Changes to the Estate Administration Tax Act
Just wanted to follow up on my blog from earlier this week about the new Estate Administration Tax Act Regulations and forms that came into force on January 1, 2015.
Now that the Ministry of Finance’s auditors are going to be looking closely at the figures that estate trustees are declaring in their probate applications, some particular issues come to mind.
- Inclusion of joint assets. The Supreme Court in the Pecore Estate case found that certain assets which are held joint with right of survivorship between a parent and an adult child are presumed to be beneficially owned by the parent. In light of that, will the Ministry be relying on that legal presumption with respect to all assets held jointly between a parent and an adult child?
- Deduction of Mortgage where mortgage is life insured. If a mortgage was life insured, are you entitled to deduct the mortgage value from the value of the real property?
- Insurance Trusts- It is quite common to designate the same people for both executors in the Will and trustees for insurance proceeds. They typical insurance trust says that the trustees shall distribute the proceeds on the same terms of the Will. Most of us have taken the position that those proceeds do not form part of the Estate for probate purposes. However, the Carlisle Estate case from Saskatchewan concluded the opposite. What position do you think the Ministry will take?
Some of the answers, and no doubt more questions, will come out at the next Institute for Wills and Estate Education (IWEE) seminar being conducted on Thursday January 15, 2015. Representatives from the Ministry of Finance, including the Senior Manager for Audits, will be discussing how the new regulations work, explaining how to properly complete the new tax returns and answering questions related to audits and the Regulations.
For those not familiar with the IWEE, it is a Law Society Accredited Provider of CLE, run by our colleague, Jordan Atin.
If you are a lawyer or a law clerk, and would like to attend the seminar, you can find out more details and register at www.iwee.ca.