Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

Pecore, Calmusky and Mak, Oh My!!

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 |
Wills, Trusts and Estates

By: 

Posted May 17, 2022

I am often asked the question of whether the will-maker should disclose the contents of their will to their beneficiaries.  In some situations, the will-maker[...]
Blog |
Real Estate

By: 

Posted May 10, 2022

The More Homes for Everyone Act, 2022 (“Bill 109”) received Royal Assent on April 14th, 2022. Some sections of Bill 109 will come “into force”[...]
Blog |
Real Estate, Wills, Trusts and Estates

By: 

Posted May 3, 2022

As we all know, house prices are skyrocketing in the region, and this in turn has resulted in parents providing assistance to children who are[...]
Blog |
Employment, Labour, and Human Rights

By: 

Posted April 26, 2022

The mediator’s reaction to my client’s disclosure that she had secretly recorded her conversation with her boss was one of dismay.   He made it clear[...]
Blog |
Family Law

By: 

Posted April 25, 2022

Family law litigation can be a particularly complicated and expensive legal endeavor exacerbated by the emotional difficulties of a fractured relationship. These matters become even[...]
Blog |
Real Estate

By: 

Posted April 14, 2022

What is the Federal Budget? Every year the Department of Finance is tasked with balancing the revenue and expenses of the Government of Canada. As[...]

Subscribe to Our Newsletter

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