Tag: inter vivos trust

23 Oct

Can a Guardian Settle a Trust?

Noah Weisberg Capacity, Estate Planning, Ethical Issues, Guardianship, Power of Attorney Tags: , , , , , , , , , , , 0 Comments

Does an attorney, or guardian, have the power to change a grantor’s estate plan?

According to section 31(1) of the Substitute Decisions Act, a guardian of property (or attorney for property) has the power to do on the incapable person’s behalf anything in respect of property that the person could do if capable, except make a will.

The statute, however, is deceptively simple.  Can a guardian transfer property into joint tenancy?  Can a guardian sever a joint tenancy?  Can a guardian change a beneficiary designation on a RRSP, RRIF or insurance policy?  Can an inter vivos trust be established or an estate freeze undertaken to save taxes?  There are numerous cases which have tested these issues.

For instance, in Banton v Banton, Justice Cullity found that although the grantor’s attorneys had the authority to create an irrevocable inter vivos trust, they nonetheless breached their fiduciary obligations owing to the grantor, in creating the trust.

The irrevocable trust provided for income and capital at the trustee’s discretion for the grantor’s benefit during his lifetime and a gift over of capital to the grantor’s children, who were also the attorneys.  The scheme of distribution of the irrevocable trust was the same as provided for in the grantor’s will.   However, the court found that the fact that the remainder interest passed automatically to the grantor’s issue defeated the grantor’s power to revoke his will by marriage and would deprive his common law spouse of potential rights under Parts II and V of the Succession Law Reform Act and Part I of the Family Law Act.  The court found that the gift of the remainder of the interest went beyond what was required to protect the grantor’s assets.

Justice Cullity stated:

“I do not share the view that there is an inviolable rule that it is improper for attorneys under a continuing power of attorney to take title to the donor‘s assets either by themselves or jointly with the donor .  This must depend upon whether it is reasonable in the circumstances to do so to protect or advance the interest, or otherwise benefit, the donor.”

Noah Weisberg

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

13 Nov

Anticipating Issues in Trust Arrangements – Hull on Estate and Succession Planning Podcast #86

Hull & Hull LLP Archived BLOG POSTS - Hull on Estates, Hull on Estate and Succession Planning, Hull on Estate and Succession Planning, Podcasts, PODCASTS / TRANSCRIBED Tags: , , , , , , , 0 Comments

Listen to Anticipating Issues in Trust Arrangements

This week on Hull on Estate and Succession Planning, Ian and Suzana discuss trust planning options and anticipating issues that may arise in the future.

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23 Oct

Inter Vivos and Principal Residence Trusts – Hull on Estate and Succession Planning Podcast #83

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Listen to Inter Vivos and Principal Residence Trusts

This week on Hull on Estate and Succession Planning, Ian and Suzana talk about Inter Vivos and Principal Residence Trusts as effective tools to consider when tax planning a will.

 

 

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04 Jul

The Family Cottage – Deciding How It’s Transferred

Hull & Hull LLP Archived BLOG POSTS - Hull on Estates Tags: , , , , , , 0 Comments

Yesterday I blogged about deciding who to leave your cottage to in your Will.  Today I thought I would discuss 3 different ways of transferring the cottage.

By Specific Bequest
The most obvious way is to make a specific bequest of it in your Will, leaving it to a named beneficiary (or beneficiaries who will own it jointly).  The beneficiaries will receive direct ownership of the property and it will be theirs absolutely, do use as they please.

If there will be multiple beneficiaries, you should give some thought to whether you would like them to receive the cottage as joint-tenants or tenants in common – this will affect what happens to the cottage on the death of one of the beneficiaries.  If you think you would like them to own the property jointly, then this will need to be taken care of at the planning stage.

By Testamentary Trust
Another option is to leave the cottage in a trust – in which case you would designate how long the trust is to remain in existence and who the ultimate beneficiaries would be. 

This option is useful if you would like your spouse to continue to have use of the cottage during his or her lifetime, but would then like it to go to your children. This option also allows you to put conditions on the term of ownership as well as to provide for the continued maintenance of the cottage.

By Inter Vivos Trust
This option involves transferring the cottage into a trust for the beneficiaries during your lifetime.  The advantages of this option are that your estate won’t have to pay probate fees or taxes on the
property after your death.  On the other hand, you may trigger tax liability while you are alive.

Different options will work for different people – if you have a cottage, this is definitely a topic you should discuss with an estate planning expert.

Thanks for reading!

Megan F. Connolly

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