Companion Advisor: Taxes
Blind Sided by a Support Claim
It happens. Due to changing and volatile family relationships, an estate and its Estate Trustees/Executors can often be blind sided by a claim for support against the estate. Such claims will arise when the person who has died has either died without a Will or has ignored their legal obligations by not including provision in their Will for someone for whom they ought to have provided.
In Ontario, the Succession Law Reform Act is far reaching in its application of social policy because it creates a legal right to support of a dependant of a deceased. By this law, a Court may order such provision as it considers adequate out of the estate of the deceased for the proper support of his or her dependants or any of them.
`Estate' Definition Expanded
So reading this newsletter you may think, "Oh well, he and I or she and I own all of our property jointly and we are designated as beneficiaries on each other's life insurance and registered funds. If one of us dies, of course, the other one will inherit all of these assets. There will be no `estate', so we don't need to be worried about these types of claims".
This type of thinking is misguided, as the Succession
Law Reform Act deems the value of
Who Is A Dependant?
The definition of `dependant' is: a spouse (present or former, legal, common-law, or same sex), parent or child (being an actual child, grandchild or one treated as a child of the family), or a brother or sister of the deceased. A dependant is a person to whom the deceased was either
The providing of support does not mean simply a monthly cheque but could take the form of providing a car, providing room and board, paying off debts and credit cards or interim gifts of money to any one or more of this group.
Once a claim has been established, how does a judge decide how much to award? There is a list of 19 factors in the legislation which include the following:
Avoiding Messy Legal Battles After Death
So how are you to be proactive in dealing with these possible claims against your estate so that you do not leave your Estate Trustees and beneficiaries in a messy legal tangle after your death?
Conclusion - Post Death
If you do not take any of these steps and a claim is made against your estate after your death, your Estate Trustees would be well advised to apply for immediate probate of the Will as such claims generally need to be brought within 6 months of the probate of the Will. If the Estate Trustee delays or thinks that it is not necessary to probate the Will, this lack of probate leaves it open ended as to when a claim can be made. If such a claim is validly made on a timely basis, lawyers often are recommending the use of mediators to attempt to settle the dispute rather than the court process. If you think that you or someone in your family has a situation which would benefit from further legal advice in this matter, please contact us for an appointment to discuss it further.
Suzanne Michaud heads the Wills and Estates department at Pallett Valo, LLP She works with clients and their other advisors in the areas of estate planning and administration. Suzanne is also the Estate Planning Consultant with Zurich Canada, providing continuing education and case consultation to Zurich's brokers partners across Canada.
Bonnie Yagar concentrates her practice on estate
planning and administration, Wills, and the resolution of contentious
estate matters. She assists individuals with structuring their personal
assets to maximize the benefits in wealth transfer. Bonnie has a particular
expertise in estate planning for families with disabled beneficiaries.
She is very involved in the for Peel Activities and Rehabilitation (PAR).
Fiscal Agents Financial Services Group are not engaged in rendering tax,
accounting or legal professional services or advice. The comments in this
article are not intended, nor should they be relied upon, to replace specific
professional advice. Before acting on material contained herein. Readers
should seek advice that is appropriate to their personal circumstances
from a professional advisor.
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