Category: News & Events
As Ian Hull and Daniel Enright of our office blogged last week, as of April 1, 2021, small estates in Ontario will be defined as those worth $150,000.00, instead of the $50,000.00 figure we are all used to.
The Ontario Attorney General, Doug Downey, advised that the process of applying to manage an estate in Ontario was the same, whether it is worth $10,000.00 or $10 million, which often deters people from claiming smaller estates.
As a result of this change, more estates will be able to access a simplified probate process, though the amount of probate fees payable will not change.
Although these changes are welcome, some consider that there are still a number of other issues outstanding, such as:
- Due to real estate values, estates in Toronto could be considered small, whereas that would not be the case in other parts of the province (e.g. a $500,000.00 estate in Toronto could be considered small); and
- The probate process itself could be simplified, as many financial institutions take the position that assets cannot be managed until such time as probate is obtained (which in turn can often cost an estate, as asset values fluctuate).
A recent article discussing the above-noted points can be found here.
It will certainly be interesting to see if the new changes will make a difference, and whether more changes are coming, in light of the concerns expressed by various members of the legal profession.
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Who is ready for some good news? Our firm has been interested in the issue of organ donation for some time now. In 2012, we blogged about whether P.E.I. may be the first province in Canada to automatically enroll all of its people as organ donors until you chose to actively “opt-out”. In 2014 and 2019, we blogged about Nova Scotia’s efforts in this regard.
Today, we are happy to report that this is now the new reality in Nova Scotia as of January 18, 2021.
The Human Organ Tissue and Donation Act was passed in April, 2019. The Act, when it came into effect this Monday, meant that everyone in Nova Scotia are now considered to a potential organ donor until they “opt-out”. This new “opt-out” system is the first of its kind in North America according to the Huffington Post. Ontario, like everywhere else, has an “opt-in” program where you have to actively sign up in order to be considered as a potential organ donor whereas the “opt-out” system is the opposite of that. Nova Scotia is hoping that this will dramatically increase the rate of organ donation in the province like the 35% increase that has been noted in certain European countries.
In order to balance and respect the wishes of each individual, the director of the organ donation program has indicated that the known wishes of an individual will be respected even if he/she has not formally opted out.
This is an issue that is personally meaningful to me because of the statistics surrounding organ donors and organ recipients of colour. People of colour tend to be underrepresented within “opt-in” systems of organ donation. According to the Gift of Life, while race and ethnicity is not determinative of a match, a match is more likely to be found within one’s own ethnic community because of compatible blood types and tissue markers. 60% of patients waiting for a transplant are from communities of colour. I, myself, am registered with the Gift of Life and I can attest to how easy and painless it was to sign up.
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2020….what a year – I’ll say nothing more other than I herewith present the most popular estate and trust cases of 2020 as decided solely and arbitrarily by me:
Calmusky v Calmusky – here, the Superior Court of Justice ruled that the designated beneficiary was presumed to be holding a RIF in trust for the estate of the deceased and had the onus of rebutting the presumption. Essentially, the court applied the rule in Pecore to a RIF by stating that “…I see no principled basis for applying the presumption of resulting trust to the gratuitous transfer of bank accounts into joint names but not applying the same presumption to the RIF beneficiary designation”.
Sherman Estate – should probate applications be sealed? At the Superior Court of Justice, the sealing order over the Sherman probate applications was granted ex parte. This was based upon the perceived risks to the executors and beneficiaries as well as the need to protect the privacy and dignity of the victims of violent crimes and their loved ones. The Court of Appeal, however, held that a public interest component must be met and proceeded to set aside the sealing orders. The matter reached the Supreme Court of Canada on October 6, with a decision yet to be released.
Trezzi v Trezzi – what happens when a will gifts an asset that is actually owned by a corporation? The Court of Appeal had to determine the potential validity of a bequest of property in a will when the property was not directly owned by a testator, but rather owned by the testator through a wholly owned private corporation. Although the court upheld the bequest in question, they noted that the language used in the will was potentially problematic and encouraged counsel to be more careful when drafting in similar circumstances.
Lima v Ventura – notwithstanding COVID, procedural timelines set out in court orders must be respected. Here, a party brought a motion to extend the deadline to exercise an option to purchase a home, citing the circumstances of the COVID-19 pandemic as the basis for the request. The request for an extension was ultimately denied because the party failed to provide evidence to support the claim that the circumstances caused by COVID frustrated efforts to purchase the house. The court did set out a number of factors to consider related to delays due to COVID-19 that could justify varying a court-imposed timeline.
Happy New Year!
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In Ontario the courts have been rapidly adapting their practice and procedures in response to the COVID-19 pandemic. Beginning on July 6, 2020, the Superior and Ontario Court of Justice will now be further expanding its operations. The date is dependent on approval from the Chief Medical Officer of Ontario.
The Ministry of the Attorney General (“MAG“) has established an incremental plan to prepare courthouses to facilitate the return of full court operations in Ontario. MAG has announced that Phase One will be implemented on July 6, 2020 in a limited number of courthouses and courtrooms. Court operations will continue to expand with a targeted completion date of November 1, 2020.
I will briefly highlight some of the takeaways from MAG’s strategy for re-opening:
- Reopening of 74 courthouses and 149 courtrooms across Ontario;
- Workplace safety considerations are being implemented throughout courthouse and courtrooms including the installation of plexiglass barriers, hand sanitizer stations, and distance markers. There will also be increased screening procedures for those entering any courthouse and caps on the number of occupants in each room;
- Each courthouse will have risk assessment conducted so that the proper preventative measures can be put into place;
- Virtual hearings will continue as we gradually phase back to in-person appearances.
MAG has yet to clarify on the types of in-person court appearances that will be heard during Phase One. Since the declaration of the emergency, the Superior Court of Justice has heard many “urgent” matters, being motions, case conferences, and pre-trials. It is hoped that the types of matters that are to be heard will be expanded as a part of Phase One.
In the meantime, counsel should continue to utilize and embrace the new technologies offered by the Courts to schedule virtual hearings and integrate them into their regular practice. Rather than waiting for a complete re-opening of the Courts, lawyers should be prepared to “attend” virtual hearings in order to best serve clients and provide them with access to justice.
Thank you for reading and stay tuned!
My last blog discussed recent steps taken by the legislature to modernize the administrative side of the practice of law in Ontario. The practical side has also seen a number of developments that have emerged as a direct result of the ongoing pandemic. Some of these efforts have been spearheaded by the courts directly, while others, such as the Estate Arbitration and Litigation Management initiative, have been developed by members of the Bar an in effort to continue moving matters towards a resolution despite limited court access.
A recent decision of the Superior Court of Justice provides some important commentary on the judiciary’s expectations of parties and counsel to adapt to the current reality using these tools and others so that files can continue to progress.
In Arconti v Smith, Justice Myers grappled with the competing views of the parties as to whether an examination for discovery ought to proceed by way of a videoconference. The defendant, who was to submit to examination, proposed that the examination proceed by way of videoconference given the social distancing guidelines in place.
The plaintiff objected on several grounds. Among other objections, the plaintiff argued that the defendant and their counsel ought to be in each other’s presence to ensure the process proceeded smoothly. Alternatively, the plaintiff argued that the fact of conducting an examination remotely would “[deprive] the occasion of solemnity” and would otherwise make it more difficult to assess the defendant’s demeanour as a witness. The plaintiff argued that the examination ought to be deferred until social distancing guidelines were lifted.
Justice Myers’ initial response to the plaintiff’s position was simple, yet persuasive: “It’s 2020.” He held that the parties have technological tools at their disposal to conduct examinations and other litigation steps remotely, and that the use of such tools was especially salient in the context of the social distancing guidelines. Although Justice Myers advised that the concerns raised by the plaintiff might be relevant in different circumstances, they were not at issue there.
Ultimately, Justice Myers held that the use of readily available technology should be part of the skillset required both of litigators and the courts, and that the need to use such tools was merely amplified, not created, by the pandemic. The plaintiff was ordered either to conduct the examination of the defendant by videoconference, or to waive their entitlement to conduct the examination altogether.
This decision provides a glimpse into the court’s expectations of litigants and counsel to move matters forward in spite of the social distancing guidelines and court closures. While the current directives and legislation cannot be used to compel a party to perform a particular litigation step by audiovisual means, one may read Arconti as suggesting that the courts will nonetheless expect the parties to consider the entirety of their skillset to move matters along so that they do not languish in litigation purgatory as a result of social distancing guidelines.
Once social distancing guidelines have been lifted, it will likely be some time before the courts have dealt with the matters that were adjourned between March and June and are in a position to hear new matters. Parties who are willing to use the tools at their disposal to move matters forward and avoid contributing to this delay may find themselves commended by the judiciary. Those who are resistant to adapt, on the other hand, may expose themselves to commentary from a judge, or possibly cost consequences for their client, depending on the circumstances.
If you are interested in learning more about litigation procedure and estate planning best practices in the time of COVID-19, please consult our information guide.
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There’s a really good chance that if you live anywhere in the world that is not completely disconnected from the rest of society, you would have heard about COVID-19, and the fact that it has officially reached every single continent (except for Antarctica). The World Health Organization (WHO) has maintained that the containment of COVID-19 must be the top priority for all countries, given the impact it may have on public health, the economy and social and political issues.
Around 1 out of every 6 people who gets COVID-19 becomes seriously ill and develops difficulty breathing. Older people, and those with underlying medical problems like high blood pressure, heart problems or diabetes, are more likely to develop serious illness.
In a statement released on March 4, 2020, the WHO indicated “although COVID-19 presents an acute threat now, it is absolutely essential that countries do not lose this opportunity to strengthen their preparedness systems.”
The value of preparedness is being played out in a Seattle suburb, where COVID-19 has spread to a local nursing home, resulting in a quarantine of residents and staff. In the US, nursing homes are being criticized for being incubators of epidemics, with relaxed infection-control practices and low staffing rates, among other issues. Friends and family of residents in this Seattle facility are in an unenviable position, worrying about the health and safety of their loved ones and considering the gut-wrenching possibility that their loved ones might die alone. To read more about this issue, click here.
With the number of confirmed positive cases of COVID-19 on the rise in Ontario, I wonder how our long-term facilities are preparing to deal with an outbreak should one occur?
In the spirit of prevention, it is important to consider reducing the frequency of visits with our elderly loved ones, and spreading knowledge and information about hand-washing and other preventative measures.
For more information about COVID-19, click the links below:
Government of Ontario: https://www.ontario.ca/page/2019-novel-coronavirus
World Health Organization: https://www.who.int/emergencies/diseases/novel-coronavirus-2019
Thanks for reading!
An estate trustee has several responsibilities, including paying tax liabilities arising from the deceased’s death. There are multiple deadlines to remember, including:
- Prior Year’s T1 Return – If the death is between January and April, the return for the prior year must be filed within six months after the date of death.
- Terminal T1 Return – If the death is between January and October, the return for the year of death is due April 30th of the next year. If the death is in November or December, the return must be filed within six months.
- T3 Tax Return – If there is income received by the estate after the date of death, the T3 tax return must be filed within 90 days after the end of the calendar year or the estate year (365 days post-death), whichever period the estate trustee elects.
In addition to the above income tax-related deadlines, should the executor apply for a Certificate of Appointment (probate), Estate Administration Tax (“EAT”) will be owed upon filing the application. EAT is calculated on the value of the assets of an estate:
- $5 per $1,000.00, or part thereof, is owed on the first $50,000.00; and
- $15 per $1,000.00, or part thereof, is owed on the value of the estate over $50,000.00.
Once probate is granted, an Estate Information Return (“EIR”) must be filed with the Ministry of Finance. An EIR requires the executor to provide an inventory and particulars of each type of asset of the estate, including fair market values at the date of death. The deadline to file the initial EIR is within 90 days after probate is granted. If the executor discovers incorrect or incomplete information, an amended EIR must be filed within 30 days of the discovery.
The 2019 Budget of Ford’s Ontario government proposes certain changes that would impact both the EAT and EIR.
EAT – The 2019 Budget proposes to eliminate the payment of EAT on the first $50,000.00 of the estate value. This change would spare modest estates from having to pay EAT, which may be particularly impactful in circumstances with limited available monies. It will also result in a savings of $250.00 for larger estates, as no EAT will be payable on the first $50,000.00.
EIR – The 2019 Budget proposes to extend the EIR initial filing deadline from 90 days to 180 days, and the amended filing deadline from 30 days to 60 days. The change to the initial filing deadline may be especially helpful for executors, as it can be a challenge to obtain particulars and date of death valuations of all estate assets within just three months of death.
Thanks for reading and have a great day,
Any estate litigator will tell you that many of the cases that we deal with on a daily bases involve disputes regarding the beneficial ownership of assets, being jointly held assets or assets that are wholly owned by one party and alleged to be beneficially owned by another.
For reference, legal ownership or legal title refers to property held in the name of a person or persons. In contrast, beneficial ownership is what is referred to as “actual” ownership even though the property is registered in someone else’s name.
Without a clear trust agreement, it is often very difficult to argue that beneficial ownership exists and the parties to the dispute will resort to arguments over things like, who is paying taxes for the property, who is collecting rental income and other evidence that relates to the parties’ intention.
The Province of British Columbia appears to have come up with a solution to the question of whether the specific property truly belongs to the person in whose name it is registered.
The Land Owner Transparency Act has been introduced to create a public registry of property owners in the province. Notably, this is the first legislation of its kind in Canada and is aimed towards ending the use of trusts, corporations and partnerships to shield transactions from public view.
The new legislation was positively received at Transparency International Canada whose executive director, James Cohen, noted that Canada has been criticized globally for our apparently lax beneficial ownership legislation.
In accordance with this legislation, corporations, trusts and partnerships that buy land would have to disclose their beneficial owners in the registry. It is interesting to note that failure to do so will result in fines of up to $100,000.00 or 15% of the assessed value of the property, whichever is greater.
The Society of Trust and Estate Practitioners (Canada) submitted certain concerns to the province such as questions of how the new framework is to work with other relevant legislation and raised questions of privacy.
Will Ontario follow suit? Stay tuned.
To learn more about this new initiative, check out this Globe and Mail article on the topic.
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Cryptocurrency is aptly described in a recent post as “digital cash stored on an electronic file and traded online… like online banking but with no central bank or regulator. It also has virtual wallets which store the cryptocurrency.”
As with any online assets, access to a deceased person’s cryptocurrency is vital. Without it, heirs will not receive their intended entitlements and the cryptocurrency will remain dormant. A stark example of such a problem can be found in the QuadrigaCX debacle.
QuadrigaCX is Canada’s biggest cryptocurrency exchange. Its’ founder, Gerald Cotton, died unexpectedly and prematurely at age 30. He was the only one who knew the password to access the holdings of the company’s clients. Once news of his death got out, thousands of clients were rushing to withdraw millions in funds. They have not yet been successful, the reason being, as one author explains, is that “…Cotten was the sole person responsible for transferring QuadrigaCX funds between the company’s “cold wallet” — secure, offline storage — and its “hot wallet” or online server…Very little cryptocurrency was stored in the hot wallet for security purposes. Cotten’s laptop was encrypted, and his widow, Jennifer Robertson, and the expert she hired have been unable to access any of its contents.”
QuadrigaCX is evidently now in financial straits. It has filed for creditor protection in the Nova Scotia Supreme Court. Further, Ms. Robertson has reportedly sought the appointment of Ernst & Young to oversee the company’s dealings while attempts to recover the lost holdings continue.
This unfortunate situation highlights the risk that may accompany cryptocurrency’s lack of regulation. It also serves as a reminder to us that with ownership of digital assets growing, we need to think about how to ensure that gifting such assets is effected, including making sure to inform our intended estate trustees of how to access the assets. Doing so is helpful because, as the above case demonstrates, it is a must in the case of cryptocurrencies to have the password relevant to the wallet where the currency is held. Further, with an asset as volatile as cryptocurrency can be, a fully informed estate trustee will be in a better position to avoid delays in the administration of an estate and/or allegations of mismanagement if he/she is able to quickly access and distribute such assets.
Thanks for reading and have a great day,
It is nearly a new year. It is during this time that we reflect on the past year, make goals for the upcoming year, and come across all sorts of ‘best of’ and ‘most popular’ rankings.
As such, I herewith present the most popular estate and trust cases from 2018, as decided solely by me (and without regard to any actual data):
- Moore v Sweet – the Supreme Court of Canada provided clarification regarding the juristic reason competent of the test for unjust enrichment, as well as confirmed the circumstances in which a constructive trust remedy is appropriate in the context of unjust enrichment.
- Re Milne Estate & Re Panda – In Re Milne (currently under appeal), the Superior Court of Justice found that multiple Wills were invalid where so-called ‘allocation clauses’ (also referred to as basket clauses) in the Wills provided the Estate Trustees with the discretion to determine which estate assets fell under which Will. Conversely, in Re Panda, the Superior Court of Justice declined to follow Re Milne and probated the Will notwithstanding the presence of an allocation clause. The Superior Court of Justice also addressed the roles of the court as either the ‘court of probate’ or ‘court of construction’ and whether a Will is a trust that is subject to the three certainties.
- Wall v Shaw – the Court of Appeal (sitting as the Divisional Court) held that there is no limitation period to objecting to accounts in an Application to Pass Accounts. The Court reasoned that a notice of objection does not commence a ‘proceeding’ for the purposes of section 4 of the Limitations Act.
- Seguin v Pearson – the Ontario Court of Appeal reiterated the different tests for undue influence that apply in the inter vivos and the testamentary context.
- Valard Construction Ltd. v. Bird Construction Co. – the Supreme Court of Canada found that a trustee had a fiduciary duty to disclose the terms of a trust (here, it was a bond) to the beneficiary, notwithstanding the fact that the express terms of the trust did not stipulate this requirement.
Thanks for reading!
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