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Ontario Estate Planning Tips

What the experts are saying

Estate Administration Tax – The Nightmare Begins

It has been 19 years since Ontario’s probate fees – the forerunner of the Estate Administration tax (EAT) – were effectively tripled…What should be of greater concern, however, are the audit and verification powers that the government has given the Minister of Revenue…They include the power to require the estate trustee to provide all reasonable assistance with, and answer all questions pertaining to, the audit or examination being conducted…penalties have been added to the Estate Administration Tax act…offences are punishable by fine, by imprisonment or by both …the minimum fine will be $1000. (for the executor). The maximum fine will be twice the EAT payable.

From an article written by Barry S. Corbin for the Ontario Bar Association.

The Amendments To The Estate Administration Tax – Watch Out

Word is out. The Ontario Government has turned its mind again to the Estate Administration Tax Act in the context of Bill 173…There is much that remains unclear – even the time frame for assessment and reassessment. The Act provides it may be made within four years after the day the taxes became payable, or at a later date, if there was a failure to comply with the information requirement imposed by the amendments…

From an article written by M. Jasmine Sweatman, Certified Specialist (Estates and Trusts Law) for the Ontario Bar Association.

The Big Six Banks Will Fleece You – If You Let Them

A federal agency has stripped away any remaining pretense that banks are trustworthy providers of advice, assistance, guidance, help or anything else along those lines.

The Financial Consumer Agency of Canada said in a report issued Tuesday that the corporate culture at the Big Six banks is sharply focused on selling products and services, and that there are insufficient controls in place to protect clients from aggressive sales practices…

Today’s bank branches should be called financial retail outlets, or maybe money stores. The FCAC report notes that technology has enabled banks to focus less in their branches on handling transactions for clients and more on selling things like mortgages, lines of credit, savings and chequing accounts, mutual funds, term deposits and more.

As in any sales-based operation, bank branch employees are compensated to at least some extent according to the amount they sell. The FCAC said frontline bank staff are mainly on salary, but they also receive variable pay based on their performance as well as the results achieved by their team and the bank. Compensation for managers includes a bigger percentage of variable pay.

From an article written by Rob Carrick for the Globe and Mail. 

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Court Decision Casts Doubt Over Beneficiary Designations

An Ontario Superior Court of Justice decision in a disagreement between twins over their father’s estate has raised uncertainty over how courts will interpret beneficiary designations on registered plans, estate practitioners say. The judge in Calmusky v Calmusky found that the sole named beneficiary of a RRIF was not the plan’s ultimate beneficial owner. Instead, the judge found that the beneficiary was holding the RRIF in trust for the deceased’s estate.

The Calmusky case involves Henry Calmusky, who died in 2016 at age 94. He had named his son Gary Calmusky as joint owner of three bank accounts, which had an approximate combined value of $285,000 at his death. He also named Gary as beneficiary of his RRIF, which was valued at about $41,000 on death.

Randy Calmusky, Gary’s twin, applied to court arguing that Gary held the bank accounts and the RRIF in trust for Henry’s estate. Gary, however, argued that he was entitled to the proceeds of the joint accounts by right of survivorship, and to the RRIF as the designated beneficiary of the plan.

The court found that the proceeds of the bank accounts belonged to the estate, applying the principle established under the Supreme Court of Canada decision in Pecore v Pecore — that a transfer of property for no consideration to an adult child is presumed to be a trust.

From an article written by Rudy Mezzetta for Advisor’s Edge.

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