JOINT OWNERSHIP WITH CHILDREN

A Simple Solution to Avoid Probate?

“Probate” is a court application to confirm the validity of a Will. It is an increasingly complex process, and requires payment of a probate tax. For many couples, probate can be avoided on the first spouse’s death by joint ownership. Not surprisingly, after the first spouse dies, the family may assume that joint ownership with the children is appropriate to avoid probate. This may or may not be the case.

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Changes to the Friends and Family & Accredited Investor Exemptions

Subject to certain requirements, private companies can sell shares to friends and family and “accredited investors” without issuing a prospectus or hiring a registered securities dealer. These exemptions have been amended to require that companies take “reasonable steps” to confirm that investors meet the requirements of the exemption. Companies may no longer simply rely on the representations of the investor. In addition, accredited investors must sign a new Risk Acknowledgment Form.

Honesty Isn’t Just the Best Policy…It’s the Law

In a unanimous decision, the Supreme Court of Canada ruled that parties to a contract have a duty to act honestly in the performance of their obligations. The Court noted that this “means simply that parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract”. On the other hand, the Court also noted that the duty of honesty “does not impose a duty of loyalty or of disclosure or require a party to forego advantages flowing from the contract; it is a simple requirement not to lie or mislead the other party about one’s contractual performance”.

ESTATE LAW CONSIDERATIONS

Executors Proceed Cautiously

We last wrote to you about changes to BC Wills laws. Changes to our laws for processing Estates have also been made. The estate law overhaul doesn’t particularly require any action on your parts. A brief review of our take on today’s handling of estates follows…..

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PROPERTY TRANSFER TAX – FIRST TIME HOME BUYERS’ PROGRAM

Property Transfer Tax is a provincial tax on the transfer of real estate. It is payable at 1% of the first $200,000 of the fair market value, and 2% on the amount over $200,000. The 2003 provincial budget included changes to the First Time Home Buyers’ Program, which provides a tax exemption from Property Transfer Tax for individuals buying their first home. Buyers who meet the following conditions will be eligible for the exemption.

The Buyer:

– must be a Canadian citizen or permanent resident who has:

– lived in BC for one full year prior to the purchase, or

– filed two income tax returns as a BC resident within the last six years.

If the buyer is not a Canadian citizen or permanent resident at closing, but becomes one within one year of closing, the buyer can apply for a refund of the tax.

– must have never owned an interest in a principal residence anywhere in the world at any time.

– must occupy the property as their principal residence within 92 days of the date the property is registered in the buyer’s name, and must continue to reside in the property for the first year of ownership. If the buyer moves out prior to the one year anniversary,  some or all of the tax may have to be re-paid

If the property is vacant land, the buyer must build and move into the home within one year of the date the property is registered in the buyer’s name, and must continue to reside in the property for the first year of ownership.

The Property:

– value must not exceed $475,000. A proportional exemption is available for properties that have a value of up to $25,000 above this threshold (ie. up to $500,000).

– in the case of vacant land, the value of the land plus the total construction costs must not exceed the amounts stated above.

– must be classified as residential. If some of the buildings on the property are not classified as residential, only a partial exemption is available.

– must not exceed 0.5 hectares (1.24 acres) in size. If it does, a partial exemption is available.

If you have any questions about the First Time Home Buyers’ Program, please call us.

WILLS LAWS OVERHAULED

Changes May Affect You

This past March, British Columbia implemented major changes to its wills and estates laws. The new Wills Estates and Succession Act (“WESA”) consolidates four older acts, and modernizes the law regarding Wills and the administration of estates for BC residents. These changes may seem, on first blush, to be of little interest. But they are substantial, and we are sending this newsletter to our clients to let you know that we are concerned that some of you may need to update your Wills……

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PREPARE WISELY: SELLING YOUR BUSINESS

 Make the right deal to ensure a secure retirement

Jeffrey owned a business that manufactured electronic navigation components sold around the world. He started the business at the same time that he and his wife Marilyn were starting their family. They had hoped that one or both of their children might be able to take over the business some day, but their children’s own families and careers took them elsewhere…

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MAKING YOUR MORTGAGE PAY OFF

Is it the right choice for you?

Jane was retiring! To prepare, she attended a retirement seminar and noted she’d need a new Will. She’d heard about Beacon Law’s Estate Planning Navigator program, so she made an appointment to see her lawyer, Lianne. She’d ensured she’d be looked after in her old age, and would provide for her beneficiaries when she passed on, but during the Navigator review, Lianne and Jane noticed one more thing that it would be wise to look into….

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LIFE CYCLE OF A BUSINESS

Geoff and Amanda, a married couple, found a business that they really wanted to buy.

However, they knew that without legal advice they could inherit some of the existing business owner’s debts. They had also heard horror stories about business owners who had trouble getting financing because their corporate records were not properly created and maintained. Having heard about Beacon Law’s Business Start-Up NavigatorTM program, and wanting things to go smoothly, they made an appointment to meet with Del….

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UPDATING YOUR WILL

Widower Wants A Will without Woe

A peninsula resident for 25 years, Michael Flanagan never sought a lawyer’s counsel until his nephew, Bob (a home-buyer in Raising the Bar issue 4), suggested he update his Will.

Will review overdue

With arthritic joints and hair gone white, Michael felt that his health was starting to fail. He wanted help to revise the Will not updated since before his wife, Shannon, died.

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