This week on Hull on Estates, David Smith and Nadia Harasymowycz discuss a fairly new investment vehicle that has been set up by the Canadian Government to allow for Canadians with disabilities and their families to save for the future. More specifically, this podcast discusses how one can use this investment fund as an estate planning tool.
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For more information on Nadia Harasymowycz click here.
Some interesting points Clare A. Sullivan of Aird Berlis made on this topic at the 2011 Six-Minute Estates Lawyer are:
· Conflicts – Consider whether the Trustee appointed in the Primary Will is the same as the Trustee appointed in the Secondary Will; if not, it may be that the solicitor can not act for both; it may also support the contention that the testator intended the assets under one Will to be dealt with separately from those governed by the other Will;
· Assets – Trustees should list the assets of each estate separately and confirm none of the assets of the secondary estate require probate; if such an asset requires probate, probate taxes will be payable on the total value of the secondary estate;
· Notification – The beneficiaries under each Will should be provided with formal notification of their interest in the estate and the probate application, and be given a copy of both Wills;
· Creditors – it the Trustees of each Will are the same one advertisement should suffice; separate ads or a joint ad should be considered if the Trustees are not the same; and
· Debts and Taxes –
· When there are different residuary beneficiaries under each Will, it is important for Trustees to ensure their actions cannot be construed as favouring one or over any other;
· If the Trustees and residuary beneficiaries are the same in each Will, and there is no doubt that there will be sufficient assets of both estates to pay all debts and taxes, there will be no issues regarding abatement; and
· If the residuary beneficiaries are different or there is not certainty that the residue of the two estates are sufficient to cover all debts and taxes, the Trustees will have to consider from which estate debts and taxes will be paid and which gifts will abate in which order. This may involve an interpretation of the Wills based on the testator’s intentions. If unsure or the beneficiaries disagree with the Trustees’ interpretation, it is advisable to seek the direction from the court.
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Natalia R. Angelini – Click here for more information on Natalia Angelini.
This week on Hull on Estates, Craig Vander Zee and Sharon Davis discuss the Law Society of Upper Canada’s recent program The Six-Minute Estates Lawyer 2011, which was held on April 27, 2011. This annual program featured a series of speakers including Hull & Hull LLP own Suzana Popovic-Montag, Craig Vander Zee and Jordan Atin.
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Craig R. Vander Zee – Click here for more information on Craig Vander Zee.
Sharon Davis – Click here for more information on Sharon Davis.
An interesting excerpt from Diane Francis’s new book Who Owns Canada Now? was published in Saturday’s National Post and touches in some detail on offshore trusts as a mechanism to avoid Canadian taxes.
Aside from briefly lamenting my non-mention in a book chronicling Canada’s wealthiest, I was struck by the contradiction in the apparent approaches of different wealthy Canadians to the opportunity to avoid taxes. According to Ms. Francis, one common tax avoidance mechanism involves settling assets in an offshore trust, apparently becoming a fairly common option for the wealthy. It seems to require spending six months of the year out of the country, something I doubt many Canadians would baulk at after the dreadful winter we’ve just suffered through.
What really struck me about the article were the quotes from wealthy Canadians who refuse to avail themselves of this option on the basis that as Canadian citizens who became wealthy in Canada, they should pay Canadian taxes and not shelter assets.
Here’s hoping I face this touchy dilemma myself – the sooner the better!
At any rate, an interesting article offering a good précis of both sides of the issue and much food for thought.
It will be even more interesting if these trusts begin to be litigated. Certainly English jurisprudence seems to deal with them often, if only because the Judicial Committee of the Privy Council continues to take appeal cases from the Courts of former British colonies.
Thanks for reading.