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Sabey Rule Blog

How to Properly Document a Transfer into Joint Tenancy

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I have preached caution about the use of joint tenancies as an estate-planning tool to transfer wealth often from a parent to a child, or sometimes to some other relative or friend. One of the first blog posts I wrote back in September, 2005, was entitled “Six Potential Pitfalls Parents Should Consider Before Transferring Real Estate Into a Joint Tenancy with Their Children.” There are in fact more than six, and I won’t repeat them all here. Instead I want to focus on how to properly document a transfer into a joint tenancy when the transfer is done as part of an estate plan.

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Supreme Court of Canada Overturns B.C. Court of Appeal Decision in S.A. v. Metro Vancouver Housing Corp

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The Supreme Court of Canada, in S.A. v. Metro Vancouver Housing Corp., 2019 SCC 4, overturned the decision of the British Columbia Court of Appeal, a decision I wrote about here. This case deals with the use of a discretionary trust to provide benefits for a person with disabilities without jeopardising other benefits that are means tested. These trusts are sometimes referred to as Henson Trusts, and in many provinces, including British Columbia, are an effective way of preserving the person’s provincial disability benefits.

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Interest on Legacies

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In British Columbia, if a legacy is not paid within one-year of the will-maker’s death, the beneficiary is entitled to interest at a rate of 5% per year from the first anniversary of the date of death. This rule applies unless the will provides that no interest is payable or provides for a different rate. In my experience, most will-makers do not address this issue in their wills.

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Moore v Sweet

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On November 23, 2018, the Supreme Court of Canada released its decision in Moore v. Sweet, 2018 SCC 52, in which the majority imposed a remedial constructive trust on the proceeds of a life insurance policy in favour of the life insured’s former spouse. The life insured, and owner of the policy, Lawrence Anthony Moore, had orally agreed with his former spouse, Michelle Constance Moore, that he would retain her as the beneficiary of his life insurance policy, if she paid the insurance premiums. She did so, paying approximately $7,000 in premiums after her separation from Mr. Moore. He broke his promise to her, by appointing his new common-law spouse, Risa Lorraine Sweet, as the irrevocable beneficiary. The policy paid out $250,000. At death, Mr. Moore’s estate was insolvent.

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Panda Estate

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I wrote about the Ontario decision in Re Milne Estate, in which Mr. Justice Dunphy refused to grant probate in respect of two wills on the grounds that in his view they were void for uncertainty of subject matter. A husband and wife each made two wills, one intended to deal with those assets for which an estate grant was required, and the other for which no grant would be required for the estate trustee to deal with the assets.
I described this two-will strategy to reduce probate as follows:

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Re Milne Estate

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I suspect that a recent decision from the Ontario Superior Court of Justice is causing some consternation among the Ontario estate planning bar. In Re Milne Estate, 2018 ONSC 4174, the Court held that a will was void for uncertainty of subject matter and could not be admitted to probate. The effect of the decision was to frustrate a two-will estate planning strategy to minimize probate fees. In understand that the decision is under the appeal, and I would argue that the reasoning is fundamentally flawed. But it does highlight the risks of using a multiple-will strategy to reduce probate fees. Continue reading “Re Milne Estate” »

Bare Trustee Found to be “Particular Individual” under the Excise Tax Act: New Housing Rebate Denied

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 Her Majesty the Queen v. Cheema, 2018 FCA 45 (CanLII)

Often home buyers need to rely on a guarantor in order to allow them to qualify for the mortgage. In such cases, a lender often requires the guarantor to be registered as an owner of the property; even if the parties agree that the purchasers are the sole beneficial owners of the property. In this context, the guarantor, or bare trustee, holds no beneficial interest in the property although they are a registered owner of the property. Continue reading “Bare Trustee Found to be “Particular Individual” under the Excise Tax Act: New Housing Rebate Denied” »