Lancaster, Brooks & Welch LLP

St. Catharines Office
80 King Street Suite 800
Tel. 905.641.1551
Welland Office
247 East Main Street
Tel: 905.735.5684

Publications


PROTECT YOUR PRINCIPAL RESIDENCE EXEMPTION!

PROTECT YOUR PRINCIPAL RESIDENCE EXEMPTION! – CHANGES TO REPORTING REQUIREMENTS FOR THE SALE OF YOUR HOME

By Dave ThomasDave Formal white jpg

 

Generally speaking, Canadians do not pay any Capital Gains Tax on the growth in value of their homes.  The Income Tax Act provides an exemption called the “Principal Residence Exemption”.  In most cases, if you own your home and sell it, you get the full benefit of the exemption and pay no tax, even if the value of your home has increased significantly.  The Income Tax Act requires you to keep track of your original costs and the sale price.  However, until recently, you did not have to report the sale on your income tax return. You just got the benefit of the exemption.

Under new rules, which will affect sales of homes occurring in 2016 and afterwards, people who sell their homes will need to report the sale on their tax returns for that year.  It will be necessary to fill out Schedule 3.  You will have to report the address of the home, the proceeds of sale, and the date that the home was acquired.  If you qualify, there will still be no tax.  However, if you do not report the sale and the gain, you may be reassessed later and then you won’t be able to claim the exemption and you’ll have to pay an unnecessary tax.  There can also be penalties for failure to report the gain.  Late filed declarations may be accepted, but will involve penalties.

This new rule also applies to estates. If a person dies owning a home, there is a “deemed disposition” of the home as of the date of death, as if the home had been sold for its fair market value as of that date.   The Estate must report the capital gain in the deceased’s final tax return, and claim the exemption.

It is therefore important to keep in your records the details of the purchase of your home, and also its sale.  Most of this will be found in your lawyer’s reporting letter.  Make sure that your tax preparer is advised of the sale.

In most cases, where you have used the home as your principal residence for the whole time that you owned the property, there will be no difficulty getting a full exemption.  In some cases, where you or your spouse have owned other properties which you occupy, at the same time, or where your property has been rented out for part of the time that you owned it, you may not get the full exemption.  In these cases, it is important to have your documentation available so that the gain can be calculated and you can calculate how much of the exemption you get.  In some cases, where you own more than one home, you may need to get the advice of your accountant or real estate agent to help you determine which home should be designated as your principal residence for a given year.  Whatever you do, make sure you report the capital gain and claim the exemption.  The alternative can be very expensive.

 

Dave Thomas is a senior partner at Lancaster, Brooks & Welch LLP and he can be reached for legal advice on residential and commercial real estate matters at 905-641-1551. Lancaster, Brooks & Welch LLP are Niagara Lawyers for 135 years.

 

 

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How to Keep Your Parent/Child Joint Assets Out of Estate Litigation

KristiCollins-Formal-onwhitePART 1,  By Kristi Collins

One very common source of estate litigation today stems from a key misunderstanding about how the law treats assets held jointly by elderly parents and their adult children.

In this Part 1, I briefly define “joint tenancy with right of survivorship” and explain the difference in the way the law treats joint tenancy of married spouses as opposed to joint tenancy between parents and their adult children.  The difference between joint tenancy and beneficiary designations is also explored.

Joint Tenancy with Right of Survivorship

Most people understand that when assets are held in “joint tenancy with right of survivorship”, this means that each owner owns an undivided 100% of the asset, and when one of the joint owners dies, the surviving owner(s) will automatically take 100% ownership in their own name.  This is different than a “tenancy in common”, where each owner owns their own percentage (often 50% each) of an asset.  When one dies, 50% ownership will go to his/her estate and the other 50% ownership will remain with the survivor.

Married spouses often hold their real property, bank accounts and investments as joint tenants and expect that when one of them dies, the other will automatically take 100% ownership of the asset without the asset forming part of the estate.  This avoids the need to administer an estate and/or to pay Estate Administration Tax (more commonly known as ‘probate fees’).   What they may not realize is that this only goes so smoothly because family law legislation specifically provides a legal presumption that married spouses who hold their assets in joint tenancy intend for this transfer outside of the estate to occur.

In the same way, many aging parents are transferring their homes and/or their accounts to the joint names of themselves and their adult children during their lifetimes, thinking that this will allow the assets to go to the children after death without having to pay probate fees.  THIS IS NOT THE LAW.

The Supreme Court of Canada has made clear that when assets are held jointly by parents and their adult children, the law in fact presumes the OPPOSITE:  specifically, the law presumes that any assets gratuitously transferred by the parent into joint ownership with their adult child are intended to form part of the parent’s estate after death, to be administered in accordance with their will.

Lawyers frequently hear: “but our bank/financial planner told us that ownership of assets held in joint tenancy passes entirely to the survivor.”  Technically, that is correct – this is the meaning of joint tenancy with right of survivorship.  Nonetheless, the law presumes that adult children hold assets jointly with their parents in a “resulting trust” for the benefit of their parent’s estate.  (Note that joint assets of parents and their minor children are treated differently than those discussed here.)

One reason why the law does this is because it can sometimes be unclear whether a parent added their adult child to a bank account or home as a joint tenant for the parent’s own convenience or whether it truly was intended to pass on their death to that child.

The following is a common scenario that illustrates the difference in the way the law treats joint ownership of married spouses as opposed to joint ownership of parents and their adult children:

Dad and Mom have three adult children (let’s call them “Al”, “Bob”, and “Charlie”).  Dad and Mom own a house in joint tenancy.  Dad and Mom also own a joint bank account.  Dad solely owns a classic car.  Mom solely owns various items of jewellery.  Dad and Mom have made wills that each leave their estate to the other or, if the other predeceases them, to be divided evenly between their three children.

Dad dies.  Mom takes the house and joint account by right of survivorship, outside of the estate.  Mom takes the classic car through the estate in accordance with Dad’s will.

Over the next few years, Mom requires more assistance at the house and in managing her finances.  Al begins to assist Mom.  He may or may not move in with her.  He may or may not be appointed under a Power of Attorney. (None of these facts change the legal presumption.)  In any event, Mom decides to add Al as a joint tenant on title to her home and as a joint holder on her bank account.  CONTINUED ONLINE

Then Mom dies.  Very often the “Al” in this scenario believes that the house and the joint account belong to him.  Maybe Mom had even thought this would be the result.  But this is incorrect.  The law presumes that Al holds the home and bank account in a resulting trust for Mom’s estate.  In fact, the home, the bank account, the car and the jewellery (and anything else Mom owned) fall into her estate which, after probate fees are paid, will be distributed equally between Al and his two brothers in accordance with Mom’s will.  If Al refuses to accept this, then Bob and Charlie will likely sue, as their shares in the estate would be minimal without the house and the joint account being included in Mom’s estate.

There is still hope for parents who wish to use joint tenancy as a tool for estate planning.  The presumption of a resulting trust can be rebutted by evidence that the parent intended that the surviving child would take the joint asset and it would not fall into the estate.

In order to avoid litigation over jointly-held assets, parents should clearly document their intentions in placing assets in joint ownership with their adult children.  If litigation ensues, a court will look at all the evidence on all sides to try to determine what the parent’s true intentions were.  This will include a consideration of any memoranda, letters or other documents demonstrating intent, the wording of the will, witnesses who may have discussed the parent’s intentions, and how the parent and child treated the assets during the parent’s lifetime (for example, were the assets solely used for the parent’s benefit until death? How were the joint assets reported on the parent’s tax returns?).  The evidence of the surviving child will not be sufficient on its own.  In other words, the court will not just take Al’s word for it that Mom intended the house and bank accounts to go to him.

To avoid inconsistent evidence, parents should document their intentions with respect to joint assets with the assistance of legal counsel as part of their estate planning.

Beneficiary Designations

The use of beneficiary designations on insurance, RRSPs/RRIFs and other investments is another way to transfer your assets after death outside of your estate (thereby avoiding probate fees on those assets).  The legal presumption with beneficiary designations is that the asset is intended to go to the named beneficiary.  Generally, you do not need to worry about separately documenting your intentions when you name a spouse, an adult child or anyone else as a surviving beneficiary.

There is therefore a key difference in legal presumptions between naming an adult child as a joint holder of your investment accounts rather than naming the adult child as a surviving beneficiary of those accounts.

Similarly, there is a key difference between naming an individual as beneficiary of your life insurance rather than naming your estate as beneficiary.

Dependent Support

Even where you use and document joint ownership and beneficiary designations correctly, you should be aware that the law provides that these can be “clawed back” to your estate if you do not adequately provide for one of your dependents in your will.  This issue will be the subject of Part 2 of this series.

In conclusion, your intentions in planning your estate may not be carried out if they are based on a misunderstanding of the law.  You should thoroughly discuss your plans with respect to jointly-held assets and beneficiary designations with your legal and financial advisors as part of your estate planning.  Careful planning now will minimize the risk that your assets will fall into estate litigation later.  If such transfers have already taken place, you should speak with your lawyer to sufficiently document your intentions.

 

Kristi Collins is an Associate at Lancaster, Brooks & Welch LLP and she may be contact for discussion on Estate Litigation matters at 905-641-1551

 

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Full Olympic Ban On Russia Never Had A Chance

Rio 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By Jamie Strashin, CBC Sports

In the wake of the latest investigation into widespread doping by Russian athletes, many reached what they thought was an obvious conclusion:

the traditional athletic superpower would be sidelined for the Rio Olympics because of its numerous, grievous and brazen violations.

If you read Richard McLaren’s damning report on Russia’s government-supported cheating, anything less in terms of punishment would be

absurd, right? Not so fast. Though the International Olympic Committee was roundly criticized for its decision to stop short of such a move,

a full ban on Russia’s Olympic team would have been problematic on a number of fronts.

For one, a blanket ban on Russian athletes would likely have been derailed by numerous legal hurdles. The Court of Arbitration for Sport,

among others, would likely overturn a universal ban that included athletes who haven’t been implicated in doping.

“We were mindful of the need for justice for clean athletes,” IOC vice-president John Coates told reporters. “We did not want to penalize

athletes who are clean with a collective ban and, therefore, keeping them out of the Games.”

Instead, the IOC opted to punt the decision on whether to allow Russian athletes to compete to the 28 federations that govern summer

Olympic sports. Those federations are reviewing Russian athletes’ records and deciding who can compete in Rio next month.

Some, like swimming and canoe/kayak, have already issued their decisions.

Fair play?

It was a wise move by the IOC, says Canadian lawyer Leanne Standryk, who specializes in sports law.

“A blanket ban would not have been upheld,” she says, noting that McLaren wasn’t mandated to determine whether a full ban would

best deal with the systematic issue of Russian doping. He was simply commissioned to investigate allegations made by Russian whistleblowers.

“From a legal perspective, the IOC is required to ensure that it upholds the principles of natural justice and procedural fairness,” Standryk says.

“In Canada and in most common law jurisdictions, the principles are in part depended upon to maintain public confidence in our legal system.

Presumption of guilt

It’s no different in the context of sports law, where the concept of fair play applies, says Standryk. McLaren’s report does not directly name

any athletes and does not link specific evidence to individual athletes. At a basic level, Standryk says, Russian athletes have no knowledge of

the actual case against them, nor any chance to present any evidence on behalf of themselves.

“The blanket ban would presume that all Russian athletes were guilty of a doping violation. This is contrary to the notion of natural justice,

” Standryk says. “The IOC, rather than declining to make a decision, as has been reported, sought to balance the competing interests, including

the right to protect clean athletes and the integrity of the sport.”

Even without an all-out ban, the IOC decision may not stand up. There is already debate around the  ruling that any Russian athlete who has ever

served a doping suspension will be barred from competing in Rio. This is more punitive than the World Anti-Doping Code, which usually allows

athletes to return to competition after serving a suspension.

‘You need strong competition’

Legal reasons aside, other factors may have influenced the IOC’s decision.

Perhaps, for instance, the organization decided that Russia is too important to the Olympics to be sidelined. Fans, television networks and sponsors

may talk about integrity and doing the right thing, but in the end, many of them just want to see the most compelling event possible.

“At the end of the day, [Olympic partners] want really good performances,” says Cheri Bradish, an Olympic marketing expert who teaches at Ryerson

University in Toronto. “Once the Games start, the focus is on the field of play. For the partners, they want to ensure the best athletes are there. “

In the United States especially, a residual Cold War rivalry still exists. The idea of an American beating a Russian athlete (as opposed to, say, a

Canadian) makes for a better story and more exciting television. And leave it to a Russian athlete to remind the world that the Olympics just

wouldn’t be the same without them. “How can a country win and consider itself a full Olympic champion now?” asked modern pentathlete

Aleksander Lesun, who is allowed to compete in Rio while two of his teammates who have been implicated in doping are not.

“They’re weak countries and weak athletes.

“You need strong competition for it to count.”

 

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Estate Administration Tax Act – The New Reporting Requirements

David A. Thomas

Estate Administration Tax Act –   The New Reporting Requirements

by Dave Thomas

A new reporting regime has started for Estate Trustees in Ontario.    Anyone who has, after January 1, 2015, applied for and received a Certificate of Appointment as Estate Trustee from the Superior Court, must file a detailed Estate Information Return with the Ministry of Finance.    This is a new form, requiring full detail on estate assets and their value, and is subject to audit and assessment for a four year period.

This paper will examine the Ontario Estate Administration Tax Act, 1998 (“EATA”).  We will review how we got here, what has changed, and what this will mean in practice.

Probate  – What is it? Why and when is it needed?

The Court process of approving wills, and certifying people to carry them out, has a long history.  The process was for many years referred to as “Probate” – literally the “proof” of a will.    It is a court process in which a judge certifies that a will is in fact the valid last will and testament of a deceased person. The process also confirms the name of the person who has the legal authority to deal with the assets of the estate, and to carry out the terms of the will.

Probate is needed so that the beneficiaries, the executors, and in particular, third parties,  can know with legal confidence that a will is in fact the valid will, and they can rely on it.

Without probate, everyone is at risk, if it turns out that the will they have been using is not in fact valid.  Beneficiaries may have to give back what they thought they inherited.   Executors may be liable for what they have done with the assets.  Third parties who have given up assets under their control, may be liable to the true beneficiaries.  A banker who gives the estate’s money to a person with an un-probated will, may be faced the next week with a better, newer, valid will – and may have to come up with the same amount of money again.

A person relying on a probated will is protected, even if a better will is later discovered.  Therefore, most banks, securities issuers and other financial institutions will require probate before giving up assets.  Probate is also required for some government purposes, such as most transfers of property in the Land Titles office.

Terminology

A few definitions will be helpful.   A lot of the legal terminology changed in 1995, but the old terms are often still used in practice.

“Estate Trustee”.   This is the current Ontario term for the person who has the legal authority to act for an estate.    This person was formerly known as “Executor” or “Administrator”, and these terms are often still used in practice.

“Certificate of Appointment of Estate Trustee”.    This is the Court document which legally confirms that a will is valid and confirms who the Estate Trustee is for an estate. This was formerly known as Letters Probate.  It is a court document, attached to a copy of the will.

“Executor”   This is the person appointed in a will, and confirmed by the Certificate of Appointment of Estate Trustee, to be the person legally entitled to control the assets of the estate.

“Letters Probate”.    This was the term used for years in Ontario (and still used many places in the world) for a probated will.   It is now known as “Certificate of Appointment of Estate Trustee with a Will”.

“Letters of Administration”.  This was a court document that was issued where there was no will.  The Court appointed a person to be the administrator of the estate – with similar power to an executor, but governed by the laws of succession rather than by a will.   This is now called “Certificate of Appointment of Estate Trustee without a Will”.

“Estate Administration Tax”.   This is the tax which must be paid in order to apply for a Certificate of Appointment.

“Probate Fees”.  This is the old term for what is now the Estate Administration Tax.

Estate Administration Tax

In order to apply to the Court for a Certificate of Appointment in Ontario, an application form must be filed with the Superior Court.  It is a simple form, and has not changed under the new regime.   Among other things, it requires the executor to set out the value of the assets of the estate.   The tax is levied based on this value.

The rate of tax has for a long time been based on the value of the estate, and has increased over time.  Until 1960 the rate was 0.25%.  It increased to 0.3% in 1960, and then to 0.5% in 1966.

The tax stayed at 0.5% until 1992.  In 1992, the rate on the value of an estate above $50,000 tripled, to 1.5% (or $15.00 per $1,000.00).

The large increase in 1992 led to a bit of a revolt. Since then, people have spent more and more time and imagination finding ways to minimize the tax, or to arrange their affairs to avoid the probate process entirely.  Some commentators suggest that so much tax has been avoided by various techniques that the Province of Ontario would have been better off leaving the tax at the old rate.  Even at 1.5%, the tax is still small.  For larger estates, however, the tax bite is sufficient that people feel it worthwhile to arrange their affairs to avoid or reduce it.   Lawyers and accountants are often at pains to ensure that in doing so, their clients do not make things worse, or stumble into unintended consequences.

What is the Estate Administration Tax levied on?

The tax under the EATA is levied on the “value of the estate”.     This phrase is defined, in Section 1 of the Act, to be

“the value which is required to be disclosed under section 32 of the Estates Act… of all of the property that belonged to the deceased person at the time of his or her death less the actual value of any encumbrance on real property that is included in the property of the deceased person….”.

Section 32 of the Estates Act states as follows:

“Evaluation

  1. (1)The person applying for a grant of probate or administration shall before it is granted make or cause to be made and delivered to the registrar a true statement of the total value, verified by the oath or affirmation of the applicant, of all the property that belonged to the deceased at the time of his or her death. R.S.O. 1990, c. E.21, s. 32 (1).

“Evaluation of subsequently discovered property

(2) When after the grant of probate or letters of administration any property belonging to the deceased at the time of his or her death and not included in such statement of total value is discovered by the executor or administrator, they shall, within six months thereafter, deliver to the registrar a true statement of the total value, duly verified by oath or affirmation, of such newly discovered property. R.S.O. 1990, c. E.21, s. 32 (2).

“Evaluation of limited grant

(3) Where the application or grant is limited to part only of the property of the deceased, it is sufficient to set forth in the statement of value only the property and value thereof intended to be affected by such application or grant. R.S.O. 1990, c. E.21, s. 32 (3).”

Generally, the tax applies to the following types of assets owned by the deceased:

  • Assets that are owned by the estate and that are covered by the Will being probated (more on this point later).
  •  Real Estate in Ontario, valued net of registered encumbrances
  • All other assets, valued at fair market value

The tax can be paid based on estimated value, but additional tax must be paid if values are determined to be wrong, or more assets are discovered.

Assets taxable may include assets not registered in the deceased’s name, but where the deceased was the beneficial owner.  For example – assets which are held in joint ownership with an adult child, where there is no evidence of intent that the child would become the absolute owner on default.

What is NOT taxable?

A number of classes of assets are not covered by the Tax.

  • Real estate outside of Ontario
  • Assets that are not beneficially owned by the deceased.
  •  Assets that are owned in joint tenancy with right of survivorship, with someone who outlives the deceased and therefore retains ownership as surviving joint tenant (e.g. jointly owned home, jointly owned bank accounts). Note: not all assets owned by multiple owners are owned with right of survivorship.
  •  Insurance death benefits that are payable to a named beneficiary (i.e. not payable to the estate).
  •  RRSP proceeds payable to a named beneficiary.
  •  Assets owned by a trust, such as a spousal trust, alter ego trust, where there are provisions that direct the assets to other parties on death.

What do people do to minimize tax?

People are very imaginative in trying to set up their affairs to avoid probate entirely.  Some examples:

  • All assets are held in joint tenancy – most commonly with spouses, or in some cases, with children. (This can be risky if not handled properly).
  • All major assets are held in an alter ego trust, family trust, or similar vehicle
  • Investments are held in products with designated beneficiaries, such as insurance policies, RRSPs, or segregated funds

Multiple Wills   Where it is not possible or practical to totally avoid the need for probate, people sometimes divide their assets between two or more wills.

One will is for the assets that will require probate, such as:

  • Bank accounts
  • Real estate
  • Publicly traded securities and  other investments with financial institutions

This will is often referred to as the “Primary Will”.   On death, this will would be submitted for probate, and the tax will only be payable on the value of the assets specifically covered by this will.

The other will, often referred to as the Secondary Will, is for assets which can be administered without probate. These will commonly include:

Shares and debt of closely held corporations

  • Real estate that does not require probate (such as homes owned for a long time)
  • Debts owed by family members
  • Personal possessions, jewelry, furniture
  • Beneficial interests in other assets, where probate is not required (such as assets held in joint ownership in some cases)

 The New Regime

The EATA was changed about three years ago, to require Estate Trustees to file an Estate Information Return after a Certificate of Estate Trustee is issued.   The operation of this requirement was suspended pending publication of new regulations.   During this period there was a lot of speculation, but no real facts about what was to come.

The new Regulation was finally published in late 2014, and came into effect for estates where an Application for Appointment of Estate Trustee is submitted on or after January 1, 2015.   The new regime does not change the probate process at all, and the Application for Appointment of Estate Trustee remains exactly the same, and the tax is the same.

However, the law now requires the filing of an Estate Information Return, within 90 days of the issuance of the Certificate of Appointment.

Estate Information Return                              

The form is a seven page form that is filed with the Ontario Ministry of Finance.  It can be found online and in a fillable pdf format.    The main page is http://www.fin.gov.on.ca/en/tax/eat/index.html.

The return itself can be found at:  http://www.forms.ssb.gov.on.ca/mbs/ssb/forms/ssbforms.nsf/GetFileAttach/9955E~1/$File/9955E.pdf

It is filed by the Estate Trustee, and requires some basic information, and then gets into detailed information about assets of the estate:

  • Real estate – Properties are to be listed individually, showing their value, less encumbrances
  • Bank accounts – to be listed separately
  • Investments – to be listed separately
  • Vehicles, boats, of all kinds – to be listed separately
  • “Other property” – this includes
    • Business interests
    • Copyrights
    • Patents
    • Household contents
    • Art
    • Jewelry
  • o   Loans receivable

All are to be listed, and totaled, and the tax calculated.  If the value is above or below the amount declared on the original application, additional tax must be paid, or a refund requested.

Audit and Assessment

The Return is subject to audit and assessment by the Ministry of Finance.    No notice of assessment is sent in most cases. No news is good news, but there is no provision for clearance certificates.   The return is open for assessment by the Ministry for four years.

Because of the long assessment period, Estate Trustees may wish to hold back some money from distribution until the four years is up.

Estate Trustees may be personally liable for any additional tax if they have not held back funds.

There are penalties for failing to comply. There are also penalties which can be assessed against anyone (including presumably valuators, appraisers, lawyers or accountants, who advise executors on the Return) who make or assist in making false or misleading statements on the Return.  Penalties can be between $1,000 and double the tax, and/or up to two years in jail.

An Estate Trustee is able to file a Notice of Objection if unhappy with the assessment.   The objection procedure is the same as under the Retail Sales Tax Act.

Estate Trustees must keep all records for four years at their principal place of business or residence, so they can be audited.

Guide to the Estate Information Return

The Ministry has published a 13 page guide to the Return.

http://www.forms.ssb.gov.on.ca/mbs/ssb/forms/ssbforms.nsf/GetFileAttach/9955E~2/$File/9955E_Guide.pdf

It is a step by step guide to the Return and it is easy to read.

Valuation

Estate Trustees need to take steps to value estate assets, and to keep written records to substantiate the values used.   Valuation is to be as of the date of death.

For real property, estate trustees should get an appraisal, and not just rely on the MPAC assessment, which may not be up to date.    Real property values are only reduced by registered mortgages – no unregistered debts can be deducted.

Valuations of partial interests in assets are based on the proportion equal to ownership percentage. There is no discount for minority interest.    For assets held in joint tenancy, each joint tenant is deemed by law to own an equal share.

For vehicles, use the wholesale value in the “Canadian Red Book”

For boats, use the “Boat Value Book”

Valuations for business interests may be more problematic. In order to be able to survive an audit, and avoid penalties, it will be important to have a credible valuation that can be scrutinized by the Ministry.  The Guide doesn’t give a lot of guidance on what would be considered acceptable.

Limited Grant

If the Court has issued a “Certificate of Appointment of Estate Trustee with a Will Limited to the Assets Referred to in the Will” with respect to a limited will (the Primary Will, in a dual will situation), only the assets covered by the limited will have to be listed in the Estate Information Return.  Assets covered by the Secondary (non-probated) will, do not have to be listed.

Planning Points

There are still ways to minimize or avoid the Tax.  However this requires careful planning:

  1. Dual wills This technique will continue to be useful, to minimize Estate Administration Tax Payable, and may in fact become more common.

Secondary (unprobated) wills should be carefully drafted to include such things as

  • Private company shares and debt
  • Non-arm’s length debt (e.g. debts owing by family members)
  • Beneficial interests held through bare trusts and resulting trusts, and other trusts where the estate continues to have a beneficial interest.
  • Real estate which can be transferred without probate

Joint Ownership.  If assets are held in joint tenancy with adult children, care should be taken to ensure there is written evidence of an intention to pass ownership to the surviving joint tenant.  Recent court decisions have held that there is a presumption in some circumstances that no survivorship right is created. As a result, the asset is considered to be held by the survivor in trust for the deceased (and thus taxable).   This can be rebutted by clear evidence.

Alter Ego Trusts. These trusts will continue to be useful. The advantage of such a trust is that there is no tax payable when they are created, the beneficiary maintains full control of the assets, and on death they pass to the beneficiaries without probate, and are not included in the Estate Information Return.

Conclusion

The new regime is not as disruptive as some people had feared. However, there are significant new responsibilities on estate trustees relating to the Estate Information Return, and the requirement to value individual assets.  The four year audit period adds risk and uncertainty.

It is likely that this will end up costing estates more time and money.  It is also likely that the urge to avoid the probate process, in whole or in part will continue.

It will remain very important to plan one’s affairs carefully, to get good advice, and to document values as carefully as possible.  Fortunately, there are lots of good accountants and lawyers who can assist.

Dave Thomas is a Senior Partner within the Corporate & Commercial Department of Lancaster, Brooks & Welch and he may be reached by calling 905-641-1551.

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Why Choosing A Local Personal Injury Lawyer – Is In Your Best Interest!

ShielaMarcantonio-Formal-tight cropWhy Choosing A Local

Personal Injury Lawyer

Is In Your Best Interest!

 

You, or a loved one have been injured, and it may be a natural inclination to think that a big city lawyer will fight for you and get better results in your case. That is simply not the truth. In fact, finding an experienced local Personal Injury lawyer offers you many more advantages. Knowledge of the local market and accident conditions, as well as local access to your lawyer.

Local Courts are more easily accessed than larger city courts that may take several years to even begin your case, delaying any settlement and potentially creating great hardship for you and your family.

Experience and results is not the exclusive domain of larger city lawyers – in fact, Sheila Marcantonio offers 30 years’ experience fighting for the rights of her clients. She is among the most successful Personal Injury Lawyers in Canada and she chooses to live here in Niagara where she has an established reputation for results that she values. You can count on her availability and accessibility for local clients.

Not only is she committed to her clients results, she in invested in their lives. Often meeting with clients outside the office. She is regularly sought out by clients throughout Ontario including larger cities.

Sheila is ready to help you receive the financial compensation you deserve after you have been injured. Her specialties include motor vehicle accidents (automobile, motorcycle, farm equipment and tractor-trailers), catastrophic determinations, accident benefits matters, traumatic brain injuries, fatality claims, premises liability (slip/trip and falls), products liability and more.

With 30 years of experience with personal injury law, Sheila will take the time to form a personal relationship with you, which is one of the main benefits of retaining a local law firm for your personal injury matter. No matter where you are in the Niagara Region, Sheila is ready to protect your personal injury interests and give you the results you deserve.

No matter how your personal injury occurred, it will lead you to have to deal with insurance companies. Sheila knows how to get you the results you deserve while allowing you to stay close to the comfort of your own home. She has represented insurance companies in the past and knows how to fight for your rights. The laws for personal injury cases are complex and change constantly. Sheila takes pride in keeping herself up to date on these changes and her clients are rewarded by her experience and know-how.

She is down to earth, approachable, results focused and she can be trusted to take your personal injury as seriously as you do! Sheila’s philosophy in representing injured people is commitment, integrity and results – these 3 words reflect her practice.

Sheila is ready to meet with you free of charge to evaluate your case. She will also travel to your home or even hospital if your injuries are so serious as to prevent you from attending at her office.

 

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CAR ACCIDENT 101 – NOW, IS THE TIME TO USE YOUR CELL PHONE

ShielaMarcantonio-Casual-onwhiteCAR ACCIDENT 101 –

NOW IS THE TIME TO USE YOUR CELL!!!

 

If you have been injured in a car accident, there are certain things you must be aware of in proceeding with an insurance claim in Ontario. A serious personal injury can have a devastating impact on the victim of a car accident and his/her family. A car accident claim can add to the victim’s difficulties. The victim’s physical and psychological recovery should be the primary focus, the car accident claim secondary.

If you or a loved was injured in a motor vehicle accident, this is what you need to know.

Photos photos photos and the USEFUL use of your cell phone!

Taking photographs of the accident scene and the damage to all vehicles involved is very useful. Everyone now own a cell phone and capable of taking photos. If you’re not badly injured, NOW IS THE TIME TO USE YOUR CELL! I promise you won’t get ticketed for it, on the contrary, the lawyer you hire will praise you!

If you don’t have anything to write on, take a picture of the vehicle’s license plate, the other driver’s license and insurance information, even snap a photo of the parties involved if you can. With your cell phone, you have no excuse not to have gathered the important information you will need to start a claim. If your injuries are such that you can’t take the photos yourself, assign someone to do it for you.

Witnesses

If there are any witnesses, take their names and contact information. Again, if you have no pen or pencil, TEXT the information to yourself, or take a photograph of their information! CONTINUE READING ONLINE

Immediately seek medical attention or as soon as possible. If an ambulance is called, it is suggested you use it.

STEP BY STEP GUIDE

STEP 1 – STOP – If your vehicle is involved, you need to stop. If you don’t, you may subject to criminal prosecution.

 

STEP 2 – CALL 911 – if anyone is injured; the total damage to the vehicle exceeds $1,000; you suspect any of the drivers is guilty of a Criminal Code offence (DUI, texting, etc.) – Police will arrive shortly. Do not try to move anyone injured in the accident. If damages seem to be less than $1,000, take the information as specified above in writing or with your cell phone.

 

STEP 3 – MOVE your vehicle out of the way if it is safe to do so. If it cannot be driven, put on your hazard lights or use cones if available. Keep flares in your vehicle and use at night time.

 

STEP 4 – WRITE/TEXT/TAKE PICTURES of names, addresses, phone, driver’s license, plates, insurance information and registered owners of the vehicles. Same for all witnesses.

 

STEP 5 – JOT down specific details about the scene using accident worksheet or taking pictures. If you can, find out whether the other driver(s) were driving their own vehicle and if not, whether they had permission from the vehicle owner.

 

STEP 6 – ASAP report the accident to your insurance company. This should be done preferably within 7 days, regardless of who is at fault for the accident. Please note that reporting damages to your vehicle and reporting your injuries are things that need to be done with two different departments of your insurance company.

Accident Benefits

Accident benefits are the legal way you can claim compensation as a result of sustaining injuries in a car accident whether or not you were at fault. These benefits may include income replacement, caregiver, non-earner, occupational therapy, rehabilitation therapy, attendant care, housekeeping and home maintenance (only with optional insurance clauses), expenses of visitors, medical benefits, and other expenses. Your insurer will be in a position to explain all these to you and provide you with all the appropriate forms to complete. You need to complete these forms within 30 days.

The amounts available for accident benefits depend on the type of car insurance you purchased and whether you opted for optional clauses.

Limitation Period

Not all accidents will lead to legal proceedings. It will depend on the injuries suffered and the severity of the disability caused by those injuries and whether or not there is an income loss. There are different types of damages. If you have been injured in a car accident and you are not at fault for the accident (you did not cause the accident), you need to formally start legal proceedings against the at-fault driver as soon as possible.

If you or someone you know has been involved in a motor vehicle accident, do not hesitate to call Sheila at Lancaster Brooks & Welch LLP today for your free consultation 905-646-1177

 

 

 

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Sheila P. Marcantonio in Health, Wellness & Safety Magazine

Sheila P. Marcantonio is on the cover of Health, Wellness & Safety Magazine.Sheila P. Marcantonio

Read the cover story: Helping With The Hurt

 

 

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Marriage Contracts: or Don’t Set Up Home Without One

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This article was written by Michael A. Mann as one of his regular contributions to the Canadian MoneySaver magazine.

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