Are you acting under powers of attorney for a family member or friend? Did you know that you can be paid for the work that you are doing? Did you also know that if you are paid, you must report your compensation to CRA? If you didn’t, you are not alone.
Like many offices, we require new clients to provide us with valid, government-issued photo ID of some kind. When I met with Clare (not her real name) in my Stittsville law office, she told me she no longer drives due to her recent loss of sight. She no longer has a driver’s licence and she has no other government ID.
For most clients, the usual form of ID is a driver’s licence. Like Clare, some of our clients do not have a driver’s licence either because they stopped driving due to a health issue or because they never had a driver’s license.
If that’s you, here’s what to do.
Publication: Parent-Child Guide Book, Lanark, Leeds and Grenville
Volume 14 Number 4 Summer 2013
The other day I met with Alison (not her real name) in my law office in Ottawa. We first met her about five years ago. At the time, she was a young, single professional just about to buy her first home. She knew the importance of ensuring her estate planning was done. She was now approaching another milestone in her life – marriage. She wanted to make sure her estate planning was in order before the big day.
I told Alison she had done the right thing to put estate planning on her wedding planning checklist.
Last week in my law office in Ottawa, I met with Joan (not her real name) to finalize her late husband’s estate. At the end of the appointment, Joan said to me that she would like to meet with me again in the near future to re-visit her own estate planning. In particular, now that her husband was gone, she felt it was time to decide how best to deal with the family cottage. As we approach the first long weekend of the summer, this may be an issue that is on your mind as well.
At my law office in Ottawa, practically on a daily basis I explain to clients about the exciting estate planning opportunities offered by testamentary trusts. Just the other day, I met with Jim and Sue (not their real names) and suggested they consider including trusts in their Wills for each of their three adult children.
As I explained to Jim and Sue, a trust that is created as a result of a death is known as a ‘testamentary’ trust. Trusts in wills are an 
example of testamentary trusts. One benefit to setting up a testamentary trust is to provide for the possibility of income splitting. A testamentary trust is taxed as a separate taxpayer at the same marginal tax rates as individuals. So for Jim and Sue, a properly-drafted trust can offer significant tax savings as their adult child’s personal income and the trust income can be taxed separately for the first 21 years of the trust’s existence. Also, naming the child’s spouse and children as potential trust income beneficiaries can offer further income splitting and tax savings. Income splitting is but one of a number of benefits offered by testamentary trusts.
There is a possibility that changes are afoot however.
I recently met with Jim and Phyllis (not their real names) at my law office in Ottawa. As many other Canadians who have been investing in property, they had recently purchased a vacation property south of the border. They had signed Wills about two years ago but wanted to know if there was anything special that needed to done as a result of their newly-acquired vacation property. They were considering gifting the property to their oldest son as they felt their other children would not be interested.
I told Jim and Phyllis they had done the right thing in coming to see me. I explained to them that although many jurisdictions will recognize a Will drafted and signed in Canada, some will not. Even if the Will is recognized, the legal system of another jurisdiction may differ from Canada’s and could result in an unexpected distribution.
To minimize problems, I suggested that Jim and Phyllis either have their Canadian Wills reviewed by a lawyer licensed to practice in the jurisdiction where the real property is located or have a Will drafted in that jurisdiction to deal only with their vacation property.
Not too long ago, I met with Gail (not her real name) at my law office in Ottawa. Gail had signed a Will about five years ago. Since then, she had some new assets and wanted to review her estate planning and make sure her Will was up-to-date.
During our meeting, Gail mentioned that she had recently invested in a small family company which owns a large island in Ontario cottage country. There are several cottages on the island which are used by various family members all of whom, along with Gail, own some of the shares of the corporation. Gail’s two children also own shares in the company. For this reason, Gail thought she might want her shares to go to her grandchildren. However, she wasn’t sure if she should gift the shares during her lifetime or wait until her death. All of her grandchildren love the spending time at the island as much as Gail does. They spend as many much time there as possible even though they have busy lives with careers and young families of their own.
Publication: Ottawa Citizen
April 20, 2013
Donna is interviewed about Powers of Attorney and how these documents can be used.
Link to article online: Role Reversal
I remember meeting with Michael (not his real name) in my Ottawa, Ontario, office not long after he’d moved his mom into long-term care. She was suffering from dementia which had advanced quite quickly. As she could no longer manage her financial affairs, Michael had been acting under the financial Power of Attorney (POA) his mom had signed years ago.
Michael had heard that the best thing to do to avoid probate fees was to make all of his mom’s assets joint with himself. However he decided to have a meeting with me before making any changes.
I explained to Michael why changing assets to joint ownership is a big mistake when done while acting under a Power of Attorney. If he had gone ahead and made those changes he could have been in a lot of trouble.
