Chantal and I are thrilled to have been invited to be a part of an upcoming seminar hosted by Lifetime Networks of Citizen Advocacy on Wills, Estates and Power of Attorney. This day-long event will highlight the…
The Senators in the playoffs, temperatures in the twenties, and tulips beginning to bloom…we think it is safe to say that spring has finally and truly arrived in Ottawa (although our friends to the west who have yet to put away their snow shovels may not agree). Another sure sign of spring is the bustling spring real estate market. This brings to mind changes to the principal residence exemption which were announced by the federal government last fall.
Generally speaking, when a capital property such as a home or cottage is sold, an individual is taxed on the increase (or ‘gain’) in the value of the property. The gain is calculated from the date it was acquired by the individual to the date it was sold. However, if the property disposed of qualifies as the individual’s principal residence, he or she can take advantage of the principal residence exemption to reduce or eliminate any taxes owing on the capital gain.
Buying or selling a home, cottage, or rental property? Call us! We are pleased to announce that we are expanding our practice areas to better serve our clients. We will now be assisting clients with sales of real property, purchases, and mortgage refinancing. Call us at 613.836.9915 for further details.
The temperature in Ottawa has steadily risen over the past week and culminated over the weekend in our first heatwave in May in over 100 years. This steady rise in temperature is matched by a steady rise in residential property sales over the last few years in Ottawa with this spring being no exception.
At this time of year, many of us turn our attention to the dream of cottage ownership. While shopping for the perfect lakeside getaway however, it is important to keep in mind that there are different issues to consider when buying a cottage property versus buying a property in a more urban setting.
Here are our top three things to consider when buying a cottage property:
For many reasons, the answer could still be ‘yes’ despite the Canadian government’s decision to tax almost all testamentary trusts at a higher rate.
What is a testamentary trust?
A testamentary trust is one that arises as a result of a death. A testamentary trust, including a Henson trust, can be included in a will or in a separate document.
At my law office in the Kanata-Stittsville area of Ottawa, some of the individuals that I meet are acting as the trustee of a Henson trust. If I were asked what are the top three tips you share with trustees to make the job go as smoothly as possible, here are my answers:
I recently met with Kate (not her real name) at my law office in the Kanata-Stittsville area of Ottawa. She explained to me that her grandmother had recently passed away and left her a cash gift of $100,000. Kate was concerned about what effect the gift may have on the benefits she receives from the Ontario Disability Support Program (‘ODSP’). She had not yet received her gift but, acting on the advice of her father, she had made an appointment to meet with me sooner rather than later.
I told Kate that coming to me before receiving her gift was the right thing to do. It was unfortunate that Kate’s grandmother had not been advised to include a Henson Trust in her Will for Kate’s benefit. There are, however, some steps that Kate can take to protect her ODSP benefits.
I regularly get asked questions like this. Many of my clients who meet with me at my law office in the Kanata-Stittsville area of Ottawa have been given this advice by a well-meaning friend or family member or sometimes another professional. They are often told that holding some or all of their assets jointly with one or more of their adult children will make managing theirs affairs easier for their family and will save probate fees.
I almost always recommend that assets not be held jointly with adult children for a number of reasons.
“I’ve named my little granddaughter as the beneficiary of my life insurance policy but with her dad, my son, as the trustee. He’ll have full control, won’t he?”
I get asked the above question time and time again. The answer, in short, probably not to the extent you think he will.
You may already know that at our law office in Stittsville (near Ottawa), we specialize in estates and trusts. As a result, we often meet people who are beneficiaries or trustees of a Henson Trust and who want to understand how it works.
A Henson Trust is a special type of trust that holds the money and assets meant for a beneficiary with a disability. A properly-drafted Henson Trust allows the beneficiary to be left an inheritance indirectly without affecting their benefits under the Ontario Disability Support Program (‘ODSP’). If an ODSP beneficiary receives an inheritance directly, ODSP benefits could be reduced or eliminated … not usually what anyone wants unless the inheritance is a very large amount.
The trust is looked after by a trustee … a person or trust company appointed to manage or administer the Henson Trust assets. Sometimes clients want to know if the trustee can get paid and, if so, how much.
At our law office in Stittsville (near Ottawa), we have talked with clients who are beneficiaries of a Henson Trust. Most often, a parent or other relative has included a Henson Trust in his or her Will to help the trust beneficiary who has a disability. Receiving an inheritance by way of a properly-drafted Henson Trust can mean the trust beneficiary’s benefits under the Ontario Disability Support Program (‘ODSP’) won’t be affected. A Henson Trust can also be set up in a separate document.