The Blunt Bean Counter: probate

Showing posts with label probate. Show all posts

Monday, August 8, 2022

The Best of The Blunt Bean Counter - Inheriting the Cottage/Cabin/Chalet –The Great Estate Planning Challenge

This summer I am re-posting the "best of" The Blunt Bean Counter blog while I work on my golf game. Today, I am posting a November, 2014 blog titled "Inheriting the Cottage/Cabin/Chalet - The Great Estate Planning Challenge. While this post is almost eight years old, it is still relevant today and what better time to contemplate the future use of your cottage than while you are spending time there.

This blog post was written by my most popular guest poster, Katy Basi. Katy has guest posted such BBC favourites as Qualifying Spousal Trusts - What are They and Why do we Care?, a three part series on new will provisions for the 21st century dealing with your digital life, RESPs and reproductive assets and Alter Ego Trusts and Joint Partner Trusts - A Primer. Without further ado, here is Katy!

Inheriting the Cottage/Cabin/Chalet –The Great Estate Planning Challenge

By Katy Basi

From my lovely vantage point on the dock at my dad’s cottage, looking around the lake at all of the other family cottages, I’m reminded that every cottage, cabin and chalet has a story. Some have been in the same family for generations, with or without accompanying drama. Too many more were sold to a third party against the expectations of the family, often as a result of poor estate planning.

The family vacation home can be the Cyanean Rocks against which an estate plan crashes and sinks. (The Cyanean Rocks, aka the Symplegades, were a pair of rocks at the Bosphorus that moved, causing major problems to boats in the area until Jason and the Argonauts defeated the rocks). There are many factors that make planning for this property more challenging than for other assets. For example:

Often the legal ownership of a cottage does not reflect the practical reality of the cottage situation (for the remainder of this blog, I will refer to the “cottage” as this is the term commonly used in Ontario, but no disrespect is intended to owners of cabins and chalets - many of the same principles and problems will apply!) Due to the inter-generational history of many cottages, cottage ownership is often just not as simple as ownership of a primary residence. I have seen cottage ownership being shared between siblings, or divided among parents and all of their adult children. Sometimes a child is on title “but everyone understands that the cottage belongs to mom”. A parent may own only a “life interest” in the cottage, with adult children holding the “remainder interest”. Other times, ownership was transferred to a trust in the misty reaches of time. If a trust owns your cottage, you’ll want to read my companion blog next week entitled “Cottage Trusts” to ensure that you are aware of some nasty tax traps with the cottage trust structure.

If an owner spends any time at a cottage with his/her family, the cottage will qualify as a matrimonial home for family law purposes, and may therefore be shareable upon a later separation or divorce of the owner (unless there is a marriage contract in place which addresses this issue). Let’s say, for example, that in your Will you leave your cottage to your son Adam and your daughter Beth as 50/50 tenants in common (not as joint tenants, as you want Adam’s children to be able to inherit his 50% interest if Adam so chooses). You shuffle off of this mortal coil, so that Adam becomes a co-owner of the cottage. Adam spends a week a year at the cottage with his wife and two children. Adam then separates, and his wife makes a claim for 50% of Adam’s 50% interest in the cottage on the basis that it is a matrimonial home. Will Adam be able to pay 25% of the value of the cottage to his ex as part of the settlement? Will he need to sell his interest in the cottage to Beth to provide the funds for this payment? If Beth cannot afford to buy Adam’s share, this issue may result in the sale of the cottage to a third party. Leaving the cottage to your beneficiaries in a cottage trust created in your Will may be helpful in this respect if marriage contracts are not doable (this planning technique is discussed in more detail in my “Cottage Trusts” blog).

Cottages are expensive to maintain. Not every beneficiary who wants the cottage can afford the upkeep, and not every beneficiary who can afford the upkeep wants the cottage.

Family members often have strong emotional attachments to the cottage. Leaving the cottage in your Will to the child with the financial resources to maintain the cottage may be the smart choice from a monetary perspective, but if this decision leads to lifelong conflict between the cottage child and the non-cottage child, it may not be the best plan taking all considerations into account.

Cottages are not divisible in the same way as financial assets. Cottage owners who intend to leave the cottage to more than one person need to ask themselves what the practical implications are of each beneficiary inheriting only a share of the cottage. For example, co-ownership agreements are strongly recommended whenever more than one person or family shares ownership of a cottage. These agreements can provide for the payment of maintenance expenses and utilities associated with the cottage, allocation of time at the cottage, “shared time” (everyone is welcome!) versus “private time” (my family only please…), policies on having pets/friends over to stay (allergies? replenishment of beverages required?), bringing household items to/taking household items from the cottage, etc.

If the cottage owner has owned the cottage for a number of years, there is often a large accrued capital gain on the cottage that is triggered upon the owner’s death. If the owner does not have sufficient liquid assets to pay the tax, and the beneficiaries do not have the funds, the cottage must often be sold simply to pay this tax bill. Insurance on the life of the owner is often recommended, where available at an affordable premium, to backfill this monetary gap. Sometimes a beneficiary is given the cottage in the Will upon the condition that the beneficiary pays the related capital gains tax, saving the other beneficiaries of the estate from bearing part of this burden. The calculation of the capital gain is often complex due to shoeboxes of receipts, collected over decades, which may or may not affect the adjusted cost base ("ACB") of the cottage, as well as principal residence issues (sometimes a cottage may be designated as a principal residence for certain years of ownership….and sometimes not!)

If you own a cottage, it is strongly recommended that you speak with a professional to ensure that your cottage estate plan is optimized. My sisters and I spent lots of idyllic summers at my dad’s cottage as children, and we’re very lucky to still be able to enjoy the cottage, and the memories it holds for us, to this day. I hope that I’ve helped my family create an estate plan whereby my children, and my nieces and nephews, will be just as fortunate, and I wish the same for you.

Katy Basi is a barrister and solicitor with her own practice, focusing on wills, trusts, estate planning, estate administration and income tax law. Katy practiced income tax law for many years with a large Toronto law firm, and therefore considers the income tax and probate tax implications of her clients' decisions. Please feel free to contact her directly at (905) 237-9299, or by email at katy@basilaw.com. More articles by Katy can be found at her website, http://www.basilaw.com/

Monday, July 25, 2022

The Best (Most read all-time) of The Blunt Bean Counter - Transferring Property Among Family Members - A Potential Income Tax Nightmare

This summer I am posting the "best of" The Blunt Bean Counter while I work on my golf game. Today, I am re-posting my most read blog post of all-time (over 200,000 page views); a post on transferring property amongst family members. As you will read, there is potential for some strange income tax results and care must be taken when transferring property to family members. I thus strongly suggest you obtain professional advice before undertaking any such transfer.

Transferring Property Among Family Members - A Potential Income Tax Nightmare

In today’s blog post, I will discuss the income tax implications relating to the transfer of property among family members. These transfers often create significant income tax issues and can be either errors of commission or errors of omission. Over my 25 years as an accountant, I have been referred some unbelievably messed up situations involving intra-family transfers of property.

Transfers of Property - Why They Are Undertaken

Many individuals transfer capital properties (real estate and common shares, being the most common) in and amongst their families like hot cakes. Some of the reasons for undertaking these transfers include: (1) the transferor has creditor issues and believes that if certain properties are transferred, the properties will become creditor protected (2) the transferor wishes to reduce probate fees on his or her death and (3) the transferor wishes to either gift the property, transfer beneficial title or income split with lower-income family members.

I will not discuss the first reason today because it is legal in nature. But be aware, Section 160(1) of the Income Tax Act can make you legally responsible for the transferor's income tax liability and there may be fraudulent conveyance issues amongst other matters.

Transfers of Property - Income Tax Implications

When a property is transferred without consideration (i.e. as gift or to just transfer property into another person's name), the transferor is generally deemed to have sold the property for proceeds equal to its fair market value (“FMV”). If the property has increased in value since the time the transferor first acquired the property, a capital gain will be realized and there will be taxes to be paid even though ownership of the property has stayed within the family. For example, if mom owns a rental property worth $500,000 which she purchased for $100,000 and she transfers it to her daughter, mom is deemed to have a $400,000 capital gain, even though she did not receive any money.

There is one common exception to the deemed disposition rule. The Income Tax Act permits transfers between spouses to take place at the transferor’s adjusted cost base instead of at the FMV of the capital property.

This difference is best illustrated by an example: Mary owns shares of Bell Canada which she purchased 5 years ago at $50. The FMV of the shares today is $75. If Mary transferred the shares of Bell Canada to her brother, Bob, she would realize a capital gain of $25. If instead Mary transferred the shares of Bell Canada to her husband, Doug, the shares would be transferred at Mary’s adjusted cost base of $50 and no capital gain would be realized. It must be noted that if Doug sells the shares in the future, Mary would be required to report the capital gain realized at that time (i.e. the proceeds Doug receives from selling the shares less Mary’s original cost of $50) and Mary would be required to report any dividends received by Doug on those shares from the date of transfer.

When transfers are made to spouses or children who are minors (under the age of 18), the income attribution rules can apply and any income generated by the transferred properties is attributed back to the transferor (the exception being there is no attribution on capital gains earned by a minor). The application of this rule is reflected in that Mary must report the capital gain and any dividends received by Doug. If the transferred property is sold, there is often attribution even on the substituted property.

We have discussed where property is transferred to a non-arm’s length person that the vendor is deemed to have sold the property at its FMV. However, what happens when the non-arm’s length person has paid no consideration or consideration less than the FMV? The answer is that in all cases other than gifts, bequests and inheritances, the transferees cost is the amount they actually paid for the property and there is no adjustment to FMV, a very punitive result.

In English, what these last two sentences are saying is that if you legally gift something, the cost base and proceeds of disposition are the FMV. But if say your brother pays you $5,000 for shares worth $50,000, you will be deemed to sell the shares for $50,000, but your brothers cost will now only be $5,000; whereas if you gifted the shares, his cost base would be $50,000. A strange result considering he actually paid you. This generally results in “double taxation” when the property is ultimately sold by the transferee (your brother in this case), as you were deemed to sell at $50,000 and your brothers gain is measured from only $5,000 and not the FMV of $50,000.

Transfers of a Principal Residence - The Ultimate Potential Tax Nightmare

I have seen several cases where a parent decides to change the ownership of his or her principal residence such that it is to be held jointly by the parent and one or more of their children. In the case of a parent changing ownership of say half of their principal residence to one of their children, the parent is deemed to have disposed of ½ of the property. This initial transfer is tax-free, since it is the parent’s principal residence. However, a transfer into joint ownership can often create an unforeseen tax problem when the property is eventually sold. Subsequent to the change in ownership, the child will own ½ the principal residence. When the property is eventually sold, the gain realized by the parent on his or her half of the property is exempt from tax since it qualifies for the principal residence exemption; however, since the child now owns half of the property, the child is subject to tax on any capital gain realized on their half of the property (i.e. 50% of the difference between the sale price and the FMV at the time the parent transferred the property to the child, assuming the child has a principal residence of their own).

An example of the above is discussed in this Toronto Star story that outlines a $700,000 tax mistake made by one parent in gifting their principal residence to their children.

I have been engaged at least three times over the years by new clients to sort out similar family transfer issues.

Transfers for Probate Purposes

As noted in the first paragraph, many troublesome family transfers are done to avoid probate tax. Since I wrote on this topic previously and this post is somewhat overlapping, I will just provide you the link to that blog post titled Probate Fee Planning - Income Tax, Estate and Legal Issues to consider.

Many people are far too cavalier when transferring property among family members. It should be clear by now that extreme care should be taken before undertaking any transfer of real estate, shares or investments to a family member. I strongly urge you to consult with your accountant or to engage an accountant when contemplating a family transfer or you may be penny wise but $700,000 pound tax foolish.

Note: I will not be answering any questions on this "best of" post. The original post has 268 comments. Please scan those comments; it is likely your question has already been addressed.

Monday, October 19, 2020

Probate fees: These two ways to avoid it also bring pitfalls

Finances are the last item on people’s minds when a loved one dies. Between grieving for the loss of a family member and caring for other members of the family, people worry more about feelings than finances.

Eventually family finances do kick in, primarily in the form of the deceased’s wishes for their assets. Taxes play a large role in the estate, but less known are the probate fees assessed by the courts as part of the estate probate.

This week Jeffrey Smith explains what probate fees are and why two strategies to avoid them are more complicated than they first appear. Jeff is a Manager in BDO’s Wealth Advisory Services practice, based in Kelowna, BC.

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By Jeffrey Smith

Probate fees are the estate administration fee charged by the courts to administer probate—which is the process to confirm that the will of the deceased is valid. If a will isn’t validated by the courts, third-party interests on assets such as banks or land titles will not transfer ownership to the estate. Any assets that transfer through the will to the deceased’s estate will be probated. If the will is not probated, there will be little success with transferring assets of the deceased to the beneficiaries of the estate, such as bank accounts, real estate, and investments.

Each province assesses its own probate rates. When looking at provinces where probate is more expensive, B.C., Ontario and Nova Scotia have rates ranging from 1.4% to 1.65% on estate assets exceeding a minimum - $50,000 in B.C. and Ontario, and $100,000 in Nova Scotia.

Let’s look at B.C. as an example. Someone with an estate worth $2 million would be subject to probate totaling $27,450: no fee for the first $25,000, then $150 for the next $25,000, followed by $1400 per additional $100,000.

As probate fees are significant, people try to plan appropriately to reduce it where possible. They or their estate may be subject to significant taxes on their death, before paying probate fees. However, some of these strategies create additional challenges.

Let’s examine a couple of the strategies used to avoid probate fees and the pitfalls that sometimes arise as a result. As you learn about these strategies, consider whether the benefits outweigh the costs for your estate.

Making a child joint owner of your home

People often wonder whether they should add their child to the title of their home. The thought is to allow the home to pass directly to the child, and not form part of the estate for probate. With properties in Canada having potentially very significant value, it becomes an appealing option to save on probate. However, there are potential disadvantages of making your child a joint owner of your home:

May allow your child to borrow against or use the equity in the home as collateral for a loan without your consent
Opens the value of the home to creditors of your children
May form part of family property for division if your child goes through a separation
Could potentially lose principal residence exemption on the portion of your home if your child owns a home themselves. This would create a future taxable event for your child, or even a loss of the exemption for the parents if the child wants to claim another home as a principal residence.

A possible alternative to transferring part of your home to a child is to place your home in a trust. This is complicated and should be discussed with your tax and legal advisors, but where structured correctly, the trust ownership may avoid probate on the home entirely. Alter ego and joint partner trusts will typically work to prevent probate fees and allow for the principal residence exemption. Again, this is complex and should be reviewed with your professionals in light of your provincial rules as it may not work in each province.

Naming direct beneficiaries of your RRSPs or RRIFs

By naming direct beneficiaries of your registered accounts, you allow the value to bypass your will and avoid probate.

While naming a direct beneficiary avoids probate fees, the estate is still subject to tax (unless you have named your spouse as the beneficiary of your RRSP/RRIF, in which case, the transfer should be tax-free). The full value of your RRSP or RRIF at the time of death is taxable on the deceased’s terminal return. For example, if the RRIF had $500,000 of value and assuming that it is taxed at BC’s highest rate of 53.50%, there would be $267,500 of personal taxes due on the terminal return.

This presents two challenges. For one, if the estate had no other liquid investments or cash and taxes are payable, the executor of the will may struggle to come up with the cash. The beneficiaries of the RRSP or RRIF have the cash and the estate owes the tax owing on the RRSP or RRIF ($267,500 using the above example). If the beneficiaries do not want to fund the tax liability related to the RRSP or RRIF, it becomes an estate issue - i.e., the estate has the $267,500 tax obligation and the beneficiaries get the RRSP or RRIF value tax-free, an unfair result.

Bloggers Note: There was a recent case in Ontario where the judge found a beneficiary son was not the RRIFs ultimate beneficiary (as there was not sufficient evidence to prove the father’s intention) and the court held the son was holding the RRIF in trust for the deceased’s estate. Legal advice should be sought regarding how this decision applies.

Secondly, if dealing with a large estate and testamentary trust planning is being used, any funds that flow outside of the estate, in this case the RRSP or RRIF account, would not be included in the testamentary trust. This could reduce the overall benefits of will planning that was previously completed.

When looking at implementing a probate savings strategy, it is important to discuss your goals, family situation, tax planning and net worth details with your financial advisor and tax and legal professionals. In doing so, you can weigh the benefits and costs for each specific asset type and make proper decisions in your estate planning, so that your probate planning decisions are not made in isolation.

Jeffrey Smith, CPA, CA, CFP, CLU - is a Manager in BDO's Wealth Advisory Services practice. He can be reached at 250-763-6700 or by email at jrsmith@bdo.ca.

The content on this blog has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The blog cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information on this blog or for any decision based on it.

Please note the blog posts are time sensitive and subject to changes in legislation.

BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.

Monday, May 4, 2020

Alter Ego Trusts and Joint Partner Trusts – An Example

Way back on March 9th, I posted a guest blog post by Katy Basi on the basics of Alter Ego Trusts and Joint Partner Trusts. Who would have thought it would be 8 weeks later before I was able to publish Part 2 of this excellent series by Katy?

In Part 2, Katy uses an example situation to reflect the benefits of these trusts and some of the complicated tax issues that can arise when utilizing these trusts. I thank Katy for her excellent blog posts.

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By Katy Basi

Our previous blog provided a simplified explanation of Alter Ego Trusts (AETs) and Joint Partner Trusts (JPTs) and set out some pros and cons of using these types of trusts. The following is a sample fact situation illustrating why and how an AET or JPT can be useful – your advisors would be able to let you know if you are a good candidate for this type of planning.

Let’s take the example of John, a 72-year-old debt-free widower with two adult children. John owns his home in Ontario, having a value of $1.2 million, and he is planning to live in his home for the remainder of his life (he will leave his home feet-first, in his words). He also owns a non-registered portfolio of listed stocks and bonds worth $600,000 (cost base is $350,000) and a $500,000 RRIF. John sits down with his advisors (investment counsel, accountant and estates lawyer) and they all recommend that he set up an AET. Why?

In John’s case, this recommendation relates to the 1.5% estate administration tax in Ontario (aka probate tax) that would otherwise be payable on the value of John’s home and investment portfolio upon his death. Having an AET created to be the new owner of these assets results in a probate tax savings of approximately $27,000, so the recommendation is certainly worthy of consideration – who doesn’t like to save on taxes? John’s RRIF cannot be transferred to the AET, but he has named his two children as equal beneficiaries of the RRIF. As a result, there will be no probate tax on the RRIF as long as at least one of his children survives him.

As noted in our prior blog, an AET can be created when the settlor (John in our example) is 65 years of age or older. An AET is a living trust, meaning that it is created while John is alive (as opposed to a testamentary trust, which would usually be created in John’s will, taking effect only upon his death). John can transfer assets to the AET without triggering capital gains tax on these assets, unlike the result with other living trusts. Upon John’s death, the assets owned by the AET are deemed by the Income Tax Act (the “ITA”) to have been disposed of by the AET at fair market value, potentially triggering capital gains tax at that time (but no probate tax).

An AET is subject to income tax at the highest marginal tax rate. Hence, as a practical matter, while John is alive the net income earned by the AET on the investment portfolio (after expenses are deducted) would usually be paid or allocated to John by the AET by the end of every calendar year. John would then include this income in his tax return, allowing John’s marginal tax rate to apply (the AET deducts the income allocated to John in its tax return, leaving the AET with no income after the allocation). If John does not need the after-tax income, he can gift it to the AET if desired. The net result is that John effectively pays the tax on the investment income in the same manner as before the creation of the AET – the paperwork is just more complex.

John and his advisors must consider the income tax that will be triggered by John’s death in determining whether an AET is helpful. Thankfully, an AET is permitted to claim the principal residence exemption (unlike most other types of trusts), so any capital gain accrued on John’s home that is triggered by John’s death will not create a tax obligation (provided that the AET’s tax return is prepared and filed properly – professional accounting advice is a necessity here). However, the AET will be taxable on the capital gain triggered on the investment portfolio. Capital gains are only half taxable, but the taxable half of the capital gain will be taxed to the AET at the highest marginal tax rate (53.53% in Ontario). John’s RRIF is fully taxable upon his death, but the RRIF is included in John’s terminal return (the personal tax return filed for John from January 1 of John’s year of death to his date of death). (We note that either John’s children could pay the tax on the RRIF, or the funds in the AET could be used to pay this tax. In either case, the tax rules relating to graduated rate estates will need to be considered carefully in order to ensure that this payment does not create a tax problem.)

Let’s compare this result with the outcome if John did not have an AET. Upon his death, John’s RRIF and the taxable capital gain from his investment portfolio are included in John’s terminal return. John’s RRIF is large enough to soak up all of John’s marginal rates of tax (we reach the highest marginal tax rate in Ontario at an income level of $220,000). Therefore. a sizeable chunk of his RRIF, and the taxable capital gain from the investment portfolio, are subject to tax at the highest marginal rate. This is the same result as with the AET, so the income tax effects of having an AET are neutral for John. This is not always the case, however, and the income tax implications should be carefully considered by anyone who is looking at AET planning.

John has decided that the AET works for him. He has considered the cost of having his estates lawyer draft the deed creating AET and other documents (e.g., trust resolutions), and the cost of having a real estate lawyer transfer title of his home to the AET. John’s investment counsel has assured him that there is no cost to transfer his investment portfolio to the AET. John understands that he will be required to file annual tax returns for the AET, and has an idea from his accountant as to the annual fee for this service. (AET tax returns are due by March 31 – March 30 in a leap year – so earlier than John’s personal tax returns.) John is comforted by the fact that he is a trustee of the AET and has been given complete control of the AET while he is mentally capacitated to manage his financial affairs. He has concluded (somewhat pessimistically) that his life expectancy is such that while he will incur costs to set up and administer the AET, these costs are substantially outweighed by the probate tax savings provided by the AET.

If John has a spouse or common law partner, as defined under the ITA, he could create a similar trust, being the JPT. If both John and his spouse (Joanne) are 65 years of age or older, they can both transfer assets to the JPT without triggering capital gains tax. (If Joanne is younger than 65, she will have to wait until she turns 65 to transfer assets to the JPT on a rollover, or tax-free, basis.) All income generated by the JPT will need to be allocated to either John or Joanne (care must be taken here to ensure that the attribution rules under the ITA are considered – no shifting of income from one spouse to another is allowed). The JPT continues until both John and Joanne are deceased, at which time the tax results are as detailed above.

If you think that AET or JPT planning may be helpful, be sure to reach out to your advisors for their views on your particular situation. AETs and JPTs are far from simple planning - professional advice is an absolute necessity.

Katy Basi is a barrister and solicitor with her own practice, focusing on wills, trusts and estates. Katy practised income tax law for many years with a large Toronto law firm, and therefore considers the income tax and probate tax implications of her clients' decisions. Please feel free to contact her directly at (905) 237-9299, or by email at katy@basilaw.com. More articles by Katy can be found at her website, basilaw.com.

The above blog post is for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Readers are advised to seek specific legal advice regarding any specific legal issues and for their specific province.

Monday, March 9, 2020

Alter Ego Trusts and Joint Partner Trusts – A Primer

Readers have offered me several suggestions for topics over the last few months. The three most popular requests have been: (1) an update on Tax On Split Income (“TOSI”), which was covered off in late February; (2) a discussion on gifting and leaving money to grandchildren, which you can look forward to in the next month or two; and (3) a discussion on what exactly Alter Ego and Joint Partner Trusts are and the benefits of these trusts.

Your requests are my direction and today I present a primer on Alter Ego and Joint Partner Trusts, by Katy Basi. In two weeks, I will post another blog by Katy, which uses a sample situation to reflect when these types of trusts may be helpful. It will also discuss some of the income taxes associated with these trusts.

If you are a reader of this blog, Katy needs no introduction. If you are a new reader of the Blunt Bean Counter, check out Katy’s past guest posts, including Power of Attorney for Personal Care – Mental Capacity and Medical Assistance When Dying, Estate planning for Extended Families, New Will Provisions for the 21st Century - Your Digital Life, and Cottage Trusts.

I thank Katy for her assistance with this blog post.

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By Katy Basi

Alter Ego Trusts (“AETs”) and Joint Partner Trusts (“JPTs”) are relative newcomers to the estate planning scene, having been introduced into the Income Tax Act (Canada) (the “ITA”) effective January 1, 2000. As the popularity of AETs and JPTs has increased over the last few years, we thought it would be helpful to provide a simplified description of these trusts and some of the circumstances in which they can be useful.

An AET is generally set up for the benefit of one person: a JPT, for the benefit of spouses or common law partners. (In this post when we refer to “spouse” we mean “spouse or common law partner.”) These are inter vivos trusts, meaning that they are set up during a person’s lifetime, unlike testamentary trusts, which are created as a result of the death of a person, generally by being incorporated into the person’s will. (For more on trusts in general, see this great explainer piece.)

The conditions

AETs and JPTs allow a transfer of capital assets to the trust on a tax-deferred basis. In order to obtain this deferral, the ITA sets out a number of conditions.

Some of the key conditions are:

The settlor, meaning the person who transfers assets to the trust, must be at least 65 years of age at the time the trust is created. A JPT sometimes has two settlors being the two spouses.
For an AET the settlor must be entitled to receive all of the trust’s income before death.
For a JPT, the settlor and/or their spouse must be entitled to receive all the trust’s income prior to the surviving spouse’s death.
No one apart from the settlor or, for a JPT, the settlor and their spouse, is entitled to receive any assets from the trust prior the settlor’s death (or the death of surviving spouse in the case of a JPT).
The settlor(s) must be Canadian.
A majority of the trustees must be Canadian, as the trust must be a Canadian resident trust.

Why use an AET or JPT?

AETs and JPTs are not income splitting vehicles and are subject to income attribution. Hence when spouses both contribute assets to a single JPT, it is important to track the income derived from each spouse’s contribution, in order to ensure that the tax reporting is accurate. (In the case of contributed investments, often a JPT would have separate investment accounts for the purpose of tracking the income attributable to the assets originally belonging to each spouse.)

However, AETs and JPTs offer some other important benefits, including the following:

Probate is not required for assets held by AETs and JPTs. For several provinces — notably Ontario, British Columbia, and Nova Scotia — this can save an estate thousands of dollars in probate fees or taxes. Other provinces, such as Quebec and Alberta, have minimal to no probate fees or taxes, and thus AETs or JPTs would not generally be used to avoid these fees.
Wills that are probated are documents available in the public domain; however, an AET or JPT is not submitted for probate and remains private (provided that no litigation ensues requiring production of the AET or JPT deed in court).
These trusts can save substantial professional costs that can be associated with probating and administering an estate, such as legal fees and executor compensation.
As probate is not required for assets owned by an AET or JPT, upon the settlor’s death these assets are available to the trustees on a fairly quick timeline (it is critical to ensure that the settlor is not the only trustee named in the trust deed).
The settlor is often one of the trustees of an AET or JPT. If the settlor becomes incapacitated, the trust deed is usually drafted to permit the other trustees to manage the trust assets. These trusts can therefore be viewed as an alternative to a financial power of attorney.

The downside of AETs and JPTs

You should watch out for several challenges when using an AET or a JPT:

There are upfront legal setup costs and ongoing accounting and tax administration expenses.
There are issues where U.S. persons or U.S. assets are involved or there are potential U.S. estate tax concerns.
AETs and JPTs can restrict the tax benefits of charitable giving, both during a settlor’s lifetime and upon their death.
Losses realized by a settlor personally may not be able to be utilized against gains realized by an AET or JPT, and vice versa.
Capital gains exemptions may be left unclaimed as capital gains realized on assets in the trust will not qualify for the exemption.

If this blog has piqued your interest, check out our next AET/JPT blog in a couple of weeks, which will set out a sample fact situation where an AET or JPT could be a helpful planning tool.

Katy Basi is a barrister and solicitor with her own practice, focusing on wills, trusts and estates. Katy practised income tax law for many years with a large Toronto law firm, and therefore considers the income tax and probate tax implications of her clients' decisions. Please feel free to contact her directly at (905) 237-9299, or by email at katy@basilaw.com. More articles by Katy can be found at her website, basilaw.com.

Monday, October 14, 2019

What To Do When Your Spouse Dies Before You

I have written before on what happens when someone dies: both on the administrative issues an executor needs to consider and also on the income tax issues upon death. However, I recently realized those posts are essentially directed at what happens when a single person dies, or a widower or widow passes away.

Today I’m filling in the gap with a look at what happens when the first spouse in a married or common law couple passes away. This week I address the administration issues – many of which are the same as for when the surviving spouse dies later on, but I have added several additional items. My post in two weeks will tackle the tax issues – which can be very different from when the surviving spouse dies.

How to tackle the nitty gritty of administration

Here are 25 administrative considerations for the surviving spouse (family, or executor of someone who dies):

1. Determine the deceased’s funeral wishes and if the funeral has been prepaid. If they have not made arrangements, you may unfortunately need to deal with this issue immediately while you are likely still in shock from your spouse’s or parent’s passing.

Key takeaway: Always ensure your funeral arrangements have been communicated while you are healthy.

2. Obtain several copies of the funeral director’s statement of death. Many institutions accept this document in lieu of the death certificate, which is issued by the province and is time consuming to apply for and receive.

3. Open the safety deposit box (“SDB”). You may need to open the SDB if the will is in the SDB or to prepare a list of the contents of the SDB with the representative of the bank.

Key takeaway: Please always ensure someone has a copy of the SDB key or knows where to find the key.

4. Meet with your or your spouse’s lawyer to review the will and understand any legal obligations such as advertising for creditors. In general, most spouses leave all if not the majority of their assets to their spouse. This generally makes things easy for tax, but that is not always the case. In addition, specific assets may often be left to the children or a charity, and those assets need to be dealt with in the near term.

5. Notify any beneficiaries of their entitlements under the will and request their personal information.

6. Meet with your or your spouse’s accountant, to ensure you are clear on the income tax obligations and the income filing requirements. If you or your spouse do not have an accountant, engage one. As noted above, I will address this issue in more detail in two weeks.

7. If the executor is someone other than the surviving spouse, ensure you contact them and advise them of their duties and determine whether they accept the appointment. Hopefully, they are already aware they would be appointed.

Key takeaway: always inform the people who will be your executors and provide them an estate organizer or similar document to provide them a roadmap of your assets. They will need to have a list of all your assets for probate and to ensure a full distribution is undertaken.

8. Your lawyer will advise you whether you will need to obtain a certificate of appointment of estate trustee with a will (probate), a very important step in Ontario and most other provinces.

Key takeaway: If you own shares in a private corporation, in certain provinces you can have a second will that removes these assets from probate. Ensure you discuss this with your lawyer if you do not already have a second will.

9. Collect any life insurance benefits.

10. Meet with your and your spouse’s financial planner, insurance agent or any other relevant advisor.

Key takeaway: Make sure you and your spouse meet all family advisors while both spouses are alive to create at least a basic comfort level.

11. Where the deceased was a controlling shareholder or ran a business, find out if there was a succession plan/disaster plan in place and that it is being followed. If the deceased did not create a plan, take control of the business in the short term and start looking for a manager to take over running the business. Your accountant can likely assist you in this.

Key takeaway: As I’ve written before, many business owners do not have a succession plan. This is the quickest way to lose some or a significant portion of your family’s worth when you die. Ensure you have a plan in place now or take steps to put one in place.

12. Apply for any government benefits the estate is entitled to, such as the CPP death benefit, survivor benefits and possibly child benefits.

13. Notify CPP/QPP and Old Age Security – at Service Canada – of your spouse’s death so they stop making payments.

14. Cancel the deceased’s driver’s licence, health card and other provincial documentation. (See this page for Ontario; each province will have a similar resource online.) Also make sure to cancel the deceased’s Social Insurance Number, passport and Nexus account as applicable.

15. Cancel credit cards in your spouse’s name, email and websites attached to them, and memberships in fitness clubs and organizations.

16. Change the name listed on utility, telephone and other bills.

17. Cancel personal health insurance premiums, cell phones and possible “fall alerts” if the deceased was elderly.

18. Transfer RRSPs, RRIFs and TFSAs.

19. Update your will or power of attorney (POA) if your deceased spouse was the beneficiary of all or some of your assets or your POA.

Key takeaway: It is important to update your will and especially your POA as soon as possible. I have seen many situations where the stress (broken heart) of spouse's passing often creates a medical issue for the surviving spouse, so updating your POA is very important.

20. If you have real estate holdings in your spouse’s name or in a joint name, review the legal ownership and transfer issues with your real estate lawyer.

21. If your spouse had a vehicle, sell or transfer it and cancel or transfer the applicable auto insurance.

22. If the deceased had a domestic caregiver and the payroll account was in their name, you will need to issue final T4s, and possibly set up a new account in your name.

23. A sometimes-troublesome issue is family members taking items, whether for sentimental value or for other reasons. They must be made to understand that all items must be allocated according to the will or other means, and nothing can be taken.

Key takeaway: This is a very ticklish issue and needs to be handled delicately, but a family member "grabbing" a sentimental item can sometimes cause more dissension than monetary allocations.

24. For any jewellery and art not noted in the will, please note there are tax and probate consequences. See this blog I wrote on “Personal Use Property - Taxable even if the Picasso Walks Out the Door.”

25. Depending upon whether assets were left to beneficiaries other than the spouse, you may have to deal with a passing of accounts - commonly known as an official accounting of the estate’s assets – and possibly request a clearance certificate.

The administration and tax issue burdens are immense upon the death of a spouse. We have now covered the key items that the surviving spouse needs to deal with from an administrative angle. Look out for our next post, which will get you up to date on the taxation issues. For both areas, I strongly urge you to obtain professional legal and tax assistance.

Monday, August 13, 2018

The Best of The Blunt Bean Counter - Is a Corporate Executor the Right Choice?

This summer I am re-posting the "best of" The Blunt Bean Counter blog while I work on my golf game. Today, I am posting an April, 2011 blog on why you may wish to use a corporate executor, where you do not have a family member or friend capable of the task or you feel conflicts could arise among your family if one or two children are selected as executors.

You Have Been Named an Executor Series

The first blog in my executor series, discussed the concerns the Globe and Mail had in respect of the estate tax system and in particular, some of the issues surrounding the Paul Penna estate. The problems associated with Mr. Penna’s estate, highlight the importance of considering a corporate executor in certain circumstances.

In my second blog, I discussed the duties and responsibilities of an executor. These responsibilities can often overwhelm the appointed executor(s); which again leads back to today’s guest blog on whether a corporate executor is the best choice for estates that will have unsophisticated executors?

Today, in my final installment of the series I have a guest blog by Heni Ashley. Heni is a lawyer with over 20 years experience in the estate and trust industry, who brings a unique perspective to this issue. I thank Heni for her contribution.

Is a Corporate Executor the Right Choice? (By Heni Ashley)

I have read Mark’s two prior blogs and the Penna estate article with great interest. The Penna estate, in my opinion, was just the type of situation where a corporate executor should have been considered.

What exactly is a corporate executor? Corporate executor services in Canada are available through incorporated trust companies, which are typically subsidiaries of our national banks.

Had Mr. Penna appointed a corporate executor, his bequests would have been carried out and the estate’s finances would have been tracked diligently and accurately.

In my opinion, a corporate executor provides an estate with the following:

1) Professionalism, knowledge, expertise. Knowledge in the area of estate, trust and tax law is invaluable, as is expertise in asset gathering and valuation, property management, investing and accounting.

2) Impartiality. A corporate executor can manage conflicting interests (i.e. second marriages), difficult personalities and bring an objective, unemotional approach to the estate administration.

3) Availability. The corporate executor is always there. There is no need to worry about an out of town executor, or an executor dying or becoming incapacitated or physically unable to carry out the task.

4) Ease of administration. There is no worry about unduly burdening a family member, friend or associate as the job of an executor can be difficult (depending on the size of the estate and the personalities of the beneficiaries) and time-consuming (depending on the nature of the assets).

5) Continuity/permanence. A corporate executor can provide the continuity needed for certain family situations such as an ill or incapacitated spouse or minor or disabled children where there is a need for long term trusts and financial care.

6) Cost efficiency. The personal executor can charge the same fee as a corporate executor. Often a fee agreement can be negotiated with a corporate executor at the time that the will is drawn. Also, a corporate executor often eliminates the need to hire additional outside experts, which results in a cost savings to the estate.

Notwithstanding the above, had the deceased in the Penna case given thought to using a corporate executor, there are a few reasons why he might have decided against it:

1) Impartiality (which can sometimes be viewed as indifference to family): Some people are concerned that a corporate executor will be indifferent to the needs of the beneficiaries. This objection, however, can be overcome by jointly appointing a corporate executor together with a personal executor who can shed some light on the personal circumstances of a deceased’s family. The two executors can then act as a check and balance against each other. Another way to deal with this is to leave a detailed memo together with the will, explaining to all executors the reasons for certain bequests and discretionary powers (i.e. to help a child get established in business, to see a particular charity get off the ground, to provide the best of care for a sick spouse, etc.)

2) Knowledge: A testator (the person making a will) may have a knowledgeable professional relative, friend or colleague who is willing to act as an executor (although Mr. Penna thought he had such a person).

3) Cost: While a personal executor can take the same fee as a corporate executor, in many cases he/she will not take the maximum fee because he/she feels it is excessive (the fee can be as high as 2.5% of the assets coming in and 2.5% of the assets going out as well as a fee on income earned by the estate and a care & management fee).

I would suggest it does not make sense to engage a corporate executor in the following circumstances:

1. Where the estate is very small,

2. Where there are only a few well defined beneficiaries,

3. Where the gifts are all outright (i.e. no long term trusts to be administered), and

4. Where the assets are all very straightforward (e.g. one or two bank accounts or brokerage accounts, no real estate).

In summary, each situation is as unique as the individual parties involved. Some beneficiaries are never happy no matter what, whether it is with their bequest, with someone else’s bequest, with the choice of executor, the manner in which the estate is administered … Often childhood jealousies surface to complicate matters – families can be difficult and the job of an executor is rarely an easy one!

Monday, September 4, 2017

The Best of The Blunt Bean Counter - The Duties of an Executor

This summer I am posting the "best of" The Blunt Bean Counter blog while I work on my golf game. Today, I am re-posting a blog post from April 2011, on the duties of an executor. As the 86 comments on the initial post reflect, many people are oblivious to these duties, until they are suddenly thrust upon them. This is the last "Best of" for this year, I return next week with my regular newly minted blog posts.

The Duties of an Executor

As I noted in the first installment of this series, I have been an executor for three estates. I have also advised numerous executors in my capacity as the tax advisor/accountant for the estates of deceased taxpayers. The responsibility of being named an executor is overwhelming for many; notwithstanding the inexcusable fact many individuals appointed as executors had no idea they were going to be named an executor of an estate. In my opinion, not discussing this appointment beforehand is a huge mistake. I would suggest at a minimum, you should always ask a potential executor if they are willing to assume the job (before your will is drafted), but that is a topic for another day.

So, John Stiff dies and you are named as an executor. What duties and responsibilities will you have? Immediately you may be charged with organizing the funeral, but in many cases, the immediate family will handle those arrangements, assuming there is an immediate family in town. What’s next? Well, a lot of work and frustration dealing with financial institutions, the family members and the beneficiaries.

Below is a laundry list of many of the duties and responsibilities you will have as an executor:

Your first duty is to participate in a game of hide and seek to find the will and safety deposit box key(s). If you are lucky, someone can tell you who Mr. Stiff's lawyer was and, if you can find him or her, you can get a copy of the will. Many people leave their will in their safety deposit box; so you may need to find the safety deposit key first, so you can open the safety deposit box to access the will.
You will then need to meet with the lawyer to co-coordinate responsibilities and understand your fiduciary duties from a legal perspective. The lawyer will also provide guidance in respect of obtaining a certificate of appointment of estate trustee with a will ("Letters Probate"), a very important step in Ontario and most other provinces.
You will then want to arrange a meeting with Mr. Stiff's accountant (if he had one) to determine whether you will need his/her help in the administration of the estate or, at a minimum, for filing the required income tax returns. If the deceased does not have an accountant, you will probably want to engage one.
Next up may be attending the lawyer’s office for the reading of the will; however, this is not always necessary and is probably more a "Hollywood creation" than a reality.
You will then want to notify all beneficiaries of the will of their entitlement and collect their personal information (address, social insurance number etc).
You will then start the laborious process of trying to piece together the deceased’s assets and liabilities (see my blog Where are the Assets for a suggestion on how to make this task easy for your executor).
The next task can sometimes prove to be extremely interesting. It is time to open the safety deposit box at the bank. I say extremely interesting because what if you find significant cash? If you do, you then have your first dilemma; is this cash unreported, and what is your duty in that case?
It is strongly suggested that you attend the review of the contents of the safety deposit box with another executor. A bank representative will open the box for you and you need to make a list on the spot of the boxes contents, which must then be signed by all present.
While you are at the bank opening the safety deposit box, you will want to meet with a bank representative to open an estate bank account and find out what expenses the bank will let you pay from that account (assuming there are sufficient funds) until you obtain probate. Most banks will allow funds to be withdrawn from the deceased’s bank account to pay for the funeral expenses and the actual probate fees. However, they can be very restrictive initially and each bank has its own set of rules.
As soon as possible you will want to change Mr. Stiff's mailing address to your address and cancel credit cards, utilities, newspapers, fitness clubs, etc.
As soon as you have a handle on the assets and liabilities of the estate, you will want to file for letters of probate, as moving forward without probate is next to impossible in most cases.
You will need to advise the various institutions of the passing of Mr. Stiff and find out what documents will be required to access the funds they have on hand. In one estate I had about 10 different institutions to deal with and I swear not one seemed to have the exact same informational requirement.
If there is insurance, you will need to file claims and make claims for things such as the CPP benefit.
You will need to advertise in certain legal publications or newspapers to ensure there are no unknown creditors; your lawyer will advise what is necessary.
It is important that you either have the accountant track all monies flowing in and out of the estate or you do it yourself in an accounting program or excel. You may need to engage someone to summarize this information in a format acceptable to the courts if a “passing of accounts” is required in your province to finalize the estate.
You will also need to arrange for the re-investment of funds with the various investment advisor(s) until the funds can be paid out. For real estate you will need to ensure supervision and/or management of any properties and ensure insurance is renewed until the properties are sold.
A sometimes troublesome issue is family members taking items, whether for sentimental value or for other reasons. They must be made to understand that all items must be allocated and nothing can be taken.
You will need to arrange with the accountant to file the terminal return covering the period from January 1st to the date of death. Consider whether a special return for “rights and things” should be filed. You may also be required to file an “executor’s year” tax return for the period from the date of death to the one year anniversary of Mr. Stiff's death. Once all the assets have been collected and the tax returns filed, you will need to obtain a clearance certificate to absolve yourself of any responsibility for the estate and create a plan of distribution for the remaining assets (you may have paid out interim distributions during the year).

The above is just a brief list of some of the more important duties of an executor. For the sake of brevity I have ignored many others (see Jim Yih's blog for an executor's checklist).

The job of an executor is demanding and draining. Should you wish to take executor fees for your efforts, there is a standard schedule for fees in most provinces. For example in Ontario, the fee is 2.5% of the receipts of estate and 2.5% of the disbursements of the estate.

Finally, it is important to note that executor fees are taxable as the taxman gets you coming, going and even administering the going.

Monday, November 21, 2016

The Top 10 Estate Planning Mistakes

I think it is fair to suggest, that most of us wish to plan our estates to minimize any income tax and probate fees owing upon our passing. Yet, many of us do not seek professional assistance to deal with the various technical income tax, probate planning and "soft family" issues that must be considered when dealing with our estates. As such, we often end-up eroding our estates because of unanticipated tax obligations and significant legal costs when family members litigate the estate. Today, Neil Milton an estates expert discusses the Top 10 Estate Planning Mistakes he observes in his practice.

The Top 10 Estate Planning Mistakes

By Neil Milton

There are many widely held myths and misconceptions about wills, probate and estates. These myths and misconceptions lead to estate planning mistakes. These mistakes can cause a lot of damage – both to your wallet and to relationships with family members. In this blog we have gathered 10 of most common and yet easily avoided estate planning mistakes.

1. Not Having a Will

The rules for how an estate is divided in Ontario when there is no will (intestate succession) can have some shocking consequences. Remarkably few people are aware that if you die without a will:

Your common law spouse inherits nothing. Zero. (They might have a claim for support, but that is a very different thing).

If you are separated but not divorced from a spouse, your legally married, they will inherit the bulk of your estate (The first $200k + a healthy chunk thereafter).

If you are legally married and not divorced, your parents and siblings get nothing.

If you have ‘step children’ that you have not legally adopted, they get nothing.

Everyone adult should have a will. If you do not have a will, get one now (74% of Canadians do not have an up-to-date will).

2. Do It Yourself Wills

Sure you can save $500 by doing your own will, but that does not mean you should. You can also do your own dental surgery. For both wills and dental work, the results of DIY are rarely satisfactory and often very expensive to fix.

3. Joint Accounts to Avoid Probate Tax

Do not put your investments or bank accounts in the name of one of your adult children to avoid probate tax without proper advice. You may save probate, but you may trigger significant income tax consequences. In addition, you may create a lot of grief and legal fees to fix the mess where the child whose name you put on the account, claims it for their own and the other children sue.

4. Joint Ownership of Houses to Avoid Probate Tax

Do not put one of your adult children on title to your house (“joint tenancy”) to avoid probate tax without very careful proper planning and documentation. You can create income tax issues and unless you document in writing your intention to give the house as a gift to that child to the exclusion of your other children, you do not save probate tax and you create lots of misery and a legal fee bonanza.

5. Assuming Your children get Along

Do your children really get along? Are they really facing similar financial circumstances and stresses? Many children have serious issues with their siblings. Do not assume that just because they are your children that they trust or work well with each other. This is particularly relevant to your choice of executor.

6. Choosing an Executor who is Not Up to the Job

Being an executor is a difficult job, not an honour. Good executors are a rare breed. They are prudent but decisive, can handle conflict (especially among beneficiaries), are attentive to detail, communicate well, are financially savvy, enjoy accounting and taxes, and must complete, send and receive many letters and forms. An ideal executor is tech savvy, and can scan, print, and email at will.

Your favourite caregiver may be a wonderful person, but that does not mean they will be a good executor. Being an executor is a hard job and you should provide for reasonable compensation (“pay peanuts, get monkeys” applies here). Also consider aging – your executor must be able to perform when the time comes, which may be a long time from now. At the very least, you should have an alternate if the primary choice is unable to act.

I strongly recommend that you consider using a professional to handle this complex job at a pre-agreed fair rate of compensation (which does not have to be a flat 5%).

See Mark's post on the duties of being named an executor for more information.

7. Putting Your Executor in a Conflict of Interest

Enormous trust is placed in an executor, and it is very difficult to force an executor to act at all or decently. If you do not trust someone absolutely to behave quickly, properly and fairly as between all beneficiaries, do not appoint them at all. Too many executors have massive conflicts of interest between their interests and the interests of other beneficiaries, and these conflicts were created by the testator.

For instance, if one child lives with you in your home, and you name that child your executor, they have a clear conflict between their desire to stay in the house as long as they can and to avoid paying rent, versus their obligation to sell the home and distribute the estate. It is unfair to them and the other beneficiaries to put them in this awkward spot – choose an executor without a conflict of interest.

8. Hedging Your Bets With Multiple Executors

Being an executor is a hard enough job without having to chase a co-executor for approval and signatures on everything. In most cases you should choose one person as your primary executor, and name an alternate. Do not name co-executors because you don’t trust one or you are too indecisive to choose between them.

9. Not Thinking Gifts Through or Keeping Them up to Date

Just because someone is your child does not mean that they will outlive you. You need to plan for contingencies. Similarly, if you appoint someone a trustee of funds for a minor child, make sure that they are willing and able to handle the task, and will be able to for the duration of the trust – if a trust for a child might last 20+ years, do not name someone who is already in their 70s as the trustee.

10. Not Giving Enough Away Sooner or to Charity

Gifts of things or experiences to your loved ones (to support their education, or travel for instance) while you are alive often have a much bigger impact on the recipients than lump sums of cash when you pass away (See Mark's blog post on Family Vacations. Meaningful gifts to mark milestones like graduation often get remembered much longer than cash inheritances. See Mark's blog post on Family Vacations for how meaningful and fulfilling a family vacation can be.

Even modest gifts to charity can have a big impact on the intended charity. Gifts to charity teach your values to your family. Also, a gift to a charity can create a legacy that is shared among your survivors giving them a common bond and remembrance of you that the same amount of cash, divided among them as inheritance, can never have. Lastly, there are tax benefits for gifts to charity.

Estate law is complex because life is complex. There are often many options, and choosing the options that are best for you and your family depends on your unique circumstances. We strongly recommend that you get advice from an expert in the field who can help you weigh the options, choose a desired outcome, and get there efficiently.

Neil Milton is an experienced estates lawyer who advises estate trustees (executors) and beneficiaries on all aspects of probate, guardianship, and estate administration, and helps resolve estate-related disputes. Miltons Estates Law has offices serves clients across Ontario from offices in Ottawa and Toronto, and provides a wealth of free information and eBooks on its website www.ontario-probate.ca. Feel free to contact Neil directly at nmilton@miltonsip.com or 1.866-297-1179 ext 224

Please note that this post is based on Ontario law. If you live outside of Ontario, it is strongly recommended that you consult with an estates lawyer licensed to practice in your province.

The above blog post is for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Readers are advised to seek specific legal advice regarding any specific legal issues.

This site provides general information on various tax issues and other matters. The information is not intended to constitute professional advice and may not be appropriate for a specific individual or fact situation. It is written by the author solely in their personal capacity and cannot be attributed to the accounting firm with which they are affiliated. It is not intended to constitute professional advice, and neither the author nor the firm with which the author is associated shall accept any liability in respect of any reliance on the information contained herein. Readers should always consult with their professional advisors in respect of their particular situation.

Monday, August 8, 2022

The Best of The Blunt Bean Counter - Inheriting the Cottage/Cabin/Chalet –The Great Estate Planning Challenge

Inheriting the Cottage/Cabin/Chalet –The Great Estate Planning Challenge

By Katy Basi

Other Cottage Blog Posts by The Blunt Bean Counter

Monday, July 25, 2022

The Best (Most read all-time) of The Blunt Bean Counter - Transferring Property Among Family Members - A Potential Income Tax Nightmare

Transferring Property Among Family Members - A Potential Income Tax Nightmare

Transfers of Property - Why They Are Undertaken

Transfers of Property - Income Tax Implications

Transfers of a Principal Residence - The Ultimate Potential Tax Nightmare

Transfers for Probate Purposes

Monday, October 19, 2020

Probate fees: These two ways to avoid it also bring pitfalls

Making a child joint owner of your home

Naming direct beneficiaries of your RRSPs or RRIFs

Monday, May 4, 2020

Alter Ego Trusts and Joint Partner Trusts – An Example

Monday, March 9, 2020

Alter Ego Trusts and Joint Partner Trusts – A Primer

The conditions

Why use an AET or JPT?

The downside of AETs and JPTs

Monday, October 14, 2019

What To Do When Your Spouse Dies Before You

How to tackle the nitty gritty of administration

Monday, August 13, 2018

The Best of The Blunt Bean Counter - Is a Corporate Executor the Right Choice?

Monday, September 4, 2017

The Best of The Blunt Bean Counter - The Duties of an Executor

The Duties of an Executor

Monday, November 21, 2016

The Top 10 Estate Planning Mistakes

The Top 10 Estate Planning Mistakes

By Neil Milton

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