Tag: estate administration
The recent decision of Mervyn Estate, Re, 2020 ONSC 6989 (CanLII) illustrates the types of issues that can arise on a passing of accounts, and also the underlying factors that can lead to a contested hearing.
In Mervyn, Bud died leaving a will. In his will, he appointed his second wife Anne, a long-time employee and his daughter as estate trustees. He also had two sons, who were beneficiaries. The estate trustees prepared an accounting, and his two sons raised objections.
Before getting to the specific objections, the court noted that there were a number of factors that contributed to the distrust and animosity between the trustees and the sons. Some of these pre-existed the estate administration, and several arose in the course of the estate administration. For example, the sons had a strained relationship with the second wife and their sister for some time. (Alarm bell: testators should reconsider appointing estate trustees who already have a strained relationship with the beneficiaries.) In addition, the estate trustees failed to disclose a bank account in their initial accounting. (Alarm bell: even though the judge found that this was an oversight, and that the estate trustees did not know of the account, this served to heighten the distrust.) Another factor was a “different understanding” between the parties as to whether Bud wanted a one-day open-casket visitation. (Alarm bell: this trigger point could be avoided by a testator making his or her plans clear to all.)
With respect to the specific objections to the accounts, one was that two rifles listed as estate assets in fact belonged to one of the sons. This led to the son reporting the “theft” to the police. The estate trustees countered by alleging that the son’s position that he owned the guns “effectively amounts to theft” by him. (Alarm bell: accusations of theft and the involvement of police can only intensify the animosity and distrust.)
The court ultimately accepted that the son had purchased the guns. Spouse Anne didn’t get the guns.
Which brings me back to the title of this blog. What came to mind was Squeeze’s “Annie Get Your Gun” from 1982. A great song that I will now be humming all weekend. What I wasn’t thinking about and only learned of after further digging was the 1946 musical about sharpshooter Annie Oakley, “Annie Get Your Gun” by Irving Berlin. The musical features the song “There’s No Business Like Show Business”. Think Ethel Merman. Another song that I might be belting out this weekend. Sorry family.
Have a great weekend.
I blogged about Estate Information Returns on April 29, 2019 and what they mean for a recently appointed Estate Trustee.
There have since been a few changes to the obligations of an Estate Trustee in connection with an Estate Information Return.
Whereas the Estate Information Return had to be filed with the Ministry of Finance within 90 calendar days after a Certificate of Appointment of Estate Trustee (with or without) a Will was issued, that requirement is changed to 180 days since January 1, 2020.
Another important change is that whereas before January 1, 2020, an Estate Trustee had to file an Amended Estate Information Return within 30 calendar days of becoming aware of any information submitted that was inaccurate or incomplete, that period was increased to 60 days.
Since January 1, 2020, there is also no Estate Administration Tax payable on the first $50,000.00 of the Estate assets. The Estate Administration Tax is paid on the basis of $15.00 for every thousand dollars of the remainder of the Estate assets (i.e. above and beyond $50,000.00).
These changes are important because they allow an Estate Trustee more time to investigate the nature of the Estate assets and provide as accurate information to the Ministry of Finance, as possible.
A helpful guide from the Ontario government in respect of Estate Information Returns and the issues surrounding them can be downloaded here.
Thanks for reading!
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The Canada Revenue Agency (CRA) recently provided an update regarding its processing of clearance certificate requests.
Due to COVID-19, clearance certificates may be taking longer to process because employees have limited access to CRA offices and are receiving minimal submissions by mail or fax. Any new clearance certificate applications submitted after March 12, 2020 may not form part of the inventory being processed. As such, CRA is encouraging legal representatives who submitted a clearance request after March 12, 2020 to resubmit the request and supporting documents electronically, either through My Account, Represent a Client or My Business Account.
If the applicant cannot use one of these portals, in order to help stop the spread of COVID-19, CRA has created a temporary procedure allowing taxpayers and their representatives to submit clearance certificate requests and supporting information by e-mail. To do so, we can contact the CRA at CCTX19G@cra-arc.gc.ca, and the province where the executor lives should be named in the subject line. CRA has a sample e-mail accessible in the link at the top of this blog, and CRA warns that sensitive information or attachments should not be included in the e-mail request. We can expect a CRA officer to reply by e-mail with requirements to authorize e-mail communication and to advise when/if we are permitted to submit the clearance certificate application by e-mail.
This e-mail option is helpful to applicants, as it may avoid delay in attending to an estate’s tax matters. However, it is a route to consider carefully, as there is greater risk in proceeding by e-mail than through portal access.
Thanks for reading and have a great day,
Natalia R. Angelini
This week on Hull on Estates, Natalia Angelini and Doreen So discuss the estate administration issues surrounding the disposition of the body, where there is no will, in Re Timmerman Estate, 2020 ONSC 3424 (CanLII) and Re Timmerman Estate, 2020 ONSC 3425 (CanLII).
Should you have any questions, please email us at firstname.lastname@example.org or leave a comment on our blog.
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,
Please click on this link to see our COVID-19 related resources.
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),  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.
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).
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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?
(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!
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.
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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.
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