May 13, 2015
Estate Trustees are fiduciaries and must act in the best interests of the beneficiaries of the estate. Estate Trustees have a common law duty to maintain accounts of what they have done with the trust property.
The Trustee is obliged to provide a complete set of accounts, a true and perfect accounting at all times.
While the formal rule is that Estate Trustees have a duty to constantly be ready to account, in practice, it is not always practical to produce accounts on the spot. Timing of the delivery will depend on the circumstances and should be governed by common sense. Although Estate Trustees are usually given one year to administer an estate of average complexity, an Estate Trustee would be wise to be ready to account before the “executor year” expires.
Strictly speaking, an Estate Trustee does not have to account without being asked to do so or being ordered to do so by the court. In the vast majority of cases, the Estate Trustee will voluntarily account to the beneficiaries as part of the process to complete the administration of the estate. An estate is said not to be complete until the beneficiaries or the courts have approved the administration of the estate. Beneficiaries will not approve the administration without first reviewing the accounting. An Estate Trustee should not distribute the estate without getting some assurance that the beneficiaries are satisfied with the administration and will not be making claims against the Estate Trustee in the future.
Dec 17, 2014
Estate planning involves the transfer of wealth to family, friends and charity in an efficient and effective manner. In many cases, the efficiency goal requires a review of various tax minimization, tax avoidance or tax deferral strategies. Indeed, tax considerations are an integral and important part of any estate plan.
For an estate plan to be effective, it is also important to have an understanding of the client’s goals and priorities and to advance them within the relevant legal framework. A wide variety of legal considerations need to be taken into account in every case. It is beyond the scope of this paper to address all such considerations.
This paper is focussed on family law considerations and how family law rules impact how an estate is allocated and structured. While family law rules can result in claims being made against an estate, family law can also be used to protect assets. The extent to which specific family law rules will apply will often depend on the marital status of the client and his or her beneficiaries as well as the location, nature and extent of assets owned by the client and where the client and the beneficiaries reside.
Failure to collect all of the relevant information and to understand and deal with family law rules will likely lead to unintended consequences, costly litigation and delays in the administration of an estate and disappointed beneficiaries.
The summary of family law considerations in this paper is for individuals who reside in Ontario. Individuals who have a multi-jurisdiction estate or non-resident beneficiaries also need to address the relevant legal considerations in other relevant jurisdictions. Since this paper is being presented to non-lawyers, the paper does not exhaustively cover all legal considerations. The goal of this paper is to raise general awareness. This summary is provided for information and education purposes only. You should not rely on this summary as legal advice. Specific advice should be sought in each case.
Apr 22, 2014
It is now common practice for parents with disabled children to incorporate a Henson trust in
their estate plan.
In most cases, the share of the estate allocated for the disabled beneficiary is directed to be held
by a trustee in a fully discretionary trust during the disabled child’s lifetime. The trust is
typically created in the parent’s Will. The trustee is given discretion to pay income or capital to
the child and income that is not allocated to the child is typically directed to be accumulated in
the trust, subject to the provisions of the Accumulations Act that require trust income to be
distributed after twenty-one years.
The disabled child’s share of the estate is set aside in such a trust, both for the purpose of
preserving the beneficiary’s entitlement to government benefits and to avoid the need to appoint
a guardian of property to manage the disabled family member’s interest in the estate.
When drafting Henson trusts, it is important to have an understanding of the Ontario Disability
Support Program (“ODSP”) rules and exemptions.
We will first provide an overview of the ODSP plan and conclude with some Will planning and
estate administration tips.
Apr 01, 2014
Jim Smith, a widower, has operated a farming business since he bought his farm property in 1975 for $200,000. He has three adult sons who help him with the farming operation; one or more of them may wish to continue a farming operation in the future. In his Will, Jim has named his three sons as equal beneficiaries of his estate. The current value of the property is about $4.2 million. Some developers have approached him about selling the farm. He does not know what he should do.
Dec 01, 2012
Sue and Dave have one child of their marriage, a 10-year-old son named Jack. Dave’s aunt died recently, naming Jack as sole beneficiary of a $20,000 insurance policy. Sue and Dave have wills, in which Sue’s sister Mary is named as guardian for Jack, should Sue and Dave die before Jack reaches age 18. They want to know if Mary as guardian would have the authority to manage Jack’s assets, including the $20,000 insurance policy.
Sep 27, 2012
A properly drafted Will is usually the cornerstone of a good estate plan. A good estate plan will address a wide variety of planning considerations including whether a beneficiary should receive his or her interest in the estate by outright gift or whether the gift should be left in trust.
Apr 01, 2012
Murray and Sara own a house, which is registered in both their names as joint tenants, and a condo in Florida, which is held in the name of Murray’s company. One of their children works in the company; the other lives overseas. When Murray consults his financial advisor about retirement, the advisor talks about the need for an estate plan. Murray is surprised: he thought all he needed was a Will.
Dec 01, 2011
The executor of an estate has many duties. One of them is to ensure that debts and taxes are paid before the estate is distributed to the beneficiaries.
In Ontario, there are two main types of taxes on death: income tax and probate tax (which is formally known as ‘estate administration tax’). Although probate tax was tripled in 1992 from 0.5% to 1.5% of an estate’s value, the Ontario government has not seen a corresponding increase in taxes collected. In May, 2011, the Ontario government passed legislation giving the Ontario Minister of Revenue the power to audit and reassess an estate within four years of the tax being payable. This legislation is to take effect January 1, 2013.
Oct 01, 2010
With the rise in divorce and remarriage, many family units involve children from prior relationships and multiple sets of parents. In many such families, the challenge is to make fair provision for the second spouse while also leaving something for the children of the prior relationship and/or the current relationship. The law imposes different obligations for the division of assets depending on whether the spouses are living common law or are legally married.
Dec 01, 2008
What seems like a simple matter of access to a parent’s bank account can be more complex than most family members realize.
Apr 01, 2008
Losing a loved one is bad enough, but losing large chunks of an inheritance at the same time can feel like cruel and unusual punishment. A bereaved family can find probate fees or capital gains tax eating up a large part of their loved one’s estate.