Upcoming changes to the capital gains inclusion rate: Planning opportunities to reduce the impact of the new rules
Since 2000, the capital gains inclusion rate under the Income Tax Act (the “Tax Act”) has been one-half of the applicable capital gain. As a consequence, capital gains during this period of time have generally been subject to tax at […]
Gifts of ecologically sensitive land
Gifts of private land are becoming increasingly important to the preservation of Canada’s environmental heritage. The federal Ecological Gifts Program (the “EGP”) provides a way for Canadians who hold ecologically sensitive land to simultaneously protect nature for future generations and […]
Succession and the kinless Canadian: Special estate planning issues for kinless Canadians – Part 2
Kinless Canadians make up almost one-third of Canadian households[1]. In Part One of this two-part series, we explained why estate planning is important for kinless Canadians notwithstanding that they may not have any dependants to whom to provide financial support. […]
Succession and the kinless Canadian: General estate planning considerations – Part 1
More Canadians are living by themselves now than ever before. In 1981, 1.7 million Canadians lived alone.[1] In 2021, this number rose to 4.4 million.[2] Today, single Canadian households make up 29 per cent of households countrywide.[3] Contrary to what […]
Widow found to be “spouse” for purposes of section 160(1)(a) of the Income Tax Act
The Tax Court of Canada recently considered whether the term “spouse” in section 160(1)(a) of the Income Tax Act[1] [“ITA”] includes a widow(er) of a transferor tax debtor in Enns v. The King, 2023 TCC 28. Section 160 permits the […]
Gratuitous transfers into joint tenancy and the gift of the right of survivorship: Part I
Gratuitous transfers into joint tenancy Parents often wish to transfer their real property into joint tenancy with their adult child, or add their child as a co-owner of their bank accounts. The parents may have a number of reasons for […]
Gratuitous transfers into joint tenancy and the gift of the right of survivorship: Part 2
In the first part of this two-part series, we discussed the ownership interests that can arise when property is gratuitously transferred into joint tenancy. We focused specifically on the gift of the right of survivorship. In this second part, we […]
Canada’s new foreign homebuyer ban: An estate planner’s view
Clients, their advisors, and estate planners need to be careful about Canada’s new foreign homebuyer ban. The Prohibition on the Purchase of Residential Property by Non-Canadians Act, S.C. 2022, c. 10, s. 235 (the “Act”) came into force on January […]
2023 Canada Federal Budget: A Summary
Canada’s Minister of Finance (and Deputy Prime Minister) tabled Canada’s federal budget for 2023 (“Budget 2023”) on March 28, 2023 (“Budget Day”). While there is good news insofar as Budget 2023 does not propose any increases in tax rates or […]
Estate planning and the Indian Act : Practical considerations for assisting Indigenous clients living on reserve
Introductory thoughts When we began assisting Indigenous clients with status under the Indian Act with drafting their wills, we found that there were few resources that addressed estate planning or estate administration matters under the Indian Act.[1] We soon discovered […]
Estate freezes: What are they and how they can help
When a Canadian owns shares in a private company, they might think about using an “estate freeze” to “freeze” or “lock-in” the value of their shares. Why do this? As I explain below, estate freezes can be an effective tax […]
Family’s dynamics: A critical consideration for effective estate planning
Introduction A well-executed estate plan ensures that wealth is transferred from one generation to another in a tax effective and strife-free way. Crucial to the planning process is a consideration of the many potential pitfalls that may emerge during both the […]
Electronic witnessing and signing of estate planning documents in British Columbia
Much has changed since May 19, 2020. That is when British Columbia first allowed the remote witnessing of wills, enduring powers of attorney (EPAs), and representation agreements (RAs) to accommodate those isolating because of COVID-19 and the resulting restrictions on […]
Does a promise to transfer property create an express trust?
The British Columbia Court of Appeal recently dealt with whether a promise to transfer property created an express trust in Virk v. Singh, 2022 BCCA 153. Background Mr. and Mrs. Virk married in India in 1977, where they met Mr. […]
Multiple will mishap
Introduction A recent decision from the Ontario Superior Court of Justice, Gordon v. Gordon et al., 2022 ONSC 550 (“Gordon“) shines a light on the importance of prudent drafting when undertaking multiple will planning. Multiple wills, when properly drafted, can provide […]
Giving corporate assets by will
One cannot give away what one does not own. This concept is so fundamental that it should go without saying. The same is true for the principle of corporate separateness; that is, a corporation is a distinct legal person from […]
2022 Federal Budget Review
Introduction The 2022 Federal Budget was tabled in the House of Commons on April 7, 2022 by the Honourable Chrystia Freeland, Canada’s Deputy Prime Minister and Minister of Finance. With a Foreword that began with a thank you to Canadians […]
Don’t presume your kid will get it: Simard Estate and beneficiary designations
This past February, millions of Canadians contributed to their Registered Retirement Savings Plans (“RRSPs”). However, few may realize that those hard-earned savings might not go to their chosen beneficiary. The British Columbia Supreme Court decision of Simard v. Simard Estate, […]
Multiplying the capital gains exemption: WAIT – THEY GET THE MONEY??
You’re ready to sell your business. Excellent – congratulations on building something worth buying. You’ve had one of those family trust things around for several years. Thanks for following sound tax planning advice. You’re hearing now about multiplying the lifetime […]
CRA significantly expands proposed trust reporting requirements to include bare trust arrangements
In 2018, the Department of Finance Canada released Legislative Proposals, and Explanatory Notes that dealt with, among other topics, the Reporting Requirements for Trusts as first announced in Budget 2018. We posted about these new requirements and some of their […]
Electronic wills are here in BC – but should you make one?
On December 1, 2021, British Columbia became the first province to allow electronic wills – fully digital wills. Previously, a will-maker could only make a valid will under BC law by signing a physical will with wet ink in the […]
Update on Bill C-208 New taxation rules impacting transfers of family businesses to the next generation
In our previous article on this topic, we discussed Bill C-208 (the “Legislation”), a Private Member’s bill that amends the Income Tax Act[1] (the “Act”) to change certain rules in sections 55 and 84.1 of the Act to facilitate intergenerational […]
New taxation rules impacting transfers of family businesses to the next generation Everything you thought you knew about intergenerational transfers is now wrong
Owners of family small business corporations, family farming and fishing corporations, especially those contemplating intergenerational transfers of those businesses, should take note of a significant change to Canada’s tax laws designed to “level the playing-field” between related-party and arm’s-length transfers. […]
The relationship between personal directives and goals of care (Alberta)
In Alberta, a person’s medical care team uses a document called a “Goals of Care Designation Order,” or “GCD,” to set out the types of medical care to which a patient does or does not consent, and to guide the […]
Capacity to marry: the case of Tanti v Tanti et al.
In the case of Tanti v Tanti et al., the Ontario Superior Court of Justice was tasked with determining whether Paul Tanti was capable of marrying his “much-younger, live-in companion”, Sharon Joseph.[1] In 2014, Paul went to a community organization […]
Reform on the horizon in Ontario estates law
On February 22, 2021, the Attorney General for Ontario tabled Bill 245, Accelerating Access to Justice Act, 2021, which has now received Second Reading. If passed into legislation, it will significantly reform various areas of law, including in the area […]
Alberta court confirms competent Testator’s right to privacy
In the recent Alberta decision of Duhn Estate, 2021 ABQB 35, the Court of Queen’s Bench has confirmed that, absent a sufficient evidentiary basis, the Court will not displace a testator’s right to keep her pre-death financial life private and […]
New trust reporting requirements – A status update!
In the 2018 Federal Budget, the federal government proposed to increase reporting requirements for trusts and impose penalties for failing to comply. Later that year, the Ministry of Finance released draft tax legislation on the new trust reporting requirements. Fast-forward […]
Update on medical assistance in dying (MAID) law in Canada
The law related to medical assistance in dying (MAID) in Canada continues to evolve since the Supreme Court struck down applicable portions of the Criminal Code[1] in 2015.[2] The federal government introduced legislative reform in 2016, and proposed further amendments […]
Passing on the family cottage
For many families, a summer or winter home or cottage is one of their most treasured assets. Most cottage owners want the cottage to stay in the family for generations. However, this requires significant thought and planning. Families need to […]
Don’t let your dream vacation home become a tax nightmare
Do you have your eye on a villa in Tuscany or a ski chalet in Vermont? Or do you already head south to your beach house or condo in Florida to escape the Canadian winters? Before you jump into foreign […]
Proposed amendments to medically-assisted dying rules
On February 24, 2020, the Government of Canada presented to the House of Commons proposed legislative amendments to the country’s Criminal Code[1] via Bill C-7, An Act to amend the Criminal Code (medical assistance in dying)[2](Bill C-7). The Bill passed […]
A trustee’s duties in volatile markets
Introduction Market volatility arising from the COVID-19 pandemic is unlike anything experienced in recent history. Two of the largest single day drops in the history of the Dow Jones Industrial Average occurred in March 2020. Later that same month, the […]
British Columbia introduces legislation allowing wills to be created and signed electronically
British Columbia introduced legislation on June 22, 2020, to enable courts to accept electronic wills and to permit the remote witnessing of wills. Bill 21 proposes amendments to the Wills, Estates and Succession Act of British Columbia to enable the […]
Some good news in an uncertain time: Prescribed rate decreasing to 1%
Canada has a progressive income tax system, which means that generally the more money a taxpayer earns, the more income tax he or she pays. As a result, higher income earners attempt to reduce their family’s overall tax burden by […]
Family ties: The family shareholders’ agreement
Family (however you may personally define that term) is our common societal unit globally. The family business has long been a fundamental cog of the Canadian economy. Investing in both the family and the family business by entering a shareholders’ […]
Elimination of Estate Administration Tax on Estates under $50,000
Effective January 1, 2020, Ontario eliminated estate administration tax (also known as probate tax) on estates valued under $50,000. These changes, announced during the 2019 Ontario Budget, are intended to provide some relief from the onerous estate administration tax regime. […]
Turning our minds to estate planning and the importance of maintaining an up-to-date estate plan
A number of factors motivate individuals to engage in the estate planning process. Common motivating factors include a change in relationship status, births or deaths in one’s family, a change in net worth and a health diagnosis that turns one’s […]
Business Income Tax Measures
Small Business Tax Rate Currently, as a result of the small business deduction, the first $500,000 per year of qualifying active business income of a Canadian-controlled private corporation (“CCPC”) is subject to a federal income tax rate of 11%. Consistent […]
New Non-Resident Trust and Related Rules Enacted: Important Considerations
Background After well over a decade of debate, consultation and consideration, on June 26, 2013, Bill C-48 received royal assent. Bill C-48 is an omnibus tax bill that includes, among other measures, revised rules for the taxation of non-resident trusts […]
Third party tax assessments and death
For purposes of the Income Tax Act (the “Act”) are we still related to someone after their death? In certain circumstances, the answer to this question will determine whether a taxpayer is jointly and severally liable for the unpaid tax […]
Spousal claims against estates: The utility and impact of domestic contracts
Although marriage is often regarded as a rite of passage that carries with it intense societal significance, a recent survey reported by Statistics Canada has revealed that 41% of all married couples in Canada will either separate or divorce before […]
New trust reporting rules and ongoing trust compliance
The Canada Revenue Agency (“CRA”) is stepping up its scrutiny of trusts in Canada by increasing its collection of information regarding beneficial ownership. Trustees and their advisors need to be prepared to respond to the new compliance and reporting obligations. […]
Electronic witnessing of Alberta estate planning documents
The declaration of states of emergency resulting from the current COVID-19 pandemic, public health orders and guidelines for self-isolation and social distancing have affected everyone in Alberta and around the world. As many people are at home contemplating the global […]
Electronic witnessing of BC estate planning documents
The BC Government has declared a state of emergency as a result of the COVID-19 pandemic. During this time, we are encouraged to maintain physical distance from one another. Even when it may be possible to meet and maintain an […]
Generating a dividend refund as a result of a s. 84.1(1)(b) deemed dividend
Recent statements from Canada Revenue Agency (“CRA”) confirmed a reversal of their position on the interplay between amounts deemed to be dividends under paragraph 84.1(1)(b) of the Income Tax Act[1] and a payor corporation’s ability to recover refundable taxes under […]
The perils of will kits during the Coronavirus pandemic
During the Coronavirus pandemic (COVID–19) many people may be doing a Google search on “do-it-yourself” will kits to try to get their financial and family affairs in order. You might believe these will kits are an inexpensive and easy way […]
Have losses? Plan so that you can use them!
One of the consequences of COVID-19 is volatility in the stock market. Some investors facing losses in their portfolios are considering strategies to crystallize them and use the losses to offset capital gains. One-half of capital losses (referred to as […]
Estate planning during the Coronavirus pandemic: Giving it away
Estate planning can be a challenging process in the best of times. No one wants to face the reality of illness or death. The current pandemic forces us to face that reality. While most of us are in self-isolation, we […]
Estate freeze: The time is now
The COVID-19 pandemic is currently causing over half of the global population to be living under some form of self-isolation. Provincial and territorial government directives are properly constricting business and social activity across Canada to protect our collective health and […]
Restarting the clock on a trust’s 21-year deemed disposition: The Coronavirus (COVID-19) economy may be the right time
An estate freeze is an effective mechanism used in estate and succession planning for owners of privately held corporations or for investors with investment portfolios. An estate freeze normally contemplates the current shareholder/owner being issued fixed value preferred shares in […]
How to update a will during the Coronavirus pandemic
During the Coronavirus pandemic (COVID-19), many of us are reflecting on whether our financial and family affairs are in order. Those whose affairs are in order take great comfort knowing that, if something were to happen to them, their family […]
Ontario Court of Appeal upholds Marley v. Salga: 2020 ONCA 104
In our July 9, 2019, issue of Wealth Matters[1] we discussed the decision of the Ontario Supreme Court in Marley v. Salga.[2] In that lower court decision, the application judge, Mr. Justice Reid, held that an otherwise valid joint tenancy […]
Saskatchewan’s Court of Appeal confirms award of entire quarter-million dollar estate for teenage children under the Saskatchewan Dependants’ Relief Act
In Lutz Estate v Lutz, 2020 SKCA 14, the Court of Appeal for Saskatchewan confirmed that under certain circumstances, “reasonable provision” under the Saskatchewan Dependants’ Relief Act (“DRA”) may require the entire estate being used towards the support of dependant […]
Executor releases: the parameters on what is possible
Introductory comments about executor releases Is it appropriate for an executor to ask beneficiaries to sign a release and indemnity prior to receiving a distribution from an estate? Although non-indemnified executors may face potential personal liability for their work as […]
CRA further circumscribes trust 21-year planning strategies involving non-resident beneficiaries
Subsection 107(2) of the Income Tax Act[1] generally provides for a tax-deferred rollout of capital property held by the trustees of a Canadian-resident personal trust to their capital beneficiaries in satisfaction of their capital interests in the trust. This rollover […]
A recent example of the importance of proper will planning
In Ontario, if an individual dies without a valid will, their estate will pass in accordance with the laws of intestacy, which are set out in the Succession Law Reform Act, R.S.O. 1990, c. S.26 (the “SLRA”). This is, for […]
Death During a Divorce
What happens when someone dies after they have separated and before they have divorced or settled the matrimonial property issues? Does the death of one of the parties end the divorce proceedings? How is the property divided? What can a […]
Powers of Attorney and the Alberta Land Titles Registry
The Alberta Land Titles office no longer accepts powers of attorney for general registration. This recent change in procedure prompted us to reflect on the limitations of “enduring” powers of attorney where the grantor of the power has interests in […]
Alberta Family Property Act – The Basics
In Alberta, when a married couple divorces, the way in which their property is divided is governed by the Matrimonial Property Act, RSA 2000, C.M-8, and other legislation. This legislation provides a framework for determining which assets are to be […]
CBCA Corporations and the Beneficial Ownership Register
In 2017, Canadian federal, provincial and territorial finance ministers signed an Agreement to Strengthen Beneficial Ownership Transparency (the “Agreement”). This Agreement was made in furtherance of international conventions to prevent the misuse of corporations and other legal entities for tax […]
Understanding the Use of No Contest Clauses in Alberta: Anderson Estate, 2017 ABQB 422 and Mawhinney v Scobie, 2019 ABCA 76
Background No contest clauses, or “in terrorem” clauses (latin for “in terror” or “by way of threat”) are often used in wills to attempt to create a consequence or an ability to prevent a gift, if certain conditions are not […]
(Re:) Toigo Estate and the Power of Encroachment
When implementing an estate plan that involves a life interest, such as a spousal trust, it is typical to grant the Trustee a power to encroach on the capital of the trust for the benefit of the life interest beneficiary. […]
Alberta’s new Act to Strengthen Financial Security for Persons with Disabilities
Effective April 1, 2018, Alberta introduced changes to the Assured Income for the Severely Handicapped Act and Regulations to allow families and guardians more options for financial support for persons with disabilities without negatively affecting their entitlement to provincial benefits […]
Beneficial Interests in Discretionary Trusts and the Associated Corporations Rules; Moules Industriels v. The Queen
When two or more corporations are associated for the purposes of the associated corporation rules in section 256 of the Income Tax Act (the “Act”), those corporations are required to share a business limit and, consequently, eligibility for the small […]
Recognizing and Understanding Undue Influence in Estate Planning
Undue influence is a troubling issue in estate planning as it is not always apparent to even the most experienced of lawyers when taking instructions from clients. The circumstances of influence are frequently not disclosed by a client, and the […]
Surviving Spouse Granted Extension of Time to Decide Whether to Make Spousal Election
In Ontario, after the death of a married spouse, the surviving spouse has a choice to make. He or she must decide within six months of the death of the spouse whether he or she wishes (1) to inherit pursuant […]
Estate Planning and Shareholders’ Agreements
The importance of a properly drafted shareholders’ agreement in the context of a business owner’s estate plan is often overlooked. Having a will, or multiple wills, to control what happens to the estate is important; but if a business owner […]
The Pitfalls of Disability Planning
When a testator is considering leaving assets to a beneficiary who has a disability, there are important factors that the testator needs to examine to ensure that the disabled beneficiary is appropriately protected. With new and proposed tax laws, the […]
Granger v. Granger – Unjust Enrichment Where There Has Been A “Mutual Conferral of Benefits”
Unjust enrichment is a legal concept based on the general equitable principle that no person should be allowed to profit at another’s expense without a legal reason for doing so. The burden is on the plaintiff to prove: 1) an […]
Tax Tips for Recreational Property Owners
One of the most common and biggest tax savings measures available to Canadians is the principal residence exemption from capital gains tax. Ordinarily, if you sell a property for more than you paid to buy it, you have a capital […]
Extra-Jurisdictional Recognition of Enduring Powers of Attorney and Representation Agreements in British Columbia
Significant amendments to the Power of Attorney Act and the Representation Agreement Act came into force in British Columbia on September 1, 2011. While powers of attorney or representation agreements made before this date are still valid, the new legislation […]
Ademption: Beware the Potential Failure of Gifts
Introduction Professionals involved in the preparation of Wills should be made aware of the potential consequences of the doctrine of ademption. Put simply, the doctrine provides that you cannot bequeath what you do not own. For example, if a testator’s Will […]
Valuation of Control Shares
“Control shares” of a private corporation that carry voting rights but are not entitled to receive dividends, or to receive more than a nominal amount on liquidation of the corporation, play an important role in many estate plans. Control shares […]
Disability Planning and Henson Style Trusts in Quebec
In many instances, a parent will not have sufficient assets to fully care for a disabled child for the remainder of his or her life. As a result, access to provincial benefits will be crucial for the disabled child. Provincial […]
Alberta Exempts Registered Savings Plans from Seizure
Jonathan Ablett, Articling Student Miller Thomson Edmonton jablett@millerthomson.com One more province has joined the ranks of extending creditor protection to registered savings plans. Alberta’s Civil Enforcement Amendment Act came into force on October 1, 2009 (the “Act”). It applies to […]
Partnership Freeze Revisited
The Federal Court of Appeal recently ruled on a partnership freeze structure, unanimously dismissing the taxpayer’s appeal in Krauss (2010 FCA 284). Krauss is the first reported case dealing with a partnership freeze. The taxpayer and her adult son (who […]
PST and Real Property Transactions
Commodity taxes always have a big impact on transactions related to real property. A 7% tax on the purchase price of your hamburger and fries at lunch is not a big deal, but a 7% tax on the purchase price […]
Sawdon Estate v. Sawdon – The Beneficial Ownership of Funds in a Joint Account
Introduction In Sawdon Estate v. Sawdon, 2014 ONCA 101 (“Sawdon“), the Court of Appeal for Ontario was tasked with determining, inter alia, to whom the funds held in several joint accounts belonged—the children of Arthur Sawdon (“Mr. Sawdon”), the deceased, […]
Subsection 75(2) Re-examined: Brent Kern Family Trust v The Queen
Introduction The recent Tax Court of Canada decision in Brent Kern Family Trust v The Queen examines the application of the attribution rule in subsection 75(2) of the Income Tax Act (the “Act”). The decision is significant in that it […]
A Review of Qualified Disability Trusts
Bill C-43, which received Royal Assent on December 16, 2014, introduces a new type of trust to benefit disabled individuals – the “qualified disability trust” (“QDT”). Accordingly, QDTs will apply to the 2016 and subsequent taxation years. The main benefit […]
Pitt v Holt and Futter v Futter – The Case for Amending Trustee Decisions
The U.K. Supreme Court (UKSC) judgment in the cases of Pitt v Holt and Re Futter [2013] UKSC 26, has clarified the law of trusts in applying both the rule of Hastings-Bass and the law of mistake. Pitt v Holt […]
Testamentary Freedom and Policy Constraints
It is a hallmark of common law jurisdictions that testators have freedom of testamentary disposition , subject only to three exceptions. In other words, an individual may dispose of his or her property as he or she wishes, even if […]
Trust Interests and Family Law Rights – What Estate Planners Need to Know After Tremblay and Mudronja
Introduction Since the enactment of the Family Law Act (“FLA”), Courts have struggled with determining, firstly, if and when the interest of a spouse in a discretionary trust qualifies as “property” as defined in the FLA for purposes of equalization […]
Zeligs v. Janes: Severing Joint Tenancy
Joint tenancy is a common form of ownership for family holdings and is often used for estate planning purposes. The main benefit of a joint tenancy is the right of survivorship which provides that when one joint tenant dies, his […]
