and subsequently has three children, Evelyn, rank, an Gretel). Who is entitled to inherit Albert’s succession? 3. When Horatio’s uncle died, his will left all the uncle’s assets to Horatio. An inventory of the succession showed that the assets amounted to $123,456. His uncle owed debts in the amount of $654,321. What advice would you give Horatio concerning this succession? 4. Rico prepared his will on his new computer and signed it in his own handwriting. In it he said that he left all his property and money to his wife Anastasia. Is this will valid? Why or why not? Would your answer be any different if he asked his wife to sign at the bottom as a witness? 5. Stanis made a holograph will in which he left all his possessions to his friend Maria. He gave her the original of this will and kept a photocopy for his own record. Two years later, Stanis and Maria had a terrible fight and Stanis tore up his copy of his will and made a new will leaving all his property to his friend Victor. When Stanis died ten years later, Maria presented the will Stanis had given her and claimed all of Stanis’s assets. Is she entitled to receive them? 6. When Dietrich was a young man, he made a will leaving hi ivi trich , ing his assets to be divided between his children, even though he was not married and had no children at that ‘Scanned with CamScannerSUCCESSIONS AND WiLLs 349 A few years later he married and eventually had two children. Many years Dietrich suffered from a mental illness and was placed under protective servision. He then wrote a new will, leaving everything to his favourite museum. if he dies, who will inherit his assets? If Dietrich is cured of his illness and the protective supervision is removed, which of his two wills would be valid? When Liam dies who of the following living members of his family will inherit his assets and in what percentage? (Treat a), b), c), d), and e) as separate cases.) Liam does not have a will. a. his wife, his sister, and his grandmother; b. his two children and his brother; c. his adopted daughter, his wife, his parents, his brother, two aunts on his father’s side, and his grandmother; d._ his three children and his parents; ¢. his wife, his mother, and his cousin. Using the family tree chart in this chapter, prepare a similar chart for the members of your own family, putting your name in the diamond shape at the centre. Can you identify any family members related to you in the eighth degree (or higher)? Explain, in your own words, the rules that apply to each of the three types of wills that can be made in the province of Québec. In order to carry out the distribution of the assets of a deceased person, a liquidator is appointed. Explain each of the duties that the liquidator is required to carry out. ‘Scanned with CamScannerChapter 15 MARRIAGE REGIMES & MARRIAGE CONTRACTS CQRerrD OBJECTIVES This chapter was prepared to enable you to achieve the following objectives: 1. To realize that, although marriage is essentially a personal matter, there are many important business implications to this relationship involving the management of the couple’s assets within the framework of the marriage union. 2. To become aware that either with or without the knowledge and acceptance of the marriage partners, the law insists that the spouses are bound within a “Marriage Regime” with respect to their assets. To understand what is meant by the expression, “Marriage Regime.” 4, To know that the legal regime of “Partnership of Acquests” applies to any couple married in the province of Québec unless they take specific steps to choose another regime. 5. To understand the rights and obligations of the marriage partners under each of the three regimes available under the civil law: a) Partnership of Acquests b) Separation of Property c) Community of Property. 6. To understand what constitutes a family patrimony and the effects it has. 7. To know the procedure by which a couple can select or change their marriage regime. 8. To understand what happens to the marriage regime when the marriage is dissolved by death or divorce. ‘Scanned with CamScanner338 A CHAPTER FIFTEEN INTRODUCTION Section 15.1 Marriage is a combination of many aspects of the lives of the partners. Clearly there are the personal and family sides to the relationship. There is also a business side to marriage. Not only do the spouses bring together their personal lives but also their property, money, and other assets. In certain aspects, they cannot avoid this mingling of assets. For example, if one of them buys food or clothing, which is essential for their family life cannot pay for it, then the other spouse may be legally required to make payment. Beyond the necessities and the restrictions imposed by the Family Patrimony rules, however, the spouses are legally permitted to decide what property arrangements they want to exist between them. There are three main choices or marriage “regimes” permitted by the Civil Code when a man and a woman are married: Partnership of Acquests, the partners can keep some of their property separate and share the balance; Separation of Property, the partners can keep their property entirely separate from each other; and Community of Property, the parties can put all of their property together and share it all. Because property may be shared, there may be important business implications to any of the marriage regimes. If a person had opened a business (such as a sole proprietorship) and was unable to pay his or her debts, we know there is unlimited personal liability. But if the personal assets of the debtor are not sufficient to pay all of the debts, can the creditors seize the spouse’s assets to recover the balance? The answer will depend on the marriage regime that has been selected by the parties. Obviously this will be an important consideration to be taken into account when one partner in a marriage opens a business. Selected articles from the Québec Civil Code related to this subject are reproduced in Appendix “15-A” at the end of this chapter. a FAMILY PATRIMONY Section 15.2 The term “patrimony,” used in reference to an individual, refers to the total of the net assets that the person owns. In referring to marriage, the Civil Code develops the concept of the “family patrimony,” which is created by the law and comes into existence at the time of the marriage. In this context there is a restrictive meaning given to the term—it does not include everything belonging to the spouses. The family patrimony, as explained in Article 414 of the Civil Code, consists only of the following property, regardless which of the spouses actually owns the Property: © the family residence(s) ‘Scanned with CamScannerMARRIAGE REGIMES AND MARRIAGE Contracts W 339 the movable property (furniture, pictures, appliances, etc.) found in the family residences, and used by the family «the motor vehicles used for family travel «the benefits that accrue durin, 1g the marriage from a retirement plan (either the husband’s or wife's or both) + the pensionable eamings of the spouses, uring the marriage (as defined in the Québec Pension Plan Act) It should be noted that certain property is specifically excluded from the family patrimony, including any property given to one of the Spouses as a gift or through inheritance, and any property not referred to in Art. 414, During the marriage, each consort has the 5 Tight to enjoy, sell or otherwise deal with those parts of the family patrimony owned by him or her. For example, the wife can sell her car, put some of the money she receives into an RRSP, and use the balance purchase furniture for the family residence. Itis only at the time of a legal separation (separation from bed and board) or dissolution of the marriage by yy death or divorce that the value of the family rimony, as it then stands, is established and the net assets of the family patrimony equally divided between the spouses (Art, 416). In order to establish the net value, y amounts still owing on the price of any elements of the family patrimony are ducted from the value of the items included. ‘Thus at the time of a divorce, the statement of the family patrimony might look ike this: Assets Liabilities House in Montreal $450,000 Mortgage ~=—»«$ 285,000 House in country 245,000 Mortgage 112,000 Furniture in houses 46,000 Still unpaid 10,850 2 family cars 50,000 Still unpaid 19,500 Totals $791,000 $416,897 The net value of the family patrimony, to be equally shared between the consorts, would be $374,103. Afier dividing the net assets of the family patrimony when the marriage is dissolved, the rules that govern the marriage regime chosen by the consorts will determine how the balance of their property will be dealt with. MARRIAGE REGIMES Section 15.3 We shall briefly examine each of the three principal marriage regimes Permitted in Québec and outline the legal requirements to change regimes. ‘Scanned with CamScanner340% CHAPTER FIFTEEN 15.3.1 Partnership of Acquests This is the “legal” or automatic regime which applies if the partners do not sign a marriage contract. Under its terms, the property of each spouse is divided in two—each has private property and acquests (Art. 448). Private property consists of (Art. 450) such items as the property owned by the person before the marriage, property inherited or received as a gift, personal clothing, wedding ring, and instruments required to carry on a trade or profession. ‘Acquests consist of property acquired during the marriage and not included in the definition of private property. It includes specifically wages or salary earned by the spouses during the marriage and the revenues collected from each spouse's private property during the marriage. As an example: Before his marriage, John owned a duplex, a car, $5,000 in Canada Savings Bonds, and was working; Nancy had a gold ring which her grandmother had given her and 100 bank shares bought with money she had saved from her salary. Af John and Nancy are married under the regime of Partnership of Acquests, John’s private property will consist of his duplex, his car and the Canada Savings Bonds. His acquests, starting on the date of their marriage, will include the Profit from the duplex, the interests from his bonds and his salary. Naney’s private property includes her bank shares and her gold ring. Her acquests will include any dividends she receives from her shares and her salary. During the marriage, each spouse has full control and administration of both their private property and their acquests (Art. 461). However, they cannot give away any significant portion of their acquests without the written agreement of their spouse (Art. 462). When this regime is dissolved, each spouse keeps his or her private property, one-half of his or her own acquests, and has the right to accept or renounce (refuse) one-half of the acquests of the other spouse (Art. 467). If the acquests consist of valuable assets, then the other spouse will want to accept the one-half. If, however, there are only debts left by the other spouse, then the acquests will be renounced (refused). 15.3.2 Separation of Property Separation of Property, an alternative regime to Partnership of Acquests, may be chosen by the parties. If they do so, however, it can be done only by way of a marriage contract prepared by and signed in front of a notary (Art. 485). Usually, in the marriage contract, the spouses declare that they want to keep all of their property separate (i.e., there will be no acquests). In this case, the partners remain fully responsible for all their own property whether it belongs to them before or after the marriage, and the other partner has no rights to this property (Art. 486). The contract provides that each partner remains solely responsible for his or her own debts, except for those that may be considered family expenses. __ __ Since the spouses are completely separate with respect to their property under this regime, it is usual for one or both of them to promise to give gifts to the other ‘Scanned with CamScannerMARRIAGE REGIMES AND MARRIAGE CONTRACTS 344 during the marriage. Thus, a future husband may promise to give his wife real estate worth $200,000 (such as a house), all the furniture used in their family residence, and/or a gift of eash to be paid during the marriage. Similar gifts may also be made by the wife to the husband in the marriage contract. If, in fact these gifts are not paid during the marriage, they may be claimed from the estate of the deceased spouse when the marriage is ended by death. 15.3.3 Community of Property Many years ago, this was the legal regime in Québec. It was replaced in 1970 by the Partnership of Acquests. If, however, the spouses wish to be governed by the regime of Community of Property, they can choose to have it apply to them. This must be done by way of a marriage contract entered into before a notary. It is quite rare today that this regime would be selected. This regime provides that the property of the spouses be divided into common property, private property, and the reserved property of the wife. Under the rules of Community of Property, all of the community (common) vroperty is under the control of the husband who has full authority over how it is .dministered, but requires the permission of the wife before he can sell it, give it away, or mortgage it. Upon dissolution of the marriage, the “common” property is divided in half, and the wife has the right to accept or refuse her half. The husband must accept his half, even if it consists only of debts, since he was responsible for it during the marriage. 15.3.4 Changes to the Marriage Regime Marriage partners will generally decide before their marriage, the regime by which they wish to be governed. If they agree with the Partnership of Acquests, there is nothing for them to do. Since it is the “legal regime,” it applies automatically, and simply by getting married they will be regulated by this regime (Art. 431). If they want to modify it, or replace the Partnership of Acquests with one of the other regimes, they can do this only by signing a marriage contract which is prepared by a Notary (Art. 432). If, however, the spouses do not enter into a marriage contract, the Civil Code states that they will automatically be subject to the regime of Partnership of Acquests (Art. 432). During the marriage, the spouses may decide that they want to change or modify their marriage regime. They can easily do this, but again it can only be done by a Notarial Contract. The new regime takes effect when it is signed, and cannot be retroactive. Notice of the change of their regime must be published so that any interested creditors may take the necessary steps to protect their interests. It is, therefore, quite important that the spouses examine carefully the consequences of each of the available regimes to determine in advance which one best suits them, ‘Scanned with CamScannergaz © CHAPTER FIFTEEN APPENDIX “15-A” SELECTED ARTICLES FROM The Civil Code of Québec 397. A spouse who enters into a contract for the current needs of the family also binds the other spouse for the whole, if they are not separated from bed and board. However, the non-contracting spouse is not liable for the debt if he or she had previously informed the other contracting party of his or her unwillingness to be bound. 398, Either spouse may give the other a mandate in order to be represented in acts relating to the moral and material direction of the family. This mandate is presumed if one spouse is unable to express his or her will for any reason or if he or she is unable to do so in due time. Family Patrimony 414. Marriage entails the establishment of a family patrimony consisting of certain property of the spouses regardless of which of them holds a right of ownership in that property. 415. The family patrimony is composed of the following property owned by one or the other of the spouses: the residences of the family or the rights which confer use of them, the movable property with which they are furnished or decorated and which serves for the use of the household, the motor vehicles used for family travel and the benefits accrued during the marriage under a retirement plan. The payment of contributions into a pension plan entails an accrual of benefits under the pension plan; so does the accumulation of service recognized for the purposes of a pension plan. This patrimony also. includes the registered eamings, during the marriage, of each spouse pursuant to the Act respecting the Québec Pension Plan or to similar plans. ‘The earnings contemplated in the second paragraph and accrued benefits under a retirement plan governed or established by an Act which grants a right to death benefits to the surviving spouse where the marriage is dissolved as a result of death are, however, excluded from the family patrimony... Property devolved to one of the spouses by succession or gift before or during the marriage is also excluded from the family patrimony. For the purposes of the rules on family patrimony, a retirement plan is any of the following: - aplan governed by the Act respect- ing Supplemental Pension Plans or that would be governed thereby if it applied where the spouse works; - a retirement plan governed by a similar Act of a _ legislative jurisdiction other than the Parliament of Québec; - a plan established by an Act of the Parliament of Québec or of another legislative jurisdiction; - aretirement-savings plan; - any other _retirement-savings instrument, including an annuity contract, into which sums from any of such plans have been transferred. 416. In the event of separation from bed and board, or the dissolution or nullity of a marriage, the value of the family patri- mony of the spouses, after deducting the debts contracted for the acquisition, im- provement, maintenance or preservation of the property composing it, is equally divided between the spouses or between the surviving spouse and the heirs, as the case may be. Where partition is effected upon separation from bed and board, no new Partition is effected upon the subsequent ‘Scanned with CamScannerMARRIAGE REGIMES AND MARRIAGE CONTRACTS “#343 dissolution or nullity of the marriage unless the spouses had voluntarily resiimed their community of life; where a new partition is effected, the date when the spouses resumed their community of life is. substituted for the date of the marriage for the purposes of this section. *hoice Of Matrimonial Regime 31. Any kind of stipulation may be sade in a marriage contract, subject to he imperative provisions of law and ublic order. 432, Spouses who, before the solemniza- sion of their marriage, have not fixed their ‘matrimonial regime in a marriage contract, are subject to the regime of partnership of acquests. 433, A matrimonial regime, whether legal or conventional, takes effect on the day when the marriage is solemnized. ‘A change made to the matrimonial regime during the marriage takes effect on the day of the act attesting the change. In no case may the parties stipulate that their matrimonial regime or any change to it will take effect on another date. 434, A minor authorized to marry may, before the marriage is solemnized, make all such matrimonial agreements as the marriage contract admits of, provided he is authorized to that effect by the court. The person having parental authority or, as the case may be, the tutor shall be summoned to give his advice. The minor may apply for authorization alone the 438. During marriage, spouses may change their matrimonial regime and any stipulation in their marriage contract, provided the change itself is made by marriage contract. Gifts made in marriage contracts, including gifts mortis causa, may be changed even if they are stipulated as irrevocable, provided that the consent of all interested persons is obtained. Ifa creditor suffers injury as the result of a change to a marriage contract, he may, within one year of becoming aware of the change, obtain a declaration that it may not be set up against him. 440. Marriage contracts shall be established by a notarial act en minute, on pain of absolute nullity. 441. The notary executing a marriage contract changing @ previous contract shall immediately notify the depositary of the original marriage contract and the depositary of any contract changing the ‘matrimonial regime. The depositary is bound to enter the change on the original ‘and on any copy he may make of it, indicating the date of the contract, the name of the notary and the number of his minute. 442. A notice of every marriage contract shall be entered in the register of personal and movable real rights at the requisition of the officiating notary. Partnership Of Acquests 448. The property that each of the spouses possesses when the regime comes into effect or that each subsequently acquires constitutes acquests or private property according to the rules that follow. 449. The acquests of each spouse include all property not declared to be private property by law, and, in particular, (1) the proceeds of that spouse's work during the regime; (2) the fruits and income due or collected from all that spouse's _ private property or acquests during the regime. 450, The private property of each spouse consists of (1) property owned or possessed by that spouse when the regime comes into effect; property which devolves to that spouse during the regime by succession or gift, and the fruits and income derived from it if the testator ‘or donor has so provided; @ (3) property acquired by that spouse to replace private property and any insurance indemnity relating thereto; ‘Scanned with CamScanner