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You may transfer a motor vehicle out of the deceased’s name at an Insurance Corporation of British Columbia autoplan broker. You can search for an autoplan broker near you (if you live in B.C.) here.
If you and the deceased owned the motor vehicle together as joint tenants, you should bring the current vehicle registration, and either an original death certificate or a certified copy with you to the autoplan broker.
If you are the executor of the deceased’s will, and the value of the deceased’s estate is $25,000 or less, you may transfer the motor vehicle without obtaining probate of the deceased’s last will. You will need to bring to the autoplan broker original or certified copies of the will and the death certificate, as well as the current registration. You will also be required to complete a statutory declaration before a lawyer or notary public stating that the estate is not worth more than $25,000. The autoplan broker should have a form of the statutory declaration available for you to take to a notary public or lawyer.
If the deceased died without a will, you may also be able to transfer the motor vehicle without a grant of letters of administration if you are the beneficiary of the deceased’s estate, and the total value of the estate is $25,000 or less.
In determining whether the estate is worth $25,000 or less, you only need to include assets that pass through the deceased’s estate, and not those assets that pass outside of the deceased’s estate. For example, some couples own their house as joint tenants, keep all of their bank accounts and investments in joint accounts with right-of-survivorship, and name each other as the beneficiaries of their life insurance policies and Registered Retirement Savings Plans. If one spouse dies with just a car worth $25,000 or less in his name, his spouse may be able to transfer the car as executor of his will without obtaining a grant of probate from the court.
If the estate is worth more than $25,000, you will need to obtain a grant of probate or letters of administration from the Supreme Court of British Columbia to transfer the vehicle. You may bring the current registration and the letters probate and will (or letters of administration if there is no will) to the autoplan agent to transfer the motor vehicle.
What if there is a will, the estate is worth more than $25,000, and you wish to transfer the motor vehicle before you obtain probate of the will? If you have a lawyer representing you in the probate application, your lawyer may write a letter of undertaking, promising to deliver a copy of the letters probate to the Insurance Corporation of British Columbia when the court grants the probate. You may bring the letter of undertaking, together with the current registration, a certified copy of the will, and an original or certified copy of the death certificate to the autoplan agent to transfer the motor vehicle in advance of obtaining the probate.
In addition to the documents I have referred to above, you will need to complete a Transfer/Tax Form to complete the transfer. Your autoplan broker should have this form available for you. Unless, the vehicle is being transferred to the deceased's spouse, you must also bring in the plates.
You may also consult the Insurance Corporation of British Columbia's "Checklist for Estate Transfers."
Saturday, April 28, 2007
Wednesday, April 25, 2007
British Columbia Government Intends to End Mandatory Retirement at 65
British Columbia Attorney General Wally Oppal is introducing legislation in the Legislative Assembly to end mandatory retirement at 65 in B.C. The Provincial Government intends to implement the Premier's Council on Aging and Seniors’ Issues recommendation to amend the Human Rights Code to to extend the prohibition against discrimination in employment based on age to those aged 65 and over. You can read the backgrounder released today here.
Amendments to British Columbia Adult Guardianship Legislation Introduced
The Attorney General of British Columbia, Wally Oppal, introduced Bill 29 in the Legislative Assembly last week. The new legislation is intended to replace the Patients Property Act with more modern legislation. If passed, Bill 29 will also make changes to legislation relating to powers of attorney, representation agreements, and it will authorize advance directives.
According to the Ministry of Attorney General press release,
According to the Ministry of Attorney General press release,
"The new guardianship law strikes an improved balance between protection and selfdetermination for adults who have guardians,” said Public Guardian and Trustee Jay Chalke, Q.C. “The replacement of the old Patients Property Act with this new law allows all guardians to better implement modern adult guardianship principles of autonomy, procedural fairness and the use of the least restrictive and intrusive form of support.”
The act enhances incapacity planning options by strengthening and clarifying representation agreements and enduring powers of attorney. The act also introduces an additional planning option, called an advance directive, for health-care decisions. Advance directives give British Columbians another choice for communicating their health-care wishes.
Saturday, April 21, 2007
Filing Canadian Tax Returns for an Estate
If you are an executor of a will or administrator of an estate of a deceased person in Canada, you are responsible for filing tax returns for the deceased.
If the deceased had not filed tax returns for the years before his or her death, you must file those returns for him or her.
You must also file a terminal return for the year of death. If the deceased died before October 31, then you usually are required to file the terminal return on or before April 30 of the following year. But if the deceased or his or her spouse or common-law partner carried on a business, the period for filing the return is extended to June 15.
If the deceased died on or after November 1, you must file the terminal return no later than six months after the date of death (or the later of June 15 or six months if the deceased or the deceased's spouse or common-law partner carried on a business). This provides you with a little more time to file the return.
In the terminal return, you report all of the income the deceased received before death, and income from deemed dispositions on death. (For example, if the deceased owned a rental property, the deceased will be deemed to have sold the rental property at death for fair market value, and there will be capital gains on the increase in value over the properties cost for tax purposes. In some cases, this will result in a tax liability.)
In addition to the terminal return, you may file other returns in some circumstances, including a return for rights or things, a return for a partner or proprietor of a business, or a return for income from a testamentary trust. For example if the deceased’s employer owed the deceased salary, commissions or holiday pay for a pay period that ended before the date of death, the amount may be claimed in a rights or things return.
These other returns are optional. Why would any sane person file optional tax returns? The reason is that by reporting certain kinds of income in the optional returns instead of in the terminal return, the income tax rate on the items claimed in the separate returns may in some cases be lower. In other words you may save the estate some taxes by filing separate returns.
After you have reported all of the deceased’s income to the date of death your job is not complete. From the date of death to the date you distribute the estate to the beneficiaries, the estate assets may generate income or capital gains. You will need to file T3 – Trust returns for the time from the deceased’s date of death to the date of distribution. You may pick the year-end for the trust; it does not have to be December 31. Sometimes there are tax savings if you pick a different year-end. You must file the T3 return within 90 days of the year-end you select.
You may apply for a Clearance Certificate from Canada Revenue Agency after you have filed the various tax returns, and Canada Revenue Agency has sent you its assessment notices. A Clearance Certificate provides you with some protection in case Canada Revenue Agency later determines that there is more tax owing. It is prudent to wait for the Clearance Certificate before completing the distribution of the estate to the beneficiaries.
For more details, you may consult Canada Revenue Agency’s “Preparing Returns for Deceased Persons, 2006,” “T3 Trust Guide, 2006,” and “Income Tax Information Circular 82-6R5: Clearance Certificate.”
If are an executor or administrator, and you find all of the information in these Canada Revenue Agency publications a bit overwhelming (I do), don’t panic. A public accountant with experience in filing returns for estates can provide enormous assistance, piece of mind, and in some circumstances, tax savings. I always recommend to my estate administration clients that they retain a professional accountant (as opposed to a tax filer without professional training) to assist them.
If the deceased had not filed tax returns for the years before his or her death, you must file those returns for him or her.
You must also file a terminal return for the year of death. If the deceased died before October 31, then you usually are required to file the terminal return on or before April 30 of the following year. But if the deceased or his or her spouse or common-law partner carried on a business, the period for filing the return is extended to June 15.
If the deceased died on or after November 1, you must file the terminal return no later than six months after the date of death (or the later of June 15 or six months if the deceased or the deceased's spouse or common-law partner carried on a business). This provides you with a little more time to file the return.
In the terminal return, you report all of the income the deceased received before death, and income from deemed dispositions on death. (For example, if the deceased owned a rental property, the deceased will be deemed to have sold the rental property at death for fair market value, and there will be capital gains on the increase in value over the properties cost for tax purposes. In some cases, this will result in a tax liability.)
In addition to the terminal return, you may file other returns in some circumstances, including a return for rights or things, a return for a partner or proprietor of a business, or a return for income from a testamentary trust. For example if the deceased’s employer owed the deceased salary, commissions or holiday pay for a pay period that ended before the date of death, the amount may be claimed in a rights or things return.
These other returns are optional. Why would any sane person file optional tax returns? The reason is that by reporting certain kinds of income in the optional returns instead of in the terminal return, the income tax rate on the items claimed in the separate returns may in some cases be lower. In other words you may save the estate some taxes by filing separate returns.
After you have reported all of the deceased’s income to the date of death your job is not complete. From the date of death to the date you distribute the estate to the beneficiaries, the estate assets may generate income or capital gains. You will need to file T3 – Trust returns for the time from the deceased’s date of death to the date of distribution. You may pick the year-end for the trust; it does not have to be December 31. Sometimes there are tax savings if you pick a different year-end. You must file the T3 return within 90 days of the year-end you select.
You may apply for a Clearance Certificate from Canada Revenue Agency after you have filed the various tax returns, and Canada Revenue Agency has sent you its assessment notices. A Clearance Certificate provides you with some protection in case Canada Revenue Agency later determines that there is more tax owing. It is prudent to wait for the Clearance Certificate before completing the distribution of the estate to the beneficiaries.
For more details, you may consult Canada Revenue Agency’s “Preparing Returns for Deceased Persons, 2006,” “T3 Trust Guide, 2006,” and “Income Tax Information Circular 82-6R5: Clearance Certificate.”
If are an executor or administrator, and you find all of the information in these Canada Revenue Agency publications a bit overwhelming (I do), don’t panic. A public accountant with experience in filing returns for estates can provide enormous assistance, piece of mind, and in some circumstances, tax savings. I always recommend to my estate administration clients that they retain a professional accountant (as opposed to a tax filer without professional training) to assist them.
Saturday, April 14, 2007
Waters' Law of Trusts in Canada
I have recently completed reading Waters, Gillen and Smith, Waters’ Law of Trusts in Canada Third Edition (Toronto: Thompson Carswell, 2005).
Professors Waters, Gillen and Smith provide a comprehensive treatment of Canadian trust law. This book is remarkable both for its breadth and depth. Although focused on Canadian law, the book cites the older English authorities, as well as other Commonwealth and American cases. They analyze trust law in its historical context, but they are forward looking, suggesting areas in need of reform.
This book is divided into thirty chapters. It covers how express trusts are created, and how they may arise by operation of law. There is an excellent chapter on charitable trusts. The book deals with such mundane, practical issues as appointing successor trustees, and trustees’ duties to account to beneficiaries. It also deals with fascinating, but more esoteric, issues such as whether The Hague Convention on the Law Applicable to Trusts and on their Recognition allows a resident of a jurisdictions that has implemented the convention to avoid domestic restrictions on trust law by choosing the laws of foreign jurisdictions even if the trust, assets and beneficiaries do not have any other connection to the foreign jurisdictions.
Waters’ Law of Trusts in Canada also has an interesting discussion on the evolution of trustee investment powers in Canada. The authors look at the historical relationship between the types of investments trustees were permitted to make, and the rules requiring trustees to keep an even hand between income and capital beneficiaries. Certain types of investments were once seen as both safe, and as providing a fair return to income beneficiaries, while preserving capital. With changes in the economy, and modern portfolio investment theory, trust law in most Canadian provinces has moved to a more flexible prudent investor standard. But, the types of investments a prudent investor might invest in to maximize the total return to the trust may change the balance between income and capital beneficiaries. The authors suggest investment decisions could be divorced from even hand considerations by creating “unitrusts” or “percentage trusts.” In other words, instead of income, some beneficiaries get a percentage of the trust funds each year.
How influential is Waters’ Law of Trusts in Canada? I searched “Waters” and “law of trusts” on the Canlii website, and got 435 cases. The Canlii website contains relatively recent cases only (it goes back to about 1990 for B.C. cases). The Supreme Court of Canada cited the 3rd edition in its decision in Buschau v. Rogers Communications Inc., 2006 SCC 28, [2006] 1 S.C.R. 973. I found about 15 Supreme Court of Canada cases in which the court cited the 2nd edition, which came out in 1984. I cannot think of any Supreme Court of Canada cases dealing with trust law since 1984 that have not cited either the 2nd or 3rd edition.
Waters’ Law of Trusts in Canada is my starting point for research into trust law issues.
Professors Waters, Gillen and Smith provide a comprehensive treatment of Canadian trust law. This book is remarkable both for its breadth and depth. Although focused on Canadian law, the book cites the older English authorities, as well as other Commonwealth and American cases. They analyze trust law in its historical context, but they are forward looking, suggesting areas in need of reform.
This book is divided into thirty chapters. It covers how express trusts are created, and how they may arise by operation of law. There is an excellent chapter on charitable trusts. The book deals with such mundane, practical issues as appointing successor trustees, and trustees’ duties to account to beneficiaries. It also deals with fascinating, but more esoteric, issues such as whether The Hague Convention on the Law Applicable to Trusts and on their Recognition allows a resident of a jurisdictions that has implemented the convention to avoid domestic restrictions on trust law by choosing the laws of foreign jurisdictions even if the trust, assets and beneficiaries do not have any other connection to the foreign jurisdictions.
Waters’ Law of Trusts in Canada also has an interesting discussion on the evolution of trustee investment powers in Canada. The authors look at the historical relationship between the types of investments trustees were permitted to make, and the rules requiring trustees to keep an even hand between income and capital beneficiaries. Certain types of investments were once seen as both safe, and as providing a fair return to income beneficiaries, while preserving capital. With changes in the economy, and modern portfolio investment theory, trust law in most Canadian provinces has moved to a more flexible prudent investor standard. But, the types of investments a prudent investor might invest in to maximize the total return to the trust may change the balance between income and capital beneficiaries. The authors suggest investment decisions could be divorced from even hand considerations by creating “unitrusts” or “percentage trusts.” In other words, instead of income, some beneficiaries get a percentage of the trust funds each year.
How influential is Waters’ Law of Trusts in Canada? I searched “Waters” and “law of trusts” on the Canlii website, and got 435 cases. The Canlii website contains relatively recent cases only (it goes back to about 1990 for B.C. cases). The Supreme Court of Canada cited the 3rd edition in its decision in Buschau v. Rogers Communications Inc., 2006 SCC 28, [2006] 1 S.C.R. 973. I found about 15 Supreme Court of Canada cases in which the court cited the 2nd edition, which came out in 1984. I cannot think of any Supreme Court of Canada cases dealing with trust law since 1984 that have not cited either the 2nd or 3rd edition.
Waters’ Law of Trusts in Canada is my starting point for research into trust law issues.
Friday, April 06, 2007
Claims by a Common-law Spouse to Inherited Property on Breakdown of the Relationship
When a common-law relationship breaks down in British Columbia, one common-law spouse may have a claim against the other common-law spouse on the basis of unjust enrichment. To succeed the spouse making the claim must prove three things. She must show that she contributed money, other assets, or services to the other common-law spouse. She must show that the other common-law spouse benefited. Finally, she must show that there is no principled reason to allow the other common-law spouse to keep the benefit without compensating her.
Sometimes the courts will award money (a monetary award), and other times, the courts will award an interest in specific property (a constructive trust) to the contributing common-law spouse.
Can a common-law spouse make an unjust enrichment claim in respect of property the other inherited?
The British Columbia Court of Appeal considered this issue in Hughes v. Miller, 2007 BCCA 116.
Bambii Hughes and Bryan Miller lived in a common-law relationship for twelve years. The trial judge found that during some of those years, Ms. Hughes contributed the larger proportion of their modest living expenses. She also provided care and assistance to Mr. Miller.
Mr. Miller had inherited an interest in some land from his father. During the common-law relationship, Mr. Miller inherited a further interest in the land, and some money from his aunt’s estate. When the parties separated, the land was worth about $ 1.75 million.
The trial judge found that Mr. Miller had been unjustly enriched by Ms. Hughes contributions during their relationship, but did not consider it appropriate to award Ms. Hughes an interest in the land. The trial judge took into consideration the fact that Mr. Miller inherited the land, and Ms. Hughes did not contribute to the acquisition of the land. The trial judge ordered Mr. Miller to pay Ms. Hughes $75,000.
The Court of Appeal agreed with the trial judge’s analysis, but increased the award to $100,000. From the time the Mr. Miller inherited his aunt’s interest in the land to the couple’s separation, the land increased in value by about $300,000. Mr. Justice Hall, in the Court of Appeal, considered it appropriate to award Ms. Hughes of one-third of the increase in value.
Sometimes the courts will award money (a monetary award), and other times, the courts will award an interest in specific property (a constructive trust) to the contributing common-law spouse.
Can a common-law spouse make an unjust enrichment claim in respect of property the other inherited?
The British Columbia Court of Appeal considered this issue in Hughes v. Miller, 2007 BCCA 116.
Bambii Hughes and Bryan Miller lived in a common-law relationship for twelve years. The trial judge found that during some of those years, Ms. Hughes contributed the larger proportion of their modest living expenses. She also provided care and assistance to Mr. Miller.
Mr. Miller had inherited an interest in some land from his father. During the common-law relationship, Mr. Miller inherited a further interest in the land, and some money from his aunt’s estate. When the parties separated, the land was worth about $ 1.75 million.
The trial judge found that Mr. Miller had been unjustly enriched by Ms. Hughes contributions during their relationship, but did not consider it appropriate to award Ms. Hughes an interest in the land. The trial judge took into consideration the fact that Mr. Miller inherited the land, and Ms. Hughes did not contribute to the acquisition of the land. The trial judge ordered Mr. Miller to pay Ms. Hughes $75,000.
The Court of Appeal agreed with the trial judge’s analysis, but increased the award to $100,000. From the time the Mr. Miller inherited his aunt’s interest in the land to the couple’s separation, the land increased in value by about $300,000. Mr. Justice Hall, in the Court of Appeal, considered it appropriate to award Ms. Hughes of one-third of the increase in value.
Tuesday, April 03, 2007
Kelowna General Hospital Foundation - Planned Giving
I have recently joined a planned giving committee of the Kelowna General Hospital Foundation. You can donate funds to the Kelowna General Hospital Foundation, which holds funds for the Kelowna General Hospital. The Kelowna General Hospital Foundation is registered as a Public Foundation. This means that, when you make a donation, you can get a tax receipt allowing you to claim a tax credit to reduce your Canadian income taxes.
From my experience so far, the committee is made up of energetic, thoughtful people. Being new to the committee, I still have a great deal to learn about the Foundation's planned giving programs.
I think planned giving is quite different from other types of fundraising. First, it is a long-term commitment. Secondly, a good planned giving program assists the donors as well as the charities. There are many different ways to donate funds, such as trusts, life insurance policies, annuities and gifts in wills. Lawyers, accountants, financial planners and other professions play an important role in assisting clients in choosing the best methods for them to carry out their charitable wishes.
I am looking forward to working on this committee.
From my experience so far, the committee is made up of energetic, thoughtful people. Being new to the committee, I still have a great deal to learn about the Foundation's planned giving programs.
I think planned giving is quite different from other types of fundraising. First, it is a long-term commitment. Secondly, a good planned giving program assists the donors as well as the charities. There are many different ways to donate funds, such as trusts, life insurance policies, annuities and gifts in wills. Lawyers, accountants, financial planners and other professions play an important role in assisting clients in choosing the best methods for them to carry out their charitable wishes.
I am looking forward to working on this committee.
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