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Disclaimer: This article on buying a book of business 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.
In many businesses, entrepreneurs have to face the question of succession planning. Will the business be sold to someone? Should it pass on to a family member? Will it merge with another organization? These are all important questions to consider, and having a plan in place can help ensure that the business continues to be successful.
Many professionals are getting older (for example, the average financial advisor is now in their 50s), with retirement looming on the horizon. For new professionals in the field, this may be the expansion opportunity that you’ve been waiting for. After all, what better way to expand than to acquire a well-established adviser’s clients and business?
Expanding your business this way is no small matter. Making sure that your interests are protected – whether you are the purchaser or the seller – requires legal expertise, good advice and a savvy business sense.
In this article, we will talk about buying this specific type of business and different areas that you need to consider.
What is a “Book of Business”?
When acquiring a financial advisor’s business, you will likely be purchasing the book of business. This is the advisor’s client list and their associated assets. It typically includes detailed information about each client (e.g., contact details, relationship history, and account balances).
However, buying a book of business is an intangible asset and can be difficult to value. It is much different than buying (for example) a retail location with merchandise, equipment and the associated liabilities. The right legal and financial due diligence is required when considering such a purchase and its potential for success.
Much of the value behind a book of business lies in its “goodwill” or the value of the relationships between the advisor and their clients. Factors like trust, satisfaction with services rendered, as well as reputation can have a major effect on whether or not a client decides to stay with the business after an ownership change.
Questions to Consider
When considering buying a book of business, there are many questions to consider, such as:
- How will you determine the value of the book of business? Will multiple appraisals be required? When should the seller provide a finalized list of clients and their assets?
- What will the transition period look like? How will the clients be informed? Will the seller make introductions and work towards a smooth transition? How will existing staff, if any, be retained and/or rewarded for their loyalty?
- What other financial obligations (such as taxes) need to be taken into account when making the purchase?
- What kind of non-competition clause should you include to ensure that the seller does not take business away from you?
Of course, each transaction is unique and will have its own specific requirements. It is important to have experienced advisors and lawyers on your side to make sure that you are getting the best deal possible.
Buying a financial advisor’s book of business can be an exciting opportunity for entrepreneurs looking to expand their businesses. However, it requires careful consideration and due diligence in order to ensure that all parties
Take the next step with Beeksma Law
Whether you are looking to buy another advisor’s book or sell your business, Beeksma Law can help. Our team of experienced lawyers can guide you through the process and make sure your interests are protected every step of the way.
With our experience and expertise, our clients can rest assured that the deal will be as hassle-free as possible. As entrepreneurs ourselves, we know what your business means to you and take it just as seriously as you do. To learn how we can help you buy or sell a book of business, contact us for a consultation today.
Disclaimer: This article on challenging a will is intended for the purposes of providing information only. It 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.
Estate disputes are becoming increasingly common, as family members wish to challenge the contents of their deceased relative’s will for a number of reasons.
If that’s the case, can you challenge a will? Who has the right to do so? What are the different grounds for contesting or challenging a will? These are the questions that we will answer in this article.
Who can challenge a will in Ontario?
In the province of Ontario, only certain individuals have the right to challenge a will. We call these individuals “interested parties.” Under Ontario’s Succession Law Reform Act (SLRA), interested parties are those who “appear to have a financial interest” in the estate. This could mean those who would be beneficiaries under the intestacy provisions of the Act if there were no will, or anyone else who can demonstrate that they were financially dependent on the deceased.
Typically, challenges are brought by children, grandchildren, spouses, siblings and other close relatives.
What are common grounds for challenging a will?
The court will not invalidate a will that treats you unfairly or if you do not receive what you felt entitled to inherit. Simply put, there is no legal requirement to be nice or to share an estate equally. It’s also important to note that the onus is on the person bringing forward a challenge to prove that the will is invalid. This means that the courts will assume that the will is fine and it is up to you to convince them otherwise.
However, you could successfully challenge a will under a few grounds. Let’s consider some of those.
Lack of Capacity
The law requires that someone making a will knows and understands the impact of what they are signing. Because of someone’s capacity, someone may question the validity of a will. Therefore, an interested party may challenge a will if the testator (the person making the will) did not have the mental capacity to understand:
- what they were signing;
- what it meant for their beneficiaries; and
- how another party was likely to interpret the will at the moment that the testator reviewed and signed the will.
This is particularly important – you must prove that the testator lacked capacity at the time of signing. There is a principle in law called a “lucid interval”. This means that while a person may struggle with cognitive function, they can still have lucid intervals where they can reason and make decisions. If that is the case, then a will made during this period could be valid.
Undue influence is another common ground for contesting wills. This is when an individual forces, coerces or manipulates the testator into making decisions that were not in their best interests. This could be by another family member, a caregiver, or even a lawyer or other professional involved in the drafting of the will.
The court can consider factors such as whether the will benefited anyone too highly in a disproportionate way. It can also consider whether the testator was influenced by someone they had an unequal relationship with (such as a caregiver).
We typically see this among elderly people who live alone. A “new friend”, caregiver or one of their adult children may take advantage of their relationship with that person to try to influence their decisions in order to benefit from their will or powers of attorney.
If you believe that any of these conditions have been present, then a court challenge might be the right course of action for your case.
We noted the example of actor Heath Ledger in an earlier article. He created a will, but did not update it after the birth of his daughter.
In some circumstances, an interested party can challenge a will if there is evidence that the testator did not update it to reflect changes in their circumstances. Those circumstances must be so noteworthy that the will no longer reflect the testator’s true wishes (i.e. to care for their children).
Fraud or Forgery
It is possible to challenge a will if there is evidence that someone forged or altered it in any way. It is also possible to challenge a will if someone fraudulently obtained the signature of the testator.
Contesting a Will in Ontario
Challenging a will in Ontario involves a few steps. First, you need to file a Notice of Objection. This is where you explain why you’re objecting to the will and state your interest in the estate (like being the child of the deceased and a beneficiary in a prior will). When you file this notice, the court will not move forward with any applications for the appointment of an estate trustee (or executor) until the objection is resolved.
What if an estate trustee has already been appointed? Then, you will have to file a motion demanding the return of the Certificate to the court.
Courts in Ontario can try to determine what the person who made the will (the testator) truly intended. Figuring out their intentions can be tough, especially if they’re no longer around to explain.
Challenging a will is a serious legal matter, and getting the process right is essential to protect your interests.
When You need to Contest a Will in Ontario, Contact Beeksma Law
At Beeksma Law, we are experienced in dealing with will disputes and can help you through the process. We understand that this is a difficult time for families. Our team of estate lawyers balances compassion with professionalism to be your guide and advisor through this process. If you would like to discuss your case further or any of your estate planning needs, please do not hesitate to contact us today. We are here to help!
Disclaimer: This article on what to do after making a will in Ontario is intended for the purposes of providing information only. It 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. It does not purport to be exhaustive.
After all, you must decide who will be the executor and your attorney under your powers of attorney. You also likely had to consider some decisions unique to your family. This could include second marriages, the family cottage or whether you wanted to make any charitable contributions.
Once you sign your estate documents, you can’t forget about them. You must ensure that you store them safely and securely so that they will be available when needed.
This article will outline what you must do once you sign your documents and some best practices to keep in mind. At Beeksma Law, we have helped many clients prepare their estate documents.
What are properly executed estate documents?
First of all, let’s review what it means to have your documents properly executed.
The first step is to ensure that you have the original copies of your will, power of attorney for property and personal care properly executed. You should sign your will in front of at least two witnesses, who must also sign the document along with you.
The witness can be almost anyone over 18 years old, as long as they are not a beneficiary, the spouse of a beneficiary or your executor. While digital signatures are invalid, since COVID-19, wills can be witnessed virtually, so long as one of the witnesses is a licensee under the Law Society Act and the making or acknowledgment of the signature and the subscribing of the will are contemporaneous. This simply means that when a testator signs a will, the witnesses must be present, whether that is physically or virtually.
Handwritten (or holograph) wills have slightly different signing requirements. These must be dated and signed by the testator (the person creating the will). It does not require witnesses and anything gifts listed after the signature are not valid. You cannot create handwritten powers of attorney.
There will typically also be an affidavit of execution signed by the witnesses confirming they witnessed you signing the documents.
Where should I store my estate documents?
When you pass away, you want your executor to be able to access it as quickly as possible. You also want to make sure that the document is secure.
Some people choose to purchase a fire and waterproof file folder that are fairly inexpensive. They then store this folder at their home and let their executor know where it is located.
Sharing the location of your estate documents
The only person who needs to know where your estate documents are located is your executor. You do not need to tell any of your family members or beneficiaries where it is located and what it contains.
Should I store my estate documents in a safety deposit box?
We don’t recommend it. While a death certificate may be enough to let your executor access your safety deposit box, if you were to become incapacitated, it could create a catch-22 for your executor. They may need to prove to the bank that they have the right to access the contents of the safety deposit box; however, that proof is located inside the safety deposit box.
Creating and updating your estate plan
At Beeksma Law, we understand the importance of creating a secure and up-to-date estate plan for yourself. We are here to help you create and review your will or powers of attorney. You can also make updates to your documents as needed over time.
If you want to learn more about taking the next steps in planning your estate, contact us today. We look forward to helping you secure your family’s future.
Disclaimer: This article on For-Profit and Not-For-Profits is intended for the purpose of providing information only. It 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.
The differences between for-profit and not-for-profit corporations in Ontario can be significant and are important to understand if you’re considering setting up either type of corporation in the province. While both types of business entities have similarities, there are also some distinct differences that you must consider.
In this blog post, we will explore the key distinctions between for-profit and not-for-profit corporations in Ontario. This information can help you make an informed decision about which type of corporation is right for your business.
What is a not-for-profit corporation?
Not-for-profit corporations, also referred to as “nonprofits” or NFPs, are businesses that are set up to provide goods, services and assistance to the community. They do not offer a financial return on investment (ROI) and instead provide benefits to their members and/or the public at large.
Not-for-profit corporations typically serve a certain sector of the community. For example, a community garden or athletics group may opt to incorporate as a not-for-profit corporation to help with obtaining funding.
What law governs for-profit and not-for-profit corporations?
The Ontario Business Corporations Act governs for-profit corporations, while the Ontario Not-for-Profit Corporations Act governs not-for-profit corporations.
Who owns for-profit and not-for-profit corporations?
The ownership structure of for-profit corporations is typically linked to the shareholders, who own the company’s assets and profits. In contrast, Not-for-Profits are controlled by their members, who act as custodians of the organization’s assets and activities.
What is the cost to set up a not-for-profit corporation?
The cost of setting up a for-profit corporation in Ontario depends on several factors. These factors include the number and structure of shares issued, filing fees and other requirements such as obtaining professional advice or assistance.
For nonprofit organizations, your cost would include all of the factors noted above. However, there are additional costs to incorporate under the Not-For Profit Corporations Act. These costs include filing fees, legal review costs and more. These corporations are more complicated and the fees, therefore, reflect those additional considerations.
Requirements for Non for Profits
There are some requirements for not-for-profit corporations that do not apply to for-profit corporations.
For example, a for-profit corporation can set out any number of directors in the Articles of Incorporation. By contrast, a not-for-profit corporation must have a minimum of three directors.
Additionally, a not-for-profit corporation must set out the corporation’s activity and how it will assist the community. Generally speaking, you would include between two and six paragraphs outlining the intention of the corporation. You must carefully word that statement to avoid confusion or legal troubles down the road – this is one area where you definitely need to seek legal advice before filing!
Finally, a not-for-profit corporation includes the following special provision: Commercial purposes, if any, included in the articles are intended only to advance or support one or more of the non-profit purposes of the corporation. No part of a corporation’s profits or of its property or accretions to the value of the property may be distributed, directly or indirectly, to a member, a director or an officer of the corporation except in furtherance of its activities or as otherwise permitted by this Act.
Can a not-for-profit earn a profit?
Absolutely! For example, a not-for-profit can earn a profit from activities that are related to its purpose or mission. However, you must distribute any profits back into the organization to help it achieve its goals and objectives, such as providing services or products to its members.
|For Profit Corporations
|Not For Profit Corporations
|Is governed by the Ontario Business Corporations Act
|Is governed by the Not-For-Profit Corporations Act
|Is owned by the shareholders
|Is owned by the members
|Can earn a profit
|Can earn a profit but must distribute that profit back into the organization
Setting up your not-for-profit corporation with Beeksma Law.
At Beeksma Law, we understand the unique needs of not-for-profit corporations and can help you navigate the legal process. We are here to help you navigate the process and answer any questions that you may have. To book your complimentary consultation, please click here. We look forward to speaking with you!