Wednesday, April 15, 2015

Crash victim's will made all the difference - Saanich News

When I talk to people who don't have wills and I ask them why they haven't made one yet, I get a variety of answers. The one I hear the most is that people plan to make wills "later", when they are older, or sick, or injured. They believe that they will have the opportunity to make one when their need is greater. Guess what? You don't always get the chance. The article below talks about how fortunate it was that the victim of a car crash had made a will even though he didn't anticipate needing one for a long time.

Editorial: Crash victim's will made all the difference - Saanich News

Iowa politician charged with sexual assault after sex with his wife who had Alzheimers

The National Post is carrying a story about Henry Rayhons of Iowa. Mr. Rayhons, who is 78, is charged with sexual assault after allegedly having sex with his wife while her Alzheimer's disease was so severe that she could not have consented to having sex. She lived in a long-term care facility and the event allegedly happened in her room there.

This is a tricky situation, legally speaking. Obviously nobody should have sex without having given consent to it. The questions are more complicated than that. Assuming that a sexual act took place, was Mrs. Rayhons able to consent? Did she know he was her husband (the facts given in the article would suggest that she probably did not)? Does the fact that she had Alzheimer's mean that she can never give consent, on any occasion? Who should decide these things? If she had a Health Care Directive in place, does that person have the right to give or withhold consent?

If you held a Health Care Directive for your parents, how would you feel about making this decision?

Obviously this is a collision between freedom of choice and legal capacity. Any decision made by the courts won't be an easy one, and it will have far-reaching effects. Given the changing demographics and an aging population, this is an issue that will concern tens of thousands of people. It's an American story, but the issue is just as relevant here in Canada.

Click here to read more about this case at www.news.nationalpost.com. I'll be watching for the decision in this case with great interest.

The attached photo of Henry Rayhons appeared in the National Post article, and is credited to Daniel Acker/Bloomberg.

Tuesday, April 14, 2015

Uh oh. I didn't file estate tax returns. Now what?

There's nothing like realizing six years after you think an estate is finished that you really should have filed tax returns. Many of us might panic at the thought of bringing the wrath of Canada Revenue Agency down on our heads! A reader recently wrote to me about this situation. Her letter and my response follow:

"I am in a pickle. My husband died 6 years ago without a will. I went to a lawyer who dealt with life insurance, selling the house, dealing with the public trustee, etc. What he didn't do is file the estate taxes. Neither did I. Now I cashed out an RRSP and got a T4RSP for 2009 estate, which I need to pay tax on. How much trouble am I in to file 6 years late? What do I do?"

This is fixable. You need to go to an accountant as soon as possible. Take all of the estate documents with you, as well as any paperwork relating to any estate assets over the last six years, and your own tax information (copies of returns, Notices of Assessment, etc). Ask the accountant to file all of the returns that have not yet been done. You didn't say whether your husband's last return was filed, but if not, that should be done too. Your own return might have to be amended.

You said your husband didn't leave a will, but you did refer to selling real estate, so I assume that you were appointed by the court as administrator of the estate. If so, you can authorize Canada Revenue Agency to release estate information to the accountant so that he/she can check on whether your husband's last return was filed.

There will be penalties and interest on the amount due, because of the late filing. The Canada Revenue Agency webpage has details as to how much those will be. The sooner you get these returns done, the less you will have to pay in penalties and interest. It's also possible to have penalties and interest waived under certain circumstances. Your accountant should be able to tell  you more about that.

There is no reason that the lawyer would have filed the tax returns for the estate. Lawyers are not accountants and should never file tax returns on behalf of a client. Ever. The lawyer's responsibility was to advise you of the requirement to file returns as part of the duties of an executor or administrator. I frequently noticed with my own clients that there is so much information coming from the lawyer at the beginning of an estate that it's overwhelming. Often, telling a client that later on he or she will have to file tax returns gets lost in the avalanche of information. Giving that advice to the client in writing is much more useful to the client. If you check back over your information received from the lawyer, you should (hopefully) find a letter in which the lawyer advised you about the need for filing tax returns.

Since I'm not an accountant, I can't and won't give information that is very detailed. If any accountants are reading this and have additional information or ideas for this reader, please feel free to add a comment.

Thursday, April 9, 2015

Executor and Trustee Compensation

Toronto lawyer Ian Hull, who blogs at http://estatelaw.hullandhull.com, has recently posted about executor compensation in Ontario. The article is really helpful to executors and beneficiaries alike who are wondering how to calculate an executor's compensation. Click here to read Mr. Hull's article. Note: the laws quoted in this article apply only to Ontario.

Tuesday, April 7, 2015

Robin Williams' family uses mediation to resolve estate dispute

If you learn that there is a dispute brewing over an estate, do you assume that it's about money? Many estate disputes are actually about personal items because of the sentimental value of those items. This kind of conflict can be even more intense and upsetting than those caused by money.

A dispute has broken out over personal and household items in the estate of the late Robin Williams. His children and his widow disagree about who should have specific items such as Mr. Williams' watches. Though it's always sad when a family argues about estate matters, I am glad that the family has chosen to go to mediation. The mediation process involves all parties sitting down together with a mediator to talk and attempt to resolve their differences without having to resort to a lawsuit. I wish more families would choose to use mediation in estate matters, as it is faster and cheaper than a court fight, and preserves the family relationships.

To learn more about the Williams estate and why the family is using mediation, click here to read a story from www.people.com.

The attached photo of Robin Williams accompanied the article in www.people.com and is credited to Reed Saxon/AP.



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