Due to the nature of estate laws, it’s not as rare as one would hope for there to be predatory marriages in BC. The Wills, Estates and Succession Act specifies that any spouse must make the adequate provision for the proper maintenance and support for their spouse’s life in their will. When you marry someone, you become entitled to a portion of their estate. A predatory marriage is when someone takes advantage of an incapable person by acting as a loving spouse, doing so with the intention to receive a portion of their estate. Usually, victims of a predatory marriage are elderly and have accumulated a large estate.
What a Predatory Marriage Looks Like
In a non-predatory marriage, there are typically forms of love, affection, friendship and honesty between the spouses. A predatory marriage exhibits a false sense of these traits, based upon lies where the predator is looking solely for personal gains (through their spouse’s estate). The predator is usually able to manipulate the spouse when they’re in a state of incapacity and poor cognitive abilities.
Because a predatory marriage is a form of manipulation and dishonesty, the predator typically tries to keep everything private or even secretive. They will usually plan for a secret marriage so that none of the elderly’s family members are aware of what is happening until it has already happened. In most scenarios, to an outsider looking in, it can be rather obvious when a predatory marriage has happened.
While not always the case, the predator in a predatory marriage is often the spouse’s primary caregiver. The caregiver can manipulate their dependent spouse, who may marry the predator without understanding the implications. Predators in predatory marriages are often people who have a close relationship with the incapacitated person.
Capacity to Marry
BC courts previously viewed marriage as a simple contract that almost any adult could easily understand. This meant that one did not need a high mental capacity in order to lawfully contract to marriage. Recently, the courts have taken a different approach, noting that one must have a certain degree of mental capacity to enter into a marriage. There is a presumption that after marriage, both spouses had the capacity to marry at the time of the marriage. The burden of proof is on the person claiming mental incapacity in a court case.
The courts may apply the following test to determine capacity to marry:
Do you understand who you are marrying?
Do you understand the nature and consequences of the marriage?
If the court finds that one spouse lacked the capacity to contract into marriage, they void the marriage. This means the courts consider the marriage to legally have never happened.
BC Courts Confirm Marriages Can Be Ruled Void
The recent BC case of Devore-Thompson v. Poulain (2017) demonstrates an instance where the courts will rule a marriage void ab initio. The courts identified that the capacity to marry has a lower threshold than for managing one’s own affairs, making a will or instructing counsel. Further, “the authorities suggest that the capacity to marry must involve some understanding of with whom a person wants to live and some understanding that it will have an effect on one’s future in that it will be an exclusive mutually supportive relationship until death or divorce.” This established the test for mental capacity to marry.
The victim in this predatory marriage had Alzheimer’s disease and was rapidly deteriorating in terms of their mental health. She had entered into a predatory marriage with a mere stranger after he manipulated her into a false relationship. It was determined that the victim was likely unaware of the wedding and was prompted throughout the process to do what she was told. The courts ruled that she was not able to form a lifetime commitment to this person nor did she have a grip on reality. Due to her dementia, the court determined she lacked the necessary understanding of marriage, and voided the marriage.
The Legal Test for Capacity
The test for mental capacity is an important test in most estate-related matters. The test is commonly used for determining if the will-writer has testamentary capacity in order to create a valid will; however, this case shows that mental capacity must be present at the time of marriage as well. In order to have the capacity to marry, you must understand the effect it will have on your future and understand whom you’re marrying. Although this threshold is lower than for most other contracts, you must meet it to marry lawfully.
If you’re suspicious that a loved one might be unknowingly entering into a predatory marriage, contact an experienced estate lawyer today. We can help to ensure that your loved one’s estate is distributed exactly as they’re intending, without any undue influence affecting their judgement.
Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.
The BC government first introduced the BC Speculation and Vacancy tax in 2018 to incentivize homeowners to occupy their vacant properties. The tax also aims to generate revenue for housing initiatives, ultimately creating a more affordable housing market. Recently, the province has introduced legislation to expand the tax to more communities in BC. Most BC residents are subject to an exemption from the tax. In this article, we’ll discuss the various exemptions available for homeowners and how the declaration process works.
What is the Tax?
The Speculation and Vacancy Tax aims to reduce the number of residential properties that sit vacant. In British Columbia, institutional and foreign investors in real estate have gained a reputation for leaving properties empty. Until recently, the Speculation tax only applied to residential properties in the following areas:
Capital Regional District (CRD)
Metro Vancouver Regional District
City of Abbotsford
District of Mission
City of Chilliwack
City of Kelowna
City of West Kelowna
City of Nanaimo
District of Lantzville
As of 2024, property owners in the following areas also have reporting obligations:
Vernon, Coldstream;
Penticton, Summerland;
Lake Country, Peachland;
Courtenay, Comox, Cumberland;
Parksville, Qualicum Beach;
Salmon Arm; and
Kamloops
Responsibilities of Homeowners
If you own property in any of the areas listed above, you must submit a yearly declaration form. The form tells the government about where you live and how you use your property or properties. The BC government sends a letter to those subject to the tax to ensure people are aware of their responsibilities. Homeowners in applicable areas must fill out the declaration each year, even if they are exempt from the tax.
The Yearly Declaration Form
Residential property owners in the newly affected areas will have submitted their first annual declaration form in January 2025. The form will report on the property’s use in 2024. When you receive your declaration letter, it will include a letter ID and a declaration code. You can use this information to quickly submit a declaration online. You can also submit your declaration over the phone.
Exceptions to the Speculation and Vacancy Tax
Most BC residents are exempt from the tax, which aims to deter a specific type of property investment which reduces available housing stock. In this section, we’ll discuss the details of the available exemptions to individuals.
Entities Which Are Always Exempt
Properties owned by the following groups and organizations aren’t subject to the tax and do not need to submit an annual declaration form:
An Indigenous Nation or a corporation owned by an Indigenous Nation
Registered charities
Housing co-ops
Certain not-for-profit organizations
Municipalities, regional districts, governments and other public bodies
Corporation owned by municipalities or regional districts
Corporations incorporated or continued through an enactment (“crown corporations”)
Corporations designated as “agents of government” by legislation, and their wholly owned subsidiaries
Further, properties with an assessed value under $150,000, or unstratified apartment buildings with four or more units are excluded from the tax.
Exemptions for Individuals
On the annual declaration form, you must claim the exemptions relevant to you only. Different exemptions can apply to different owners, even of the same property. The Provincial government has provided the following example of how individuals with shared ownership should report their exemptions:
“If a parent co-owns a home with their adult child and the adult child lives in the home and the parent lives elsewhere, then the following exemptions may apply:
The child claims the principal residence exemption
The parents claim the tenancy exemption for family or other non-arm’s length persons”
Principal Residence Exemptions
In a nutshell, the principal resident exemption means that your home won’t be subject to the tax. However, there are a number of reasons that individuals may not live in their principal residence for extended periods of time throughout the year. There are detailed exemptions which homeowners can claim, depending on the circumstances. Owners of a property can be exempt, even if they are not living in the property full time, if:
A person with a disability designated under the Canada Pension Plan, Employment and Assistance for Persons with Disabilities Act, or the federal Disability Tax Credit under the Income Tax Act lives in the property as their principal residence.
An owner or owners are temporarily living away from the residence for medical or work reasons.
The owner is a member of the Canadian Armed Forces and is living away from the residence due to military service requirements.
An owner is living in a residential care facility and their spouse still resides on the property.
Previous Principal Residence Exemptions
If you have moved out of a property that was your principal residence, you may still be able to claim the exemption if:
You lived in the residence before moving out of province, and were unable to tenant or sell the home before the end of the year.
You lived in the residence before moving into a residential care facility. This exemption can apply for up to two years.
You are living away from the home for medical reasons, for up to two years.
You moved out of the property because it became uninhabitable as a result of a disaster or hazard.
You have temporarily moved to a secondary residence to be closer to medical treatment.
You and your spouse have separated or divorced in the same calendar year, and one spouse has moved out of the residence.
Tax Exemptions and Estate Planning
There are also a number of exemptions relating to the death of a homeowner and the estate’s tax liabilities if the house is held on trust after their passing. If a homeowner dies, their estate and any other living owners on title are exempt from the vacancy tax for that year, and the year immediately following. This eases the burden on estate administrators who may be stuck waiting for probate to be able to distribute the property to its beneficiary.
Further, if the property is held in a trust created in the owner’s will for the benefit of a minor, the property is exempt until the beneficiary turns 19. This means that a property can be vacant without being subject to the tax, so long as all beneficial owners of the property are minors. If the beneficiary of the trust is a charity, the property held on trust will also be exempt.
Reminders for Homeowners
It can be challenging to navigate exemptions for this tax, particularly if you are living in an area that is only subject to the tax for the first time this year. If you’re unsure of how the tax will impact you, your investments or estate plan, contact an experienced lawyer today.
For more information, you can find the full list of exemptions for individuals here.
Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.
Updating your will is very important after major life events like marriage or divorce. These changes usually impact your estate planning goals, and failing to update your will can lead to unintended consequences. When you get married, your priorities and beneficiaries often change. If you fail to revise your will, your assets might be distributed in ways that no longer reflect your wishes. This can create stress and conflict for your loved ones. By proactively updating your will, you can ensure that your estate plan aligns with your current priorities.
Does Marriage Impact the Validity of Your Will?
In the past, if a testator became married after executing their will, the marriage would automatically revoke the will. Under section 55 the Wills, Estates and Succession Act, a will is only revoked in certain circumstances. It must be clear that the testator specifically intended for the will to be revoked. This means that after your marriage, your estate plans will remain unchanged unless you make an updated will.
While leaving your will unchanged may be appropriate for some, it’s common for estate planning goals to change as your family grows. For instance, you may wish to include your spouse as a beneficiary or appoint them as an executor or trustee. By updating your will, you ensure that your estate plan aligns with your wishes and provides for your loved ones.
If you were married before WESA’s introduction in March 2014 and haven’t executed a new will, your will is still revoked under the old legislation.
Separation and Divorce
After a divorce or separation, gifts to an ex-partner in a will are automatically revoked. The remaining arrangements made in the will remain unchanged. Though this sounds convenient for those with simple estates, it remains important to update your will after a separation. Neglecting to update a will after a divorce can lead to several problems. For example, gifts may fall into intestacy if a will-writer doesn’t include a residuary clause. This may result in specific gifts going to beneficiaries who you may not have intended. For more on the rules of intestacy, see our blog post here.
In British Columbia, people who live together for two or more years in a ‘marriage-like relationship’ are considered spouses for legal purposes.
A divorce from a legal marriage is not the only consideration which may impact your estate plans. A breakup from a long-term separation may have a significant impact on your estate planning. If the relationship was considered “marriage like” under WESA, separating from your partner may have a similar effect to divorce. Couples are considered spouses if they have lived together in a marriage-like relationship for two years or more.
Updating Your Will to Reflect a Relationship Change
While it isn’t often at the top of people’s minds when entering a new relationship or separating from a long-term partner, estate planning is an important aspect of anyone’s plans for the future which must be given adequate attention.
After a Marriage
Depending on the nature of your relationship, the structure of your family and existing estate plan, the changes you might make to your estate plan after a marriage may vary, In general, the most common and important changes that people should consider after a marriage include:
Including your spouse as a beneficiary of your estate;
Updating the guardianship of your children, if applicable; and
Making revisions to your executor, trustee and power of attorney appointments.
Updating your will after marriage is crucial to ensure your wishes are respected, especially regarding appointments for a power of attorney and personal health representative. By updating your will, you can designate a trusted individual, usually your new partner, to make decisions on your behalf if you lose the capacity to do so.
Mutual and Mirror Wills For Married Couples
Spouses usually share a majority of their estate’s assets, and want to work together in their estate planning. Couples can create a mutual will or mirror wills to handle their estate in a way they both agree upon. If a couple decides to create a will jointly through either of these methods, it’s important to consider which one best suits your life, family, and estate planning goals.
A mutual will is a single will, created between two people. Will writers should be aware that you cannot change mutual wills after one of the spouses passes away. In some cases, one spouse goes on to remarry after the death of their spouse. If there is a mutual will in place, the spouse cannot go against the deceased’s wishes and change it. At first glance, this appears to be beneficial to both spouses writing the mutual will. However, it can create complications if the surviving spouse has more children after the death of their first spouse. Giving the new children an inheritance from the estate can be extremely difficult because you cannot change the mutual will.
Mirror wills are two identical wills written by a couple. This differs from a mutual will because a mirror will doesn’t prevent someone from changing their will after the death of their spouse. With a mirror will, the surviving spouse could modify their will. They could disinherit or inherit people who the predeceased spouse would not have agreed with. The surviving spouse is in full control of the entirety of the estate. Spouses with mirror wills can’t be fully certain that their partner will honour their final wishes.
After a Divorce or Separation
Under section 16 of WESA, a gift, appointment or power given in a will to a spouse is automatically revoked upon divorce unless the will expresses a contrary intention. This means that, unless you explicitly state otherwise, any assets left to an ex-spouse in your will are to be disposed of according to the laws of intestacy or a residue clause as if the partner predeceased you.
Although gifts in a will to your former partner are automatically revoked, it’s important to ensure that your precise testamentary wishes are reflected in your estate plan. For this reason, we recommend that people revisit their entire estate plan and reassess their estate planning goals after a separation. Similarly to those revisiting their estate plan after a marriage, those making changes after a separation should consider making revisions to the following at a minimum:
Beneficiaries of their estate;
Guardianship and custodial arrangements for their children, if applicable; and
Appointments of executors, trustees, powers of attorney and personal representatives.
If you had previously appointed a partner as your power of attorney, for example, and then divorce without updating your will before you die, you will not have a power of attorney prepared should you unexpectedly lose capacity.
How to Legally Change a Will in British Columbia
It is not complicated to execute a new will in British Columbia. Under WESA, when a testator creates a new will, any previous versions of their will are automatically revoked. However, it may be a good idea to inform your loved ones that you have created a new will to avoid confusion. If you are only making very minor revisions to your will, you may opt to use a codicil. This is a document that is attached to your will to make simple amendments to provisions within the existing document. It is usually advisable to create an entirely new will after a marriage due to the nature of the change in your succession plan which often results from marriage. A codicil is not an appropriate tool to amend an existing will if, for example, a couple chooses to have mutual or mirror wills or make arrangements for jointly owned property.
Reminders for Will Writers
Updating your will after marriage or divorce is important, and shouldn’t be overlooked despite the automatic protections under WESA. By making regular updates to your estate plan, you can ensure your wishes are clear and enforceable. This helps protect your assets and provides clarity for your loved ones. Whether it’s appointing a new power of attorney, updating beneficiaries, or making other changes, taking these steps now can prevent future disputes and simplify the probate and asset distribution process for your loved ones It can also ensure that, should you lose capacity unexpectedly, a trusted power of attorney or health representative is able to step in right away without waiting for a court appointment.
Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.
Testamentary capacity describes the mental ability required to create a valid will. When individuals draft their wills, they must be of sound mind and capable of understanding the implications of their decisions. This is crucial in estate planning. It ensures that wills accurately reflect the testator’s wishes and mitigate risk of estate litigation.
Assessing capacity can be complex. The courts can be willing to find testamentary capacity in some cases where a person isn’t able to, for example, make financial decisions for themselves. Because wills drafted by a person lacking capacity are invalid, will writers and their beneficiaries should recognize the signs of lack of capacity.
What is Testamentary Capacity?
Testamentary capacity is the legal standard for having the mental ability to make or change a will. When someone drafts their will, they must meet specific criteria to ensure its validity. To have testamentary capacity, a will writer must have an understanding of the following.
Nature of a Will
The testator (the person making the will) must understand the purpose and effect of creating a will.
They should comprehend that a will outlines how their assets and property will be distributed after their passing.
Extent of Their Property
The testator needs to be aware of the nature and extent of their property.
They must understand the extent of the assets which beneficiaries stand to inherit from the estate.
This includes knowing what assets they own, such as real estate, bank accounts, investments, and personal belongings.
Beneficiaries and Relationships
The testator must recognize the people who stand to inherit from the will.
Understanding family relationships and friendships relevant to the will is crucial.
They must understand the nature of disputes which may arise, particularly from those left out of the will.
Coherent Planning
Testamentary capacity requires a will writer to understand these issues, and use that understanding to create a coherent estate plan. When the courts have reason to believe that a person didn’t have testamentary capacity, they can invalidate a will or reverse gift transfers.
The Importance of Testamentary Capacity for Will Writers
The general aim of the Wills, Estates and Succession Act and the BC courts that enforce it is to give effect to genuine, valid wills that reflect the will writer’s testamentary intentions. For this reason, the courts are empowered to cure deficiencies in invalid wills to ensure its writer’s wishes are respected. However, the courts can also invalidate a will that was written by someone lacking testamentary capacity for the same reasons. If you write a will without having the testamentary capacity to do so, it may not reflect your genuine testamentary intentions and may not be upheld.
Ensuring Your Will is Valid and Enforceable
To be valid in British Columbia, a will must be in writing, signed by the testator and by two witnesses. However, wills which meet these formal requirements can still be considered invalid if they were written by testators lacking testamentary capacity.
To ensure that the administration of your estate aligns with your wishes, it’s important to keep your will updated while you maintain testamentary capacity. Further, a robust estate plan should include plans for who will manage your legal, financial, healthcare and lifestyle decisions in the case that you lose capacity unexpectedly. Remember, you can lose testamentary capacity unexpectedly at any time due to serious injury or illness.
Mitigating Risk of Estate Litigation
It is not uncommon for estate litigation to arise when a beneficiary or interested party has suspicions that the will writer lacked testamentary capacity when they executed their will. A common example of this type of wills variation challenge happens when a will writer, lacking testamentary capacity, creates changes to their will without professional assistance. This can often take the form of a handwritten codicil or notes left in their estate home prior to their death instructing changes to their existing estate plan.
When beneficiaries or interested parties (including past beneficiaries, spouses or children) have suspicions regarding the will writer’s capacity to make those changes, they can make a wills variation claim. Though the outcome of the claim may be that the most recent will from before the writer lost capacity is enforced, the process is still costly to the estate. Will writers should endeavor to prevent possible litigation arising as it can lower the overall value of their beneficiaries’ inheritances and significantly delay the administration of their estate.
It’s important to understand that loss of testamentary capacity is not always permanent. Older will writers may experience periods of testamentary incapacity due to health issues or medications they take, but can regain capacity later. Will writers should execute all updates and changes to their will with an estate lawyer, who can ensure that you have testamentary capacity and that your changes will be upheld.
The Importance of Understanding Testamentary Capacity for Beneficiaries
Beneficiaries should also understand the significance of testamentary capacity and recognize signs of incapacity for several reasons:
Protecting Their Interest in the Estate
Beneficiaries have a vested interest in the validity of a will that they stand to inherit from. Beneficiaries who recognize signs of incapacity can raise their concerns before the death of the will writer, potentially preventing future estate litigation. Further, if a will writer who lacks capacity makes inter vivos gifts of estate assets during their lifetime, beneficiaries can provide valuable evidence should a dispute arise concerning the transfers.
Challenging Invalid Wills
Beneficiaries and interested parties need to know when they can raise concerns over a will’s validity. If they have grounds to suspect the will writer lacked capacity when executing their will, they can seek legal help to raise a wills variation claim. Recognising the signs of testamentary incapacity early can help beneficiaries to protect their inheritance.
An Example From Case Law
Testamentary capacity is important to understand because the mere presence of cognitive deterioration or illness when a will was written doesn’t necessarily mean the will is invalid. The BC Supreme Court recently discussed this distinction in Nykoryak v. Anderson (2017).
The case concerned the estate of Ivan Hlynsky. His son and grandaughter, Bill and Mariya, applied for an order from the courts declaring that the most recent version of Ivan’s will was invalid due to lack of capacity. Ivan drafted a will in 2006 leaving the residue of his estate to his son Stephan, and Mariya. Ivan did not include his other children, Bill and Natalie, as beneficiaries of the estate. Before his death in 2015, Ivan created a new will excluding Mariya. He left the residue to his children Natlie and Stephan.
Bill and Mariya challenged the will on the grounds of testamentary incapacity because at the time, Ivan was experiencing cognitive decline including some memory loss and confusion. He was also having significant difficulty with his hearing.
The Court’s View
The court reviewed evidence from Ivan’s will drafting lawyer to determine if he had testamentary capacity at the time. Despite his cognitive decline, it was found that he understood:
The nature of a will;
The nature of his property disposed of in the will; and
The people who stood to benefit from the will.
Further, a medical examination from shortly after the will was executed was reviewed by the court. The examination found that Ivan was experiencing ‘fairly advanced dementive illness’. However, the examining doctor noted that, at the time, Ivan had no delusions and a good understanding of his assets, beneficiaries, and the nature of the will. Ultimately, the court found that Ivan had testamentary capacity at the time he drafted the new will. In the judgment, several cases which acknowledge that testamentary capacity can exist despite the presence of cognitive decline. The judge granted the defendant’s request and ordered that the 2015 will was valid.
Reminders for Will Writers
As the Nykoryak case and other BCSC case law demonstrates, testamentary capacity can be found even where the testator is experiencing cognitive decline. However, even where a will written by a testator with cognitive decline is found valid, the estate and beneficiaries can ultimately lose out on time and money from resulting litigation. To minimize risk of litigation, will writers should update their will frequently, and ensure to seek help from a professional who can assess and provide evidence on their capacity if necessary.
Understanding the limits of testamentary capacity in BC estate law is important for all will writers and beneficiaries. Further, planning in advance for potential future incapacity is an essential part of a robust estate plan. Remember, you can lose capacity unexpectedly at any time, particularly later in life. If you’re curious about the impact of potential capacity issues on your estate, or an estate you stand to benefit from, contact an experienced estate lawyer today.
Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.
Estate disputes are usually thought of as conflicts that arise after someone passes away. In some cases, these disputes begin while the will writer is still alive and can change their will. Pre-death litigation involves challenging a testator’s estate plan while they are still capable of making those decisions. This can happen due to concerns about their mental capacity, undue influence, or disagreements over broken promises.
Pre-death litigation is becoming more common in British Columbia as families grapple with complex estate issues. These disputes can be highly emotional and may have long-lasting impacts on both the testator and their loved ones. Understanding why pre-death litigation occurs, the legal tools available, and the potential consequences is important for those considering challenging a will.
What is Pre-Death Estate Litigation?
Pre-death litigation are challenges to wills or property transfers that arise before a testator (the person making the will) passes away. Common reasons for initiating pre-death litigation over estate assets include allegations of undue influence, concerns over the testator’s mental capacity, or disagreements about the handling of property and assets.
Will writers should ensure that the contents of their will are compliant with WESA to reduce the risk of estate litigation.
Common Causes of Pre-Death Estate Litigation
Most often, pre-death estate litigation concerns broken promises or wills created by people who lack testamentary capacity. Other issues that may prompt pre-death estate litigation are:
Committeeship orders for incapacitated testators;
Power of attorney appointments and disputes;
Advance care directives and their role in the broader estate plan;
Proprietary estoppel and broken promises in a new will.
An Example From Case Law
In Linde v Linde (2019) the BC Supreme Court ordered a father to leave his farmland to his son upon his death. The father, Kenneth, had promised his son Howard that in exchange for his years of low or unpaid work on the family farm, he would inherit the land when his father died. Kenneth and Howard had a falling out, and Kenneth changed his will, removing Howard as the beneficiary of the farm. Howard sued his father, claiming that proprietary estoppel barred him from disinheriting Howard.
The judge considered the promises Kenneth had made to Howard, the contributions Howard made to the farm, and the personal losses he suffered as a result of the broken promise. Ultimately, Kenneth was ordered to leave Howard the land in his will. However, Kenneth was given the right to live on the land and draw a modest profit from the land until his death.
Issues to Consider Before Pursuing Litigation
Contesting an estate before the death of the will writer can be a lengthy and complex process. While it is beneficial to resolve disputes early, particularly in cases of broken promises or misrepresentations, it can come with significant challenges. Litigation can strain family relationships, incur substantial legal costs, and may fail if the court is unconvinced of the claims. Alternatives like mediation, estate planning reviews, or drafting binding agreements—such as cohabitation agreements or mutual wills—can address concerns without litigation. Consulting with an experienced estate lawyer can help you determine the best path forward in your circumstances.
Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.
Almost every estate has some assets left after all the gifts have been distributed and estate expenses have been paid – this is called the residue of the estate. In some cases, the residue of the estate is the largest bequest of the will. Will-writers often name a residuary beneficiary to inherit the residue of the estate, whatever the amount may be. A frequent question that beneficiaries, executors and will-writers ask is ‘what exactly is included in an estate’s residue?’. In short, the residue of the estate is anything that is left after all estate debts/expenses/taxes have been paid and all the non-residuary beneficiaries have received their inheritances. It’s recommended that all wills include a residuary clause because there will always be some residue unless the estate is not solvent (not large enough to pay all of its debts).
How to Calculate the Estate’s Residue
While it’s impossible for a will-writer to come to an exact number for the value of the estate’s residue, they can make estimations. In general, the larger the estate is, the higher the estate administration expenses will be. Some of the most common expenses that must be paid before the residue of an estate can be distributed are:
Probate fees,
Debts owed by the estate such as credit card payments,
Taxes owed by the estate such as income tax in the month before death,
Executor’s fees,
Funeral expenses,
Legal expenses, and
Beneficiary bequests.
Essentially, the residue of an estate is the entire value of the estate minus the above expenses (and any other estate fees).
How Residuary Clauses are Used
For example, a man with a total value of $100,000 in his estate wishes to gift his spouse, his two children and his sister in his will. He plans to give gifts of equal value to his children, a small gift to his sister, and the majority of the estate to his spouse. For simplicity, let’s say the estate expenses total $10,000. There are two possible ways the man could attempt to achieve his distribution goals using a residuary beneficiary:
The man could have his spouse inherit $50,000 and the children inherit $20,000 each. His sister can then be named the residual beneficiary. When the man was writing the will, he assumed the estate fees would be closer to $1,000, but they ended up being much higher than he expected. In this scenario, the sister would be left with a $0 inheritance because of this residuary clause.
The man could write specific bequests of $20,000 to each of his children and $10,000 to his sister. The man’s spouse can be named as the residuary beneficiary and would expect to receive $40,000.
In both cases, one of the beneficiaries is left with a smaller inheritance than the man intended. The residuary clause is typically left for the largest bequest for this reason. In option (2), the spouse still inherits the majority of the estate as the residual beneficiary.
Another option the man could consider if he is determined to ensure everyone receives a just share of the estate, he could name everyone as a residual beneficiary of the will. He could give the spouse 50% of the residue, the children 20% each and the sister 10%. However, this approach is only useful for simple estates of modest value.
No Residual Beneficiaries
As per section 44 of the Wills, Estates and Succession Act, when the will (a) doesn’t dispose of the entirety of the estate and (b) doesn’t name a residual beneficiary, the intestate beneficiaries would receive the residue of the estate. If there are no available intestate beneficiaries, the government would be given the residue. For more information on intestate succession, read our blog on how assets are distributed in intestacy. To prevent this from happening, will-writers should include a residuary clause at the end of their wills.
If you’re a will-writer who is unsure how to handle the residue of your estate, contact an experienced estate lawyer today. We will ensure your will is properly drafted and executed as you’re expecting/intending.
Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.
In order to write a valid will in BC, the writer must be able to understand and accept their will. This is called the testamentary capacity to make a will. Often, a will-writer loses testamentary capacity after suffering an injury or illness. Once the will-writer loses testamentary capacity, many assume that they never regain the capacity to make a will. This isn’t always the case. An incapable person can experience lucid intervals where they regain testamentary capacity for a period of time.
More specifically, according to the judgement in Banks v. Goodfellow (1870), for a will-writer to have testamentary capacity they must be:
Capable of understanding the act of making a will and its effects;
Capable of understanding the nature and extent of their property relevant to the disposition;
Capable of evaluating the claims of those who might be expected to benefit from [his/her] estate, and able to demonstrate an appreciation of the nature of any significant conflict and or complexity in the context of the testator’s life situation;
Capable of communicating a clear, consistent rationale for the distribution of their property, especially if there has been a significant departure from previously expressed wishes or prior wills; and,
Free of a mental disorder, including delusions, that influences the distribution of the estate.
Will-writers must be able to understand the nature of their estate, the distributions they’re making in their will and the overall impact their will is going to have.
Lucid Intervals
A lucid interval is a period of time where someone without testamentary capacity regains capacity. Depending on the mental state and health condition of the testator, this can be as short as a few moments. For people who suffer from a condition such as Alzheimer’s disease, they may have lucid intervals lasting an entire day or more.
To demonstrate testamentary capacity with a lucid interval to legally change their will, an applicant won’t have to prove the illness was cured. They must only prove that the will-writer had testamentary capacity in the moment the will was made.
Lucid Intervals Confirmed by the Courts
Lucid intervals were at issue in the Alberta case of Zukas Estate (Re) (2016). The will writer’s testamentary capacity was questioned as he was in hospice when his will was executed. The deceased was reportedly on medications that could have affected his testamentary capacity when he wrote the will. The drafting lawyer had performed tests on the writer to ensure that he had capacity to make a valid will. About 2 weeks after the will was drafted, a codicil was made to fix an error in the will. The lawyer identified that the will-writer did not have the testamentary capacity at the time of the codicil being executed. Was this enough evidence to conclude that the will-writer didn’t have the testamentary capacity when the will was executed?
The Court found that this wasn’t evidence of whether or not the deceased had testamentary capacity while executing the will. As stated by the judge, “all that is required of a testator is a lucid interval. The Respondents have failed to identify any evidence that overwhelms [the lawyer’s] assessment that the Deceased, at the time of giving instructions and on the date of execution, had testamentary capacity.” The time before or after a will’s execution doesn’t necessarily speak to the testator’s capacity when they wrote the will.
Mental Illnesses
In Re Weidenberger (Estate) (2002), the will-writer was diagnosed with a mental illness prior to writing the will. The courts identified that the will-writer must have the testamentary capacity “at the time the will was created.” The judge further mentions that, “what the Deceased’s state of mind was one year before or one year after the date of the document is not overly relevant.”
In the end, it was determined that the will-writer had the testamentary capacity to execute their will. The mental illness, while restricting the deceased’s ability to understand the value of the estate, did not restrict their ability to understand the terms.
Reminders for Will Writers
The mere fact that a testator doesn’t have the testamentary capacity before or after executing a will is not sufficient evidence to prove a case for a lack of testamentary capacity because of lucid intervals. If you’re unclear of the impact of a lucid interval in regards to will writing, contact an experienced estate lawyer today.
Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.
As a small business owner, you put time, money and care into your business. The vast majority of businesses in Canada are small businesses, or are owned and operated by families. For many, it’s not just a source of income, but an important part of their family’s life and legacy. But what happens when you’re no longer at the helm? According to PWC, 25% of Canadian CEOs aren’t sure if their business will be viable in 10 years if they continue on their current path.
Creating a succession plan is a crucial step for any business owner who wishes for their business to carry on after they retire or pass away. It’s more than a mere administrative task- it’s a strategic approach to planning your business’s future. Whether you’re considering retirement, giving leadership of the company to a family member, or planning for unforeseen circumstances, a detailed succession plan ensures continuity and secures your business’s legacy. In this article, we’ll discuss the basics of succession planning, and what you need to know to get started.
Benefits of Succession Planning
Each business’s succession plan should be tailored to their operational needs, being mindful of potential risks and opportunities within their organization and the market they operate in. Some of the benefits of creating a detailed succession plan include:
Continuity and Stability
A well-structured succession plan ensures that your business continues to thrive when you’re no longer leading it. In general, a succession plan helps to minimize disruptions, maintain operational stability, and provide an easier transition for employees, customers, and stakeholders.
Business owners should consider all of their assets and liabilities, and potential longterm risks and opportunities in their market in their succession plan.
Talent Retention
Succession planning identifies potential leaders within your organization, and provides structured plans for their professional development in the company. By preparing existing employees for key roles, you retain valuable talent and avoid the costly process of external recruitment.
Risk Mitigation
Life is unpredictable, and unexpected events can impact your business. A succession plan prepares you for such contingencies, reducing the risk of business interruption due to illness, death, or other unforeseen circumstances.
Preserving Company Culture
Your business’s culture often contributes to its commercial success. This is usually a very important part of the operations of a family business. A thoughtful succession plan ensures that cultural values, work ethics, and organizational standards are passed down to the next generation of leaders in your business.
Financial Security
A smooth transition prevents financial instability arising from an interruption in operations and employees struggling with new responsibilities. Whether you’re selling the business or passing it on to a family member, a well-drafted succession plan safeguards the business’s financial interests.
Tax Efficiency
Depending on the company’s share structure, carefully planned succession can reduce tax liabilities for both the outgoing owner and the successor. Particularly for family businesses and companies with multiple shareholders, it’s essential to consult with financial and legal professionals.
Different Models of Succession Planning
There are a number of different paths business owners can take when creating their succession plan. As a business owner, you can customize your succession plan to align with your business’s unique needs, family dynamics, and personal goals. Some of the most common models of succession planning for family-owned and small businesses include:
Internal Succession
In this model, the successor comes from within the organization. It involves identifying existing employees for leadership roles, and working to develop their skills and knowledge over time to prepare them for taking over the business. Benefits of this approach include continuity, the successor’s familiarity with company culture, and a smooth transition for other employees and stakeholders.
Family Succession
For many family businesses, it’s very important to keep leadership of the company within the immediate family. This can be emotionally rewarding, and an essential part of supporting the culture and financial interests of the business and family. However, family succession requires careful planning to ensure a smooth transition, balancing family dynamics and the needs of the business.
External Succession
External succession involves bringing in an outsider—a qualified individual who may purchase the business or simply take over as the new leader. This model can provide fresh perspectives and skills, but requires thorough vetting of potential candidates. Further, it requires a detailed succession plan to ensure the original owner’s expectations and visions for the business’s operations are met in the future.
Hybrid Succession
Some businesses combine elements of internal and external succession. For example, an internal candidate or candidate from within the family may lead initially, with a long-term plan to bring in external talent for specific roles.
Emergency Succession
This model prepares for unexpected events (like sudden illness or death). It designates interim leaders and outlines procedures to ensure business continuity during crises. This planning method puts emphasis on contingency planning, and should include detailed guidelines for day-to-day business operations, long-term goals and company culture to ensure the most simple transition possible.
The Succession Planning Process with a Lawyer
Your business’s succession plan should be uniquely tailored to its operations, market, and employee and family culture. Every succession plan will look different, and every succession planning process will differ in some ways as well. In general, the process of creating a succession plan looks something like this:
Step 1: Assessment and Setting Goals
Consultation: Meet with a lawyer to discuss your business, personal goals, and family dynamics.
Identify Objectives: Clarify what you want to achieve through succession planning (for example, smooth transition, tax efficiency, preserving legacy).
Assess Assets and Liabilities: Evaluate your business’s financial health, assets including intellectual property, and debts.
Step 2: Legal Documentation
Buy-Sell Agreements: Set up agreements that address ownership and share transfer in specific situations (for example, retirement, disability, death).
Power of Attorney: Designate someone to make financial and legal decisions on your behalf if you become unable to.
An important element of a detailed succession plan is ensuring that your personal estate plan is up to date. If you become unable to manage your business and personal financial affairs suddenly as a result of serious injury or illness, it is essential to have a power of attorney and personal representative ready to assist. Otherwise, your family will have to seek a court order to authorize someone to manage your affairs. This not only causes stress and delay for your family, but can impact the normal operations of your business.
Step 3: Identify Successors
Identify Roles: Consider the role or roles that you will be stepping out of in the future, and what responsibilities will need to be taken over by a successor or successors.
Internal Candidates: Discuss potential successors within your organization.
Family Members: Consider family members interested in taking over.
External Search: Explore external candidates if suitable for your business’s operations and your vision for the future.
Step 4: Training and Transition
Professional Development of Your Successor(s): Create a detailed plan to support your successors in developing the knowledge and experience they will need to take a leadership role within the company.
Training Period: Allow time for the successor to learn the skills necessary to fill the role competently.
Gradual Transition: Avoid abrupt changes; gradually transfer responsibilities.
Communication Plan: Inform employees, clients, and stakeholders about the transition when it is time for you to step down.
It’s important to remember that the training and transition process will look very different for every business, depending on their operations, licensing requirements and successors. Creating a detailed plan for training and transition is essential.
Step 5: Regular Review and Updates to Your Plan
Life Changes: As circumstances change both personally, within your family, or the market your business operates in, update your plan.
Legal Changes: Stay informed about tax obligations, corporate governance regulations, and estate planning laws.
An estate lawyer brings legal expertise and objectivity to the succession planning process. They ensure your succession plan aligns with your wishes and protects your business’s legacy in an efficient and risk-averse way. It’s important to understand that your succession plan and supporting documents, such as power of attorney appointments and your personal will should be revisited frequently to ensure they align with your wishes.
Reminders for Business Owners
For many family-run and small business owners, their company represents more than just an income. Your company is an important part of your family’s lifestyle, history and legacy. Developing a detailed succession plan for your business is essential to ensuring its continuity if you become unable to run the business. Business owners should remember to:
Start Early: Begin your succession journey well before retirement. The earlier you start, the more finely tailored your plan can be.
Seek Professional Guidance: A lawyer’s expertise ensures legal compliance, tax efficiency, and a smooth handover.
Tailor Your Succession Plan: While we’ve discussed different common models of succession planning—internal, family, external—don’t hesitate to combine them. Hybrid models or personalized adaptations to the succession plan can fit your business’s unique circumstances.
Be Mindful of Your Legacy: Yes, financials matter, but so do your business’s values, culture, and social impact.
Make Regular Updates: Life and business changes with time— marriage, death, and market shifts can all impact your family business. Regularly review and update your plan to keep it relevant and effective.
Succession planning, particularly for family businesses, is not just about financial and operational stability. A detailed succession plan can support you in achieving your long-term goals for your family and business, even when you are no longer able to work. If you’re ready to start succession planning for your small business, contact an experienced lawyer today.
Have a question about this topic or a different legal topic? Contact us for a consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.
In recent months, British Columbia has introduced and passed a number of bills to address the ongoing housing crisis. These bills address a wide range of housing policy issues, and will impact many people. Broadly, the bills all aim to increase available housing stock for purchase and for rent in British Columbia. In particular, new restrictions on short-term rentals have sparked discourse online and in the news. In this article, we’ll discuss the rules that came into effect on May 1st, and what hosts need to know.
The New Rules
B.C. passed the Short-Term Rental Accommodations Act in 2023. New restrictions on short-term rentals came into effect on May 1st, 2024. They aim to take short-term housing stock in high-demand areas and make them available to long-term renters. They also expand the powers of local governments to enforce restrictions on short-term rentals locally.
The main obligations imposed on affected short-term rental hosts by the Act are:
Hosts must display a local government business number on their short-term rental listing.
Hosts must comply with the provincial principal residence requirement.
The Provincial Primary Residence Requirement
The most significant change faced by hosts as a result of the new rules is the Provincial principal residence requirements. Essentially, this rule limits short-term rentals to rooms within the host’s principal residence, plus one secondary suite on the same property. This rule aims to ensure that suitable long-term homes aren’t taken off of the market for vacation accommodation. In a nutshell, short-term rental properties in affected areas can only be on the host’s primary residence property. Hosts aren’t allowed to construct more than one extra suite on that property for the purposes of short-term renting.
For example, a host can advertise a room or suite on their property on websites like Airbnb and VRBO. They can even construct a separate dwelling on their property, known as an accessory dwelling unit, for this purpose. However, a host can’t divide their existing basement suite into two studio apartments to be rented out on sites like Airbnb and VRBO.
Which Properties Are Affected?
The Act applies to short-term rentals offered to the public, including:
Those on online platforms connecting short-term renters with hosts, like Airbnb and VRBO
Those offered through other online channels, including Facebook and Craigslist
Listings in print offers, like newspapers and flyers
Traditional Bed and Breakfasts are still able to operate as normal, though the provincial principal resident requirement still applies. B&B owners must live on the property that they host guests on in order to comply.
What is a “Short-Term Rental” According to the Act?
The Act considers rental properties available for stays of less than 90 days short-term rentals. According to the province, data from 2023 indicates there are over 16,000 entire residential properties being used as short-term rentals for at least most of the year in BC. More recent figures estimate that number is up to 19,000 properties.
Regions and Municipalities
The rules automatically apply to cities that have a population of 10,000 or more. However, smaller municipalities can opt in to have the bylaw apply in their town. Restrictions on short-term rental properties must be as restrictive as the Provincial guidelines or more restrictive, unless they do not apply due to population size. It’s important to note that local governments usually can’t opt out of these rules. The province only allows local governments tol request to opt out if they have a rental vacancy rate of at least 3% for two consecutive years.
As of right now, the communities which have the principal residence requirement are primarily in the Lower Mainland, and areas in the Okanagan and Capitol Regional District. For more information, the province has provided a map of the municipalities that currently have this requirement.
So far, at least 17 unaffected municipalities have elected to opt-in to the new rules, including many of the Gulf Islands, Tofino, and Osoyoos.
Which Properties And Businesses Are Exempt?
Some properties may be exempt from this requirement, depending on their zoning and the type of accommodation service provider the business is. The aim of the Act is to increase long-term rental housing stock by taking suitable properties on the short-term market and ensuring they are available as long-term homes for British Columbians. Properties which aren’t suitable for long-term housing are exempt. According to the province, this can include:
Strata-titled hotels and motels
Time share properties
Properties listed on home exchange websites
Fractional ownership properties, where no one owner uses it as a principal residence
Overnight accommodation lodges (fishing or hunting lodges, for example)
Student accommodation owned by an institution or non-profit
Employee accommodation owned by an institution or non-profit
Strata guest suites
How Will The Rules Be Enforced?
The Act aims to help local governments enforce regulations on short-term rental businesses. This includes the following requirements and enforcement methods:
Requiring Display of Business Licence: In areas where businesses must display a local business licence, short-term rental owners have to display that licence number on their property listing.
Holding Online Platforms Accountable: Online short-term rental platforms must remove non-compliant listings from their offerings at the request of the local government. The Act requires these platforms to share information on local short-term listings with local governments on a monthly basis.
New Licensing Authority for Local Governments: Amendments to the Local Government Act now allow regional districts to regulate and grant licences to short-term rentals.
The Provincial Compliance and Enforcement Unit: The Province will establish a dedicated unit to ensure compliance and enforce the new regulations. This unit will monitor compliance using data provided by online short-term rental platforms and can issue penalties for violations.
Introduction of a Provincial Registry: The Province says it aims to launch a short-term rental registry by early 2025 to aid in compliance monitoring. Hosts will have to register with the province, and include their registration number on their property listings. Online platforms will be required to validate the provincial registration numbers on listings to ensure compliance.
Fines For Non-Compliance
Non-compliance with the new regulations can result in receiving fines for bylaw offences. Regional districts can issue fines of up to $50,000 for bylaw offences, and municipalities can issue fines of between $1,000 and $3,000 per infraction per day. It is yet to be seen how municipalities and regional districts will approach ticketing for violations of short-term rental bylaws.
New Responsibilities For Short-Term Rental Owners
Many short-term rental owners have expressed concern about the new regulations, including the lack of consultation from the government and potential impact on their investments. If you are or have been operating a short-term rental business, it’s essential to understand your new obligations under the Short Term Rental Accommodations Act. Here is an overview of the new rules under the Act:
Short-term rentals must be hosted in your primary residence or on the property.
Only one accessory dwelling unit or secondary suite is allowed on that property for short-term rental.
You must display a local business licence on your short-term rental listing.
You may have to register that short-term listing with the province in the future.
Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.
The BC government first introduced the BC Speculation and Vacancy tax in 2018 to incentivize homeowners to occupy their vacant properties. The tax also aims to generate revenue for housing initiatives, ultimately creating a more affordable housing market. Recently, the province has introduced legislation to expand the tax to more communities in BC. In this article, we’ll explore the impacts of the tax and exemptions available for estates, trustees and businesses.
What is the Tax?
The Speculation and Vacancy Tax aims to reduce the number of residential properties that sit vacant. In British Columbia, institutional and foreign investors in real estate have gained a reputation for leaving properties empty. Until recently, the Speculation tax only applied to residential properties in the following areas:
Capital Regional District (CRD)
Metro Vancouver Regional District
City of Abbotsford
District of Mission
City of Chilliwack
City of Kelowna
City of West Kelowna
City of Nanaimo
District of Lantzville
As of 2024, property owners in the following areas will also have reporting obligations:
Properties held on trust for a minor are eligible for an exemption until the minor turns 19.
Vernon, Coldstream;
Penticton, Summerland;
Lake Country, Peachland;
Courtenay, Comox, Cumberland;
Parksville, Qualicum Beach;
Salmon Arm; and
Kamloops
What Is the Tax Rate?
Currently, the rate varies based on the owner’s residency status, and if they are a Canadian citizen or resident. The tax is calculated on your property’s assessed value for that year. The rates are:
0.5% of the property’s assessed value for Canadian citizens and residents (excluding untaxed worldwide earners)
2% of the property’s assessed value for foreign owners and untaxed worldwide owners
Exceptions to the Speculation and Vacancy Tax
Most BC residents are exempt from the tax, which aims to deter a specific type of property investment which reduces available housing stock. However, the impact may be greater on some businesses which hold or develop residential property. According to the provincial government, many of the exemptions available to individuals can also be claimed by corporations and trustees.
Disclosure Obligations
In order to be eligible for certain exemptions, corporate interest holders, beneficial owners and partnership interest holders must all meet the requirements that individual owners would. This means that, in order to claim an exemption, all interest holders must be:
Canadian citizens or permanent residents
BC residents for income tax purposes, and
Not untaxed worldwide earners or members of a satellite family
Additionally, trustees and business owners should contemplate their obligations under the Land Owner Transparency Act (LOTA). The Act requires that corporations and trustees register interests in land with the BC Land Title office. This requirement includes the submission of a transparency report. Under the Act, beneficiaries must be disclosed as indirect owners. There is a high bar for disclosure obligations, and all interest holders must meet the above criteria in order for an owner to claim an exemption.
Entities Which Are Always Exempt
Trustees of certain organizations may have no reporting obligations in order to be exempt from the tax. Properties owned by the following groups and organizations aren’t subject to the tax and do not need to submit an annual declaration form:
An Indigenous Nation or a corporation owned by an Indigenous Nation
Registered charities
Housing co-ops
Certain not-for-profit organizations
Municipalities, regional districts, governments and other public bodies
Corporations owned by municipalities or regional districts
Corporations incorporated or continued through an enactment (“crown corporations”)
Corporations designated as “agents of government” by legislation, and their wholly owned subsidiaries
Further, properties with an assessed value under $150,000, or unstratified apartment buildings with four or more units are excluded from the tax.
Exemptions for Tenanted Properties
Properties which are rented out for at least six months of the year are eligible for an exemption to the tax. Owners may have a number of different tenants throughout the year to meet his requirement. However, it is important to note that other provincial and municipal laws may impact business owners who rent out residential properties for periods of six months or less. For example, the Short-Term Rental Accommodations Act restricts short-term rentals of non-primary residences of less than 90 days in some areas. Having several consecutive short-term tenants is likely not a viable way to claim a tenanted property exemption to the tax.
Further, the Act differentiates between arm’s length and non-arm’s length tenants for determining exemption eligibility of owners. An arm’s length tenant has no personal relationship or advantage with the owner, and usually has a traditional tenancy agreement and rent arrangement. This arrangement always allows the owner to claim an exemption, even if they are a foreign owner.
A non-arm’s length tenant may be a family member or friend who lives in the property under a casual arrangement. A homeowner’s spouse or child can’t be considered a tenant for the purposes of the Act. Under section 39 of the Act, if the owner of the non-arm’s length tenanted property is not a Canadian citizen or resident, the tenant must meet the following conditions to claim an exemption:
Be a Canadian citizen or resident;
Be a BC resident for income tax purposes;
Not be an untaxed world-wide owner or member of a satellite family; and
Have BC income for the calendar year that is equal to or greater than 3 times the annual fair market rent for the entire property.
Exemptions for Estate Properties and Properties Held On Trust
There are also a number of exemptions relating to the death of a homeowner and the estate’s tax liabilities if the house is held on trust after their passing. If a homeowner dies, their estate and any other living owners on title are exempt from the vacancy tax for that year, and the year immediately following. This eases the burden on estate administrators who may be stuck waiting for probate to be able to distribute the property to its beneficiary.
Further, if the property is held in a trust created in the owner’s will for the benefit of a minor, the property is exempt until the beneficiary turns 19. This means that a property can be vacant without being subject to the tax, so long as all beneficial owners of the property are minors. Trustees must still disclose beneficial ownership and complete the yearly declaration form to claim an exemption.
How to Declare
Corporations, trusts and business partnerships with residential property in taxable regions will receive a declaration letter. The declaration process for these entities is similar to that of individuals, but requires more detailed information. You can fill out the declaration form on eTaxBC using your declaration letter, CRA business number and incorporation number.
The form asks you to describe the ownership of the property, and disclose the personal details of all corporate interest holders, beneficial owners and partnership interest holders related to the property. This information includes their name, date of birth, country of residence and Social Insurance Number.
You can find the full list of exemptions for individuals, many of which are available to corporations and trustees,here.Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.
