Category: Wills, Estates, and Trusts

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A Strong Endorsement of Testamentary Freedom: Spence v BMO Trust

When should courts invoke public policy to interfere with testamentary freedom? The Ontario Court of Appeal (“ONCA”) recently revisited this question in Spence v BMO Trust Company, 2016 ONCA 196 [Spence]. In Spence, Mr. Spence (the testator) excluded his daughter, Verolin, and grandson, A.S., from his Will. Instead, he bequeathed his assets to his second daughter, Donna, and her children. Mr. Spence’s reason for disinheriting Verolin appears to be racially motivated. The application judge, Justice Gilmore, held that the Will violated public policy and set aside the Will in its entirety. The ONCA, issuing a strong defence for testamentary freedom,...

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Wrestling over Wills and Wealth in Neuberger v York

Nothing riles a family up more than a good ‘ol contested probate of will. This is especially true if there are millions to be had. This month, the Court of Appeal for Ontario (“ONCA”) issued a ruling in Neuberger v York, 2016 ONCA 191 that allows one faction of a family to challenge a will where the other faction of that family is set to receive substantially more from the will. The Facts The warring clan is that of the now deceased Sarah and Chaim Neuberger, prominent Toronto philanthropists and real estate giants. A holocaust survivor, Mr. Neuberger came to...

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Morassut v Jaczynski: Property Division for Common Law Spouses by Stealth?

One of the criticisms laid against Ontario’s family law and succession law statutes is that they do not make allowance for people living in non-traditional relationships. The law provides a comprehensive formula for property division for married people when they divorce or one of them dies, but there is no similar entitlement for “common law” spouses who cohabit without being married. However, judicial decisions show more flexibility, particularly as Ontario courts are influenced by jurisprudence from British Columbia (where the statutes are also more liberal). One provision that does exist in Ontario’s statutes is dependant’s relief, under which a common...

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The Supreme Court Redefines Resulting Trusts and the Legal Meaning of “Gift” in Nishi v. Rascal Trucking Ltd.

The tangled case of Nishi v. Rascal Trucking Ltd., 2013 SCC 33, is a classic example of the complicated conflicts that can occur when people mix business dealings with personal friendships.   The unanimous decision of the court appears to reaffirm the doctrine of purchase money resulting trust.   However, Justice Rothstein managed to do it in a manner that achieved an apparently equitable compromise.  The principle of resulting trust was superficially affirmed, but there was no resulting trust found on the facts.   There may in fact be an effective weakening of the doctrine of resulting trust implicit in this decision.

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Bentley v Anglican Synod of the Diocese of New Westminster: The Might of Religious Doctrine

In the late 1990s, the New Westminster diocese (“territory”) of the Anglican Church of Canada (“ACC”) convened a synod (“council”) in order to consider the question of whether clergy ought to bless same-sex unions. In 1998, the Diocese decided to permit, though not require, clergy to perform liturgical blessings for same-sex couples. In 2002, the practice came into effect. The blessings are distinct from performing the sacrament of marriage, which remains out of reach of same-sex couples anywhere within the ACC.  Despite the distinction, the practice of the blessings remained controversial, with Rowan Williams, the Archbishop of Canterbury and head...

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Antle v Canada (2010): That Trust was a Sham!

Last month, the Federal Court of Appeal, in Antle v Canada, 2010 FCA 280 [Antle 2010], upheld the Tax Court of Canada decision in Antle v. The Queen, 2009 TCC 465 [Antle 2009], finding that an offshore spousal trust was not valid. Both courts agreed that the primary purpose of the spousal trust was to avoid capital gains taxes. The Tax Court of Canada considered two main issues: whether the trust was valid and if the General Anti-Avoidance Rule (“GARR”) was applicable to deny the transactions and related tax savings. Sona Dhawan discussed the Tax Court decision in an earlier...

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Caisse Populaire Desjardins de Montmagny: Crown Does Not “Own” Unremitted GST Amounts

The only surprising thing about the recent Supreme Court of Canada (“SCC”) decision in Quebec (Revenue) v Caisse Populaire Desjardins de Montmagny, [2009] 3 SCR 286 [CP Desjardins de Montmagny] is that the Quebec Superior Court (“QCSC”) at first instance found in favour of the Crown in all three cases from which the appeals arose. The issue in CP Desjardins de Montmagny was determining the status of collected but unremitted GST and QST amounts where a business later filed for bankruptcy, and determining the priority as between the government, the trustee in bankruptcy, and secured creditors in claiming the amounts in question....

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Validity of trusts and GAAR applicability: Antle and Garron

Offshore trusts have become an essential element of successful tax planning. Trusts are used as tax planning vehicles as they are considered a separate legal entity from the individual. Thus, the income and assets of the trust are excluded from the individual’s estate for tax purposes. A previously successful, but now uncertain, strategy had used the residence of trust as basis for evading taxes. The Canada Revenue Agency has taken the position in Interpretation Bulletin IT-477 “Residence of a Trust or Estate” (dated May 30, 1980) that a trust will generally be resident in the jurisdiction where the trustee who...

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Garron: Determining Residence of Trusts

Offshore trusts are major tax-planning and estate-planning tools which can be used to protect assets from taxation and to defer accrued capital gains for a long term. For all such planning tools to work, however, the “offshore” aspect of the trust—that is to say its non-Canadian residence—has to be a central feature of the structure. A trust resident in Canada would be subject to Canadian income tax on its worldwide income. The established common law principle for determining the residence of trusts is that a trust is resident in the jurisdiction where its trustees reside and operate (Trustees of the...