Tag: ASK YOUR LAWYER ASK RICK

31 Mar

Lapse and Anti-Lapse

Hull & Hull LLP Estate & Trust Tags: , , , , , , , , , , , , 0 Comments

I regularly tutor students who are preparing to write the Estate and Trust section of the Solicitor’s exam for the Law Society. One of the more common questions that my students ask is for help in explaining two concepts: lapse and the “anti-lapse provision”.

The common definition of a lapsed gift, is a gift that has failed because it is incapable of taking effect.   Two common reasons for a gift to be incapable of taking effect is where the beneficiary predeceases the testator or the gift is disclaimed by the beneficiary.  

 

Pursuant to Section 23 of the Succession Law Reform Act, unless a contrary intention appears in the Deceased’s Will, if a gift is incapable of taking effect, the failed gift will fall into the residue of the testator’s estate and distributed accordingly.

 

Section 31 of the Succession Law Reform Act is commonly referred to as the anti-lapse provision. The anti-lapse provision saves a failed gift if the beneficiary falls into the class of beneficiaries set-out under this provision and that beneficiary leaves a spouse or issue who survived the testator. If these conditions are met, the gift will not fall into the residue, however it will take effect as if it had been made directly to the spouse or issue of predeceased beneficiary.

 

Thank you for reading, and have a great day.

Rick Bickhram – Click here for more information on Rick Bickhram.

30 Mar

Appointing an Estate Trustee During Litigation

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In a recent court decision, the Honourable Justice Stinson considered a motion from competing family members for the appointment of an estate trustee during litigation.

In Buswa v. Canzoneri, the Deceased died without a Will on September 29, 2010. The Deceased did not have a spouse and was survived by seven siblings, and two children.

The concern in this case was that the Deceased did not leave anyone with legal authority or responsibility to arrange his funeral and dispose of his remains.

Two of the Deceased’s siblings, the Applicants, applied for a Certificate of Appointment of Estate Trustee Without a Will. The daughter of the Deceased, the Respondent, also applied for a Certificate of Appointment of Estate Trustee Without a Will.

 

In his decision, the Honourable Justice Stinson considered the legal interpretation of section 29 of the Estates Act, which reads as follows:

1)  Subject to subsection (3), where a person dies intestate … administration of the property of the deceased may be committed by the Superior Court of Justice to:

 

a)      the person to whom the deceased was married immediately before the death of the deceased or person with whom the deceased was living in a conjugal relationship outside marriage immediately before the death;

 

b)      the next of kin of the deceased;

As the Deceased did not have a spouse, the court considered the definition of “next of kin.” In the Black’s Law Dictionary, “next of kin” is defined as “the person’s nearest of kindred to the decedent, that is, those who are most nearly related by blood.

 

Applying these concepts, the court held that the Respondent daughter was related to the Deceased by blood in the first degree, whereas the Applicants siblings were related to the Deceased in the second degree. Accordingly, the Respondent daughter was appointed as the Estate Trustee During Litigation.

 

Thank you for reading, and have a great day.


Rick Bickhram – Click here for more information on Rick Bickhram.

28 Mar

PLANNING ON WHAT TO DO WITH AN INHERITANCE IS IMPORTANT

Hull & Hull LLP Estate & Trust Tags: , , , , , , , , , , , , 0 Comments

Within the next twenty years, Canada’s baby boomers are in line to inherit a substantial fortune, which will represent the largest transfer of wealth from one generation to the next.

In an article written by Jennifer Power Scott and published in Canadian Living, Ms. Scott discusses the  bittersweet bonanza that many heirs face and cautions the impulsive spender: "There are a lot of people in this world who might go out and blow the whole thing in a week, and that’s not appropriate. Unless you’re well-heeled to begin with, flushing the funds into trips to Las Vegas, sexy cars and plush home theatres probably isn’t the smart way to go."

In her article, Ms. Scott stresses the importance of carefully planning what to do with your inheritance, so that your inheritance can turn into a gift that lasts. Ms. Scott urges those who have received a windfall inheritance to:

  1. Take a breath. Put your inheritance somewhere safe that earns a good guaranteed rate of interest for a few months while you think things through
  2. Once you are ready to make a decision, speak to a certified financial planner
  3. Consider your option, such as satisfying outstanding debts, investing into an RESP for your children, or an RRSP or RRIF for yourself

Essentially Ms. Scott’s article forces her readers to consider their long-term goals as opposed to their short-term goals. "It pays to step back a little bit. Some people will immediately say, I’ve got this money, I don’t deserve it all, and maybe I should start helping out my kids right away. But they need to make sure that their financial future is properly secured before they do that."

Thank you for reading, and have a great day,

Rick Bickhram – Click here for more information on Rick Bickhram.

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