Tag: estate administration

02 Apr

Update Regarding CRA Filing Deadlines and COVID-19

Noah Weisberg Uncategorized Tags: , , , , , , , , 0 Comments

Last week, Paul Trudelle blogged about CRA’s announcement regarding filing deadlines in light of the COVID-19 crisis.  Since then, a further announcement has been made. 

As it relates to the administration of an estate:

  • the Estate’s T3 tax return is now due on June 1, 2020 instead of April 14, 2020.  Tax payments owed by a trust remain deferred until September 1, 2020
  • the filing of an individual’s tax return remains uncertain as mentioned in Paul’s blog

Information is changing daily.  If the above applies to you, or an estate that you are responsible for, you should contact a professional accountant and/or monitor the CRA website.

Stay safe and wash your hands,

Noah Weisberg

Please click on this link to see our COVID-19 related resources.

17 Jan

Tattoo You

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

Tattoos are, without a doubt, popular. According to a clinical report in Pediatrics, in 2010, 38% of 18 to 29 year olds had at least one tattoo. A study conducted in 2015 found that 47% of Millennials had at least one tattoo. Tattoos, once the hallmark of rebel culture, have now crossed over into the mainstream. It may be that the rebels are the ones without tattoos.

Tattoos are now also making a mark on the administration of estates.

Take Chris Wenzel, who died in 2018. His dying wish was that his tattoos, which covered most of his body, be preserved and given to his wife. According to a CBC report, with the assistance of an organization called “Save My Ink Forever”, she was able to preserve Chris’ tattoos.

Legal issues relating to the process are discussed in the December 2019 issue of Step Journal. In an article entitled “Whose Skin Is It Anyway?”, authors Julia Burns and Matthew Watson discuss the legal implications of such tattoo preservation services from the point of view of English and Welsh succession law.

One issue is that in the common law, there is “no property in a corpse”. A person cannot dispose of their own body through their will. However, the authors note that courts are relaxing this rule, particularly where the body or parts have “a use or significance beyond their mere existence”.

Estate trustees have the responsibility of disposing of the body. The deceased’s wishes are not binding on the estate trustee. However, while not binding, they are relevant. The authors cite a decision, RE JS (Disposal of Body), [2016] EWHC 2859 (Fam), where the deceased asked that her body be cryogenically frozen. The deceased’s mother wanted to abide by these wishes, but her father did not. The court appointed the mother as estate trustee. The court could not order that the wishes of the deceased be followed, but did order that the father be restrained from interfering with the mother’s arrangements as estate trustee.

If a tattoo is property of the estate, how is it to be disposed of? The authors suggest that the will should specifically address this.

Another issue that the authors identify is whether an estate trustee would have an obligation to preserve a tattoo, assuming that it has value. Is such a tattoo an asset of the estate that the estate trustee must “call in”? There appears to be no easy answer to this. However, the authors conclude that “Common law’s strength is its ability to adapt to new social developments; treating preserved tattoos as art that can be disposed of in the same manner as any other chattel may be one of them.”

Thanks for reading.

Paul Trudelle

02 Jan

Feeling Good into 2020

Noah Weisberg Estate Planning, General Interest, In the News, Uncategorized, Wills Tags: , , , , , , , , , , 0 Comments

It is the start of a new year and a new decade.  Many of us recently enjoyed some holidays and had much to eat and drink.  Many of us are also feeling the lingering effects of this merriment.  I figured that an uplifting, feel good read would be a nice way to start 2020.  I was thus delighted to learn about Eva Gordon, and her estate.

Ms. Gordon passed away at the age of 105.  She grew up on an orchard in Oregon, never graduated from college, and worked as a trading assistant at an investment firm in Seattle.  In 1964, she married her husband, who was a stockbroker.  They did not have any children together.  Neither Ms. Gordon or her husband came from money, and they lived a modest life.  Ms. Gordon’s godson, who was the Estate Trustee, joked that if Ms. Gordon and her husband went out for lunch or dinner, then they would make sure to bring their Applebee’s coupon.

From the salary that Ms. Gordon received from her employer, she purchased partial shares in numerous stocks, including oil and utility companies, and was an early investor in Nordstrom, Microsoft, and Starbucks.  Unlike many at that time, Ms. Gordon held onto these valuable stocks.  As a result of this shrewd investing, Ms. Gordon’s wealth increased considerably over the latter years of her life.

Instead of wasting away her money, in her Will, Ms. Gordon decided to bequeath $10 million to various community colleges, with about 17 colleges each receiving cheques for $550,000.  Interestingly, no stipulations were put into place as to how the money was to be spent by the colleges.  The colleges could do with the money as they wished.  For many of them, it was one of the largest donations they had ever received.

For an interesting perspective on the impact of donations to modest, as opposed to elite, institutions, you should listen to Malcolm Gladwell’s Revisionist History podcast (episode 6).

Noah Weisberg

If you find this blog interesting, please consider these other related blogs:

23 Sep

Life Tenants, and the Vesting of Real Property

Christina Canestraro Estate Planning, Executors and Trustees, Vesting of Real Property Tags: , , , , 0 Comments

Section 9(1) of the Estates Administration Act, R.S.O. 1990, c. E 22 (“EAA” ) provides, among other things, that real property vests in persons beneficially entitled to that property under a will if that property was not disposed of, conveyed to, divided or distributed among the persons beneficially entitled by the personal representative within three years after the death of the deceased (unless a caution has been registered on title).  The EAA does not provide further clarification on when vesting takes effect if a property is subject to a life interest, and further, what happens to that property upon the termination of the life interest.

The recent decision of Lewis Pelicos, Executor and Trustee of the Estate of James Pelicos v. The Estate of Stelios Pelicos, 2019 ONSC 5304 provides clarity on when vesting takes place in circumstances where real property is subject to a life interest.

In that case, the Applicant’s father, James, died testate.  The beneficiaries of James’ estate were his two sons, Steven and Lewis (the Applicant).  James’ last will and testament required his two sons, Steven and Lewis (the Applicant) to hold his residential property in trust for his wife, Lillian, for her lifetime. Steven passed away some years later, leaving only the Applicant as the beneficiary of his father’s estate. The Applicant was also the executor and trustee of his father’s estate.

Following the death of the life tenant, the Applicant wished to sell the property, but required the court’s direction on whether Steven’s estate would be entitled to a share of the proceeds of sale. The answer to that question depended on whether the property vested in the beneficiaries of James’ estate on his death, or the death of the life tenant.

The Applicant brought an application seeking the court’s directions, with the issues stated as follows:

(1) Can it be inferred that the property falls into the residue of the estate upon the termination of the life interest?

Or

(2) In the alternative, do the beneficiaries of James’ estate take their interest on the testator’s date of death, or the date of death of the life tenant?

The court ultimately found that the property vested in both Steven and the Applicant as of the date of death of the testator, and as a result, the property did not fall into the residue of the estate upon the death of the life tenant.

To learn more about Vesting of Real Property, check out this blog:

Thank you for reading!

Christina Canestraro

29 Apr

Estate Information Returns: What’s That All About?

Kira Domratchev Estate & Trust, Executors and Trustees, Trustees Tags: , , , , , , 0 Comments

Were you recently appointed as Estate Trustee and needed to obtain a Certificate of Appointment of Estate Trustee (otherwise known as “probate”)? In that case, you need to know that an Estate Information Return must be filed with the Ministry of Finance within 90 days of the date of the appointment, setting out the assets in the Estate and their corresponding date of death values.

Typically when an Application for Certificate of Appointment is filed with the Court, a trustee may not have access to every asset of the Estate such that that the value of the Estate may not necessarily be accurate.

As a result, when an Estate Information Return is filed following the Certificate of Appointment being granted, all of the assets of the Estate must be listed. Depending on the values of the assets as confirmed by the trustee following the Certificate of Appointment being granted, a refund may be issued in the event that Estate Administration Tax was overpaid or additional tax may be payable in the event that the value of the assets as listed on the Application is lower than what was listed on the Estate Information Return.

The Estate Information Return may be audited by the Ministry of Finance for up to four years after it is filed. As such, it is important to retain all relevant records in the event of such an eventuality. Another important consideration is that the Ministry of Finance will not typically provide confirmation of receipt of an Estate Information Return so it is prudent to send it via means that would provide you with confirmation of delivery such as fax.

Finally, if a trustee finds out any additional information regarding the value of the assets of the Estate that has any bearing on the Estate Administration Tax payable, an amended Estate Information Return must be filed within 30 days of the new information being uncovered.

Thanks for reading!

Kira Domratchev

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

File Your Estate Information Return On Time

The Estate Information Return and Multiple Wills

Hull on Estates #468 – Personal Property, Digital Assets and the Estate Information Return

31 May

Estate Trustee Duties 101

Noah Weisberg Executors and Trustees, In the News, Litigation, Passing of Accounts Tags: , , , , , 0 Comments

The duties owing by an Estate Trustee are plentiful and onerous.  It is important for an Estate Trustee, as soon as stepping into office, to understand their obligations and prioritize the steps to be completed.

There have been concerns rising out of Australia where firms have been billing clients, now deceased, for services that they are no longer providing.  The Australian Broadcasting Corporation, as well as Bloomberg, have reported that many financial institutions have been billing clients notwithstanding their own internal documents confirm that services are not being provided and that their client is dead.  In some instances, clients who had passed away ten years prior, were still being charged.

This serves as a helpful reminder that Estate Trustees should immediately take steps to cancel the deceased’s numerous accounts/subscriptions that are no longer needed and that may automatically renew.  These include, telephone, internet, magazine/newspaper, and the gym.  And of course, the bank!  An estate account should also be opened in order to deposit income and to pay any necessary expenses that may arise.

An Estate Trustee does not want to deliver an accounting, replete with payments for services that are no longer necessary.  This would certainly impact a claim for compensation.

Solicitors assisting an Estate Trustee with the administration of an estate often provide checklists to ensure such obligations are met.

Noah Weisberg

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

22 Mar

The Executor’s Year

Suzana Popovic-Montag Executors and Trustees, Trustees Tags: , , 0 Comments

The “Executor’s Year” is a common law rule that gives estate trustees one year to administer the estate before beneficiaries have a legal entitlement to demand payment. In general, interest on a legacy will be payable to a beneficiary with calculation commencing one year after the testator’s death or after obtaining the certificate of appointment of estate trustee, where applicable, unless otherwise specified in the will. There is nothing in the rule that prevents the estate trustee from making an earlier distribution. If the year has passed and the estate trustee has not made satisfactory progress with the administration of the estate, the beneficiaries may be entitled to take action for unnecessary delay.

The executor’s year is commonly referred to as a “rule of thumb” or an informal rule, because of its flexibility. The rule assumes the estate in question is relatively simple. In fact, many estates take longer than one year to be fully administered. Applying for a Clearance Certificate from the Canada Revenue Agency will often extend the time before final distribution, as it can take months to receive the Clearance Certificate.

The executor’s year was recently considered by the Supreme Court of Prince Edward Island in Cornish Estate, Re. In this case, the executor did not administer the estate in a timely manner, but the court found this was because of the high degree of conflict between the beneficiaries of the estate. The court declined to penalize the executor, even though she was well beyond the one year guideline in winding up the estate. The court held: “The Executor’s Year is still the proper benchmark, but it assumes only normal difficulties, and certainly no outright rebellion or action against the Executor by a sibling or siblings who raise and attempt to enforce baseless claims not mentioned in the Will, as appears to have happened in this case.”

Thank you for reading.

Suzana Popovic-Montag

Other articles you might enjoy:

Trustees, Estate Trustees, and Administratrices – A Disambiguation

Protecting a Trustee from Liability

Simplified Section 116 Clearance Certificate Procedures

 

23 Nov

Advertising for Creditors – Does the Standard Practice Need an Update?

Suzana Popovic-Montag Estate & Trust, Estate Planning, Executors and Trustees, General Interest, In the News, New Media Observations, News & Events, Trustees Tags: , , , , , 0 Comments

An estate trustee must ensure that the deceased’s debts have been discharged prior to making any distributions. This is usually done by advertising for creditors in a newspaper. With today’s emphasis on technology, however, is advertising in a newspaper still the most efficient way to reach potential creditors?

The Standard Practice

An estate trustee will usually not be personally responsible for paying the deceased’s debts, as debts are paid from estate assets. The estate trustee may be found personally responsible for debts, however, if they begin to distribute the estate prior to paying the deceased’s debts.

Updating standard practice.
“An estate trustee will usually not be personally responsible for paying the deceased’s debts, as debts are paid from estate assets.”

An estate trustee may avoid personal liability for failing to pay a debt of the estate if they advertise for creditors.  Section 53(1) of the Trustee Act provides personal protection for an estate trustee who advertises for creditors prior to distributing the estate assets.

The standard practice for advertising for creditors is to advertise in a newspaper three consecutive weeks in a location where the deceased lived and worked, and then wait at least one month from when the advertisement was first published to begin administration of the estate. The newspaper publisher will then usually send an Affidavit certifying that the estate trustee has properly provided notice to creditors. The Affidavit can be filed with the court as proof that the estate trustee has taken the proper precautions to advertise for creditors.

Does the Standard Practice Need an Update?

While the newspaper may be the most common means of advertising for creditors, is it the most efficient way to reach a creditor?

It is worth considering advertising for creditors online. Advertising through an online service may be more cost effective than in a newspaper. We have previously blogged on a service that provides online advertisements for creditors, and provides affidavits in support of the estate trustee’s advertisement. Using a service to publish notice to creditors has the potential to reach a larger majority of individuals, in a more cost-effective manner. Furthermore, the internet has the ability to provide information to creditors that may be located outside of the deceased’s jurisdiction, allowing for the advertisement to reach more individuals as compared to a newspaper advertisement that is generally confined to one jurisdiction.

As the Trustee Act does not specify the proper form of advertising for creditors, there is the potential for online services or cellphone applications to provide advertisements for creditors in a more efficient and effective way.

Thanks for reading,

Suzana Popovic-Montag

 

Other Articles you Might be Interested In

Show Me the Creditor

Can You Inherit Debt?

The Rising Age of Debt

13 Oct

The US Elections and Estate Tax

Noah Weisberg Executors and Trustees, In the News, News & Events Tags: , , , , , , , , , , 0 Comments

Given the intrigue and extensive coverage that the current US election has had north of the border, it is only fitting that we dedicate today’s Hull & Hull Blog to reviewing the position taken by Clinton and Trump with respect to changes to estate tax.

A recent article in Forbes explains that current US laws exempt estates worth $5.45 million or less from paying estate tax.  Estates valued higher pay 40% tax.

Hillary Clinton seeks to increase the taxes owing by the wealthiest from 45% to 65% based on the value of the estate, apparently the highest it’s been since 1981.  Specifically, estates over $10 million would be taxed at 50%, those over $50 million at 55%, and those exceeding $500 million (for a single person) at 65%  As well, Clinton also seeks to lower the exemption for estates valued at $5.45 million to $3.5 million.

Hillary Clinton seeks to increase the estate tax owed by wealthy Americans
“Hillary Clinton seeks to increase the taxes owing by the wealthiest from 45% to 65% based on the value of the estate, apparently the highest it’s been since 1981.”

Trump, on the other hand, seeks to eliminate the estate tax altogether.

According to the Wall Street Journal, the Republicans see the tax as “a patently unfair confiscation of wealth that punishes family-owned business”, while the Democrats view it as “a levelling tool necessary to combat concentration of wealth”.

In Ontario, while there is no inheritance tax, estate administration tax is charged on the total value of a deceased’s estate.  Subject to certain exceptions, this includes the following assets: real estate; bank accounts; investments; vehicles and vessels; all property held in another person’s name; and, all other property, wherever situated, including goods, intangible property, business interests, and insurance proceeds.

As discussed in prior Hull & Hull LLP blogs, new provisions came into force on January 1, 2015, which requires payment of $5.00 for each $1,000, or part thereof, for the first $50,000 and $15 for each $1,000, or part thereof, of the value of the estate exceeding $50,000.  There is no estate administration tax payable if the value of the estate is $1,000 or less.

Noah Weisberg

13 Sep

Application for Directions – Trustee Act

Stuart Clark Trustees Tags: , , , , , , , , , 0 Comments

Being a trustee of a trust can be perilous, with trustees facing potential personal liability should they make the wrong decision. As a safeguard against such potential liability, when issues arise in the administration of a trust, trustees may consider commencing an Application for the opinion, advice or direction of the court in accordance with the Trustee Act. Section 60(1) of the Trustee Act provides:

“A trustee, guardian or personal representative may, without the institution of an action, apply to the Superior Court of Justice for the opinion, advice or direction of the court on any question respecting the management or administration of the trust property or the asserts of a ward or a testator or intestate.”

Should the court accept such an Application, and provide the trustees with directions regarding the issue, the trustees are insulated from liability as it relates to the beneficiaries regarding such an issue so long as they act in accordance with the directions of the court. This is made clear by section 60(2) of the Trustee Act, which provides:

As per the Trustee Act, draft an Application for Directions to safeguard a trustee from potential liability.
“As a safeguard against such potential liability, when issues arise in the administration of a trust, trustees may consider commencing an Application for the opinion, advice or direction of the court in accordance with the Trustee Act.”

“The trustee, guardian or personal representative acting upon the opinion, advice or direction given shall be deemed, so far as regards that person’s responsibility, to have discharged that person’s duty as such trustee, guardian or personal representative, in the subject-matter of the application, unless that person has been guilty of some fraud, wilful concealment or misrepresentation in obtaining such opinion, advice or direction.”

Notably, while section 60(1) of the Trustee Act allows trustees to direct a specific issue for the “opinion, advice or direction” of the court, the court has been clear that on such an Application the court will not exercise discretionary decisions on behalf of the trustees. Such a point was recently made clear by Justice Broad in Keller v. Wilson, where at paragraph 25 the court states:

“The fact that trustees are expressly permitted by the Trustee Act to apply for the opinion advice or direction of the Court does not authorize the court to exercise discretionary powers on behalf of trustees, thereby shifting responsibility from the trustees, on whom the settlor of the trust placed such responsibility, to the court. This is so even though subsection 60(2) of the Trustee Act provides a specific indemnification to trustees who act upon the opinion, advice or direction of the court.” [emphasis added]

Cases like Keller v. Wilson make it clear that on an Application for opinion, advice, or direction, the court will not exercise discretionary decisions on behalf of the trustee, with their jurisdiction to provide directions being limited to questions of a “legal” nature relating to the discharging of the trustees’ duties. To this effect, the court’s direction can be thought of the court advising whether the trustee “can” not “should” do a particular action. While the court will advise whether the trustee has the legal authority to do a particular action, they will not make such a discretionary decision on behalf of the trustee.

Thank you for reading.

Stuart Clark

SUBSCRIBE TO OUR BLOG

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

CONNECT WITH US

CATEGORIES

ARCHIVES

TWITTER WIDGET