The following articles are not legal advice and should not be relied upon in place of consultation with counsel.
Should you have any questions regarding a specific matter, please contact the lawyer of your choice.
…I need a lawyer?
Most people deal with lawyers infrequently, if at all. When they do need a lawyer, they may be unsure how to proceed.
It is important to contact a lawyer immediately after becoming aware of a potential legal issue to ensure that the time limit to start a claim, issue a lawsuit or file a defence does not run out. These time limits are set out in certain laws and regulations, often referred to as “statutes of limitations.” The applicable time limit depends upon the facts and type of each case. In some circumstances, the law requires notification within an extremely short period of time. This time period could be as little as a few weeks or months, so it is important to act fast.
The process of hiring a lawyer may vary slightly between firms, but generally follows the same steps. At Daniel & Partners LLP, potential clients contact us to set up an initial consultation. The legal issue you require assistance with will determine which laywer is best suited for your consultation. Each of our lawyers’ areas of specialization are detailed in their profiles: click here. We recommend you bring all relevant documentation to the consultation.
The purpose of the initial consultation is to discuss the legal issue. The lawyer may provide a preliminary opinion, suggest possible options, and, if necessary, discuss continuing service to be performed.
We provide free consultations for personal injury claims. For other issues, the cost of a consultation varies based on the lawyer and the subject matter. Contact us to set up an appointment for a consultation.
…I’m self employed and paying child support?
Since their inception in 1997, no single piece of legislation has done more to simplify the family law landscape than the child support guidelines (or “CSG”). Now adopted at both the federal and provincial levels, the CSG allow anyone to determine what basic rate of child support they should be paying, or receiving, by simply finding the support payor’s gross income on the chart, and matching that up with the monthly support figure based on the number of eligible children. The support tables themselves are available at most courthouses or online at http://canada.justice.gc.ca/en/ps/sup/grl/Pdftab.htm.
The guidelines were written on the assumption that the support payor is a salaried employee whose income can be easily determined by looking at that person’s income tax return and using the figure shown as employment income. But, what if the support payor is self-employed, and shows either business or commission income from which expenses are deducted? What figure is used to determine that person’s gross income for child support? The answer is not always easy to come by.
Imputing Income for Child Support
Any self-employed person being asked for child support has certain disclosure requirements. This means that he or she is required, by law, to produce to their spouse any and all documentation necessary to prove the income and expenses set out in the tax return. If asked, the payor needs to be prepared to back up every deduction from income made in a given year, by producing receipts if necessary. Most of these expenses will be legitimate monies spent to earn income, and therefore should be deducted before any child support calculation is completed. However, simply because a deduction is permissible for Canada Customs and Revenue Agency (“CCRA”) purposes, does NOT mean it will necessarily be taken away from gross income for the purposes of determining child support.
Section 19(1) of the CSG states:
The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following:
(g) the spouse unreasonably deducts expenses from income:
(2) For the purposes of paragraph 1(g), the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act.
There are some deductions which are automatically disallowed for the purposes of child support.
Payments or salaries paid to non-arms length parties (such as relatives) by the payor which cannot be shown by the payor to be reasonable and necessary to earn income (CSG Schedule III, 9);
Capital cost allowance claimed by a payor spouse who owns real property (CSG Schedule III, 11);
The difference between any dividend claimed by a payor spouse from a taxable Canadian corporation on the tax return and the actual amount of the dividend received by the spouse (CSG Schedule III, 5).
All of these are added back to the support payor’s net income before child support is tabulated.
There are, however, other expenses that may be added back after an analysis by the court.
Is the Expense Reasonable?
This is the question that a court will ask itself when presented with evidence of deductions for “business” purposes, which may have a personal component added in.
While the CCRA requires the taxpayer to break down how much of their automobile use was for business versus personal use, don’t rely on a court to stop there if the percentages are not within the scope of reasonableness for your profession or if you are including fringe items such as weekly carwashes.
Another questionable expense is the home office, especially where the payor has an office for which he or she is paying rent elsewhere. These expenses may be added back in to the payor’s income.
Travel expenses, gifts, meals, club memberships and bartered services are also popular areas for courts to impute income, if warranted by the evidence presented. Even depreciation of office or farm equipment is not immune from imputation in the right circumstances.
Once the amount of “add backs” has been tallied, there is the taxation question. Since the guidelines assume that the salaried employee on which they are based will pay the usual taxes on their gross incomes, an adjustment needs to be made to the “add back” figure to account for its non-taxed status. This figure can be significant.
Determining Child Support
Now that you have made all the adjustments to a self employed payor’s income, child support can be determined by applying the table amounts as described above. Remember, as well, that additional amounts can be payable if a child meets any of the criteria in section 7 of the CSG, which allows for a division between the parents of such items as work related daycare, certain extracurricular activities and health related expenses not covered by existing insurance. Consult your family law lawyer for a detailed analysis of whether any of these apply to your situation.
…I’ve been injured in a motor vehicle accident?
Seek appropriate medical treatment.
Promptly notify your own auto insurance company to apply for accident benefits. If you do not have insurance:
- you may be eligible on a policy held by someone on whom you are financially dependent;
- you may be eligible on the policy for the vehicle in which you were traveling during the accident:
- you may be eligible on the policy for the vehicle which struck you; or
- you may be eligible to claim through the Government of Ontario.
Promptly seek legal advice:
- before giving statements or consenting to insurer assessments in your home;
- to provide a notice letter against any at-fault party within 120 days of the accident;
- to protect any applicable limitation periods or notice periods;
- well before the two year limitation for claiming against an at-fault driver.
Request that Treatment Plans be completed by your treating therapists and submitted to your insurer before incurring the cost of any therapy.
Keep copies of all receipts and expenses incurred and submitted.
Ask your broker what optional (extra) benefits you had in place on your policy.
Request a copy of the Statutory Accident Benefit Schedule from your accident benefit insurer (pursuant to Section 67 of the Statutory Accident Benefit Schedule).
Request a copy of all documents contained in your accident benefit file.
Circumstances are unique in every case and we recommend that you seek legal advice to inquire about your particular situation. Our office is pleased to provide a free initial consultation to all accident victims.
What is the difference between a tort claim and an accident benefits claim?
When involved in a motor vehicle accident, there are two potential claims that can arise: a tort claim and an accident benefits claim.
For most accidents occurring after September 1, 2010
(Law suit against party who is at fault)
- Prove Negligence (fault).
- Give notice of claim 120 days after accident.
- Issue lawsuit within 2 years.
- No claims for health care (unless qualify for permanent & serious disfigurement impairment threshold).
- Can sue for proven pecuniary losses (out-of-pocket).
- Before trial, 80% of income loss less accident benefits usually = 0.
- Future Income Loss & Less of Competitive Advantage.
- Sue for pain and suffering less a $30,000 deductible (if under $100,000) if:
- (a) death; or
- (b) permanent serious disfigurement and/or permanent serious impairment of an important physical, mental or psychological function pursuant to the Statutory definition
- Family Law Act Claims
$15,000 deductible (if under $50,000)
(Application for benefits with your own insurer)
- Apply for benefits.
- Submit Treatment Plans and expenses to insurer in writing (even if they say not covered).
- Mediate and sue/arbitrate within 2 years of a refusal by insurer to pay any benefit.
- Medical and rehabilitation expenses covered up to 10 years, up to $50,000 (if reasonable/necessary). But insurers reduce limits to $3,500 if they classify you as a minor injury.
- 70% of gross income loss according to formula up to 2 years (then test changes).
- Other expenses – lost education expenses, damage to clothing, expenses of visitors to hospital, cost of assessments.If your broker sold you optional extra coverage, you may have additional benefits, such as:
- attendant care
- caregiving benefits
- housekeeping benefits
- additional income benefits
*Settlement of accident benefits can prejudice the tort “At Fault” claims.
…I’ve been in a “slip and fall” accident?
- Seek appropriate medical attention.
- Promptly seek legal advice to protect any applicable notice or limitation periods.
- Seek assistance to promptly photograph the area of the fall; take both close-up and distance photographs.
- Photograph the footwear you were wearing during the accident, and photograph your own injuries and bruising.
- Advise counsel of your OHIP number, as OHIP has a subrogated claim.
- Collect the addresses and telephone numbers of any potential witnesses.
- Keep copies of all receipts and expenses.
Circumstances are unique in every case and we recommend that you seek legal advice to inquire about your particular situation. Our office is pleased to provide a free initial consultation to all accident victims.
…I’m buying or selling a home?
The most common question asked by someone purchasing a new home is, When can I get my keys? The answer to this question depends on a number of factors.
The closing time of your purchase will be affected by how early in the day your mortgage provider has the funds available. Once your lawyer receives your mortgage funds, the closing cheques must be certified and delivered to the vendor’s lawyer.
Your lawyer then waits for the vendor’s lawyer to release the electronic Deed. Then a search is conducted to make sure no documents have been registered against the property since the title search was performed. Also, a check is done with the Sheriff’s Office to make sure there are no writs against the vendor.
Finally, your Deed can be registered. At this time, the keys are released to you. The deadline for electronic Deed registrations is 5:00 p.m. As you can see, your lawyer only has control over some of these factors.
If you have a firm offer to sell your current property, you can apply to your bank for bridge financing and close your purchase a few days before closing your sale. Your lawyer can provide written assurance to your bank that the funds will be repaid when your sale closes. Bridge financing is an effective way to avoid moving day schedule conflicts and tension.
Choosing a lawyer to represent you when selling your home is an important decision. If you have a mortgage registered against your home, the purchaser’s lawyer will require a written undertaking from your lawyer to pay off the mortgage from the closing funds, and obtain and register a discharge from the bank.
Electronic registration of deeds and mortgages is now mandatory in the Niagara Region. The conversion of properties to the electronic system has brought to light many technical deficiencies in property title.
A conscientious lawyer will conduct searches prior to closing to bring to light any deficiencies, and will take steps to remedy them in a timely manner. This ensures that the closing will proceed as scheduled, and that your sale funds will be available when you need them.
On closing day, your funds will be released once the electronic Deed to the purchasers has been registered. The time of day that this happens depends almost entirely upon when the purchaser’s lawyer is ready to close the transaction. The purchasers will have to obtain their mortgage funds, and in some cases will have to close the sale of their home first. The deadline for electronic Deed registrations is 5:00 p.m.
…a family member has died?
Losing a family member or a close friend is traumatic. Along with the emotional upheaval, you may find yourself responsible for the financial and legal matters which need to be attended to.
The checklist below will help you through this process. Some of these duties may not apply in your particular situation, but it will keep you from overlooking something important.
- Locate the will, codicils and memorandums and review them to determine instructions re burial, executor, etc.. Most wills are held in a fireproof vault in the lawyer’s office where they were prepared. The lawyer can provide you with notarial copies, but the original Will should be kept in the vault in case you have to apply for probate.
- Arrange organ donation, funeral, burial and memorial. The deceased’s bank will issue a cheque for funeral expenses if there are enough funds in the deceased’s account, once you provide them with a death certificate and the funeral account.
- Take care of heat, lights, water taps and locking of residence.
- If you are the executor of the will, bring the following documents and information to your initial interview with the lawyer you are retaining to settle the estate:
- Death certificate, birth certificate, marriage certificate, marriage contract;
- Funeral account;
- Social Insurance card, Health card, credit cards, membership cards;
- Copies of recent income tax returns;
- Bank books/statements, records of GICs, RRSPs etc.;
- Safety Deposit Box keys;
- Shares, stocks and bond certificates;
- Life insurance policies and annuities;
- Employee benefit plans and pensions, retirement plans;
- House and car insurance policies;
- Drivers Licence and Vehicle Permits;
- Deeds, Mortgages etc. for property owned;
- Uncashed cheques and accounts receivable;
- Unpaid bills and liabilities;
- Records of Canada Pension, Old Age Security or Veterans Benefits;
- Full names, addresses, occupations and birthdates of: Surviving Spouse and Children, Executor and Beneficiaries;
- Comprehensive list of assets and their value at date of death.
- Advise your lawyer if you will be seeking executor’s compensation. The court allows the executor approximately 5% of the estate value as a fee for providing the services of executor. This must be reported on your personal income tax return as income. Inheritances under a will are not considered taxable income in Canada.
- Discuss an estate settlement plan with your lawyer and determine if the will needs to be probated. Any property or financial assets held jointly will usually pass to the survivor without the necessity of probate. Property and assets held in the name of the deceased alone will likely require probate to be dealt with, depending on the requirements of the bank involved. Probate fees are 0.5% on the first $50,000.00 of estate assets, and 1.0% on the remainder. The lawyer’s fee tariff allowed by the court for estates is 3% on the first $10,000.00, 2% on the next $90,000.00 and 1.5% on the remainder.
- Notify the parties below of the death; make arrangements as needed:
- Mail (decide where to redirect – executor’s address; lawyer’s address?).
- Deeds and Mortgages or Leases/Rental Agreements – arrange for appraisal of property owned as of date of death; advise tenants where to send cheques.
- Property tax bills and Property Insurance (vacancy permit required?).
- Water, Hydro, Gas, Cable TV, Telephone, Newspaper Delivery.
- Vehicle Permits and Driver’s License, Auto Insurance (if leased vehicle, cancel lease and get refund of deposit).
- Bank Accounts and Safety Deposit Boxes (locate keys) – if joint, the survivor automatically becomes the owner – deal with pre-authorized withdrawals or post-dated cheques.
- Life Insurance policies and Annuities (if there is a named beneficiary, proceeds are payable directly to the beneficiary rather than the estate).
- Old Age Security/CPP Benefits – deposit cheque for month of death; others must be returned. Apply for CPP death benefit and/or survivor’s benefits for spouse.
- OHIP (Health Card), passports, S.I.N. card, GST, Child Tax Benefit
- Other Health Insurance (ie. Blue Cross).
- Lodges, Societies, Clubs, Alumnae Associations and Unions.
- Credit Cards and other Creditors (notify spouse if joint account).
- Department of Veterans Affairs.
- Have an accountant prepare and file T1 income tax return from January 1 to the date of death – must be filed within 6 months of death or by April 30 of the following year – include income prior to death, capital gains, annuities, rents, dividends, business/partnership income, income from testamentary trust, RSP/RIF/Pension income, interest earned, profit sharing, medical and charitable donation credits, etc. – provide Notice of Assessment to lawyer when received.
- Have accountant prepare and file T3 return each year estate is ongoing (attach notarial copy of Will or probate) – claim CPP death benefit, interest earned, income from annuities, any other income of estate – provide Notice of Assessment to lawyer when received.
- Once the assets have all been transferred or liquidated, your lawyer can assist you with paying the legacies in the Will, and making an interim distribution to the beneficiaries (they will need to sign Release forms to protect you as executor). In consultation with the accountant, you should determine an amount to hold back for possible income taxes or expenses. This money should not be released until all Notices of Assessment and a Clearance Certificate from Revenue Canada have been received. At this time, the beneficiaries should sign a Final Release before receiving their final distribution under the will.
…I don’t have a will or power of attorney?
A question often asked is whether one has the capacity to make a valid will or power of attorney.
“Capacity”, as discussed in this article, includes both the minimum age and mental capacity required to make a will or power of attorney. The onus lies on those seeking to act under a will or power of attorney to prove the capacity of its maker.
Section 8 of the Succession Law Reform Act (Ontario) provides, in part, that a will made by a person who is under the age of eighteen years is not valid unless, at the time of making the will, the person is or has been married, is contemplating marriage and the will states that it is made in contemplation of marriage to a named person (except that such a will is not valid unless and until the marriage to the named person takes place), is a member of a regular force or placed on active service with the Canadian Forces under the National Defence Act (Canada) or is a sailor and at sea or in the course of a voyage. Thus, in most cases, a person who is under the age of eighteen years cannot make a valid will in Ontario.
Parts I and II of the Substitute Decisions Act, 1992 (Ontario) authorize the exercise of a power of decision by one or more persons on behalf of another person. Part I pertains to decisions in the management of one’s property, whereas Part II pertains to decisions concerning one’s personal care. They provide for the granting of a power of attorney authorizing the person(s) named as attorney(s) to make, on the grantor’s behalf, these types of decisions.
Part I applies to decisions on behalf of persons who are at least eighteen years old. Thus, a person who is under the age of eighteen years cannot make a valid power of attorney for property in Ontario. Similarly, Part II applies to decisions on behalf of persons who are at least sixteen years old. Thus, a person who is under the age of sixteen years cannot make a valid power of attorney for personal care in Ontario.
As noted, a person seeking to act under a will or power of attorney must also prove the mental capacity of its maker. The case law provides that, to make a valid will, one must understand the nature of the act and its effects, the extent of the property of which he or she is disposing and the claims to which he or she ought to give effect. As well, one must not be influenced by any insane delusion which might bring about a disposal of one’s property which, if his or her mind had been sound, would not have been made.
Section 8 of the Substitute Decisions Act, 1992 (Ontario) provides, in part, that a person is capable of giving a power of attorney for property if he or she knows what kind of property he or she has and its approximate value, is aware of the obligations owed to his or her dependants, knows that the attorney will be able to do on his or her behalf anything in respect of property that he or she could do if capable, except make a will (subject to any conditions and/or restrictions set out in the power of attorney), knows that the attorney must account for the attorney’s dealings with his or her property, knows that he or she may, if capable, revoke the power of attorney, appreciates that unless the attorney manages the property prudently its value may decline and appreciates the possibility that the attorney could misuse the authority given to the attorney.
Section 47 of the Substitute Decisions Act, 1992 (Ontario) provides, in part, that a person is capable of giving a power of attorney for personal care if he or she has the ability to understand whether the proposed attorney has a genuine concern for his or her welfare and appreciates that he or she may need to have the proposed attorney make decisions for him or her.
Thus, one’s mental capacity to make a valid will or power of attorney will be a question of fact in each case. References to the facts of similar cases will, in this area of law, be unhelpful.
Finally, I note that, in some circumstances, although a person may have the capacity to make a valid will or power of attorney, the will or power of attorney may not represent the expression of his or her free will. Thus, in my next article, I will discuss the concept of undue influence and its effect on one’s ability, as opposed to capacity, to make a valid will or power of attorney.
…I want to minimize estate settlement costs?
The main costs when settling an estate are probate fees and legal fees. Probate fees are 0.5% on the first $50,000.00 of estate assets, and 1.0% on the remainder. The lawyer’s fee tariff allowed by the court for estates is 3% on the first $10,000.00, 2% on the next $90,000.00 and 1.5% on the remainder.
Property and assets held in the name of the deceased alone usually require the Will to be probated in order to deal with them. Assets held jointly are not subject to probate.
You can minimize these costs by planning ahead to avoid the necessity of your Will being probated.
- If you and your spouse hold property as joint tenants, the property will pass to the surviving spouse without the need of probating your Will.
- If your spouse is deceased, you can hold property as joint tenants with one or more of your children and sign a trust agreement to protect the interests of other heirs.
- Joint bank accounts or GIC’s with right of survivorship will pass to the survivor upon presentation of a death certificate. Life insurance is paid directly to a named beneficiary.
- The year in which you turn 69 is the last year that you can contribute to your RRSPs. By the end of the year you turn 69, you have to choose to withdraw funds, transfer them to a RRIF or purchase an annuity. There are significant tax consequences to consider, and your financial consultant can instruct you on how to take advantage of marginal tax rates where possible. Speak to your financial consultant or accountant in this regard. Upon the death of the surviving spouse, all funds in RRSP or RRIF are brought into income for the year of death, resulting in taxation at a high rate.
- If you register stocks in the name of yourself and your beneficiary(ies) “or the survivor”, they can be easily dealt with after your death without probate.