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O'Sullivan Estate Lawyers | Toronto Trust and Estate Law Blog

Medically Assisted Dying in Canada - An Update

In April 2017, the CBC reported that over 1,300 people in Canada have died with medical assistance since the Criminal Code was amended in 2016 to legalize medical assistance in dying ("MAID"). While this statistic points to the importance of MAID for many Canadians, the new legislation has not settled the ongoing debate concerning the right to die. Recent litigation on various fronts has highlighted continuing controversies, including questions about the role of medical professionals in MAID, limitations on who will have access to medically assisted dying, and ambiguity in the criteria for access.

Reproductive Technology and Estate Law: The Road to Progress is Paved with Good Intentions

On January 1, 2017, most of the provisions of the All Families Are Equal Act (Parentage and Related Registrations Statute Law Amendments), 2016 (S.O. 2016, c. 23) came into effect in Ontario. The intention of the Act is to establish new rules of parentage in Ontario to deal with the modern reality of assisted reproduction and surrogacy when it comes to who is, and who is not, a parent of a child and allow for non-biological parentage structures without the necessity of Court intervention. This involved updating and revising a number of statutes to make related amendments, such as to the Vital Statistics Act (Ontario) to reflect the new rules as they affect birth registrations.

For estate planning and administration purposes, a "child" of an individual was previously defined to include a biological or adopted child or a child conceived before and born after a person's death. This definition has been expanded to include a child conceived after and born within three years of a person's death if certain conditions are met. Further, rules regarding pre-conception parentage agreements and surrogacy agreements can result in a biological parent not being considered the parent of a child or in a non-biological parent being considered a parent of a child if the requisite rules and conditions are met. The definition of "issue" as set forth in the Ontario legislation means a person's descendants and has been similarly expanded to include, for example, grandchildren or great-grandchildren who come within the new definition of "child".

The Winds of Change or the Winds of War? Government's Tax Proposals Target Business Owners

As we return from Labour Day weekend and reflect back on the summer that never quite was, a major issue that will grab attention over the next weeks, now that it's business as usual again, is the government's recent tax proposals.

The government chose on July 17, 2017 in the midst of the summer doldrums to launch its strategic ballistic missile of tax proposals and draft legislation on the taxation of private corporations and their shareholders. We were forewarned in the February 2017 Budget to take cover as the government pronounced that it intended to target private corporations and their shareholders who it says unfairly use tax planning to lower their tax bill.

Integrating Life Insurance in The Estate Plan: The Need for an Holistic Approach

One of the interesting changes in our modern age when it comes to succession on death is that for many people, most of what they pass to their family and others will not be through their will, but instead by a "will substitute" such as life insurance. Many persons have term policies with a death benefit far greater than the assets accumulated during their life.

But with the use of such will substitutes comes the need to ensure integration with the will and overall estate plan. Unfortunately, the forms available to name beneficiaries provided by many life insurance companies lead to a lack of harmony with the will plan because they are too simple. It is ironic that a lot of time and effort can be spent in designing a complicated and comprehensive will plan which deals with assets of far less value than insurance proceeds passing by way of a too simple beneficiary designation.

The New Normal: Assisting a Child with Buying a Home

A current trend in the increasingly expensive Canadian housing market is parents helping children or grandchildren and their spouses with a down payment or mortgage on a first home. In Ontario, about 35% of people buying homes now receive assistance from their relatives with a down payment and approximately 38% have a down payment of 20% or more. To see statistics for down payment assistance across the country, please refer to this link. Although such financial assistance is helpful for a child or a young couple looking to get into the housing market, this generous gesture can lead to unexpected and undesired consequences and even disputes, including upon a child's marital breakdown. Without having done the proper planning or evidencing their intention, parents may even see a child lose their gift to a former spouse.

Under the Ontario Family Law Act (the "FLA"), the value of gifts and inheritances received during marriage are excluded from equalization. However, if the gifted or inherited amount is used to purchase a matrimonial home, it loses its exclusion and its value will be divided equally between the child and his or her spouse upon a marital breakdown or death of the first spouse to die.

Navigating Multi-Jurisdictional Probate

In March of this year, I wrote about the complications which can arise in administering an estate of an individual who owns a vacation home in a U.S. state such as Florida or Arizona. In that blog, I discussed issues in estate administration which arise from the multi-jurisdictional location of assets and the requirements to obtain probate in different places. Another type of complication which can occur arises from the probate rules in other jurisdictions and the ways they differ from, and are not compatible with, the probate rules in Ontario.

In some cases, the complications will arise because the deceased lived in or owned assets in a civil law jurisdiction, whereas Ontario is a common law jurisdiction. Most Commonwealth jurisdictions and states in the United States are common law jurisdictions based on English common law. Many other jurisdictions, including most European countries, and notably Quebec, are civil law jurisdictions, originally based on Roman law. Due to the major differences between the two systems' origins, their processes can be extremely different.

The Common Reporting Standard - What's in Store

July 1, 2017 is not only Canada's 150th birthday and a cause for great celebration, which we are eagerly looking forward to. It is also the date that Canadian financial institutions must have in place appropriate procedures to provide information to Canada Revenue Agency on financial accounts held by non-residents of Canada, which will begin in 2018.

Those of us who have recently had the occasion to open an account with a financial institution are well-acquainted with the stack of paperwork and identity and other information now required. All part of the larger global agenda they say to combat tax evasion.

Keeping Things Up-To-Date

Putting estate planning documents in place can be a daunting task, but it does not end there. Estate planning is an organic process that requires ongoing attention and revision. Circumstances in your life will continue to change and your main objective is to ensure that your wishes and intentions are properly reflected in your plan and documents, both upon incapacity or death. What meets your financial and personal needs now may not do so in the future, so it is important to continue to review your documents, in particular when your circumstances change.

As we enter the summer season, and the pace eases, here are a few situations that would warrant a review of your estate planning documents:

1) Changes in the Law

Continually reviewing and updating your estate documents allows for changes to be properly addressed including any adverse tax implications for your estate. Although your goals may not have changed, ensuring that your estate is protected is important for future planning.

The New Non-Resident Speculation Tax and Estate Planning and Administration: What You Need to Know

The Ministry of Finance recently introduced a 15% tax on the purchase or acquisition of a residential property in the Greater Golden Horseshoe by individuals who are not citizens or permanent residents of Canada or by foreign corporations or taxable trustees. The new Non-Resident Speculation Tax ("NRST") is in addition to the Ontario and Toronto land transfer taxes. Although the NRST is subject to the approval of the legislature, it is currently in effect and applies to any agreements of purchase and sale entered into after April 20, 2017.

The NRST is a tax of 15% on the value of the consideration paid for a residential property. A residential property is land that contains at least one and not more than six single family residences, such as detached and semi-detached houses, townhouses and condominium units.

How does the NRST affect Estate Planning and Administration for Canadian Citizens and Permanent Residents?

The Principal Residence and Capital Gains Tax - New Rules, New Pitfalls

Most taxpayers know that when you sell an asset which has increased in value, the federal Income Tax Act provides that you will generally be liable for capital gains tax on the net increase in value, unless there is an applicable exemption. One exemption from capital gains tax is for a principal residence. In October of 2016, the federal government introduced draft legislation to amend the rules to restrict the application of the principal residence exemption. The amendments are aimed at stopping non-residents of Canada and real estate developers from unreasonably claiming the exemption. However, the amendments can also affect anyone who currently has or may wish to have a trust which holds a residence for a beneficiary, whether or not they are tax resident in Canada.

The principal residence exemption allows one family unit to designate one property as their principal residence for the purposes of accessing the principal residence exemption, as long as certain conditions are met. The exemption from capital gains tax applies to all years the property is owned plus one additional year to allow for the sale of one principal residence and the purchase of another in the same year. Under existing rules, a home held in a trust can qualify for the exemption.

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