Category: News & Events

13 May

Estate Taxes and the 2019 Budget

Natalia R. Angelini General Interest, News & Events, Trustees Tags: , , 0 Comments

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,

Natalia Angelini

15 Apr

Legal vs. Beneficial Ownership: British Columbia’s New Registry

Kira Domratchev Estate & Trust, In the News, News & Events Tags: , , 0 Comments

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.

Thanks for reading!

Kira Domratchev

Find this blog interesting? Please consider these other related posts:

Legal vs. Beneficial Ownership – Not so easily distinguished?

The Beneficial Ownership of Shares in a Corporation

House Explosion Leading to Questions or Ownership and Ultimately, Responsibility Under the Law

11 Feb

Getting Frozen out of Cryptocurrency?

Natalia R. Angelini Estate & Trust, Estate Planning, Executors and Trustees, General Interest, In the News, News & Events Tags: , , 0 Comments

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,

Natalia R. Angelini

31 Dec

The Top Estate & Trust Cases from 2018

Noah Weisberg General Interest, New Media Observations, News & Events, Trustees, Wills Tags: , , , , , , , , , , 0 Comments

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!
Noah Weisberg

Find this blog interesting, please consider these other related blogs:

26 Nov

Moore v Sweet: Hull & Hull LLP at the Supreme Court of Canada

Hull & Hull LLP Beneficiary Designations, Litigation, News & Events Tags: , , , , , , , , , 0 Comments

Earlier this year, we argued the appeal in Moore v Sweet before the Supreme Court of Canada.  On Friday, the Court released its decision, which has provided what, in our view, was necessary clarification of the juristic reason component of the test for unjust enrichment.  The Supreme Court has also confirmed the circumstances in which a constructive trust remedy is appropriate within the context of unjust enrichment.  Our firm was pleased to argue the appeal at the Supreme Court in February 2018 and to learn on Friday of our client’s success in the reversal of the split decision of the Ontario Court of Appeal.

The facts of the case were relatively straightforward: The appellant had previously been married to the deceased.  Around the time of their separation, the appellant and the deceased entered into an oral agreement whereby the appellant would remain the designated beneficiary for the life insurance policy on the deceased’s life on the basis that she would continue to pay the related premiums.  The appellant paid the premiums on the life insurance policy until the deceased’s death approximately 13 years later, while, unbeknownst to the appellant, the deceased named his new common law spouse (the respondent), as irrevocable beneficiary of the policy soon after the oral agreement was made.  At the time of his death, the deceased’s estate was insolvent.

At the application hearing, Justice Wilton-Siegel awarded the appellant the proceeds of the life insurance policy on the basis of unjust enrichment.  The respondent was successful in arguing before the Ontario Court of Appeal that the designation of an irrevocable beneficiary under the Insurance Act was a “juristic reason” that permitted what was otherwise considered the unjust enrichment of the respondent at the appellant’s expense.  The appellant was subsequently granted leave to appeal to the Supreme Court of Canada.

Justice Coté, writing for the Majority, agreed that the test for unjust enrichment was flexible and permits courts to use it in the promotion of justice and fairness where required by good conscience.  The Court clarified that the juristic reason permitting an unjust enrichment needs to justify not only the enrichment of one party but also the corresponding deprivation of the other party.  While the irrevocable beneficiary designation may have required the payment of proceeds for the policy to the respondent, it could not be considered as also requiring the appellant’s deprivation of the proceeds to which she was entitled under the oral agreement.  The Court found that a designation of an irrevocable beneficiary under the Insurance Act precludes claims by creditors of an estate, but it does not state “with irresistible clearness” that it also precludes a claim in unjust enrichment by a party who has a contractual or equitable interest in the proceeds.

While reaching the opposite result, the dissent acknowledged that this was a difficult appeal, in which both parties were innocent and had strong moral claims to the proceeds of the life insurance policy.

We thoroughly enjoyed the opportunity to argue this case before the Supreme Court of Canada earlier this year and look forward to following the role of this decision in further developments in the Canadian law of unjust enrichment.

Thank you for reading.

Ian M. Hull
Suzana Popovic-Montag
David Morgan Smith

06 Nov

Family Law at the Upcoming FDR 2018 Conference

Sayuri Kagami News & Events Tags: , , 0 Comments

On November 19 and 20, 2018, the Family Dispute Resolution Institute of Ontario (“FDRIO”) will be holding its 2018 Family Dispute Resolution conference. As you can guess from its name, the conference will be addressing topical issues in family law and family dispute resolution. From workshops on financial topics common in family law, effective arbitration, and the use of interdisciplinary teams to resolve issues with high conflict clients, the conference offers a variety of practical seminars.

The FDR conference brings together a wide variety of professionals engaged in family dispute resolution from lawyers, therapists, family coaches and parenting coordinators, and business valuators. As described on their website, FDRIO serves as an organization to bring together multidisciplinary professionals who facilitate family dispute resolution.

Of course, why discuss such a conference in a blog relating to estate and trusts law? Unfortunately, family drama, difficulties, and legal issues don’t end upon the incapacity or death of a loved one (indeed, they can often get worse). We regularly see claims brought regarding or against Estates that bring up a myriad of family law issues. From preparing financial statements as part of dependant support claims and handling claims for equalization of Net Family Property to engaging with high conflict clients who are mired in the turmoil of family difficulties, it’s important to understand the family law issues that may affect claims relating to estates. Even better, however, is learning the tools and tips of family dispute resolution professionals who have accumulated a wealth of knowledge as to how to navigate the difficult family relationships that affect their clients. While we may be focused on the legal issues involved in any particular matter, we often see clients who are instead focused on the issues that we can’t assist with such as siblings rivalries and tension resulting from the breakdown of a marriage. It’s always helpful to learn from those in the trenches of family law how to better handle such situations and best assist our clients.

Hull & Hull LLP is proud to be a silver sponsor of the 2018 conference and is looking forward to learning all the latest on Family Dispute Resolution on November 19 and 20, 2018.

For more on past FDR conferences, see our recap of the 2015 conference and 2016 conference.

Thanks for reading!

Sayuri Kagami

05 Mar

Who Holds the Copyright to an Obituary?

Rebecca Rauws Estate & Trust, News & Events Tags: , , , , , , , , , 0 Comments

When someone composes an obituary for a loved one who has passed away, carefully selecting the photograph to go along with it, one would suppose that the last thing on their mind is the copyright they may hold in that obituary and photograph. Of course, few people expect that an obituary could be the subject of republication or possible copyright infringement.

However, one website has been reproducing obituaries in their “database of deceased people”, leading to questions about ownership of the obituaries themselves, as well as the photographs accompanying them. The website reproduces obituaries and photographs, apparently without permission from the individuals who originally created and posted the obituaries. As reported in this Global News article, one family even states that an obituary for their loved one, which had not been written by their family and contained a number of errors, was posted on the website less than a day after their loved one passed away. The family did not know who wrote the obituary, although the website released a statement that all of the obituaries they re-post are already on the internet.

A recent article in The Lawyer’s Daily discusses an application for certification of a class action copyright claim against this obituary database website. The application claims that the website is infringing copyright and moral rights in respect of the obituaries and photographs. The moral rights claim relates to the website’s monetization of the obituaries by offering options to purchase flowers, gifts, or virtual candles, through affiliate retailers. Some funeral homes offer a similar service, but the article notes that the unsavoury nature of the website’s business model, which consists of “scraping” obituaries from elsewhere on the internet, without permission or notice, and making money by doing so through advertisements or the selling of flowers or virtual candles, could provide some support for the moral rights claim.

In relation to the copyright infringement claims, there may be some obstacles to overcome, particularly in relation to ownership of the copyright. According to The Lawyer’s Daily article, under the Copyright Act, R.S.C., 1985, c. C-42, the person claiming a copyright infringement must be the owner, assignee or exclusive licensee of the work in question. An assignment of copyright must be in writing. As mentioned in the article, this could create an issue if the photograph used in the obituary was taken, for instance, by a stranger.

Damages in the event of liability are also uncertain. In a recent case with similar facts, where the defendants were found to have infringed on the plaintiff’s copyright, the court awarded statutory damages of only $2.00 per image because the cost of capturing the images in that case was low. However, given the emotional aspect of obituaries, it is possible that the facts in this case could lead to a larger damages award.

Thanks for reading,

Rebecca Rauws

 

Other blog posts you may enjoy:

23 Jan

Podcast #538 – Supreme Court of Canada: Cowper-Smith v Morgan

76admin Hull on Estate and Succession Planning, Hull on Estates, News & Events, Podcasts, PODCASTS / TRANSCRIBED, Show Notes, Show Notes, Uncategorized Tags: , , , , , , 0 Comments

Today on Hull on Estates, Noah Weisberg and Rebecca Rauws discuss the recent decision of the Supreme Court of Canada in Cowper-Smith v Morgan , 2017 SCC 61, and the expanded scope of the doctrine of proprietary estoppel.

Should you have any questions, please email us at webmaster@hullandhull.com or leave a comment on our blog.

Click here for more information on Noah Weisberg.

Click here for more information on Rebecca Rauws.

15 Dec

Santa Claus in the Courts

Paul Emile Trudelle General Interest, In the News, Litigation, News & Events Tags: , , , , 0 Comments

Aside from the seminal yet apparently unreported decision of The State of New York v. Kris Kringle, which was dramatized in Miracle on 34th Street, there have been numerous other mentions of Santa Claus in judicial decisions. In honour of the season, I take this opportunity to note the following:

  • In Frasko v. Saturn 121, Inc. et al, which the judge described as “a novel application”, the plaintiff sued 115 shell corporations. (The plaintiff was said to be in the business of buying and selling shelf companies.) The plaintiff noted the 115 defendants in default, and moved for default judgment.  In support of the noting in default, the plaintiff filed a 100 page affidavit of service.  In it, as stated by the judge, the plaintiff claimed to have served or attempted to personally serve the 115 corporate defendants at a wide variety of locations throughout Ontario in only three days, plus 10 other corporate defendants in another proceeding. The judge questioned the accuracy of the affidavit of service, stating: “While Santa Claus has perfected the art of visiting millions of homes in a single night, [the plaintiff’s] affidavit of service makes no claim to have enlisted such assistance in effecting such a miracle of personal service.”

 

  • In Royal Bank v. Edna Granite & Marble Inc, the defendants argued that they had not made payments on a loan for a number of years, and thus the claim was statute-barred. Payments were, however, made by the guarantors of the loan. The bank argued that it did not matter who made the payments: whether they were made “by the borrower, by the Guarantors, or by Santa Claus”. The court accepted this argument.

 

  • In v. Liu, referred to in R. v. Sipes at para. 718, the accused was charged with first-degree murder. Upon his arrest, scratches were observed on his neck and chest. Expert evidence established that the scratches were consistent with ancient Chinese medical treatment. For some reason, the accused sent one of the investigating officers a Christmas card depicting Santa Claus with scratches on his back, being looked at incredulously by Mrs. Claus. The front of the card read “I swear, Honey – I scratched it going down a chimney. Inside the card read “Sometimes, even Mrs. Claus has a hard time believing in Santa.” There, the Crown was unsuccessful in adducing the card as evidence at trial, as its probative value was “tenuous”, yet the potential prejudice was high.

 

  • In v. M.J.O., the judge had difficulty believing the accused’s evidence. “I have read the Mr. M.J.O.’s statement on several occasions. I cannot imaging circumstances that would lead me to believe it. To believe that version of events, in the face of the objective evidence, I would have to believe in Santa Claus and the tooth—fairy.”

There are many other reported reference to Santa Claus on CanLII. Many of them are in sad or disturbing contexts, and are not appropriate for a Friday, pre-Christmas blog.

Happy holidays.

Paul Trudelle

11 Aug

The Chambers Global Private Wealth Guide

Nick Esterbauer Charities, Common Law Spouses, Estate & Trust, Estate Planning, Executors and Trustees, General Interest, News & Events, Pension Benefits, Power of Attorney, RRSPs/Insurance Policies, Trustees, Wills Tags: , , , , , , , , 0 Comments

Earlier this year, Ian M. Hull, Suzana Popovic-Montag and I contributed the law and practice content for the Canada chapter to the Chambers and Partners 2017 Global Private Wealth Guide.

The Global Private Wealth Guide includes a chapter for nineteen different countries and features practical information regarding tax issues, succession law, the status of trusts, business and charitable planning, and the role of fiduciaries in each jurisdiction.  The Guide also features a profile page for each country, in which general information related to relevant business practices is summarized.

The Private Wealth Guide is a helpful tool for lawyers assisting clients who may hold property or business interests in multiple jurisdictions.  Among the interesting features of the website for the Guide is the option of comparing the treatment of each issue between two or more jurisdictions.  For example, it offers the opportunity to obtain quick and reliable information regarding any differences between the treatment of marital property in Canada and the United States.

A complete electronic copy of the guide is available here.  A link has also recently been added to the resources section of our website.

Thank you for reading and have a great weekend.

Nick Esterbauer

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