Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

Share on twitter
Share on facebook
Share on linkedin

Pecore, Calmusky and Mak, Oh My!!

Share on twitter
Share on facebook
Share on linkedin
Share on email

Pecore, Calmusky and Mak, Oh My!!

By:

Posted July 6, 2021

Death and taxes (income and estate administration) are the true certainties in life.  Death is impossible to avoid but sometimes it is possible to arrange one’s estate to minimize or avoid the payment of estate administration tax (probate fees).  However, if this is not done in a thorough fashion uncertainty may arise and any possible savings may be lost in litigation.

A traditional manner in arranging one’s affairs to allow for assets to pass outside of a will and thus without probate fees is to hold an asset on joint account with survivorship rights or to designate a beneficiary on a life insurance or registered policy, such as a TFSA or an RRSP.  If one were to make a bank account joint with an adult child, when the only contributions have been made by the adult parent, then absent any other document to support the gift, the account will likely be found to be held on a resulting trust for the benefit of the estate.  In Pecore, the court held there is a rebuttable presumption that a gratuitous transfer of assets is held on a resulting trust and the transferee must show evidence the gift was intended.

This principle was extended in the Calmusky case where the same rationale was applied to the designation of a beneficiary on a RRIF.  The decision has caused much controversy and  a rethink of designations and the production of additional paperwork to “prove” the gift was intended.

Most recently we have the decision in Mak (Estate) v. Mak where the status quo, before Calmusky was upheld.  Justice M. McKelvey declined to extend the principle in Pecore and found that the point of a beneficiary designation is to address how the asset is dealt with on death.

In Ontario, we are now faced with polar opposite applications of Pecore in the Calmusky and Mak (Estate) decisions.  Whatever is one to do?  Until the conflict is resolved clients would be well advised to document, document, and document.  If there is intent to gift an asset by way of joint ownership or beneficiary designation to one child to the exclusion of others, then a client would be well advised to provide a separate stand-alone document evidencing the intention to gift the asset.

The same result does not hold in all provinces.  Note the news article where a mother was designated as beneficiary on son’s RRSP before he was married and had a child.  Sadly there was an untimely death and while the gentleman had prepared a will, he overlooked the RRSP designation.

This demonstrates the need for thorough and not piecemeal planning.

This blog post was written by Heather Austin-Skaret, a Partner in the Wills and Estates, Estate Litigation and Real Estate teams.  She can be reached at 613-369-0356 or at Heather.Austin-Skaret@mannlawyers.com.

More Resources

Blog |
Employment, Labour, and Human Rights

By: 

Generally, the Employment Standards Act, 2000 (“ESA”) has been interpreted to protect non-unionized employees from “temporary” lay offs unless their employment contract permits such a[...]
Blog |
Business Law

By: 

Posted October 20, 2021

On October 19, 2021, the new Ontario Business Registry System launched. This new online registry now enables businesses and not-for-profit corporations to directly access services[...]
Blog |
Environmental Law

By: 

Posted October 14, 2021

In the decision of Greenpeace Canada (2471256 Canada Inc. v. Ontario (Minister of the Environment, Conservation and Parks), 2021 ONSC 4521, released September 3, 2021,[...]
Blog |
Employment, Labour, and Human Rights

By: 

Posted October 1, 2021

This blog continues our exploration of the potential employment law consequences stemming from the degree of control a party exerts within a variety of business[...]
Blog |
Personal Injury

By: 

Posted September 27, 2021

Personal Injury lawyers and their clients are all too familiar with the carnage and suffering caused by impaired drivers.  Canada has the worst rate of[...]
Blog |
Bankruptcy and Insolvency, Business Law

By: 

Posted September 24, 2021

As is noted by the Court of Appeal in McEwen (Re), released August 12, 2021, referred to here as “Traders”, the BIA is a complete[...]

Subscribe to Our Newsletter

Name*
Consent*
This field is for validation purposes and should be left unchanged.