February 25, 2018

Investments Under Power of Attorney

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ESTATE ADMINISTRATION – INVESTMENTS UNDER POWER OF ATTORNEY

An Attorney acting under a Power of Attorney for Property is required to be careful with investments. If the Power of Attorney for Property of the incapacitated person gives specific authority to make certain types of investments, an attorney can make those investments. Otherwise, an attorney should assume that they will be held liable by the incapacitated person or the beneficiaries of their estate when they die (even though they may not actually be liable) for any losses and invest conservatively. [Read more…]

Estate Property and Vesting

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ESTATE PROPERTY MAY “VEST” 3 YEARS AFTER THE DATE OF DEATH

As a general rule, real estate that has not been transferred by an Executor / Estate Trustee of the Estate will “vest” in the beneficiaries of the Estate 3 years after the date of death. There are some exceptions: [Read more…]

Cutting kids out of your Will (Disinheriting)

When parents draft Wills they occasionally decide that one or more of their children should receive less than their other children. In some cases parents decide to leave nothing to one or more of their children.

There are many reasons for treating children differently when it comes to their inheritance: [Read more…]

More Debts than Assets in an Estate

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WHAT TO DO WHEN THERE ARE MORE DEBTS THAN ASSETS IN AN ESTATE

What does an executor do if the debts of the estate exceed the assets?

First of all, the executor (estate trustee) is not required to assume the executor role. Dealing with an insolvent estate can be complicated and time consuming. However, many estate trustees (executors) named in a Will seem reluctant to not tie up the loose ends of their loved one. [Read more…]

Probate Tax – How much does it cost?

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PROBATE TAX – WHAT IS IT AND HOW MUCH DOES IT COST?

What is Probate tax? It is a provincial tax imposed on the deceased’s estate under the control of an executor or administrator.

How much will the probate tax be on an estate? Here is a simple approach to calculating the tax. [Read more…]

No Will, Spouse or Children: Where Do Your Assets Go on Death?

Contrary to popular belief, the government does not automatically take the assets of a person who dies without a will leaving no spouse or children to inherit. The Succession Law Reform Act provides for parents, siblings, nieces and nephews to inherit if no spouse or children survived the deceased. Even if a person dies leaving no parents, siblings, nieces, or nephews, the government would not be next in line for a deceased’s assets. [Read more…]

“Unvesting” Estate Property

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“UNVESTING” REAL ESTATE  NOT TRANSFERRED WITHIN 3 YEARS OF DEATH

If property has vested because it has not been dealt with by the Executor / Estate Trustee within 3 years of the date of death there are options available to an Executor. [Read more…]

Buyer Fails to Close Real Estate Purchase

BUYER FAILS TO CLOSE REAL ESTATE PURCHASE

The Ontario real estate market experienced a significant correction in the spring of 2017 with the foreign buyer 15% tax imposed by the provincial government for GTA properties and the new Mortgage Stress Test rules. Consequently, many Buyers in the GTA did not close on their transactions because they could not or because they chose not to because of the decline in sale price.

Sellers were left in a difficult position, particularly if they had purchased another property. Many Sellers incur losses on reselling the property and they incur carrying costs (mortgage, taxes, insurance) on the property pending its resale.

A Seller in this situation can sue the defaulting Buyer for the loss on the resale plus their carrying costs. If the defaulting Buyer cannot be located, or they have no assets or income, the Seller might obtain a judgment for their full losses, but only recover the deposit.

A Seller should be cautious in any renegotiation of the transaction initiated by a Buyer trying to renegotiate the price because of the market correction or asking for an extension of closing to facilitate mortgage financing. A seller should consult with a lawyer experienced in advancing claims against defaulting Buyers if faced with this situation to ensure negotiations do not prejudice their claims.

It may be prudent for a Seller to treat the inability of the Buyer to complete the transaction as an “Anticipatory Breach” of the Agreement of Purchase and Sale (APS), before any discussion takes place regarding price or closing date. Any later discussion regarding changes to the APS should make it clear the Buyer remains in breach and that the discussions do not reinstate the APS.

Last Will Dated Before 1978

ESTATE PLANNING – DOES YOUR LAST WILL AND TESTAMENT PREDATE 1978?

Was your Last Will and Testament made before March 31 1978? Then read THIS!

If your Will:
a. Was made before March 31, 1978;
b. provides for some of your estate to ‘flow through’ to children or other descendants of named beneficiaries; and
c. does not specifically include children born out of wedlock (e.g. children of a common law couple)

Any such person born out of wedlock will not receive a share of the estate. If your Will was made after March 31, 1978 such person would receive a share of the estate.

A recent case of the Ontario Superior Court of Justice has confirmed this … “Born out of wedlock, man cannot inherit from grandma because Will is from 1977”

You should check your Will and have it reviewed by your lawyer, if it predates 1978.

Specific Gifts in a Will

G+G Estate Gift1IT IS IMPORTANT TO ENSURE YOU HAVE A GIFT CLAUSE IN YOUR WILL

If your Will leaves specific items to someone, you should ensure a gift clause says what is to happen if that person should predecease you. If you do not, there are some complicated rules within the area of Estate Law, that determine which heirs of the person the gift was intended for will receive the gift. [Read more…]