Tag: beneficiary

27 Jan

An Annuity by Will

Hull & Hull LLP Beneficiary Designations, Common Law Spouses, Estate Planning, Hull on Estates, Hull on Estates, Trustees Tags: , , , , , , , , , , , , , 0 Comments

Annuities are often employed when an individual plans his or her estate. We have covered different aspects of annuities on past blogs on Hull on Estates.

A testator, for example, may choose to have one child’s portion of the future estate placed into an annuity that will create a flow of money over time. The child would have access to the cash flow, but not necessarily access to the principal amount. 

In September 2008, Gayle Reid applied to the Superior Court of Justice for an interpretation.  The claimant’s father, Bernard Wiesberg, died and left an annuity to his friend, Avonne Richter (also identified as his common-law spouse). Minimum annual payments of the annuity were directed in the Will to Ms. Richter who received them from 2003 through to 2007. 

The Applicant was to receive the residue of her father’s estate.  A 2005 Order by Dandie  J.  required Ms. Richter to designate Ms. Reid as the beneficiary.  (A provision of the Income Tax Act required the beneficiary to be named, otherwise the retirement income fund would have collapsed, defeating the testator’s intent.)

The issue arose when Ms. Richter, who received the previous annual annuity payments in arrears up to 2006, chose to take the $17,015.57 payment in January, in advance for that year. Ms. Richter died on April 17, 2007.

The Applicant sought an interpretation of her father’s Will, specifically regarding the annual payments. As the payments were for the “lifetime” of Ms. Richter, the Estate owed $12,027.44 to the Applicant because the Court reasoned that calculations must be made to the date of Ms. Richter’s death. Therefore a pro-rata calculation was “the only reasonable and fair manner to ensure the two gifts in the Will are honoured.”

If the annuity had been paid in arrears that December, Ms. Richter’s Estate would have been owed a pro-rata amount of the annuity for that year calculated to the date of her death.

Have a good day.

Jonathan

21 Oct

The Interrelationship Between a Guardian of Property and a Trustee Under a Testamentary Trust – Hull on Estates Podcast # 133

Hull & Hull LLP Beneficiary Designations, Capacity, Estate & Trust, Guardianship, Hull on Estates, Hull on Estates, Podcasts, PODCASTS / TRANSCRIBED, Show Notes, Show Notes, TOPICS Tags: , , , , , , , , , , , , , , , , 0 Comments

 

Listen to:

The Interrelationship Between a Guardian of Property and a Trustee Under a Testamentary Trust

This week on Hull on Estates, Rick Bickhram and David M. Smith discuss the complications that can arise when an incapable person is both the subject of a guardianship order and the beneficiary of a testamentary trust.

Comments? Send us an email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.

 

READ MORE

09 Sep

Variation of Trusts – Hull on Estates Podcast #127

Hull & Hull LLP Estate & Trust, Hull on Estates, Hull on Estates, Podcasts, PODCASTS / TRANSCRIBED, Show Notes, Show Notes Tags: , , , , , , , , , , , , , , , , , 0 Comments

Listen to Variation of Trusts

Craig Vander Zee and Bianca La Neve discuss variation of trusts, with an emphasis on the Variation of Trusts Act and approval of variations of trusts on behalf of minor, unascertained, unborn or contingent beneficiaries.  The well-known case of R. v. Irving (1975), 11. O.R. (2d) 42 (H.C.) is discussed.

Comments? Send us an email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.

READ MORE

08 Jul

EVEN MORE DISAPPOINTED BENEFICIARIES

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

The common law in Ontario now appears to clearly provide for claims by “disappointed beneficiaries” against drafting solicitors where a bequest to a beneficiary fails as a result of the negligence of the solicitor. (See Harrison v. Fallis, 2006 CanLII 19457 (ON S.C.))

A decision out of the Saskatchewan Court of Queens Bench appears to open the window to this type of claim even wider. Disappointed beneficiaries may also have a cause of action as against financial institutions and others that provide estate planning advice.

In Mayer v. Nordstrom, 2003 SKQB 397 (CanLII), the deceased consulted with a financial adviser with respect to his estate plan. The deceased owned a mutual fund plan, and designated his son as the beneficiary. However, the plan was not registered, and the designation was therefore void.  The fund fell into the deceased’s estate, and the son received only half of the value of the fund as a beneficiary of the estate. The disappointed son sued the financial planner for negligence. 

The financial planner resisted the claim, taking the position that he did not owe a duty of care to the son.

The Court disagreed. The Court held that the “disappointed beneficiary” principles articulated in solicitors’ negligence cases such as Earl v. Wilhelm (2000), 183 D.L.R. (4th) 45 (Sask. C.A.) and White v. Jones, [1995] 1 All E.R. 691 (H.L.) applied equally to other professions. The “disappointed beneficiary” principle “is not a function merely of the defendant’s occupation”. The planner was a professional who held himself out as possessing special skill, judgment and knowledge in financial planning, which included estate planning tools. The planner ought to have known that carelessness on his part would cause harm to a third party.

The duty of care to potential beneficiaries, opened in the White v. Jones decision, continues to expand.

Thank you for reading.

Paul Trudelle

20 Jun

Double Legacies – A Trap to Avoid

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

Spouses commonly execute virtually identical Wills, called “mutual wills”, on the assumption that each will give the same gifts on death out of the same “family” pool of property.  Oftentimes the residue of the estate of the first spouse to die is left to the surviving spouse, as long as he or she lives at least 30 days after the death.

 

A problem can arise if both Wills provide for the same gifts in case of simultaneous death or death within 30 days.  If both spouses do in fact die within 30 days of each other then an unintended double legacy could result. 

 

The following wording might cause exactly that problem in a mutual will scenario (and perhaps should be avoided or redrafted):

 

1.           I direct my estate trustee to pay or transfer the residue of my estate to my said Husband ( Wife) if he (she) survives me by at least thirty days. 

 

2.           If my said Husband (Wife) dies before me or fails to survive me by at least thirty days, then I direct my estate trustee to pay $100,000.00 to my daughter Sue and pay or transfer the residue to my son Joe.

If both spouses have that wording in their wills, and both die within 30 days of each other, Sue might get two gifts of $100,000 for a total of $200,000 at Joe’s expense, even though only one $100,000 gift was intended.  Joe would not be a happy beneficiary.

Thanks for reading.

Sean Graham

08 May

The Genesis of Trusts (?)

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

The contemporary attitude is that we live in a young country.  True in some respects.  Yet we own the oldest contiguous institutions.  Trusts are one aspect of this venerable inheritance: the trust is as old as the Common Law.  Actually, a little older in some respects: the English trust finds its roots in the 12th century.  

It all started when a few knights returned from their crusades to find that the "friends" to whom they had entrusted management of their feudal lands refused to return said lands.  There was no mechanism at law to force the new untrustworthy owners to return the land so the law courts could do nothing. 

Naturally, the irate knights went to the Lord Chancellor and "asked" for justice.  One can imagine the scene: the silk-gowned Lord Chancellor looking down at the length of his shoe, then up at a selection of battle-worn armored thugs with gauntlets tapping hilts on chipped swords, over at the foppish, yawning new land-holder, then down again at the length of his shoe.  Unsurprisingly, the knights who had nothing else to live for continually won in the Courts of the Chancellory and the concept of trustees and beneficiaries was born.  I wager that trial by ordeal would have reached similar results so this must have been fate at work.

Tomorrow some interesting case law, I promise. 

Chris Graham

18 Dec

The Core Issues Concerning Estate Taxes – Hull on Estates and Succession Planning Podcast # 91

Hull & Hull LLP Beneficiary Designations, Hull on Estate and Succession Planning, Podcasts Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , 0 Comments

Listen to The Core Issues Concerning Estate Taxes

This week on Hull on Estates and Succession Planning, Ian and Suzana discuss the core issues surrounding estate taxes.

READ MORE

16 Oct

Beneficiary Designations – Hull on Estate and Succession Planning Podcast #82

Hull & Hull LLP Hull on Estate and Succession Planning, Hull on Estate and Succession Planning, Podcasts, PODCASTS / TRANSCRIBED Tags: , , , , , , , , 0 Comments

Listen to Beneficiary Designations

This week on Hull on Estate and Succession Planning, Ian and Suzana discuss core issues in estate planning; specifically the importance of beneficiary designations.

READ MORE

03 Apr

Breach of Trust – Criminal Penalties

Hull & Hull LLP Beneficiary Designations, Ethical Issues Tags: , , , , , , , , , 0 Comments

Yesterday I suggested that criminal charges in Estates, capacity and trust cases might become more common.

In R. v. Bunn (2000), C.C.C. (3d) 505,  the Supreme Court of Canada considered the sentencing of a Manitoba lawyer convicted of converting some $86,000 worth of trust monies to his own use. The accused acted as attorney for property for Soviet/Russian beneficiaries of Manitoba and Saskatchewan estates. He received monies in trust, but instead of paying it all to the beneficiaries, he redirected some of it to himself.

This conduct was discovered by the Law Society of Manitoba when conducting a spot audit of the accused. The accused was disbarred. Some compassion may be warranted: the accused cared for a disabled wife, was the sole income earner in the family, suffered financial woes for years, and lost his reputation and 20-year law career.

At trial the accused was sentenced to two years in a federal penitentiary, but the Manitoba Court of Appeal substituted a conditional sentence of two years less a day.

The Supreme Court of Canada, in a 5-3 decision, upheld the Appeal decision. The majority decided that the need for restorative justice and the benefits of reducing prison terms outweighed the minority’s desire to denounce the accused and promote general deterrence.

Lawyers tend to be easier targets in these cases because of the need to establish mens rea (the intent to commit a crime). It would be difficult for any competent lawyer to claim ignorance of proper usage of trust monies, but laypersons may be a different matter.

Thanks for reading.
Sean Graham

26 Mar

Federal Budget Introduces Registered Disability Support Plan

Hull & Hull LLP Uncategorized Tags: , , , , 0 Comments

Like it or loathe it, the recent federal budget is an election budget, and strives to do something for everyone.

From an estate planning prospective, it reaches out to families with a disabled member, by establishing the Registered Disability Support Plan (“RDSP”).

The plan is available in 2008, and is similar in style to the current Registered Education Savings Plan. An individual who is eligible for the disability tax credit, their parent or legal representative may establish an RDSP.

The intent is that the RDSP would provide an income for the disabled individual once they attain the age of 60.

Under an RDSP, parents, beneficiaries or others will be able to contribute a lifetime maximum of $200,000. Contributions can be made until the beneficiary is 59. While contributions are not tax-deductible, investment income earned on investments within the plan will accrue tax free, and will be attributed to the beneficiary when paid out.

The Government will provide matching contributions, depending on family income. The matching grants are between 100 and 300%! The lifetime matching grant is $70,000.

Benefits paid out under the RDSP will not reduce any federal income-tested benefits. It is stated that the federal government will work with the provinces in order to ensure that the RDSP is “an effective saving vehicle to improve the financial security and well-being of children with severe disabilities.”

The effectiveness of the meshing between the federal plan and the provincial support programs, such as Ontario’s Ontario Disability Support Plan, is yet to be seen.

Thank you for reading,

Paul Trudelle

SUBSCRIBE TO OUR BLOG

Enter your email address to subscribe to this blog and receive notifications of new posts by email.
 

CONNECT WITH US

TRY HULL E-STATE PLANNER SOFTWARE

Hull e-State Planner is a comprehensive estate planning software designed to make the estate planning process simple, efficient and client friendly.

Try it here!

CATEGORIES

ARCHIVES

TWITTER WIDGET