Feb 28, 2024
When I first started working with Angela Casey, she had a small, dog-eared poster of a car and a bike on her office wall. Under the picture of the car were the words “this one runs on money and makes you fat” and under the bike was written (you’ve guessed it), “this one runs on fat and saves you money”. A silly saying that stuck in my mind as I observed my co-worker energized and happily commuting by bike while I dragged myself to and from the bowels of the subway. Intrigued though I was, I thought it would be too difficult for me to bike from Etobicoke.
In 2013, I had just come back from a second maternity leave after having my son. Like many new parents, I was feeling pretty defeated by a lack of personal time. I was out of shape. Despite a supportive spouse, I couldn’t find my way around getting to a gym or carving out time to workout at home. So I bought a cheap bike and planned out my route.
The first ride was hard. I had to stop midway to catch my breath. But I was also exhilarated: speeding along Lake Ontario, a sunny, perfect June day, feeling stupidly accomplished and content. More than a decade later, despite the occasional spill and stolen bike seat, biking to the office is usually one of the best parts of my day. There is something about exercising and being outside that lifts the mood and clears the mind.
Each year, Baycrest raises funds for dementia research through a charity bike ride on the Gardiner and DVP. Research is continuing to establish that there is a connection between exercise and brain health, so the event is a fitting one. Our firm has participated the last two years and we’ll do so again this year. Some of our family members are participating too. My 11 year old son is already talking about the tasty corporate team buffet at the end. Whatever gets you motivated to get moving is a good thing IMHO.
Angelique Moss
Partner, Casey & Moss LLP
Nothing contained in this post constitutes legal advice or establishes a solicitor-client relationship. If you have any questions regarding your legal rights or legal obligations, you should consult a lawyer.
Feb 13, 2024
Completing the Estate Information Return
Congratulations! You have finally received your issued Certificate of Appointment of Estate Trustee from the court. Now it is time to get your hands dirty and administer the Estate. (While you may have been able to take steps before this time, financial institutions may not recognize your authority until you have a Certificate of Appointment.)
Along with the issued Certificate of Appointment, the court will also provide you with a notice about a form called an Estate information Return (“EIR”). An Estate Information Return must be filed with the Ministry of Finance within 180 days of the date of the Certificate. It is used to enforce compliance with the Estate Administration Tax Act.
The EIR lists details of all the Deceased’s assets and their date of death values. For example, if the Deceased owned a property at the time of their death, you would have to obtain the Deceased’s address, property assessment roll number and property identifier number (PIN). If the Deceased had bank and/or investment accounts, you would need to list the account numbers and contact information for those institutions. If the Deceased had a vehicle, you would have to list the vehicle identification number, make, model and year of that vehicle. The form also requires you to list all other assets such as personal effects and refund cheques that the Deceased may have been entitled to at the time of their passing.
The EIR also gives the estate trustee the opportunity to mention any asset that was missed or discovered after the Application for a Certificate of Appointment was submitted with the court and it allows the estate trustee to pay the applicable estate administration tax for those assets.
It is good practice to diarize the deadline to file the EIR so you won’t miss it!
You can find the form for the EIR along with a guide to assist you here: https://forms.mgcs.gov.on.ca/en/dataset/9955
If you are unable to obtain all asset information within the 180 days deadline, don’t worry, you can file an amended return which would be due within 60 days of the estate trustee becoming aware that the information on the initial return is inaccurate.
If you need help, contact Casey & Moss
Felicia Cyril
Nothing contained in this post constitutes legal advice or establishes a solicitor-client relationship. If you have any questions regarding your legal rights or legal obligations, you should consult a lawyer.
Jan 9, 2024
On January 1, 2022, various amendments to the Succession Law Reform Act (“SLRA”) came into effect as part of Bill 245, the Accelerating Access to Justice Act. As part of those amendments, Bill 245 repealed subsection 15(a) and section 16.
Before December 31, 2021, sections 15 and 16 of the SLRA provided that a testator’s marriage had the effect of revoking their Will, except in some specific circumstances:
Revocation generally
15 A will or part of a will is revoked only by,
(a) marriage, subject to section 16;
…
Revocation by marriage
16 A will is revoked by the marriage of the testator except where,
(a) there is a declaration in the will that it is made in contemplation of the marriage;
(b) the spouse of the testator elects to take under the will, by an instrument in writing signed by the spouse and filed within one year after the testator’s death in the office of the Estate Registrar for Ontario; or
(c) the will is made in exercise of a power of appointment of property which would not in default of the appointment pass to the heir, executor or administrator of the testator or to the persons entitled to the estate of the testator if he or she died intestate. R.S.O. 1990, c. S.26, s. 16.
In the current version of the SLRA, those provisions simply do not exist. A reader will find instead the note “Repealed”, followed by the citation for Bill 245, as shown below:
Revocation generally
15 A will or part of a will is revoked only by,
(a) Repealed: 2021, c. 4, Sched. 9, s. 2.
(b) another will made in accordance with the provisions of this Part;
(c) a writing,
(i) declaring an intention to revoke, and
(ii) made in accordance with the provisions of this Part governing making of a will; or
(d) burning, tearing or otherwise destroying it by the testator or by some person in his or her presence and by his or her direction with the intention of revoking it. R.S.O. 1990, c. S.26, s. 15; 2021, c. 4, Sched. 9, s. 2.
16 Repealed: 2021, c. 4, Sched. 9, s. 3.
There is no transition provision, meaning there is no provision specifying that marriage revoked a Will for marriages prior to January 1, 2022, or any other date. The law for decades was that marriage revoked a Will. But, in the current law there is no indication that was ever the case.
This is in contrast to other changes to the SLRA made by Bill 245, where the amendments included specific language indicating when the changes are to take effect. For example, Bill 245 added section 43.1 to the SLRA, which provides that separated spouses do not inherit on the intestate death of their former spouse. The transition provision for this section specifies that section 43.1 only applies if the event that constitutes the separation (for example, the day the couple began living separately, or the date of their separation agreement) occurred after December 31, 2021.
What is the effect of the complete revocation of sections 15(a) and 16, with no transition provision? If a person made a Will in 2020, married in 2021, and died in 2022, was their Will revoked by marriage, because the law at the time of the marriage was that the Will was revoked? Or, is the applicable law that at the time of death, and therefore the revocation-by-marriage would only take effect if the person had died before December 31, 2021, when sections 15(a) and 16 were in force?
The consensus has been that the relevant time is the time of marriage. Commentary on the revocation provisions consistently states that the changes brought in by Bill 245 only apply for marriages on or after January 1, 2022. The current probate forms draw a distinction between marriages before and after Jan 1, 2022: the applicant is required to say if the marriage was before or after that date, and if before, to explain why a prior Will was not revoked.
No court decision has addressed this question directly, but in the reported case law, judges seem to operate on the same basis: if sections 15(a) and 16 were in effect at the time a person’ married, their existing Will was revoked unless the section 16 exceptions applied.[1]
But does this make sense?
The general rule is that a Will speaks from the time of death, and before death a Will is merely a piece of paper. Courts will not consider the validity of a testamentary document until after the person has died. It seems counterintuitive, then, for the applicable legal landscape in this situation to be the time of marriage, rather than the time of death.
Further, if the legislature’s intention was for the pre-2022 marriages to continue to be treated as revoking prior Wills, would the legislature not simply have amended sections 15 and 16 to include a transition provision, specifying it only applied to marriage prior to Bill 245 coming into effect?
The law for decades was that marriage revoked a Will. But, in the current law there is no indication that was ever the case. The complete revocation of the provision suggests that the legislature intended for any Will for a Deceased who died after December 31, 2021, to have survived a subsequent marriage.
The answer will ultimately be a matter of statutory interpretation in a case where the issue is before the court. The principles in this area are complex, and are detailed at length in E.A. Driedger’s article “Statutes: Retroactive Retrospective Reflections“, 1978 CanLIIDocs 18, for anyone looking for some light reading. Sullivan on the Construction of Statutes, by Ruth Sullivan also contains an entire chapter on the “temporal application” of statutes, and how it is to be determined.
In general, there is a presumption against legislation applying “retroactively,” defined as applying “so as to change the past legal effect of a past situation.” There is also a presumption against the removal of already vested rights. However, there is an important distinction drawn between retroactive application, which changes the past effects of past situation and legislation, and what is often referred to as “retrospective” legislation, which attaches new consequences for the future to an event that took place before the legislative change.[2]
Arguably, Bill 245 does the latter, and merely changes the current effect of a past marriage. No right can be said to have vested prior to the testator’s death, since the Will does not create any rights, or have any effect prior to the testator’s death.
Nevertheless, what a court decides remains to be seen.
Laura Cardiff
[1] See, for example, Estate of Harold Franklin Campbell (Re), 2023 ONSC 4315 (CanLII) at para 5. It was an agreed-upon fact in that case that the Deceased’s marriage in the year 2000 had revoked his last Will. The issue was whether it was subsequently revived.
[2] See Benner v Canada, [1997] 1 SCR 358 at paras 39-40, citing Driedger.
Nothing contained in this post constitutes legal advice or establishes a solicitor-client relationship. If you have any questions regarding your legal rights or legal obligations, you should consult a lawyer.
Dec 14, 2023
On November 29, 2023, Adam Giancola and Zara Wong were speakers at the “Representing Children in Civil Matters” continuing professional development program held by the Ontario Bar Association, co-chaired by Trusts and Estates section and Civil Litigation section of the OBA.
Adam presented on the ethical issues and professional considerations that arise when representing children from an estates lawyer’s perspective. The presentation touched on who is the lawyer’s client, how to deal with issues that arise when dealing with separated families, and limiting or developing areas of expertise, with the goal of providing practitioners with tools to effectively address professional and ethical issues that arise in injury settlements for minors and guardianships of minors.
Zara presented on application to pass accounts in personal injury guardianships of minors. The presentation focussed on common issues found in passing of accounts applications, and provided tips on how lawyers can prepare and educate their guardian clients on following the Management Plan, understanding their fiduciary duties as guardian, and maintaining accurate records and vouchers.
Nov 27, 2023
Taxed for having your home vacant…the concept, at first blush, evokes the lyrics of a George Harrison tune:
“If you try to sit, I’ll tax your seat…
If you talk a walk, I’ll tax your feet…
‘Cause I’m the taxman, yeah, I’m the taxman.”
Nonetheless, tax on vacant homes is now in effect at the municipal level (Toronto’s Vacant Home Tax) and at the federal level (the Underused Housing Tax). The stated purpose of the taxes is to increase the supply of residential housing by creating an incentive for homeowners to keep their homes occupied.
In this blog post, I digest these recent rules (which took effect starting in 2022) to give the executor (a.k.a. estate trustee, deceased’s personal representative) an overview of the potential filing and tax obligations, when the estate includes residential property.
Executors should note that there are some other municipalities in Canada (e.g., Ottawa and Vancouver) that have their own municipal vacant home taxes (outside the scope of this digest).
Residential Properties in Toronto (municipal Vacant Home Tax)
Every Toronto homeowner has a reporting obligation under the new tax rules. If the homeowner has died, the executor of the estate will make the ‘declaration’ to the City, either online or by mail in February, indicating the status of the property (vacant or not) in the previous year.
A property’s status is ‘vacant’ where it:
- Was not occupied by tenants for at least six months in the previous calendar year, and
- Was not the principal residence of the owner, or another occupant, for at least six months in previous calendar year.
Conversely, the property is ‘not vacant’ if either of those conditions are satisfied. And if the residential property is a duplex or triplex, it’s only necessary for a single self-contained unit to meet either of those two conditions for the property’s status to be ‘not vacant’.
There’s never any tax when the status is ‘not vacant’. Even when the status is declared ‘vacant’, there’s no tax if an exemption applies. Executors should take note of the exemption from tax for the year of the owner’s death and the following calendar year (if the vacancy is due to the death of the owner). There are several other exemptions, including when occupation is prevented by renovations, or when the principal resident is in hospital or long-term care (subject to certain conditions).
If the declaration isn’t made, the City can deem the property vacant – this eliminates the ability to claim exemptions that would otherwise be available.
To summarize, vacant home tax will be owed when a residential property is declared vacant and no exemptions are applicable (or if the property is deemed vacant). The amount of tax is 1% of the assessed value listed on the property tax bill. For a property assessed at $1,000,000 for 2023, the vacant home tax would be $10,000, payable in three instalments in 2024.
Residential Properties in Canada (federal Underused Housing Tax):
Executors also need to consider any obligations they might have under the federal Underused Housing Tax, when an estate contains residential property located anywhere in Canada.
The good news is that in most cases, executors won’t have any federal filing requirement (which also means no tax). This is because individual Canadian citizens and permanent residents who own residential property are classified as ‘excluded owners’ – i.e., excluded from having to file a return. The CRA takes the view that someone who is an ‘excluded owner’ before death remains an excluded owner after death for as long as their name remains registered on title. So if title remains in the Canadian deceased’s name, the executor won’t need to file. And if title is transferred into name of the executor, there would still be no filing requirement, as long as the executor is him or herself an ‘excluded owner’ – i.e., a Canadian citizen or permanent resident.
Yet there are certain situations where a federal filing obligation could arise:
- Where a non-Canadian died owning residential property in Canada, and title remains registered in the name of the deceased, the executor will need to file (because the registered owner is not Canadian and therefore is not an ‘excluded owner’).
- An executor (if a Canadian citizen or permanent resident) is an ‘excluded owner’, but all other varieties of trustees are not ‘excluded owners’ and will need to file a return. So the trustee of a testamentary trust, who in that capacity is the registered owner of a residential property, will need to file (even if he or she is a Canadian citizen).
If there’s no filing requirement, there’s no tax. And when filing a return is required, there are exemptions, such as where the property is occupied or a principal residence for at least six months of the year, and an exemption from tax for the year of the owner’s death and the following year.
If no exemptions apply, taxes for the year are calculated as 1% of the greater of the assessed value and the most recent sale price. There’s an election to use fair market value, which may be useful where only a small part of a large parcel of land is used for residential purposes.
Summary
George Harrison undoubtedly would be miffed if he knew about vacant home taxes. But executors really shouldn’t be overly concerned, for the reasons summarized below:
- If the deceased owned residential property in Toronto, the executor will have an annual obligation to declare the property’s status under Toronto’s Vacant Home Tax. But there won’t be any tax unless the property is considered vacant and no exemptions apply (remember, tax is exempt for the year of the owner’s death and the following year if the vacancy is due to the death of the owner).
- On the federal level (Underused Housing Tax), executors usually won’t have a filing obligation (which automatically means no tax), except if the deceased homeowner was a non-Canadian and the home remains registered in the deceased’s name. When filing is required, there’s no tax if the property meets the occupancy criteria. Tax is also exempt in the year of the owner’s death and the following year.
Greg Miller
Greg is a native of Toronto. With a keen interest in litigation, he is delighted to be articling at Casey & Moss LLP. He graduated from U of T’s commerce program, and Western’s law school, with distinction. He has experience in commercial property management, and a personal interest in rare books and nutrition (with an admitted weakness for butter tarts).
Nothing contained in this post constitutes legal advice or establishes a solicitor-client relationship. If you have any questions regarding your legal rights or legal obligations, you should consult a lawyer.
