A trust in wills and estate planning is a mechanism that allows a person – known as the settlor – to provide property to another person – the trustee – for the gain of a beneficiary. Thus, the property is entrusted and administered by the trustee as a method of settling property.
For a trust to be legally valid, the following three characteristics must be present:
Certainty of Intention – the settlor must intent to create a trust
Certainty of Subject Matter – there must be property conferred upon the trustee
Certainty of Objects – the beneficiaries of the trust must be explicitly ascertained
Therefore, a valid trust must outline the settlor, the property, the trustee, and beneficial owners.
As well, it is important to note that trusts are not revocable. The property cannot revert to the settlor unless specifically suggested within the trust document.
There are two types of trusts:
Inter Vivos
This trust is established during an individual’s lifetime, with the purpose of transferring the benefit of assets to the trust’s beneficiaries. A trust’s terms will impose restrictions over the assets; with the gaining of the assets occurring once the stated conditions have been met.
Examples of inter vivos trusts:
Employee Life and Health Trust (ELHT)
Insurance Segregated Fund Trust
Registered Retirement Savings (RRSP) Trust
Tax-Free Savings Account (TFSA) Trust
Testamentary
This trust is created as a consequence of death of the settlor. The appointed trustee manages the assets of this trust under the guidelines of the particular trust provision.
Examples of testamentary trusts:
Lifetime Benefit Trust
Qualified Disability Trust (QDT)
Graduated Rate Estate (GRE)
Spousal or Common-Law Partner Trust
Duties of Trusties
With respect to administration of a trust, trustees are given certain powers to act. In order to possess the legal power to act, a trustee must follow these central duties:
Duty of loyalty to the beneficiaries – trustees must act solely for the best interest and benefit of the beneficiaries.
Duty of reasonable care – trustees must conduct business of the trust in a proper manner, in the same manner they were to conduct their own business
Duty to act with an even hand – trustees cannot favour one beneficiary over another
Duty to act personally – trustees must not delegate their powers to others
How Can We Help?
At 6ix Estates LLP, we will work with you directly to structure your estate plan by drafting your Will and assisting with any estate administration applications with or without a Will. Contact us today at for a free 30-minute, no obligation consultation.
Estate Administration Tax is a fee charged by the Ontario government based on the value of estate assets owned by the deceased. Depending on the type and nature of the deceased’s estate assets, you may need an estate certificate to collect and manage the estate. To obtain authority for the executor to act on behalf of the deceased (Probate), the payment of this tax is mandatory.
It is important to note that there is a difference between estate assets and non-estate assets that effect the value of the Estate Administration Tax. Ultimately, only estate assets owned by the deceased are included in the total value of the property in the estate.
Examples of Estate Assets:
Real Estate in Ontario (only when the title is not held jointly with a spouse)
Bank accounts and financial investments (without a beneficiary)
Vehicles and other personal property (without a beneficiary) such as:
Insurance
Goods
Business interests
Intangible property
Examples of Non-Estate Assets:
Real Estate outside of Ontario
Any assets that are expected to be paid to a designated beneficiary
Assets with joint ownership that automatically becomes that of the other owner
Debts owed by the deceased such as car loans, lines of credit, and credit card debts
Consequently, the less property one has in their estate when they die, the lower the Estate Administration Tax. The tax is paid as a deposit when the estate representative applies for a Certificate of Appointment of Estate Trustee with the Superior Court of Justice. Following changes in January 2020, you no longer need to pay Estate Administration Tax if the value of the estate is $50,000 or less. Instead, you must file an Estate Information Return within 180 days after the estate certificate has been issued. Therefore, the probate fees in Ontario are now $15 on every $1,000 of assets over $50,000.
At 6ix Estates LLP, we will work with you directly to structure your estate plan by drafting your Will and assisting with any estate administration applications. Contact us today for a 30-minute, no-obligation consultation.
The act of separation is when partners – either married or common-law – choose to live apart. Those who have separated often set out their rights and responsibilities after separation in a document known as a separation agreement. In the context of marriage, separation does not mean the marriage has ended. Rather, a divorce is needed to legally end the marriage. Therefore, for the purposes of this blog post, we will outline what a separation agreement is, the issues considered within one, and how it differs from marriage contracts and divorce.
What is a Separation Agreement?
In Ontario, separation agreements allow partners to live ‘separate and apart’ without officially ending the marriage. Technically, ‘separate and apart’ is not synonymous with living in separate homes. Rather, legal separation can involve living in the same house; as long as both individuals have separate rooms, meals, and finances.
Within a separation agreement, the following issues are addressed:
Property:
What happens with the home?
Are there any specific allocations of items within the home?
How will shared assets and debts be addressed? Pension and life insurance?
Children
Who has custody over financially dependent children?
How is responsibility for deciding matters on education, health, and welfare of the children allocated?
Who is/are the child(ren) living with? Is there a specific living schedule?
Who is paying child support? How much and how often?
Are there any special expenses specific to the child(ren)’s circumstances?
Spousal Support
Who is paying spousal support? How much and how often?
What date with the spousal payments end?
Are there any tax implications?
To make this agreement, with the addressed issues, legally binding, it must be drafted and signed by both partners in front of a witness, who must also sign the document. As well, the agreement should include the date of separation, as that gives motion for the valuation of property that will be divided between the couple.
How is a Separation Agreement Different from a Marriage Contract and Divorce?
A marriage contract differs from a separation agreement. Commonly referred to as a prenuptial agreement (or a prenup), a marriage contract is a written document that outlines the expectations within the marriage, and what is to be done if separation were to occur. Most often, marriage contracts address issues of property division and spousal support. If a couple were to separate, these issues addressed and agreed upon within the marriage contract would carry into the separation agreement. However, a marriage contract cannot discuss issues regarding children. Thus, if separation were to be sought, child responsibility and support are to be addressed within the separation agreement proceeding the marriage contract.
A divorce cannot occur without a separation agreement. Specifically, spouses cannot apply for divorce until one year after separation. Courts will only grant the divorce if they are satisfied with the arrangements involved in the separation. The exception to the one-year rule of separation is if the spouse is applying for divorce on the grounds of cruelty or adultery.
How Can We Help?
Our office will work closely with you in drafting Cohabitation Agreements, Marriage Contracts, and Separation Agreements. We also offer all our services remotely. Our lawyers are happy to meet with you virtually or at a location of your choice. Get in touch with us to set up a free 30-minute consultation.
As lawyers, we often get requests to commission oaths and notarize documents. However, we find ourselves coming across incorrect requests from clients frequently. Hence, we decided to cover this topic for our current and prospective clients to assist them in understanding the different between commissioning and notarizing documents. The misunderstanding between the two can result in spending more money than required, delays in completing documents, and rejection of documents in applications.
Commissioning Documents
As per the Commissioners for Taking Affidavits Act, R.S.O. 1990, c. C. 17, the Ontarian legislation allows the appointment of people to become commissioners of oaths. A commissioner of oaths is a title that expires and must be renewed. These individuals, with the official title, are able to take and receive affidavits, affirmations and declarations in and for Ontario. This is done through the use of a stamp that contains only a signature, but no seal.
Although eligible individuals can become commissioners of taking oaths through an application process, certain professionals are automatically commissioners and do not need to apply. This is either by virtue of their office or status. This includes, but is not limited to:
Judges
Lawyers
Students-at-law
Political representatives
Police officers
Notary publics
Paralegals
Law clerks
Notarizing Documents
A notary public has the same abilities as a commissioner of oaths, and then some. The Commissioners for Taking Affidavits Act in Ontario allows notary public to administer oaths or take affidavits, affirmations or declarations and attest them just like a commissioner of oaths. However, notary public can also certify and attest a true copy of a document, and certify or witness and attest the execution of a documents. A notary is also given a stamp with their signature, along with a seal that can be used in Ontario, within Canada, and internationally. An appointment of notary public expires in 3 years for professionals who are not in the legal or pollical field. The appointment for judges, lawyers, paralegals, etc never expires.
The Difference
The biggest difference between a notary public and a commissioner for oaths is how to document is being used, and the jurisdiction that the documents are accepted. For a simple taking of an oath, both a notary public and commissioner are acceptable to provide their services in Ontario. However, outside the province of Ontario, a notary is required and only their certified documents are acceptable. For example, the Ontario land titles office will not accept an affidavit of execution that is sworn in Alberta if the document is commissioned. The office will only accept it if the document is notarized. Another difference is that notary appointments are not granted to people who only require the powers of a commissioner. If the Minister of the Attorney General believes that you are not required to notarize documents, your application will be rejected and you will not receive an appointment.
Whether you need your document commissioned or notarized, your best bet would be to contact the professional lawyers here at 6ix Estates LLP. We will be able to assess your situation and provide you with the services you require, saving you from the headache of obtaining to wrong services and wasting time, energy, and money. Get in touch with our firm at 416-206-6816 anytime Monday to Friday between 9am and 5pm. We will be more than happy to assist you with your document commissioning notarizing needs.
Get in touch with our firm at 416-206-6816 anytime Monday to Friday between 9am and 5pm. We will be more than happy to assist you with your document commissioning notarizing needs.
Refinancing a mortgage involves renegotiating one’s current mortgage loan agreement. Whether one enters a new mortgage agreement with the same lender or with a different lender, the goal of a mortgage refinance is to benefit the homeowner. For the purposes of this blog post, we will be discussing mortgage refinancing under the scope of institutional mortgage lending.
Institutional mortgage lenders can be divided into two categories: A-Lenders and B-Lenders. A-Lenders, also referred to as ‘prime’ mortgage lenders, are comprised of the major Canadian banks: TD, CIBC, BMO, RBC, Scotiabank, and National Bank. These banks, as well as a select few other lenders, provide the best interest mortgage rates and terms in the market. Because of their rates, they have the strictest lending requirements. Generally, the A-Lenders only accept applicants who exemplify the highest level of financial stability and lowest level of risk. Thus, to be approved, an applicant must pass a mortgage stress test. Comparatively, B-Lenders offer more flexibility in their lending requirements but can still provide homeowners with a good lending rate. Examples of B-Lenders in Canada include: Home Trust, First National, MCAP, and RFA.
Why might someone refinance their mortgage? There are a few pros a mortgage refinance can provide:
Obtain a lower interest rate
Depending on the pre-payment penalty and the size of the outstanding mortgage, refinancing, and obtaining a lower interest rate can potentially save you money over time.
Accessing equity of the home
Refinancing allows homeowners to access up to 80% of their home’s value, less the value of the mortgage.
Consolidate debt
Using the accessed equity, homeowners can use their built-up equity to pay any outstanding high-interest debts, consolidating their debt through the mortgage refinance options available.
Although there are benefits to refinancing, there are some risks that should be taken into consideration. First, breaking a mortgage and entering a new one lengthens the time to pay off the mortgage of the home. As well, although you may have secured a low overall interest rate, the amount owing on your mortgage may be significantly higher. In addition, the process of refinancing is associated with additional costs, such as a prepayment charge for breaking your mortgage early.
Therefore, due to the many complex aspects of refinancing a mortgage, it may be of interest to reach out to a real estate lawyer. A lawyer will not only help you understand the terms and conditions of your mortgage loan, but they can help you determine if a refinance transaction will benefit you. Real estate lawyers will even facilitate the entire mortgage transaction between you and your lender, ensuring that you are receiving and entering a legitimate offer.
At 6ix Estates LLP, we represent clients in mortgage financing or refinancing transactions, both with institutional and private mortgage lenders. We will meet with all borrowers before closing to review the entire transaction, sign the documents and arrange for funds.
Contact us today for a free, 30-minute, no obligation consultation.
In real estate, the concept of marketability of title refers to ownership. Specifically, a marketable title refers to property that is free from claims, allowing for the transferability of possession of real property. Although a good and marketable title does not assume absolute absence of defect, buyers can expect that their ownership will not be challenged by outside claims if marketability of title is addressed in the contract for sale. Marketable title is not to be confused with marketability of property. Marketability of a property involves the physical state of the property, specifically in the eyes of mortgage lenders.
Involving a lawyer can ensure that you get a good and marketable title to a property. Prior to closing, a lawyer can conduct a thorough title search to determine multiple factors that can affect the marketable title. Specifically, they can determine previous ownership of the property, as well as prior dealings in relation to the property. In addition, a comprehensive title search can reveal any existing mortgages on the property, outstanding taxes, and any utility charges.
In some cases, defects regarding the title of the property are not discovered until after closing. This uncertainty poses as an issue because, if the buyer were to subsequently sell the property, the marketable value can decrease. As well, a buyer may have to remedy the issue, increasing spending costs on the property. The buyer can be exposed to other risks, such as fraudulent conveyance of property to another buyer.
Conversely, the risks caused by defects can be mitigated by title insurance. Title insurance can be issued in favour of the buyer, as well as the mortgage lender. Sometimes, mortgage lenders may require a buyer to purchase title insurance as a condition for the loan.
Depending on the title insurance policy sought out by the buyer, the following risks are generally covered:
Claims due to fraud, duress, or forgery
Work orders
Zoning non-compliance
Forced removal of existing structures
Lack of vehicular or pedestrian access to property
At 6ix Estates LLP, we represent clients in all aspects of residential real estate transactions; both resale and new construction of detached homes, townhouses, and condominiums. Our office will take the time to understand your intended use and characteristics of the property and ensure that you get good and marketable title to the property. Contact us today for a free 30-minute, no obligation consultation.
With the convenience of online search engines and the easy attainability of information, it may seem tempting to skip professional guidance when incorporating your business and instead rely on what is found online. Although there is no legal requirement to retain a lawyer, there can be challenges associated with incorporating a business independently. Therefore, this article will outline the difficulties that may arise with incorporating a business without the assistance of a lawyer and how including one in the process can help ensure that your entrepreneurial beginnings lead to success in the marketplace.
To incorporate a business, one must first determine the law that will regulate the corporation. Is the business a federal corporation – in that it is incorporated under the Canada Business Corporation Act, or is it provincial – incorporated under the law of incorporation of Ontario? It is essential to understand the differences between the two as legal consequences may occur if a business is being conducted provincially but is only registered federally. Incorporating under the federal Act does not exempt you from the obligation of incorporating in the province in which you operate. Thus, a lawyer will ensure that the business is incorporated under the appropriate regulations.
Next, before a business can be incorporated, a name for the company must be reserved, allowing the submission of up to three names for approval. It is crucial to ensure that the corporate name chosen is free of rights – not being used by another company. A lawyer can ensure the corporate name is not already in use as they have the materials to conduct proper checks. Allowing a lawyer to do these checks can avoid a corporate name refusal from the appropriate government authority, saving time in the process. Even if government services approve the name, the approval does not ensure that a trademark is not owned on the name. If this is the case, and one chooses to continue using the corporation name, legal penalties and sanctions can occur. Government services do not conduct trademark checks on the proposed names when approving corporation names. Therefore, a lawyer will do their due diligence to ensure all proper verifications are completed before the proposal is submitted.
Aside from the name proposal, other business start-up legalities that a lawyer can assist with include, but are not limited to:
determining a share structure that is suitable for the business
obtaining the appropriate licenses specific to operating the business
preparing contracts such as distribution, employment, service etc.
tax planning tools
and more
At 6ix Estates LLP, we can help your business in drafting Corporate and Commercial documents. Ask us about how we can help you start your business, or to protect your ongoing business interests by contacting us for a free 30-minute consultation.
With the drastic change in the housing market compared to pre-pandemic times, many have chosen to buy and sell property. It is apparent that one would seek the assistance of a real estate agent, but some may not be aware of the significance a real estate lawyer can play in the transaction. Understandably, one may ask what is a real estate lawyer? This blog piece will address the specific roles and responsibilities of a real estate lawyer, and how they can further improve your property transaction experience.
The textbook definition of a real estate lawyer is a lawyer involved in legal practice relating to real property. The broadness of this definition is to show that real estate lawyers are involved in much more than just the buying and selling of homes, such as development, acquisition, disposition, and rezoning. Not only in residential circumstances, but real estate lawyers can also advise in commercial real estate transactions such as negotiating leases, refinancing, and providing due diligence where needed.
It may be common knowledge to seek a lawyer only when a transaction goes awry, but an attorney can assist even before a real estate contract is signed and finalized. Having a lawyer involved early in the process allows for an avoidance of obstacles, as they can be discovered by the lawyer doing their due diligence of the transaction. Whether you are the buyer or the seller, a lawyer can assist you in different ways. If purchasing property, the lawyer can act as a mediator between you and your mortgage lender, they can review the agreement of purchase with you to ensure all your questions are answered, and further help you better understand your rights as a buyer. Likewise, as a seller, an attorney will assist with negotiating terms and conditions, exchanging legal documentation with the buyer’s lawyer, and guaranteeing all closing conditions are satisfied.
Next time you are involved in a real estate transaction, consider seeking the advice of a lawyer. A real estate lawyer has the legal background to both access information that may not be easily obtained by the public and translate its meaning to better assist you in making a sound decision on how to further proceed.
At 6ix Estates LLP, whether you are purchasing, selling, or refinancing real property, we will not only seek to close your matter effectively and efficiently, but we’ll also personally guide you throughout the transaction and answer any questions. We bring extensive experience and professionalism to every transaction and customize our support to your specific needs and concerns. We’re on the pulse of modern technology and have monitored its evolution to inform our own legal approaches—all to give you exceptional timely advice and service.
Contact us today for a free 30-minute no obligation consultation, to discuss all your real estate needs!
What inheritance rights does a family have when a loved one passes away without a Will? In Ontario, your rights may differ, depending on whether you’re a married spouse, a cohabiting spouse (also known as a common-law spouse), or child. In today’s blog post, we will examine the similarities and differences of each category and help underscore the importance of having a properly drafted Will and estate plan.
Legally Married Spouses
When a person dies without a Will, they are said to have died “intestate”, i.e. in the absence of a Will, the rules of intestacy apply to determine who gets what from a deceased’s estate.
Upon the death of a loved one, the surviving spouse (now widowed) should first determine whether they are better off making an election for an equalization payment under the Family Law Act (FLA) or seeking an entitlement to the deceased’s estate under the rules of intestacy.
If you are a surviving spouse, you should essentially ask yourself: “under which scenario will I receive a greater inheritance? Do I stand to make more if I opt for an equalization payment under Family law? Or am I entitled to a larger share of my deceased spouse’s estate through the rules of intestacy?”
If the surviving spouse elects to inherit under the former option (i.e. an equalization payment), then they will receive half the difference when compared to the net family property of both spouses at the date of death of the deceased spouse. To determine which option grants a larger inheritance, the surviving spouse must value both their and the deceased spouse’s assets and liabilities.
This calculation is to be determined at the dates of marriage and death of the deceased spouse. The former date is then subtracted from the latter date and the difference is to be divided between the estate and the surviving spouse.
For example:
Assume that when they got married, one spouse had a value of $20,000 and the other $4,000;
Later, when one spouse died, their value was $520,000, but the other’s remained $4,000;
The deceased’s net value is now $500,000 (520,000 – 20,000). The surviving spouse’s net value would be $0 (4,000 – 4,000).
If the surviving spouse elected to receive an equalization payment under the FLA, they would receive $250,000 (500,000/2).
However, what if the surviving spouse elected to inherit under the rules of intestacy pursuant to the Succession Law Reform Act (SLRA) instead? If the deceased had no children conceived before and born alive after the spouse’s death, then the surviving spouse would receive the entirety of the deceased’s estate.
On the other hand, if the deceased did have children, then the surviving spouse would only be entitled to a preferential share of the first $350,000 of the estate (the balance is then split depending on how many children the deceased had). It should be noted, however, that $350,000 is the prescribed amount for the preferential share of an estate of anyone who dies on or after March 1st, 2021. For those who died before March 1st, 2021, the prescribed amount for the preferential share is $200,000.
For example:
Assume that when they got married, a couple had two children, and the deceased died after March 1st, 2021, leaving behind an estate valued at $500,000;
The surviving spouse would be entitled to the first $350,000, leaving a balance of $150,000;
The surviving spouse then also gets one-third of this balance, i.e. $50,000 (150,000/3), for a total payout of $400,000;
The two children will then divide the remainder of the balance between them, i.e. each would receive $50,000.
Cohabiting Spouses (aka Common-law spouses)
Unfortunately, cohabiting spouses do not enjoy the same inheritance rights as legally married spouses. In fact, cohabiting couples have no legislative right to inherit any assets. Indeed, they aren’t even entitled to make an election for an equalization payment under the FLA, nor are they entitled to a preferential share.
However, a surviving common-law spouse is not without recourse. One option they have is to bring a lawsuit against the estate for support if the deceased never made adequate plans to properly support their dependents after they die. In this circumstance, a court order may be obtained to have the estate pay out a dependency and support claim for the proper support of the dependents in question.
Another option is to bring an unjust enrichment claim against the deceased’s estate (aka a quantum meruit claim). For this type of claim to be successful, the surviving common-law spouse has to be able to show that they contributed to the estate of the deceased and, as a result, they deserve compensation for their contribution. This entails proving that the deceased spouse received an “enrichment” (for no legal reason) that resulted in a parallel deprivation to the surviving common-law spouse.
Children
Pursuant to the SLRA, children are entitled to support and property rights. If, after paying the surviving spouse their preferential share, the monies the children received from the estate are inadequate to support them, then the child may seek a court order against the estate for support as a dependent. In a nutshell, the child would argue that their deceased parent had a legal obligation to support them at the time of the deceased parent’s death. If successful, a court could order access to the assets of the deceased’s estate to fund support for the dependent children.
Conclusion
Losing a loved one is never easy. Dying without a Will or estate plan further compounds the issues that a family must deal with in the aftermath of a death. Absent a Will, although spouses and children enjoy a certain degree of inheritance rights, these rights aren’t shared across the board, nor are they comparable in effect. The difference in outcomes and entitlements underscores the importance of having a properly drafted Will and estate plan that provides clarity, certainty and that helps families navigate the difficult aftermath of dealing with the loss of a loved one.
It is no surprise that death is not a pleasant topic. As lawyers, we empathize with our clients when discussing sensitive topics that come with the conversation of Wills. We understand that making a Will takes more time than many people think, with some people planning for months before finally creating their Will. Naturally, it is normal to have several questions and concerns when it comes to this topic; who will I give my property to? How will I split it amongst several beneficiaries? What will happen to my minor children if my spouse were to pass away too? Where will my pets go?
Making a Will is the most important decision you can make for two reasons: Death is unexpected, or an event may occur where an individual’s mental capacity becomes questionable. In these two scenarios, any specific gifts or instructions you may have intended to give will be gone. And in regard to your real estate, it will be given back to the Government through the Succession Law Reform Act, R.S.S. 1990, c. S. 26. This Act will determine how your property will be distributed.
A Will has much more power than people may think. A Will explains the distribution of your assets, your obligations to your children and elderly parents, and gives any specific instructions or wishes you want.
Although preparing a Will is an uneasy and sensitive topic, it is very important to address because death or major traumatic injury is unexpected. However, it does occur unfortunately. At 6ix Estates LLP, we can make this difficult decision easier for you. During our meetings with prospective clients, we ask the appropriate questions to make a legal determination about your capacity, your wants, your wishes, and any other important information that we may need to know to help you draft your Will. One of the major benefits of obtaining representation is that in the event that a death occurs and the Will is questioned for any reason, a lawyer’s notes will be crucial in providing evidence for what the client wanted.
Get in touch with our firm at 416-206-6816 anytime Monday to Friday between 9am and 5pm. We will be more than happy to assist you with Will drafting needs and answer any questions you may have.
