I hope your holidays are going reasonably well. The latest wave of the virus hit us as close to Christmas as could be and changed so many plans. It brings to a close a year full of surprises, many of which proved overwhelming. We all hope for a better 2022.
It is a challenge trying to predict most anything anymore. We seem to be in an era of too many “moving parts” and so to speculate as to what trends will prove important or popular next year, is best done softly. It is very easy to be wrong or otherwise way off.
In the legal environment, however, there are some areas worthy of comment, analysis and a little speculation. Let’s say it can’t hurt !
Whether because of the Pandemic or just out of general awareness (or both), it seemed that more people at least considered making Wills in 2021. It’s a good step forward because, for any person who has a family or even has no relatives at all, a Will helps. Appointing an Executor gives the Executor the immediate ability to work with Banks or Credit Unions, to pay bills, arrange the funeral and take many other steps to manage and resolve the Estate.
Our law has evolved greatly in a short few years, where Courts will recognize a Will that has not been properly made, under certain conditions.
Earlier this month, I was able to get a document declared a valid Will, in a situation where the Will was not dated, was not witnessed and did not appoint an Executor. While I don’t advise approaching Will planning with a “relaxed” attitude, be aware that a document not perfectly made can still be a “Will” (and any family member or other representative who searches the deceased person’s papers should never throw away any document that hints of being Testamentary in nature).
I regularly hear from people who cannot find a Will of a spouse or other relative and one thing they always say is that it creates a lot of extra work and time spent (not to mention the stress).
I hope that people continue making their Wills in 2022.
The tax rules change annually. This year, partly due to the Pandemic, the changes will continue coming, probably more frequently than annually, as programs are introduced (sometimes on an emergency basis) and rules are created or changed, to accommodate the programs.
As an example, because of the new Omicron variant, many persons will remain working from home. The Government, in its recent fiscal update, announced that it will continue allowing claims for home expense deductions (one method, according to the great columnist Jamie Golombek, is to claim the flat $2 per day amount, and the maximum amount allowed is now $500 per year, up from $400. The other is the detailed method, where expenses can be claimed, based on the portion of the home used for work).
It is imperative, in my opinion, that you stay informed and consider getting advice from an Accountant, depending on your circumstances.
Who is a Spouse?
In the last decade, in British Columbia, the legal definition of “spouse”, for Estate purposes, has expanded. I am asked, regularly, whether two people are actually “spouses” if they don’t live together. Well, our law says (in my opinion) that they may be. The Court will consider many factors in reaching a determination whether two persons are spouses. Those factors include whether they travel together, dine together, their relationships with children, whether they live together, whether they have intimacy, how expenses are managed, whether finances are kept separate, and it goes on. As you can imagine, where one of the two persons dies, descendants can be (and are !) surprised at what happens after.
Certainly a plan is really useful for any couple. Part of that plan might be a Co-Habitation or similar Agreement, along with Wills and perhaps Powers of Attorney as well. The fact that there are many cases in B.C. every year involving persons seeking a declaration that they were a “spouse” of a deceased person, suggests that not enough planning is happening.
Earlier this month, in the case known as Lee v. Chau Estate, our Court of Appeal disallowed the appeal of a surviving person who claimed to be the spouse of the deceased. The lower Court held that the person was not a spouse, as the persons had separated some years before the deceased died (in 2014). The deceased married the surviving spouse in 1995. A year later he made a new Will, in which he left his Estate to his two children. He filed for Divorce from his spouse as well. In 1997, they reconciled. However, they lived together only intermittently over the next years. From 2008 to 2014 they did not live together at all. The surviving spouse, who mostly lived in Taiwan, did not even know of the deceased’s Cancer diagnosis in 2010. The point was that the parties were not really “spouses” for many years. The surviving person should have sought an Agreement in writing, at or around the time of their marriage.
Because subsequent relationships are common in B.C., one cannot take for granted what flows from it. As I have said over the years, get advice!
A Happy, healthy new year to all.