Month: February 2017

7 Reasons You Should Make a Will (no matter how old you are)

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Sometimes the universe presents me with topics to write on. This was one of those weeks. Over the past week, I have spoken to 3 or 4 different people separately about the importance of doing a Last Will and Testament. During one conversation, a colleague and I pondered the reasons why so many people avoid doing their wills. My theory is people simply do not want to think about death and thinking about a will means they must think about death. It’s not a pleasant topic, I admit. But the fact of the matter is that we are all going to die! Yes, that is a little dramatic, but it is true. The old adage is that the only things that are certain in this life are: death and taxes. With that said, here are seven reasons why you should think about doing a will, no matter what your age:

7. Peace of mind: If you do your will now, you will be providing yourself with peace of mind, just by knowing that you have something written down in case you pass away. There are few things more tragic than seeing close family members upset after the loss of a loved one. Add to that the stresses of trying to figure out what documents are needed, funeral arrangements, what to do with property, etc. Having a will does not solve all of these problems, but it is the foundation for your total estate planning package and will alleviate some unnecessary stresses on your family.

6. Costs:  Similar to my comments in a previous article about why a Power of Attorney is important, doing a will now can save costs to you and your estate. If you pass away without a will, you are what’s called “intestate” and a statute called the Devolution of Estates Act (in New Brunswick) kicks in to guide the process your family must go through to have someone appointed to represent your estate (pay your bills, sell your property, gift certain properties to others). This process can be more costly in the long run than probating (proving) a will.

5. Guardianship for you children:  You could include a provision in your will to appoint a guardian or guardians for your children should something happen to you. Only you know your children and who you trust to watch over them the most. A will is an effective way of expressing your wishes for your children as well.

4. Protecting your business: Through the process of drafting a will, people often begin thinking about a succession planning for their business. This might include transitioning your business to a family member. Also, your lawyer and accountant can assist you in thinking about estate freezes and/or family trusts, which can maximize the tax potential of your transition.

3. Complexity:   People seem to build up the process of making a will in their minds into something greater than it really is. In most cases, making a will is not a complex process. You will have to attend your lawyer’s office one or two times (maybe more depending on complexity) and discuss your property, your family and your wishes. Then you will attend your lawyer’s office to sign your will. It is not that difficult, but I recently heard someone say that when she told her workmates that she was going to a lawyer’s office to make a will, one workmate asked: “oh, why, what is wrong with you?”

2. Family Fighting : We have all heard or experienced horror story scenarios with family members fighting over their parent’s properties. While a will cannot guarantee that your family will not be fighting over your property or money, it will certainly reduce the possibility of disagreements. It is more difficult for family members to contest your intentions when they are written clearly in “black and white” in your will.

1. Control: If you are like me, there are likely very few items that are important enough that they should be passed on to specific people. However, if something ever happens to me, I have some sentimental items that I would like certain people to have. It is difficult to ensure that your few important items are distributed as you wish without a will. A will is the best way to ensure that you maintain control over what little you have on this earth.

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Do you know about the Family Law NB website?

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1. Access to Justice in Canada

Access to justice is a serious problem in Canada for several reasons:

1. many people cannot afford legal services;

2. not enough judges;

3. not enough courthouses;

4. need for streamlining of many legal processes.

See for example, Action Committee on Access to Justice in Civil and Family Matters, “Access to Civil and Family Justice: A Roadmap for Change”, online: (October 2013) Canadian Forum on Civil Justice <https://www.cfcj-fcjc.org/sites/default/files/docs/2013/AC_Report_English_Final.pdf>

2. PLEIS Family Law NB Website 

One way of increasing access to justice is the use of “self-help” resources and websites, which provide information and step-by-step guides on completing court forms and how to navigate the judicial system. One of my favorite such websites is the Public Legal Education and Information Service of New Brunswick (PLEIS) Website, which houses a plethora of useful information on various areas of the law. Here is a link to PLEIS’ main page. In addition to the links on the main page, PLEIS has a website dedicated to family law information. Here  is a link to the PLEIS family law page. This website has “how-to” guides on filling out Court forms, videos from experienced family law practitioners and information about training sessions and courses available in your area. I have presented at a few of these sessions and bumped into course attendees years later, who mentioned how helpful they found the information.

While websites like the PLEIS website and the Family Law NB website should not be a complete substitute for competent legal advice, they may help you to gather information and narrow down issues before speaking to a lawyer. Also, I have had people attend my office with some of their divorce forms already filled out. This saves them time and money because our office staff can review these documents and make suggestions for revisions without having to start from scratch.

PLEIS Family Law

3. Social Media Options

I am a big believer in social media. If used correctly, one can personalize the information taken in and keep up to date on current events. I would highly recommend anyone interested in learning about Family Law (or any other area for that matter) should follow PLEIS on Facebook and Twitter for courses in your area and general information. Also, take a look around their website, as it is truly a wealth of information to get you started!

 

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Tip of the Week: Incorporated business owners — have you remembered to file your annual return?

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As the sun begins to shine and we creep ever closer to spring (okay, I’m being optimistic), companies may be coming up on their corporate year ends. Don’t forget that you will receive a notice each year reminding you to fill out your annual return and to file it with Corporate Affairs. Many people confuse the Annual Return with “some sort of financial report” because it occurs around the same time of year as your corporate year end.

Section 85(1) 0f the Business Corporations Act requires the directors of a corporation to call an annual meeting of the shareholders each year not later than eighteen months after

(i) the date of its incorporation, or
(ii) the date of its certificate of amalgamation, in the case of an amalgamated corporation,
and subsequently not later than fifteen months after holding the last preceding annual meeting; and
(b) may at any time call a special meeting of shareholders.
 
The annual general meeting is when the directors should be reporting to the shareholders on the financial status of the corporation. Also, this is when the shareholders elect new directors or affirm past directors. Once you hold the annual general meeting, you are ready to file your annual return, which is basically an up to date statement of the company’s current directors and their contact information.

 

Section 187 of the Business Corporations Act, SNB 1981, c B-9.1  states that “A corporation shall, on or before the last day of the month following the anniversary month of the corporation, send to the Director (of Corporate affairs, not one of your own directors) without notice an annual return in the form provided by the Director signed by a director or an officer of the corporation and the Director shall file it.”

 

It’s easy when the summer months come around to stash the reminder notice from Corporate Affairs in a drawer and forget to file it. If this happens, your corporation will be labeled “intent to dissolve” after a period of time and you will have 60 days to file your return before  the dissolution. It will cost you far more to re-establish the corporation than to file you annual return in the first place ($60 if you file online and $80 if you file in paper format). Here is the link to the New Brunswick Corporate Affairs website with the forms for filing your annual return.

Should you have any questions, pleas do not hesitate to contact us.

 

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Not all Title Insurance Policies are Created Equally: lender’s title policy vs. owner’s title policy

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You are buying your first home and you have signed so many documents your hand is getting sore. You likely have signed a mortgage, the mortgage covenants, discussed title to the property with your lawyer, arranged for fire insurance; maybe you talked about zoning requirements (depending on your plans for the property); arranged for your down payment on the home; Not to mention that you have been dealing with the logistics of moving—renting a van, picking up pizza and soft drinks to lure your friends in to helping you out; You have been so busy that you probably do not even remember the (likely very brief) conversation you had with your lawyer about title insurance. There can be serious consequences of not being aware of the difference between a Lender’s vs. and Owner’s title insurance policies. What is more concerning is the differences are not easily identified by title insurance companies and require a thorough reading by the counsel and the policy holder.

Here are some basic differences between the two types of title insurance policies:

1. Lender’s policy

A lender’s title insurance policy is usually required by your mortgage company when you purchase a home if you do not have a building location survey. Whereas a survey can  be thousands of dollars, a typical title insurance policy usually costs between $1-200 per policy. This makes title insurance an alluring option for home purchasers rather than spending thousands of dollars when you have already made the (likely) single biggest investment of your lifetime!

Here are some key facts about the lender’s policy:

  • Also known as “loan” policy
  • Lender requires lender’s policy before financing purchase;
  • Only covers the lender’s interests in the property;
  • Types of risks covered:
    • Fraud (signing wrong name on mortgage, etc.);
    • Legal fees in defence of title (ownership issues);
    • Issues regarding priority (other mortgages or judgements registered ahead of bank’s mortgage);
    • Gap coverage (if mortgage not registered on title for a period of time after closing);

2. Owner’s Policy

An owner’s title insurance policy can provide protection against the losses listed in the policy. Some examples could be:

  • someone else owns an interest in your title
  • existing liens against the title
  • violations of municipal zoning by-laws
  • encroachments onto an adjoining property (other than fences and boundary walls)
  • setback violations
  • realty tax arrears
  • outstanding municipal utility charges, provided such charges form a lien on title
  • existing work orders
  • lack of legal access to the property
  • unmarketability of the land due to adverse matters that would have been revealed by an up-to-date survey / RPR/ Building Location Certificate

3. Some helpful links

If the difference between the two types of title insurance policies is still not clear, here are some links that may assist you in further understanding the differences:

 

 

 

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You Can’t Always Get What You Want…and Other Sad Songs: Common Law Couples & Property Rights

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 Tough Questions

One of the topics that I discuss often with clients and prospective clients is property rights of common-law partners. There are many misconceptions and myths regarding this topic. For example, I often hear questions similar to the following:

– My partner and I have been together for two years; that means we are entitled to half of each other’s property, correct?

– My partner and I have been living together for 10 years. We purchased furniture together and most of our property was purchased after we started living together. We are each entitled to half of each other’s property, correct?

– My partner and I have been together for 6 months; is s/he entitled to half of my stuff?

The answer to many of these questions is “no, but….”. It’s understandable that these issues become confusing for the average person. The beginning of the confusion for most people starts with the Marital Property Act, SNB 2012, c.107, which defines “spouse” as a “married person”. Therefore, the division of property under the Marital Property Act (upon which the above questions are based) only applies to married people.

Kerr v. Baranow changes the landscape

In the now oft-cited case, Kerr v. Baranow, 2011 SCC 10, Justice Cromwell for the Supreme Court of Canada, noted at paragraph 1 that over a period of 30 years, courts have wrestled with property division for married couples, resulting in the various marital property acts enacted in the provinces in the late 1970s and 1980s. However, he notes that these acts only apply to married people. Regarding unmarried couples, Cromwell stated as follows:

For unmarried persons in domestic relationships in most common-law provinces, judge made law was and remains the only option. The main legal mechanisms available to parties and courts have been the resulting trust and an action in unjust enrichment. (Kerr, supra at para 1)

While common-law couples may not be able to turn to a provincial marital property statute for division of their property, the Supreme Court in Kerr, supra allows a division of property through unjust enrichment. If the claimant can prove the couple were engaged in a “joint family venture” and that he/she contributed to the joint family venture through work or funds contributed, then he/she may be able to use unjust enrichment to seek compensation for his/her contributions to the joint family venture.

Justice Cromwell notes at paragraph 31 in Kerr that “at the heart of the doctrine of unjust enrichment lies the notion of restoring a benefit which justice does not permit one to retain.” In other words, where a provincial marital property statute is not an avenue to compensation, but unjust enrichment may be.

Test for unjust enrichment

For recovery of the funds/services provided, the test for unjust enrichment requires the claimant to prove the following:

  1. The defendant has been enriched by the plaintiff (through the plaintiff’s contribution to the joint family venture);
  2. The plaintiff has suffered a corresponding deprivation (loss) due to the defendant’s enrichment;
  3. There is no juristic reason why the claim for unjust enrichment must fail and for the defendant to retain the benefit conferred by the plaintiff. At this step of the analysis, the plaintiff must exclude specific legal categories, which would provide reason for why the action in unjust enrichment must fail (gifts, statutory obligations, etc.). Secondly, this part of the analysis requires consideration of the reasonable expectations of the parties and public policy considerations of why recovery should be denied.

Finally, the Court notes that the remedy for unjust enrichment could include either a monetary award or proprietary award (return of property) but favours a monetary award if possible.

You Can’t Always Get What you Want!…and Other Sad Songs

Since 2011, Kerr v. Baranow has been cited several times by New Brunswick courts in dealing with property rights for common-law couples (for example, see paragraph 19 in Wills v. Kennedy, 2015 NBCA 31 (CanLII) for a list of cases citing Kerr v. Baranow). However, in Rollie Thomson, Lovers in a Dangerous Time’: Loose Ends After Kerr v. Baranow (Paper presented by Rollie Thomson at Canadian Bar Association, Midwinter 2014, February, 2014, Moncton, NB), Professor Thomson notes that many questions arise about Kerr’s application to specific circumstances: How do we quantify contributions? Does a property remedy through unjust enrichment apply to pre-marriage cohabitation in actual marriages? Does the analysis in Kerr affect spousal support payments?

Courts in New Brunswick have notably applied the unjust enrichment remedy unequally in different cases, making outcomes less predictable. In Mike Landry, “Breaking up is hard to do: common law partner denied share of ex’s pension” Telegraph-Journal (29 September 2016), the author refers to the recent (September 8, 2016) New Brunswick Court of Appeal case of Noel v. Butler, 2016 NBCA 49, wherein the Court denied Noel’s request for a portion of Butler’s pension because of lack of evidence that Noel specifically “contributed in any meaningful way to Butler’s ability to work as a teacher and accumulate pension benefits.”

After reflecting on Kerr v. Baranow, the answer to the questions above could now be: “possibly, if you can prove unjust enrichment based on the facts.” But absent legislative changes to clarify this area of the law, common law couples will remain “lovers in a dangerous time” because “breaking up is hard to do” and “you can’t always get what you want.”

Should you have any specific questions regarding your property rights in a common-law relationship, feel free to contact us.

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Top 5 Myths about Family Law disputes

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  1. Myth: Behaviour of the other person matters in a divorce hearing as to whether your divorce is granted.

Response: No. Since the June 1, 1986 amendments to the Divorce Act, the sole criterion for divorce is “marriage breakdown.” Divorces are now described as “no fault” in Canada.

  1. Myth: If I do not consult a lawyer and do not respond to legal papers for long enough, the problems will go away.

Response:  False. I often use the analogy that legal issues are like your car. When your change oil light comes on, you can choose to immediately take your car to the shop to get an oil change. Better yet, you may wish to schedule regular maintenance. If you do so, the costs are usually less and the issues are easier to manage. If you disregard your car’s oil change light for too long (I may have some experience in this department), it will likely cause issues with the transmission  and you will end up costing yourself far more time and money. Similarly, legal issues (especially family law issues), never go away. If you owe child support today, you will end up owing more later.

  1. Myth: If I embarrass my (soon to be) former spouse, I can get more out of the divorce.

Response: False. Remember my post here on a case in Ontario, where the judge blasted a couple for spending $500,000 combined fighting with each other about custody issues. Think about that for a moment. $500,000! These were not extremely wealthy people. I believe one was a police officer. This kind of fighting and embarrassment did no one any good.

  1. Myth: I have to go to Court to get what I want.

Response:  False. There are many options available to divorcing couples that can be more cost-efficient, rewarding and effective than court. You may choose to participate in mediation. I have seen this work extremely well and both parties walked away with their sanity and their relationships with their children were strengthened. You may choose to work with collaborative law lawyers, who can bring both parties to the table to ensure that each person’s interests are discussed and solutions are reached that reflect what each person wants out of the divorce.

  1. Myth: Whether you pay child support depends on whether you get access to a child (for the payor) and whether you grant access to the other parent depends on whether they are paying child support.

Response: False. For the most part, child support and custody and access have nothing to do with each other under the Divorce Act, the provincial legislation and the Federal Child Support Guidelines. The exception to this rule is that the amount of child support payable can change depending on whether the access parent has access to a child over 40% of the time over a year pursuant to section 9 of the Federal Child Support Guidelines. Conversely, whether someone pays child support or not should not determine whether they are granted access to their children. I know it’s hard to grant access to someone who doesn’t want to be responsible for his/her child, but you are only hurting the child when you deny access for this reason!

As always, these posts are strictly for educational/information purposes only and do not constitute legal advice. Please consult our Website Disclaimer regarding terms of use and representations. Should you have any specific questions about your situation, please contact us.

 

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