So You’ve Been Appointed an Estate Trustee (aka Executor), Now What? – Part 3

Posted on by Megan E. Fife

Reminder: this series of blog posts assumes the deceased died with a Will. Also, keep in mind that the normal caveat applies: this information only applies to estates administered in Ontario and should be used as a guide only! Speak with a lawyer about your specific situation, as every case is different.

At this point, you’ve applied for probate and received your Certificate of Appointment of Estate Trustee with a Will (“Certificate”) (see Part 1 and Part 2 of this series); now you can begin to actually administer the estate!

Depending on the Will, the administration of the estate will vary in complexity, and your estates lawyer will assist you with this, but in general terms you will need to focus on the following three elements:

  • Distribution of assets;
  • Keeping an estate accounting; and
  • Taking care of the taxes

Distribution of assets

You will need to follow the instructions of the Will, to the letter, and in the correct order of distribution. That means that any specific bequests (i.e. “I leave my diamond engagement ring to my daughter, Rose”) need to be distributed first. Once those have been distributed you can move on to the residue of the estate: what is left over after all the specific bequests have been made.

Before you start writing cheques, make sure you consider the following:

  • If you haven’t done it already, you will need to open an Estate bank account. This should be done with the deceased’s bank; visit a bank branch with your Certificate and the bank should help you the rest of the way. This account will be for estate funds only and will make it easier for you to complete an Estate accounting (more information on that next time).
  • If the house, car, boat and any other property owned by the deceased weren’t specifically left to someone, or weren’t held in joint names with someone (thereby keeping it out of the estate itself) they will need to be sold. Do this with the appraisals in mind; you have a responsibility to the Estate to sell the property for a reasonable price. The sale funds should then be deposited to the Estate bank account for distribution.
  • Like the home and car, any other tangible property of the deceased that wasn’t specifically left to someone (for example, clothes, jewelry, household goods) should be sold whenever possible, as these things also make up part of the residue of the estate and cannot be divided until they are liquidated. Again, any sale funds earned should be deposited into the Estate bank account for distribution.
  • If the deceased had multiple bank accounts consider consolidating all of the funds into the one Estate bank account, for easy handling.
  • Finally, you can’t just distribute all of the funds down to a zero balance right away. You will need to hold back enough money to pay your estate lawyer’s legal fees, the accountant’s fees, any money that might be owing to the Canada Revenue Agency, as well as a small cushion for any other expenses that the Estate may have before its wound up. Again, your Estate lawyer will be able to help you determine how much of a holdback is appropriate for your specific Estate.

To protect yourself as the Estate Trustee, each and every distribution should have an accompanying Receipt and Release document which the recipient beneficiary signs, acknowledging receipt of the item(s) or funds and releasing you, as Estate Trustee, from all further liability in relation to that distribution, before they actually receive the item(s) or funds. Your estates lawyer can help you with this.

Next time: Estate accounting and taking care of taxes.

Cosmetics Bashing – There are No Rules

Posted on by Gordon B. Greenwood

It is now official in Canada – it is better to be alarmist than to be accurate.

A Senator has introduced a Bill to amend the Food and Drugs Act, to be called the Cruelty-Free Cosmetics Act. Seriously, that is what it is called. What image does that title conjure up in the mind of the public? Surely there must be an industry rampant with animal testing where the most disgusting laboratory procedures are conducted on animals for the purpose of making Canadians more beautiful. Surely that name must be descriptive of what is done within the Canadian borders and descriptive of a wrong which must be urgently addressed? But is that really what is happening?

In a recent article by Thomas Walkom, National Affairs Columnist for the Toronto Star, a member of an animal rights advocacy group is quoted as saying that there is no information on how much animal testing for cosmetics is done in Canada but, “given that the domestic industry is small, the answer is probably: not much.” Indeed, in relation to imported cosmetics, Senator Olsen, the person who introduced the Bill, “estimates the big international cosmetics firms are already 99% free of live animal testing.”

So let’s flash back to the title of this Bill: why is it called the Cruelty-Free Cosmetics Act?

For the cosmetics industry, and indeed for any business in Canada, it is illegal to engage in misleading advertising or labelling, and a name falls in those categories. In determining whether or not a statement is considered misleading, one has to look at what is known as the “overall impression test” or “general impression test”. In other words, is there a general impression created by the words and the overall context that is, in fact, misleading or likely to mislead the public. So far as the cosmetics industry is concerned, the animal rights advocacy groups acknowledge that there is no information publicly available on how much testing is done in Canada but, if any, it is likely small. Through the words of the Senator herself, the overall effect of the Bill will be minimal because she estimates that there is already over 99% compliance.

Why is this Bill titled so as to leave the impression that the cosmetics industry in Canada is founded on cruelty? Would it not have been more truthful to have used a title that was accurate such as the Animal Testing Restrictions Act or some other properly descriptive words.

Perhaps the title was specifically chosen to generate publicity over honesty and alarmism over accuracy. In other words, for a Bill which would have such little effect in Canada because there is little or no animal testing done, and few or no products which have been tested on animals, how else could one gain the attention of the media?

In some of the ads I have seen on television sponsored by animal rights groups, and which are in favour of the Bill, they have not found it necessary to create the misleading impression in the minds of Canadians that cosmetics in Canada put beauty ahead of cruelty. These ads rather specifically speak of the need to restrict or prohibit testing on animals. They plainly say what they are supporting without the need to resort to alarmist language.

For many years I have been troubled by the double standard applied in assessing the science related to the safety of cosmetics. While industry spends millions of dollars in order to substantiate the safety of their products to health regulators around the world, others merely have to make an allegation which is then accepted without question by the media and activists as being accurate without requiring the necessity of proper scientific substantiation. I will write more on this later but, for the present time, suffice it to say that unsubstantiated allegations result in the public being misled and, if industry tries to defend itself, it is automatically viewed as an international conspiracy to poison humanity and kill off their customer base with carcinogens.

In an environment of cosmetic bashing and junk science, the last thing we need is a Senator introducing a piece of legislation which is named in such a grossly misleading manner as to lead the general public to believe that animal testing is rampant in Canada and is an evil which must be addressed because, without her Bill, cosmetics in Canada could not possibly be “cruelty-free.” The Senator readily admits there is no statistic to prove this is the case and believes that industry is already over 99% compliant. It may be 100% compliant, we don’t know. We just know that it is not the epidemic that the name given to her legislation implies.

Say what you mean and mean what you say! If you want to regulate or restrict animal testing, then title the Bill in that manner and don’t seek media attention by attempting to taint an innocent industry with a catchy, but incorrect, name.

Only in Canada!

Posted on by Mary G. Griffith

I recently wrote a blog about some of the issues that arise with “global” advertising and adapting foreign creative to the Canadian market. Perhaps the “flip” side of creative considerations is knowing what uniquely Canadian institutions, symbols etc. cannot be used to identify a product or communication as Canadian without the proper consents. If you were to ask the average person on the street what images would instantly say “Canada” or “Canadian” I am sure that among the top items would be the flag, the maple leaf, a Mountie, our money (not to mention a few furry animals).

Particularly given the potential of greater use of Canada’s emblems during its sesquicentennial in 2017, it is important to know that when you are contemplating using Canadian symbols in your commercial communication, certain rules will apply for certain images. For example, you cannot use a Mountie (real or someone in costume), or the words Royal Canadian Mounted Police, RCMP, or Mountie, without the consent of the RCMP.

The Trademarks Act protects the use of many symbols, flags and emblems, not just the Canadian flag, and the use of it or the coat of arms for Canada must be approved by the appropriate federal department.

While there are somewhat fewer restrictions on the use to the maple leaf, I would highlight a general caution. The use of a maple leaf on or in conjunction with a product would likely imply a “Made in Canada” claim. As a result the product would have to actually meet the requirements for that claim, as set out in the Food and Drugs Act and the Consumer Packaging and Labelling Act.

An inference that your product or service is “Made in” or a “Product of” Canada may also be considered misleading by the Competition Bureau. See their guidelines here.

What about the use of images of Canadian bank notes? It depends. In a television commercial …probably yes; on a coupon…no. The Bank of Canada has a useful summary. The use of images of Canadian coins is somewhat different. Copyright in coins is owned by the Royal Canadian Mint not the Bank of Canada; consent needs to be obtained and, in most cases, a license fee paid.

As with adapting “Global” advertising there are other uniquely Canadian considerations. Make sure that you protect yourself against the potential pitfalls and get legal advice before you launch your marketing and advertising programs.

So You’ve Been Appointed an Estate Trustee (aka Executor), Now What? – Part 2

Posted on by Megan E. Fife

Reminder: this series of blog posts assumes the deceased died with a Will. Also, keep in mind that the normal caveat applies: this information only applies to estates administered in Ontario and should be used as a guide only! Speak with a lawyer about your specific situation, as every case is different.

So you’ve decided that you will go ahead and act as Estate Trustee and you’ve already started to complete the first set of required forms (see Part 1 of this series). Now is the time to value the assets of the estate and apply for probate.

You will need to compile a list of all the deceased’s assets with their respective values. This includes:

  • Their primary residence and any other property they may own in Ontario, including rental properties and cottages (note: if they owned property situated outside of Ontario, consult a lawyer immediately to ensure the proper handling and recording of those extra-provincial assets);
  • Any vehicles, boats, ATVs, etc.;
  • All bank accounts, with account numbers and values at the date of death;
  • All investments, RRSPs, RIFs, etc. with account numbers and values at the date of death;
  • Personal and household items generally (if there is nothing of considerably high value, a lump sum amount can be attributed to these items as a whole); and
  • Expensive jewelry, collectibles, art, antiques, etc.

For property, such as homes and cottages, as well as vehicles, we recommend getting at least two independent appraisals for each and using the average of the values obtained as your valuation for the item in your list of assets. Similarly, for expensive jewelry, collectibles, art, antiques and the like, an appraisal should be obtained as soon as possible to determine their values.

Once all of the above has been collected and valued, you can start putting together your application for a Certificate of Appointment of Estate Trustee with a Will (i.e. probate). This includes:

  • Form 74.4 – Application for a Certificate of Appointment of Estate Trustee with a Will – This form requires you to note the value of the assets of the estate, both personal property and real estate separately, and the total value for the assets as a whole;
  • An inventory of the assets of the Estate, as described above;
  • The original will with the affidavit of execution attached;
  • Form 74.7 – Notice of an Application for a Certificate of Appointment of Estate Trustee, with Form 74.6 (Affidavit of Service of Notice) attached, which simply states that you, as estate trustee, have sent a copy of Form 74.7 to any and all persons entitled to a specific item or property or stated amount of money as noted in the Will, as well as any and all other beneficiaries as listed under the Will (and obviously, you must have sent a copy to those people before completing this step); and
  • A bank draft in payment of the full amount of the estate administration tax.

The Estate Administration Tax is based on the total value of the assets of the estate. The current rate is $5 for each $1,000 or part thereof, for the first $50,000 of the value of the estate, and $15 for each $1,000 or part thereof, of the value of the estate exceeding $50,000. If the value of the estate is $1,000 or less, no estate administration tax is required. The Ontario Ministry of Finance webpage entitled “Estate Administration Tax” gives an informative overview, however, we recommend speaking with a lawyer to ensure the estate valuation and administration tax calculation are completed properly before sending your application.

Once this is all complete, send your documents the Estates Division of the jurisdiction where the deceased resided at the time of their death.

Next time – you’ve received the Certificate of Appointment of Estate Trustee with a Will, now what?

Avoiding Surprises – Tips from a Family Law Lawyer – Part 4: Don’t Wait Too Long to Commence a Claim for Retroactive Child Support

Posted on by Michael A. Chambers

What most lawyers know, or should know, and very few parents do know, is that with respect to claiming retroactive child support in almost all cases the parent seeking support must commence the claim before the child ceases to be eligible for child support which means, again in most cases, before the child is over 18 and finished with his or her education. The Supreme Court of Canada in a 2006 decision, known as the D.B.S. decision, stated quite clearly that, “Child support is for children of the marriage (which means, children entitled to support), not adults who used to have that status.” So the lesson is, if you want to pursue a claim for child support for a child, make sure that you commence your claim before your child becomes ineligible for support. If you don’t, you will most likely find yourself out in the cold with no chance of recovering anything from the parent who should have been paying child support for the child. The Court will probably have to say to you, I’m sorry but I can’t order him or her to pay. Not a happy result. Of course, the best way to avoid this result is to commence the claim for retroactive child support when your client is still eligible for support.

There is a slim glimmer of hope that you may, in some very limited circumstances, be able to bring a claim for retroactive child support even after the child has become ineligible to receive support. You don’t want to have to rely on this, but you should have a look at it if you find yourself caught on the wrong side of the eligibility for support line. In a case decided in December, 2015, P.M.B. v. A.R.C.-A., the Ontario Court of Justice allowed a claim for retroactive child support even though it was begun some 4 months after the child had ceased to be eligible for child support. In part the Court in this case seems to have been prepared to bend the strict rule because there had been a pre-existing oral agreement between the parents that some child support be paid (the strict rule described above has been held not to necessarily apply if the claim is for retroactive variation of an existing order for child support, as opposed to a retroactive claim for a first time child support order), and because the support paying parent had been guilty of “blameworthy conduct” by failing to disclose income increases to the parent claiming child support. Other reasons were given by the Court for sidestepping the D.B.S rules, but as noted earlier, one doesn’t want to have to be trying to figure out a way around D.B.S. Avoid the problem in the first place by commencing your claim for retroactive child support when your child is eligible for support.

A simple rule to follow.