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| ESTATE PLANNING |
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| In Saylor v. Brooks, [2005], a recent decision of the Ontario Court of Appeal, it was determined that just because a bank account was in the joint names of a father and his daughter, the money did not go to the daughter when he died. Instead the Court looked for the father's "intention". (The bank records were not a sufficient indication of the father's intentions.) The Court relied on: evidence that the father maintained absolute control of the account (even though it was in both names); his sole claim for the interest earned on the account for income tax purposes; and his indication that he might remove his daughter from the account at some time in the future. This evidence outweighed the clear banking documents regarding survivorship upon death. This decision has now been reinforced by the Supreme Court of Canada in Pecore v. Pecore [2007].
While these decisions make sense, many lay people set up their affairs wrongly assuming certain results will occur upon their death. These cases point out that there is a difference between "legal" title and "beneficial" title, or - in English - the real owner of an asset may not be the one whose name is on it. And of course, once you're dead, you can't come back and fix things the way you meant. So prepare your Will carefully and with a knowledge of the law.
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| One example of how things are not as simple as a lay person thinks. |
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| Wills, and Powers of Attorney |
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| When an individual dies, their property will be passed on to someone else. Period. With a Will, the individual can choose the options. But should an individual die without a Will, ("intestate") the terms of the Succession Law Reform Act apply. Depends on a number of factors, who gets what, and it's probably not what the individual would have chosen. |
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| A. Two Standard "mirror" wills: ( where 1 spouse leaves everything to the other spouse, and vice-versa; then the remainder to the kids) |
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Legal fees: $500.00 for the pair
GST: $30.00
Total: $530.00 |
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| B. One Standard will: |
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Legal fees: $300.00
GST: $15.00
Total: $315.00 |
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| Should an individual become incapacitated mentally (due to accident, old age, or disease), a Power of Attorney permits a pre-selected assistant, or assistants, to step up to the plate and handle the individual's financial affairs and welfare on behalf of the individual. These are simple documents, but very important. Without such a document, the Court becomes involved, and a lengthy paperwork excercise is required, to appoint such a "deputy". In this case, assume a cost of several thousand dollars for the time required to comply with the requirements of the Substitute Decisions Act . |
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| C. Two Standard "mirror" Powers of Attorney: ( where each spouse appoints the other ) |
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Legal fees: $100.00 for the pair
GST: $5.00
Total: $105.00 |
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| D. Two Standard "mirror" Living Wills: ( where each spouse appoints the other ) |
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Legal fees: $50.00 for the pair
GST: $2.50
Total: $52.50 |
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| Fees for fancier, more customized work, like estate planning structures to avoid taxes, estate claims, estate administration, asset protection structures, family trusts, for example. |
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| Alter Ego Trusts/ Joint Partner Trusts/Personal trusts for individuals over 65, allowing a tax-free rollover of assets, for estate planning and capacity issues, and tax-saving and probate saving opportunities. |
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| Personal Residence Trust : A home worth $300,000 will attract a probate fee of $4000, as well as throwing all other assets into the calculation of probate. This can eliminate that expense to an estate. |
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| Henson Trust, for the safeguarding of a handicapped child's financial welfare. |
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| Estate Freezes to crystallize the $750,000 capital gains exemption in privately owned corporations, and to prepare the family business for succession. |
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| Legal fees: $300.00 per hour |
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