December, 2022

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Estate Planning for Blended Families

Disclaimer: This article on estate planning for blended families is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.

More than one in four Canadians in a relationship are in their second or subsequent marriage or common law relationship. That means that many of us have experienced a family in more than one context, with more than one partner and, sometimes, with children from each union.

The nuclear family – two married parents, their own children, and sometimes the grandparents – is no longer the only family structure. Increasingly complex family structures mean making increasingly complex decisions, and nowhere is that more true than in estate planning.

If this situation describes you, it is vital that you do not leave your estate planning to chance. A comprehensive estate plan, including a well-written will and powers of attorney, protects your entire family and your own wishes. We strongly encourage you to contact us today about your estate planning needs. Our experienced professionals can create a plan that is tailored for you and that takes into account all of your family members.

In this article, we will talk about how your estate plan will affect various family members, what you ought to take into consideration and how you can give your family the greatest gift of all – peace of mind.

Estate Law Updates

As we previously noted, on January 1, 2022, updates to the Succession Law Reform Act came into effect. A new marriage no longer revokes a previous will. This means that if you remarry and do not create a new will, your new spouse will not automatically inherit your estate.

Children from a previous relationship

You must make specific arrangements to ensure that the children receive what you wish them to have. While you may assume that your spouse will care for your children after you pass, there is simply no guarantee of this.

If you have children from a prior relationship, the executor of your will or estate plan must take into account their situation and appropriately provide for them. You could also possibly create trusts to ensure that they are cared for financially.

Your spouse

You also want to ensure that your spouse is taken care of properly in the event of your death. This can include leaving them a lump sum, setting up trusts, or other financial arrangements. Your will should also consider any special needs your spouse may have and ensure they are provided for.

You may also want to use vehicles such as RRSPs, life insurance, and other investments to provide for them in the event of your death.

When it comes to your home, you may want to add your spouse to the title now. Otherwise, they find themselves in a vulnerable position upon your death. As tenants in common or joint tenants, they will be protected should the home need to be sold.

However, it is not as simple as registering your spouse’s name on title. There are tax considerations to consider. Therefore, you need to make clear what your intentions are with respect to adding your spouse on title. It may mean creating a resulting trust , or setting up a spousal trust to ensure that the house passes in accordance with your wishes.

Finally, your will should detail any special gifts you want to leave to your spouse.

Specific Items

When you create a will, you may want to consider leaving specific items to particular family members. Your will should detail all gifts, from jewellery to artwork or furniture. This ensures that the wishes you expressed during your life are respected after your death.

Estate Planning: Factors to Consider

When your family situation is complex, it is important that you consider all factors when creating your estate plan. How can you mitigate potential disputes between family members? What financial arrangements can you make to ensure that all of your loved ones are provided for? How does the law impact you and your family’s situation?

First, take an honest look at your situation. Do your children get along with your new spouse? Do you get along with your spouse’s children? If you have children together, along with children from a previous relationship, consider how they are related to each other. Consider also how you would like them to be treated in the event of your death.

Second, consider what assets you have and who will be responsible for them upon your death. This could include your home, investments, life insurance policies and personal items with sentimental value. Consider setting up trusts or leaving money specifically to certain family members to ensure it passes in accordance with your wishes.

Third, give careful thought to who will act as your estate trustee. If there are tensions between family members, you may want to consider an independent and unbiased executor.

Fourth, be open and honest with your family about your wishes. Discussing your will or estate plan in advance can help to avoid confusion and disputes after you pass.

Finally, keep your estate plan updated as circumstances change. Make sure your estate plan reflects any significant life changes, such as a new grandchild or changes in marital status.

Estate Planning With You in Mind

Finally, seek professional advice from a lawyer and financial planner to help you navigate these various factors. You want to ensure that your estate plan reflects your wishes as well as minimizes any tax implications for you or your beneficiaries.

At Beeksma Law, we understand that each family’s situation is unique. We strive to provide you with the advice and assistance that meets your needs. With careful planning, proper preparation and expert advice, you can ensure that all of your loved ones are provided for and that your wishes are respected after you pass.

Starting and Ending Partnerships In Ontario

Disclaimer: This article on partnerships in Ontario is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.

Going into business with someone else can be a great way to increase your chances of success. You can share the workload, knowledge and resources while also having someone to hold you accountable for your decisions. Working with a partner allows you to expand your market reach, attract more customers and build relationships within the industry. 

However, going into business with someone else means you must take extra steps to set yourself up for future success. This article will discuss the importance of a partnership agreement and what happens when you want to end your partnership. 

Two people setting up partnerships in Ontario

Starting a Partnership on the Right Foot

When it comes to starting a business partnership, taking the time to ensure that everything lines up can save you and your partner a lot of headaches down the road. A strong initial agreement should outline how to share any profits, how to make decisions, and what happens if one of you wants out of the arrangement.

While you may be excited to being your venture, making sure that everything is in order should be your first priority. Doing so will help you avoid potential conflicts, confusion, and legal issues that can arise from not having a clear agreement set up.

Setting Up Your Partnership Agreement

If you’re serious about forming a business partnership, you must first determine how your business will be structured. Typically, partnerships in Ontario are formed through general partnerships or corporations.

Partnerships in Ontario

Partnerships in Ontario are defined as “the relationship between two or more people who agree to carry on a business together with the view of making profit.” This type of structure is often seen in small businesses, as it allows for shared ownership and responsibility among partners. A partnership agreement governs the arrangement and outlines the rules and details of the partnership.

Corporations

If your business is a corporation, then each partner holds a certain percentage of the company’s shares and are shareholders. This type of structure is more complex than general partnerships but can offer individual liability protection and more tax advantages.

The corporation is considered a separate entity, and as such, is subject to its own set of regulations and laws. A Unanimous Shareholder Agreement governs the relationship.

Creating Your Agreement

Once you’ve determined your business structure, it’s time to create your agreement. This will help ensure that you and your partner are on the same page in terms of expectations and responsibilities.

Your agreement should include details such as:

  • The percentage of ownership that each partner has
  • How profits and losses will be shared
  • The purpose of the partnership
  • What rights and responsibilities each partner has
  • Any restrictions placed on the partners, such as limits on selling shares or assigning interests in
  • How to dissolve the partnership
  • How the business should be appraised, how many appraisals are needed and who will cover the cost of the appraisal(s)

This leads us to the next point, which is, “What happens when you want to end a partnership?”

Ending Partnerships in Ontario

No matter how well-crafted your partnership agreement is, there may come a time when you and your partner no longer want to continue working together.

In such cases, it’s important to have a plan in place for ending the agreement. This should include steps such as notifying any creditors that the partnership has been dissolved, informing any third-party service providers, and filing the appropriate paperwork with the relevant government agencies.

What if the end of your partnership is less of an agreeable end, and more of a business divorce? In such cases, it’s best to consult with a lawyer to ensure that you are following all of the necessary steps for the dissolution.

Of course, having a strong contract in place can help minimize the conflict involved, since all parties will already have a clear picture of their rights and responsibilities.

Handling Disputes in Your Partnership

When you begin your partnership, you are in a “honeymoon phase” where everything is smooth sailing. However, disagreements may arise over the course of your business relationship, whether it be about profits, decision-making power or other matters.

It’s important to have a plan for addressing disputes that come up. Your agreement should include procedures for resolving conflicts, such as mediation, arbitration or appointing an independent third-party to act as a mediator.

By creating a clear and comprehensive partnership agreement, you can help ensure that your business relationship runs smoothly and reduce the possibility of conflict in the future.

When There Is No Partnership Agreement

It is incredibly difficult to prove the terms of a partnership without a written agreement. Even if you and your partner have verbal arrangements, these are difficult to enforce in court and can lead to costly disputes.

In the absence of a contract, you find yourself in a situation of cobbling together emails, text messages, and other evidence to prove the terms of your relationship. This is a difficult and time-consuming process and can result in costly legal battles.

Therefore, it’s important to create a partnership agreement right from the start. This will ensure that you and your partner have an understanding of each other’s roles within the business, and will help you avoid costly disputes in the future.

It does not matter if your business partner is your sibling, parent, best friend, etc. A clear written contract is necessary.

When Your Business Partner Is Your Life Partner

When spouses are also business partners, this adds another layer of complexity to the relationship. Usually, both relationships end simultaneously, creating an incredibly emotionally charged situation.

Having independent legal counsel to handle your business interests is paramount in such cases. It’s important to ensure that all parties understand their rights and responsibilities and that both partners’ needs are adequately addressed.

Additionally, Beeskma Law is happy to now provide the following Family Law services:

  • uncontested divorces
  • cohabitation agreements
  • prenuptial agreements
Beeksma Lawyers

Beeksma Law – Your Partner for Successful Business Relationships

Creating and managing a successful business relationship takes time, energy, and dedication. It’s important to have the right tools in place. That way, you can focus on what matters most: growing your business. At Beeksma Law, we understand how important it is to have an effective partnership agreement in place.

We specialize in helping business owners create, review and negotiate partnership agreements that work for both partners. Our experienced attorneys will help you navigate the legal complexities of your business relationship and protect your interests. Contact us today to learn more about how we can help you create a strong foundation for success.

Why You Might Need a Litigation Lawyer in 2023

Disclaimer: This article on hiring a litigation lawyer in 2023 is intended for the purposes of providing information only and is to be used only for the purposes of guidance. Please note this article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.

At Beeksma Law, we have been practicing law for quite some time and through different economic climates. We have seen how the practice of law changes as world conditions change. For example, we remember how our practices changed during the recession of 2008 and the boom of 2017.

By all accounts, we can expect the economy to continue to shift in 2023. Recently, Royal Bank predicted back-to-back negative quarters as early as January 2023. However, we don’t want to be all doom and gloom. We cannot control the changes that will take place in the economy, but we can control how we handle those changes.

Our experience has shown us that when there is a downturn in the economy, there is a greater need for litigation lawyers. At Beeksma Law, we can provide you with knowledgeable legal counsel and representation when it comes to litigation matters.

In this article, we will outline specific areas where you may need our litigation expertise as we move into 2023. We will also outline some steps you can take today to protect yourself, your families and your business.

Two people having a business disagreement - one of the reasons you may need a litigation lawyer in 2023

Business Disputes

This is the largest area where we see an uptick in litigation files. You may find it harder to get paid by clients as people face harder economic times. You may find yourself in other disputes.

A knowledgeable lawyer is crucial when navigating these situations and ensuring that you are lawfully protected. (Of course, enforcing your contract means being able to show that you upheld your contractual obligations.)

However, it is also important to have a lawyer on your side to prepare strong contracts. Those strong contracts will protect your interests. Your budgets may be stretched a little thin, but this is one area that you should prioritize. Without a contract in place, you are more likely to have to pursue litigation to resolve your issue. This is much more expensive than having contracts prepared.

Arming yourself with strong, well-written contracts is the single best thing that you can do to protect yourself and your business before 2023.

Real Estate Litigation

We still see some sales held up by a sudden inability to close because the purchaser can no longer get financing.

When that happens, you need an experienced advocate to negotiate how to close the deal. However, if the parties cannot agree (a topic for a future blog post), a seller’s only option may be to sue.

Of course, you can protect yourself well before you get to that point. A prudent lawyer will be able to help you structure a sale that protects your interests. She will also help you document everything in the event you need to pursue litigation.

Estate Litigation

If you are an executor or administrator of an estate, you may face more inquiries from beneficiaries during tough economic times. When people are struggling financially, they may be more likely to challenge the terms of a will or trust.

In other situations, you may suspect your loved one’s power of attorney is mismanaging the estate, leading to disputes. It’s important to note there is a 2-year limitation period where you have known, or ought to have known that a power of attorney was mismanaging the estate. Therefore, you need to be aware of your rights and act quickly in these instances.

If you find yourself in the middle of an estate dispute, it’s best to consult with a lawyer early to protect your interests and the wishes of your loved one.

Preventing Litigation in 2023

Litigation is stressful, time-consuming, and expensive. It can also have long-term impacts on a business or individual’s reputation. That is why it is so important to protect yourself now before we move into 2023.

It’s said that the best defense is a good offense, and we could not agree more.

At Beeksma Law, we specialize in working with clients to prepare them for any legal issues that may arise. We can help you review contracts, provide advice on how to structure transactions, and more. We will also be there to represent your interests if a dispute arises.

If you think you may need a litigation lawyer in 2023, book a call today. We can help you navigate potentially difficult situations with confidence.

Real Estate Update: Foreign Buyers Banned From Buying Real Estate Property

someone saying no to a foreign buyer because of the ban in Canada

Disclaimer: This article on the foreign buyer ban in Canada is intended for the purposes of providing information only and is to be used only for the purposes of guidance. Please note this article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.

Update: March 2023

The regulations to this Act were amended as of March 27, 2023. The following amendments were made:

  • Those who hold a work permit or are authorized to work in Canada under the Immigration and Refugee Protection Regulations can purchase a residential property if:
    • they have 183 days or more of validity remaining on their work permit or work authorization at the time of purchase; and
    • do not purchase more than one residential property.
  • This no longer applies to mixed-use or vacant land.
  • Private corporations can buy residential property so long as they are controlled by less than 10% by a non-Canadian.

On January 1, 2023, a new law will come into effect stating that non-Canadians cannot buy residential property for two years. This law aims to prevent foreign investors from unduly impacting the Canadian real estate market. You likely have already seen something to this effect on the news. However, it’s important to understand the more nuanced detail of this law.

This article outlines who this law does and does not apply to and what it means for real estate professionals. Of course, we welcome you to contact our office if you need any clarification.

foreign buyer ban canada

Coming into effect – what does that mean?

Simply put, non-Canadians cannot enter into or assume purchase and sale agreements as of January 1, 2023. An agreement entered into or assumed before January 1 is valid even if the transaction closes after January 1, 2023.

What is a Non-Canadian?

The Prohibition on the Purchase of Residential Property by Non-Canadians Act identifies a non-Canadian as someone who is:

  1. not a Canadian citizen
  2. not a person registered as an Indian under the Indian Act
  3. not a permanent resident
  4. a corporation incorporated in a jurisdiction outside of Canada
  5. a Canadian corporation that is not publicly traded and whose shares are owned by someone who falls under 1-3 above.

Let’s explain that last point a bit further. To illustrate, imagine a holding corporation that wants to buy an investment property. Four shareholders own shares in the corporation. Three of the shareholders are Canadian citizens; however, the fourth is not a Canadian citizen, registered under the Indian Act, or a permanent resident.

As of January 1, 2023, that corporation would be prohibited from purchasing residential property in Canada. This would remain true as long as the non-Canadian shareholder directly or indirectly owns shares in the corporation.

Who does this law not apply to?

However, the Act sets out some instances where non-Canadians may purchase residential property, namely where the purchaser is:

a. a temporary resident (as defined by the Immigration and Refugee Protection Act);

b. a protected person within the meaning of subsection 95(2) of that Act;

c. an individual who is a non-Canadian, but purchases residential property in Canada with their spouse or common-law partner. That spouse or common-law partner must be a Canadian citizen, permanent resident, person registered under the Indian Act or someone who falls under point a) or b) above.

Simply put, this allows people with strong ties to Canada to purchase a home, even if they are a non-Canadian.

Purchases by Non-Canadians

It’s worth noting that while a purchase made by a non-Canadian would be legally binding, the court can order the purchaser to sell the property at a price no higher than the purchase price.

What does this mean for real estate professionals?

Subsequently, real estate professionals, including realtors, mortgage brokers, notaries, and lawyers, must be vigilant to ensure that their transactions do not contravene the Prohibition on the Purchase of Residential Property by Non-Canadians Act. If you are a real estate professional, you may need to add some new processes, including:

  • verifying that your clients are not non-Canadians;
  • completing all necessary due diligence to ensure that a corporation’s shareholders comply with the requirements of the law; and
  • understanding how the law applies to temporary residents and protected persons.

The Act outlines severe consequences for professionals involved in a non-compliant transaction, such as fines of up to $10,000. Real estate professionals should take the time to familiarize themselves with their legal obligations and ensure they are meeting them.

Beeksma Law and Understanding Real Estate Law

At Beeksma Law, we want to help you understand and comply with the foreign buyer ban in Canada. We provide comprehensive legal services to assist clients with all aspects of real estate transactions, including buyer representation, purchase and sale agreements, documentation review, and more.

As well we enjoy working with other professionals to make sure that everyone involved in a transaction understands their legal obligations. We provide free consultations so that you can learn more about our services and how we can help you comply with the foreign buyer ban in Canada. Contact us today to book an appointment!