There is still time to save $$ for providing care to parents


Written on April 27, 2015 – 6:34 am | by Audrey Miller

We all know about double decker sandwiches and being part of the sandwich generation. Caring for parents can be costly, emotionally, physically and financially. The government has made various forms of assistance available to caregivers. Line 315 Caregiver amount: ‘If, at any time in 2014, you (either alone or with another person) maintained a dwelling where you and one or more of your dependents lived, you may be able to claim a maximum amount of $4,530 ($6,588 if he or she is eligible for the family caregiver amount for each dependent.’ ‘If the dependent is your spouse, parent or grandparent, they have to have been born in 1949 or earlier.’

This is a non-refundable tax credit, which means they can reduce the amount of federal or provincial tax an individual may owe, but it is not a cash benefit. You can claim this amount if the above information applies to you, line 315 of federal Schedule 1 is filled out. There is a video on line and an easy to follow questionnaire regarding eligibility for the Family Caregiver tax credit.

As well, it might be helpful to know that if someone is receiving services from the Community Care Access Centre (CCAC), any additional privately paid in home Personal Support Work (PSW) hours can be tax exempt according to the Canada Revenue Agency.

In addition, geriatric care management services provided by a Registered Social Worker can also be claimed as a medical expense tax deduction for income tax filing purposes. In other words, Registered Social Workers are now authorized ‘medical practitioners’ for the purpose of claiming medical expenses. .

To access the Canada Revenue Agency (CRA) chart list of professions in each province and territory that are authorized,check here.

Not alot of thanks, but alittle…. Better than nothing at all.

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    Passing of Accounts – Proportionality and Value


    Written on April 24, 2015 – 8:00 am | by Jasmine Sweatman

    Many times we have seen honest estate trustees being asked or compelled to pass accounts on the basis of “suspicions”, which frequently arise as a result of broken or strained family relationships. Despite the obligation to keep proper records, a formal passing of accounts is a tedious and often expensive exercise which may result in the needless reduction in the entitlement of residual beneficiaries if the accounts are passed substantially as presented.

    The additional rub is that Rule 74.15 under Rules of Civil Procedure permits anyone “who appears to have a financial interest” in the estate to move for an accounting, and the courts have in the past broadly interpreted this phrase to liberally grant motions to compel passing of accounts.

    However, recently the court has recognized that value and proportionality should be considered when determining whether formal accounts should be passed, particularly when the person requesting the accounting does not have a vested interest in the estate.

    In Klatt v. Klatt, 2015 ONSC 216, Carl transferred his farm property to two of his children, Lorne and Victor, as tenants in common in trust, and designated his residue to be a trust fund to be used for the upkeep of the farm. Any net profit from the sale of lumber from the property would also be added to the trust fund. Upon the death of last survivor of Lorne and Victor, the trust fund would be divided one half equally among each of Lorne’s surviving children and one half equally among each of Victor’s surviving children.

    Lorne passed away. David, Lorne’s son, sought, among other things, to compel Victor to pass accounts respecting the trust fund.

    On the facts of the case, Justice James refused to order a formal accounting, but concluded it would be reasonable to require Victor to provide accounting records for the trust fund to David.

    The Court considered the fact David’s interest was contingent rather than vested, and placed heavy weight on the potential value as well as the proportionality of the exercise.

    Regarding the question of value, the Court was concerned the cost of preparing an accounting and addressing David’s complaints would be disproportionately large relative to any discrepancies. The Court further focused on the fact that since David was unlikely the only contingent beneficiary of the trust, there was “a risk that the entitlements of the beneficiaries may be negatively affected if the fund is eroded by legal or accounting costs in circumstances where the allegations are ultimately unproven or any discrepancies turn out to be insignificant.” To add to these concerns, David had not substantiated his allegation there was an additional $50,000 purportedly belonging to the trust fund.

    The Court also contrasted the case at bar with other decisions involving large estates and substantial sums of money. At the time Lorne and Victor applied for probate around 1995, when Carl died, the personal property of the estate including cash was stated to be about $41,000; in April 2014, the trust fund included about $17,000. There was no evidence about the sale of timber.

    The approach taken by the Court is an indicator that unsubstantiated moves for an accounting will not be accepted.

    Until next time.

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      Fire’s burning, fire’s burning…


      Written on April 23, 2015 – 5:18 am | by Elaine Blades

      Last week Rachel Blumenfeld and I had the pleasure of co-chairing an informative, interesting and entertaining session on cottage succession planning. The presentation was part of the STEP Canada Passport series.

      Our presenters were Gwen Benjamin, an estate planning specialist with Wilson Vukelich LLP and Justin de Vries, Principal of de Vries litigation (not to mention founder of this blog). With a planner and litigator on hand, the stage was set for a lively to and fro session.

      Gwen began by separating the options into “at death” and “during lifetime”. Gwen then described the choices available under each heading. The “at death” techniques discussed, included:

      • leaving the disposition of the cottage to the discretion of the executor(s)
      • directing that the cottage be sold by the executor(s)
      • gifting the cottage to one or more children
      • creating a trust for the cottage + a maintenance fund
      • donating the cottage to a charity approved by the Minister of the Environment

      Additional options canvassed under the “during lifetime” heading included: transferring to a not-for-profit corporation and gifting the residual interest to a child or children while retaining a life interest.

      Gwen went to great lengths to explain the technical nuances of the various planning options while outlining the inherent pros and cons of each.  Notwithstanding, it seemed Justin had a case or story to undermine pretty much every option.  For example, Justin pointed out:

      • the myriad of problems that can accompany shared ownership
      • the difficulty in establishing a viable maintenance fund
      • the issues inherent in valuing a cottage
      • what can happen when a failed marriage and irrevocable trust collide
      • the pitfalls of the bidding process:  “It is difficult to think of a bidding process that does not alienate at least one child”
      • how wild cards such as proprietary estoppel, dependant support and constructive trust claims can muddy the lake waters

      Justin reminded us that these problems are often compounded by the fact that there may not be a “reservoir of love” among the siblings.

      The session ended on a more positive and constructive note as Gwen and Justin offered tips for avoiding litigation.  Advisors should encourage clients to:  

      • discuss plans with their children; talk early and talk often  
      • be realistic 
      • give serious thought to the various options (including selling the cottage to a third party)
      • develop a comprehensive plan

      Thanks to Gwen and Justin for an informative and thought-provoking session!

      p.s.   To see what the “Estate Planning Board of Canada” (by way of This Hour has 22 Minutes) has to say about cottage succession planning, click here.

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