June 19th, 2013
At my law office in Ottawa, practically on a daily basis I explain to clients about the exciting estate planning opportunities offered by testamentary trusts. Just the other day, I met with Jim and Sue (not their real names) and suggested they consider including trusts in their Wills for each of their three adult children.
As I explained to Jim and Sue, a trust that is created as a result of a death is known as a ‘testamentary’ trust. Trusts in wills are an example of testamentary trusts. One benefit to setting up a testamentary trust is to provide for the possibility of income splitting. A testamentary trust is taxed as a separate taxpayer at the same marginal tax rates as individuals. So for Jim and Sue, a properly-drafted trust can offer significant tax savings as their adult child’s personal income and the trust income can be taxed separately for the first 21 years of the trust’s existence. Also, naming the child’s spouse and children as potential trust income beneficiaries can offer further income splitting and tax savings. Income splitting is but one of a number of benefits offered by testamentary trusts.
There is a possibility that changes are afoot however. Read the rest of this entry »
May 30th, 2013
I recently met with Jim and Phyllis (not their real names) at my law office in Ottawa. As many other Canadians who have been investing in property, they had recently purchased a vacation property south of the border. They had signed Wills about two years ago but wanted to know if there was anything special that needed to done as a result of their newly-acquired vacation property. They were considering gifting the property to their oldest son as they felt their other children would not be interested.
I told Jim and Phyllis they had done the right thing in coming to see me. I explained to them that although many jurisdictions will recognize a Will drafted and signed in Canada, some will not. Even if the Will is recognized, the legal system of another jurisdiction may differ from Canada’s and could result in an unexpected distribution.
To minimize problems, I suggested that Jim and Phyllis either have their Canadian Wills reviewed by a lawyer licensed to practice in the jurisdiction where the real property is located or have a Will drafted in that jurisdiction to deal only with their vacation property. Read the rest of this entry »
May 16th, 2013
Not too long ago, I met with Gail (not her real name) at my law office in Ottawa. Gail had signed a Will about five years ago. Since then, she had some new assets and wanted to review her estate planning and make sure her Will was up-to-date.
During our meeting, Gail mentioned that she had recently invested in a small family company which owns a large island in Ontario cottage country. There are several cottages on the island which are used by various family members all of whom, along with Gail, own some of the shares of the corporation. Gail’s two children also own shares in the company. For this reason, Gail thought she might want her shares to go to her grandchildren. However, she wasn’t sure if she should gift the shares during her lifetime or wait until her death. All of her grandchildren love the spending time at the island as much as Gail does. They spend as many much time there as possible even though they have busy lives with careers and young families of their own. Read the rest of this entry »
April 18th, 2013
I remember meeting with Michael (not his real name) in my Ottawa, Ontario, office not long after he’d moved his mom into long-term care. She was suffering from dementia which had advanced quite quickly. As she could no longer manage her financial affairs, Michael had been acting under the financial Power of Attorney (POA) his mom had signed years ago.
Michael had heard that the best thing to do to avoid probate fees was to make all of his mom’s assets joint with himself. However he decided to have a meeting with me before making any changes.
I explained to Michael why changing assets to joint ownership is a big mistake when done while acting under a Power of Attorney. If he had gone ahead and made those changes he could have been in a lot of trouble. Read the rest of this entry »
March 25th, 2013
Jack came into my Ottawa office last week to talk about his Will. He seemed upset. He was particularly concerned about leaving a gift to his grandson, Billy, who had a disability. He and Billy had always had a very special relationship and he wanted to be sure Billy would benefit from his estate.
Another family member had told Jack that once Billy turned 18, due to his disability he would likely start receiving ODSP. If he received an inheritance, Billy might lose his ODSP.
“What is ODSP?” Jack asked me, “Can Billy really lose his disability income if I leave him money?” Read the rest of this entry »
March 14th, 2013
Jim, not his real name, came to see me at my Ottawa office last week. His brother had suffered a heart attack the day before and would not be able to take care of his financial affairs for the foreseeable future. Jim was appointed as his brother’s Attorney for Property. He needed to start acting immediately.
Jim knew that his first job as Attorney for Property was to get a complete picture of his brother’s affairs. In doing so, Jim had run into a problem particular to our increasingly paperless society: passwords. Jim’s brother did all of his banking online. As he didn’t have the required passwords, Jim didn’t know what accounts his brother had and how much was in them.
Jim is not alone. More and more Attorneys for Property are running into this problem. As individuals go paperless with their personal affairs, this trend is likely to continue.
Before the days of electronic banking, an Attorney for Property could glean full information about assets from paper statements. With more and more people paying bills and doing their banking online, if an Attorney for Property does not have the necessary passwords, getting a complete picture of someone’s affairs is much more difficult.
The lesson to take from Jim’s situation is making sure you consider how your appointed Attorney for Property will be able to find the information they need in a timely fashion and with minimal hassle if all your records are online.
And speaking of paperless, on April 4, I will be sharing the ins and outs of going paperless at this year’s ABA TECHSHOW at the Hilton Chicago. Visit www.techshow.com for more information and registration details.
Reproduction of this blog is only permitted with written authorization by the author. If you have questions or if you would like more information, please call us at 613 836-9915. This blog is not intended to be legal advice but contains general information. Please consult a lawyer or other professional to determine how the information in this blog might apply to you.
February 14th, 2013
Bill (not his real name) came into our Ottawa office to meet with me. His father had died a couple of years ago. Bill needed a copy of his father’s Will because a long-lost cousin had died just before his dad. Bill’s dad had been left an inheritance from his cousin’s estate which was just now being distributed.
Bill thought he had a copy of his dad’s will but couldn’t find it anywhere. He needed to know how to find a Will. Read the rest of this entry »
January 23rd, 2013
As I sit down to write this blog, excitement is building across the city as our Ottawa Senators’ hockey season has finally begun. After long negotiations, the players and owners ultimately agreed and signed an agreement. At the same time, our teachers and the Ontario government are trying to reach an agreement which both sides can live with. In all facets of our lives, there are times when it is necessary to simply hash out the details, whether over an existing dispute or to prevent future disputes, and come to an agreement which meets the needs of all parties involved. The same is true with estate planning.
A married couple, Bob and Sue (not their real names) recently met with me to ask how they could ensure that neither would change their wills without first consulting the other. Read the rest of this entry »
January 10th, 2013
My first day in the office of 2013, I met with Susan (not her real name) to discuss her estate planning. Our meeting went very well — she had come fully prepared, had a clear idea of her estate planning goals, and had many thoughtful questions. When we were scheduling her next appointment with me to discuss and sign her Wills and Powers of Attorney, she was literally beaming and looking quite pleased with herself. Read the rest of this entry »
December 24th, 2012
Wishing you the very best of the holiday season and a prosperous new year.
From all of us at Neff Law Office.