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Estate Planning in Ontario – Pet Trusts & Other Care for Your Pet
Disclaimer: This article is intended for the purpose of providing for your pets, including creating pet trusts. 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.
Whether or not you call them your fur baby, our pets are more than animals for many of us. To many Canadians, they are beloved family members, providing companionship, joy, and comfort.
Because their lifespans tend to be much shorter than ours, we assume we will outlive our pets. However, that is not necessarily true. So, just as you meticulously plan for the well-being of your loved ones in your estate plans, it’s crucial not to overlook your furry or feathered friends.
If you are a pet owner, how can you include your pets in your estate plan? What are your options? That is what we will consider in this article.
The Legal Landscape in Ontario: Pets as Property
Under Canadian law, including in Ontario, pets are considered property, and as such, they lack the legal capacity to own or inherit assets. This classification presents unique challenges when explicitly leaving money or property directly to your pets in your will. However, this doesn’t imply a lack of options for securing their future.
There are three basic ways to ensure your pets are cared for after you’re gone:
- Designate a caretaker
- Designate an organization to act as a caretaker
- Set up a pet trust
Designating a Caretaker: Choosing Guardianship for Your Pet
Similar to appointing guardians for minors, identifying a trustworthy caregiver to care for the pets after you’re gone is crucial. Consider family members or close friends who share a bond with your pets and are both willing and capable of providing lifelong care. A heartfelt conversation with your chosen caretaker is essential to ensure they understand and accept this responsibility. While a primary caretaker is crucial, it’s wise to designate a backup in case your original caregiver is unable to care for your pet.
Additionally, consider charitable organizations or shelters specialized in pet care. For instance, most Humane Societies offer a pet stewardship program, assuming custody and finding loving homes for pets after their owners pass away.
Financial Provisions: Ensuring the Financial Security of Your Pet
To alleviate financial concerns associated with pet care, consider you should leave an amount of money to your pet guardian in your will. This fund can cover expenses like veterinary care, grooming, food, and any unforeseen medical treatments your pet might require.
How much should you leave for pet care? That depends. Consider how long your pet’s life is expected to be, what costs you are currently incurring and other factors.
Incapacity Planning: Securing Care During Your Lifetime
As we have noted before, you need more than a will. What happens if you become incapacitated and can no longer care for your pet? Trusts and powers of attorney can be instrumental in addressing your pet’s care in case of your incapacity. While pets can’t inherit funds directly, a trust can designate funds for your pet’s care, with conditions tied to the designated caretaker ensuring proper care.
Setting up a Pet Trust: Ensuring the Future Care of Your Pets
While various trusts can be drafted, establishing a trust for pets demands precision to ensure its legality and enforceability. As the legal landscape surrounding trusts for pets continues to evolve, three fundamental rules are worth mentioning.
Beneficiary Enforcement and Legal Standing
One crucial element of any trust is that there must be a beneficiary or trustee who can enforce the terms of the trust. Practically and legally speaking, pets obviously lack the capacity to enforce a trust.
Purpose and Charitable Intent
Trusts must serve a clear purpose or have identifiable beneficiaries unless their purpose is deemed charitable. For instance, trusts designed for research and support surrounding a specific disease are considered charitable in Ontario. However, trusts created solely for pets might not meet the criteria for charitable purposes under the law.
Lawful Conditions and Public Policy
A trust can make gifts conditional on specific actions, provided these conditions are lawful and do not conflict with public policy. Creating a pet trust that adheres to these rules involves designating specific beneficiaries. As part of your trust, you can include instructions for the care of your pets. Funds from the trust are allocated for the explicit purpose of caretaking.
Termination Date
Additionally, each trust requires a termination date, signaling the final distribution of the trust fund. In the case of a pet trust, the termination typically coincides with the death of the last surviving pet. Any trust funds left are distributed per the terms outlined in your will.
Creating an Estate Plan For Your Peace of Mind
Navigating the complexities of caring for every part of the family after you’re gone can be overwhelming. Seeking guidance from an experienced estate lawyer, such as the professionals at Beeksma Law, can streamline the process. An estate lawyer can help formalize legal arrangements, ensuring your directives concerning your pet’s care are documented, legally sound, and enforceable.
Incorporating your pets into your estate planning demonstrates a commitment to their well-being and happiness. Your furry friends hold a special place in your heart and deserve careful consideration in your plans for the future.
At Beeksma Law, our dedicated estate planning team understands the significance of including your pets in your estate plans. Contact us today for compassionate legal guidance to secure the future of your beloved pets.
Real Estate Update: Foreign Buyers Banned From Buying Real Estate Property
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.
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:
- not a Canadian citizen
- not a person registered as an Indian under the Indian Act
- not a permanent resident
- a corporation incorporated in a jurisdiction outside of Canada
- 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!