Estate Law

Disclaimer: This article discusses Estate Planning.  It 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.

As your parents get older, you tend to step in and handle more day-to-day tasks for them. Maybe it’s booking appointments and coordinating their medications. Maybe it’s more involved, including managing their finances. 

For many families, sharing a bank account with a parent can be convenient for managing finances and help you care for your parent’s needs. You may also think that it can help you avoid probate fees later on. 

However, are there any risks and potential legal complications that you need to know about? What happens when your parent passes away? How is that joint bank account treated as it relates to their estate? 

We will answer those questions in this article and discuss ways to minimize those risk for parents and their children. For more information, we encourage you to reach out to our team for a complimentary call. 

What does the law presume about a joint bank account with an elderly parent?

Suppose a parent adds their son or daughter to their bank account. When that person dies, the law typically presumes it to be a resulting trust rather than a gift.

What is a resulting trust? It is a legal concept where one party holds property for the benefit of another. Adding a joint owner does not give the recipient full ownership; rather, the trustee holds the property in trust for the original owner.

What does this mean in the context of joint bank accounts? The courts will presume that the money in the account was to be held by the adult child in trust for the parent, not as a gift. The child is expected to manage the funds for the parent’s benefit, and the funds remain part of the deceased’s estate.

This presumption of resulting trust can only be overturned with clear evidence that the parent intended the funds as a gift.

What are the risks of having a joint account?

Both elderly parents and adult children face significant risks when creating joint accounts without proper documentation:

The parent’s intent could be misinterpreted.

Without explicit documentation, there can be confusion about whether the account addition was meant as a gift or a trust arrangement. This can lead to disputes among family members after the parent’s incapacitation or death. The adult child could claim that the funds were held jointly and meant as a gift (perhaps because they acted as a caregiver or other reasons), while other siblings or beneficiaries might disagree. This can result in a costly estate litigation process.

If the funds were intended as a gift and weren’t documented, they could become part of the parent’s estate.

If the funds were intended as a gift, adult children must ensure there is clear documentation, such as a gift acknowledgment, to support this claim. Without such evidence, the court is likely to presume that the funds were held for the benefit of the parent and should form part of the estate.

If the court determines that the account is a trust and should be part of the estate of the deceased, the adult child could lose access to those jointly held funds and no longer be one of the account holders. They would be required to return the money to the estate, which would then be distributed according to the parent’s will or probate laws. 

This outcome would be less than ideal for the adult child, especially if they believed the money was rightfully theirs. Additionally, the legal process to resolve such disputes can be lengthy and costly, adding further strain to family relationships and financial resources.

How can you avoid these pitfalls?

Simply put, make sure to clearly document the parent’s intentions. 

If the funds are a gift…

If the parent intends to gift the funds in the account to their child, they should create a gift acknowledgment. This document clearly states that the funds are a gift, helping to prevent disputes later on.

If the funds are not a gift…

If you are to manage the account on behalf of your parent, have a lawyer draft a trust agreement. This agreement should outline that the funds remain the parent’s property and are not a gift.

Either way, engage a lawyer to draft these documents and ensure they comply with legal standards. This investment can save significant time, money, and emotional stress in the future.

Minimize your risks with strategic estate planning. Contact Beeksma Law today!

Proper estate planning and clear documentation can significantly reduce the risks associated with joint bank accounts between you and your parents. At Beeksma Law, we specialize in helping families navigate these complex issues and ensure that their intentions are honored. Whether that is drafting your will and powers of attorney (POA) or advising you on estate administration as a trustee, we are here with strategic, personalized legal advice. 

Note: There are new tax rules relating to joint account holders, new trust reporting rules and bare trusts that the CRA (Canada Revenue Agency) announced in March 2024. We encourage you to speak to your tax advisor regarding these changes. 

Contact us today to discuss how we can assist you in creating a strategic estate plan that protects your interests and maintains family harmony.

Disclaimer: This article discusses Estate Planning.  It 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.

We have discussed the importance of choosing the right power of attorney (POA) or estate trustee to act on your behalf if you cannot do so or manage your estate if you pass away. These roles come with many duties and responsibilities. 

In some cases, you may choose a close relative or friend. However, in other cases, it may make more sense to consider appointing a trust company.

A trust company is a professional organization responsible for managing the administration of estates, trusts, and other fiduciary responsibilities. Appointing a trust company as your power of attorney for property or estate trustee (executor) has both advantages and disadvantages that are important to consider.

Note: a power of attorney for personal care is also an essential part of your estate plan. However, in most instances, a professional trust company will not be appointed for these decisions.

Personal care decisions typically involve intimate and sensitive choices about health care, living arrangements, and other personal matters. These choices are best made by someone who knows you well and understands your individual wishes and values. This article will focus on a trust company’s role in managing your finances and property and estate matters.

Reasons to consider appointing a trust company as your power of attorney or as your estate trustee

Below are some reasons you may choose a professional as your estate trustee or power of attorney. 

You need someone local to make decisions on your behalf. 

Having someone local manage your affairs can be incredibly beneficial. A local company has the advantage of being physically present and easily accessible, allowing for timely decisions and actions. A local power of attorney can attend to financial matters that require in-person attention, such as money or property management, and can address any immediate issues that arise with your assets or estate.

They are also well-versed in your area’s specific laws, regulations, and market conditions. This knowledge can be crucial for effective estate and property management, ensuring that all actions comply with local legal requirements and are optimized for local economic conditions.

Trust companies often have established relationships with local professionals, such as real estate agents, lawyers, and accountants. These connections can streamline processes and make the estate administration run more smoothly. 

Your finances are complex and require greater expertise.

A trust company’s professional expertise is invaluable if your financial situation is complex, involving multiple investment accounts, real estate holdings, business interests, or other sophisticated financial instruments. Additionally, complex estates often involve intricate tax considerations. Trust companies have tax and investment experts who can develop strategies to minimize tax liabilities, ensuring that more of your estate is preserved for your beneficiaries.

Trust companies bring specialized knowledge in trust law, estate planning, and fiduciary responsibilities. This expertise helps execute sophisticated techniques, such as establishing and managing various types of trusts, handling charitable donations, and ensuring compliance with legal obligations.

You want to appoint someone who will be neutral and impartial. 

A trust company serves as a neutral third party, which is essential in situations where impartiality is required or where there may be conflicts among beneficiaries. Unlike family members or friends, a trust company does not have a personal relationship with any parties or emotional involvement in the decisions being made. 

Building your estate plan with Beeksma Law

Working with professionals as your power of attorney or as your estate trustee (executor) is a significant step in ensuring that your financial affairs and property are managed effectively and impartially. 

For tailored legal advice, establishing an enduring power of attorney, or any other estate planning needs, it’s crucial to consult with experienced estate law lawyers. At Beeksma Law, our team focuses on estate planning and can guide you through every aspect of creating a comprehensive estate plan. Whether you need assistance drafting a will, selecting a power of attorney, or appointing an executor, we are here to help.

Contact us today to learn more about how we can assist you with your estate planning needs. We are ready to provide the guidance and support you need to protect your legacy.

Disclaimer: This article discusses Estate Law.  It 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.

As an estate trustee (or executor), you have many responsibilities and duties. One of those is ensuring that you keep accurate records. This article will provide a general overview of what records you must keep and discuss a recent case that highlights how the courts view this responsibility. 

If you are an estate trustee and want to ensure that you are properly fulfilling your duties, we encourage you to contact our office for a complimentary consultation.  

Recordkeeping for Estate Trustees in Ontario 

Estate trustees have a fundamental duty to maintain comprehensive records of the estate and provide detailed accounts to the residual beneficiaries. This responsibility includes having the accounts approved by the Court at the end of the estate administration or reasonable intervals if the administration is prolonged.

There are two types of beneficiaries. Residual beneficiaries, entitled to a share of the estate residue after debts and specific bequests are settled, must receive accurate accounts of all transactions related to the estate. On the other hand, specific bequest beneficiaries inherit particular items or amounts of money and generally do not have the right to a complete accounting once they have received their bequest. 

For residual beneficiaries, estate trustees must meticulously document each step of the estate administration, ensuring detailed records of all assets, income, and disbursements. The accounts should also include comprehensive information and receipts for all legal and professional fees and any executor compensation paid from the estate.

Huang v. Nie and the handling of estate accounts 

Recently, the Ontario Superior Court of Justice ordered a widow to submit detailed accounts of her late husband’s estate after she failed to provide this information to her 17-year-old stepson, an estate beneficiary. 

Weirong Huang died in 2019, leaving an estate valued at over $600,000, including two bank accounts and real estate. In May 2020, the respondent, Huang’s widow, applied for a Certificate of Appointment as an estate trustee without a will. She proposed to hold the estate’s assets as a property guardian, intending to retain the matrimonial home. The Office of the Children’s Lawyer (OCL) scrutinized this proposal, raising concerns about the valuations and the protection of the applicant’s interests.

Despite repeated requests from the OCL in 2022 and 2023, the respondent failed to provide the necessary estate details, such as a copy of her application for appointment as estate trustee, a list of the estate assets and debts, and a summary of all transactions since the deceased’s passing. The OCL issued a final warning in February, threatening court proceedings if she continued withholding information. However, the respondent did not file a notice of appearance or any other documents after being served with the application record.

The Superior Court emphasized the estate trustee’s duty to maintain accurate records and be ready to account for the trust’s property. While the general rule is that trustees are not required to file accounts unless requested by an interested party or creditor, section 50(1) of the Estates Act allows the court to compel an executor to submit detailed accounts. The judge noted that over four and a half years had passed since Huang’s death, during which the widow ignored correspondence from the OCL and neglected her son’s interests.

Consequently, the court ordered her to file the estate accounts within 45 days and imposed $5,000 in legal costs on her personally, payable to the OCL. The judge acknowledged that further measures, such as contempt proceedings, could be pursued if she failed to comply.

Lessons regarding handling the duties of estate trustees  

The Huang v. Nie case highlights the vital nature of estate trustees’ responsibilities in Ontario. Proper record-keeping and responsiveness are not merely administrative tasks; they are legal obligations that, if neglected, can result in significant legal repercussions. Estate trustees must prioritize transparency and diligence to fulfill their duties effectively and protect the interests of all beneficiaries involved. By adhering to best practices and legal requirements, estate trustees can navigate their responsibilities with confidence and integrity.

Contact Beeksma Law today for your estate administration needs!

In conclusion, serving as an estate trustee in Ontario demands meticulous attention to detail and adherence to legal obligations. The recent case of Huang v. Nie underscores the importance of maintaining accurate records and transparently managing the estate’s affairs. At Beeksma Law, we understand the complexities and responsibilities involved in estate administration and are here to help.

If you’re an estate trustee navigating the intricacies of estate management, we invite you to contact our experienced team for guidance and support. Whether you need assistance with record-keeping, estate accounting, or legal advice on fulfilling your duties, our knowledgeable lawyers are here to assist.

Of course, the best way to avoid estate administration challenges is to prepare a strong estate plan. We can help you avoid many of these issues by preparing your estate plan, including your powers of attorney so that your wishes are followed. 

Don’t let the complexities of estate administration overwhelm you. Contact Beeksma Law today for personalized assistance and ensure that you fulfill your duties with confidence and integrity.

Disclaimer: This article discusses Estate Law.  It 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.

We are asked these sorts of questions all the time. Many people are named as beneficiaries in their loved ones’ wills and are not sure what to expect or what they are entitled to. 

Being a beneficiary goes beyond simply inheriting assets; it’s about cherishing the memory of the person who passed and respecting their final decisions. It is a reminder of the trust and connection shared with the departed. 

In Ontario, beneficiaries of an estate are entitled to specific information and have certain rights and duties. Knowing what to expect as a beneficiary can help you navigate the process more smoothly. 

In this article, we will highlight some common questions that may arise. However, speaking to an estate lawyer is the most accurate way to know your rights. You can book a complimentary consultation with our team to have your questions answered. 

What Information is a Beneficiary Entitled to in Ontario?

Beneficiaries have the right to be informed about the estate and its administration. Your rights may include seeing the will, an inventory of the estate’s assets and liabilities and detailed accounting records. Estate trustees must also keep beneficiaries informed about the progress of the estate administration.

What Are Your Rights as a Beneficiary?

As a beneficiary, you have several rights:

Timely Information: You have the right to be informed about the estate’s administration, such as where they are in the probate process.
Fair Treatment: Beneficiaries should be treated fairly and without bias by the executor.
Legal Recourse: If you believe the executor is not fulfilling their duties or there is any mismanagement, you have the right to seek legal recourse. (We will discuss that further below).
Access to Documents: You can request to see the will, estate inventory, and financial records.

These rights are designed to protect beneficiaries and ensure they receive what they are entitled to promptly and fairly.

Do Beneficiaries Have to Perform Certain Duties?

Typically, beneficiaries do not have formal duties. However, you may be asked to provide information for tax purposes or other administrative needs. 

Also, the relationship between beneficiaries and estate trustees (or executors) runs much more smoothly with clear communication and respect. Understand that estate administration can be complex and time-consuming. Patience and cooperation can help facilitate a smoother process.

What Should You Expect from the Estate Trustee (Executor)?

The estate trustee, or executor, plays a crucial role in managing and distributing the estate. It’s important to note that the executor cannot name a beneficiary and does not have the authority to decide what a beneficiary is entitled to—that is determined by the will. They are appointed to administer the estate and ensure the proper processes are followed. 

As a beneficiary, you should expect the executor to:

Act in Good Faith: The executor must act in the best interests of the beneficiaries and the estate. They cannot favor one beneficiary or use estate assets for personal gain.

Communicate Regularly: Expect regular updates about the estate’s progress and any significant developments. The executor cannot withhold vital information or fail to keep beneficiaries informed.

Manage Assets Properly: The executor should handle the estate’s assets responsibly, paying off debts and distributing the remaining assets according to the will. They cannot mismanage or misappropriate estate assets, neglect to pay debts, or deviate from the terms of the will.

Provide Final Accounting: At the end of the administration process, the executor should provide a detailed account of all financial transactions. They cannot fail to account for all assets, expenses, and distributions or provide incomplete or inaccurate financial records.

Understanding these responsibilities can help you set realistic expectations and recognize if the executor is not performing their duties correctly. What if you notice the estate trustee failing in any of these areas? What legal recourse is available to you?  

When should you seek legal recourse? 

There are certain situations where you should consider taking legal action, such as if you suspect the estate trustee is mismanaging the estate or not fulfilling their duties. You may also run into disputes with other beneficiaries and need legal advice. 

At any time that you need clarification on your rights or whether your inheritance is being mismanaged, it is always advisable to speak to a lawyer who focuses on estate law. She will be able to provide clarity and help resolve issues efficiently.

What if the beneficiary is a minor? How is his inheritance protected?

Special considerations apply if a beneficiary or beneficiaries are minors.

A legal guardian or trustee will manage the assets or funds until the child reaches the age of majority. In some cases, the Office of the Children’s Lawyer may oversee the management of the inheritance to ensure it is handled appropriately.

While estate trustees should always keep clear records and communicate effectively, this becomes even more vital when dealing with someone under the age of 18. These measures are in place to protect their interests and ensure their rights are safeguarded until they are old enough to manage these assets themselves.

Legal advice for all of your estate administration needs with Beeksma Law

Being named as a beneficiary in a will is a significant honour that extends beyond inheriting assets. It’s about respecting the wishes and legacy of the deceased and ensuring that their estate is administered with integrity. 

At Beeksma Law, we understand the complexities of estate administration and are here to offer straightforward advice and guidance. Whether you need assistance with probate, understanding your rights, or navigating the estate planning process, our team of experienced estate lawyers is here to help. Reach out to us today to discuss your options and receive the support you need to navigate this journey with confidence.