Thursday, 8 December 2016

Supporting Gifts and Property Transfers Down the Road

Author: Joel Franz
Parents who transfer land or personal property to their children often do so with little or nothing in writing to document the transfer. Many would wonder why anything beyond the requisite conveyancing documents or simple transfer of possession would be necessary. Due to the historical nature of gifts, and how they are treated by the Courts, they can often be challenged by other parties, such as disenfranchised (or less enfranchised) siblings and family members. For the purposes of this blog, the parent is the party giving the gift, and the child is the one receiving the gift. However, the comments below apply equally to other parties, whether they are relatives, friends, or complete strangers.
Very simply, the law presumes “bargains” and not gifts. Where there is a gift, the onus is on the child to prove that the gift was (1) delivered, (2) accepted, and (3) the parent intended the gift. There is usually no issue with requirements one and two, and the dispute usually resolves around intention. This is usually complicated by the fact that when the gift is disputed, the parent has either passed away, or is incapacitated. Therefore, people need to look elsewhere for evidence of the parent’s intention.
Those challenging a gifts generally do so on the basis that the parent didn’t intend to actually effect a gift. The law is often on their side, as the person who received the gift usually bears the burden of proving intention. Those who have received gifts are often put in the difficult and uncomfortable position of proving that it was intentional. Further, they can be accused by others of unduly influencing the parent.
There are several ways to document the intention of the parties at the time the gift is transferred. For larger gifts, particularly transfers of land, the parent should always receive independent legal advice. Further, the parties can put their understanding in writing, which is always more valuable than word of mouth. Independent legal advice can be used to rebut a contention of undue influence, and is often the only practical way of doing so, particularly if the parent has passed away. For smaller gifts, getting the intention in writing is one practical solution. Getting mom or dad to write their intention of passing on an heirloom piece of jewellery, or a collectible car, is particularly useful should a family challenge the gift years later. Whatever you do, insuring the transfer is documented further than simply words spoken is key in assuring that the gift will stand years later, if challenged.

Friday, 18 November 2016

Blended Family Blunders: Considerations for Your Will

Author: Karen Platten, Q.C.

If you are in a second marriage or second relationship, your estate planning documents should reflect that.  For example, if you have children from a first relationship but would also like to provide something in your Will for your spouse, this can be done in a number of ways.  You will want to consider which assets should go to whom and whether they should be held in a trust or given to the spouse or children outright.

There are matrimonial property issues which impact your Will when you are in a second marriage or relationship and issues of to whom you are required by law to provide support.  Sometimes there is a conflict between providing for your spouse and your children and you will need to plan around that issue.

Each second marriage/relationship is different depending on the dynamics and make up of your family.  If you have been in this marriage/relationship a long time and there are no real conflicts within the family, you may consider doing mutual Wills where all of your assets go to the spouse at the death of the first spouse and then on to the children when the second spouse dies.  This requires the spouses to sign a contract which binds them and their estates.  Generally the children of both spouses are included in the distribution and the blended family is treated as one family.

If this would not work for your situation, there are many other ways of dealing with your estate.  Trusts are a fabulous vehicle, as are insurance policies, if the circumstances are right.  Holding funds in trust for a spouse to use and then having what remains at the end of the spouse’s life go to your children is very common in second marriages/relationships.

Maintaining an insurance policy so that your children receive something on your death while your other funds go to your spouse is also a solution if the circumstances are right and the policy does not become too expensive to maintain.

In short, there are many, many methods for dealing with second marriages/relationships in estate planning. You are only limited by your or your lawyer's imagination. However, if you do not want your family to feel like they have been through the blender, it is important to plan your estate so that it answers the needs of your situation.