When a spouse dies, individuals are often left unsure of their rights.  Whether there is a Will and you have been left with nothing, or there was no Will and you need to ensure that you get what you deserve, there is legislation in place to protect you.

1. What happens if your spouse dies with a Will?

Section 5 of the Family Law Act, states that when a spouse dies, the surviving spouse is entitled to an Equalization of the net family property. The practical effect of this is that the surviving spouse gets the share that they would have been entitled to if they had gotten divorced rather than if one spouse had died.

Section 6(1) of the Family Law Act presents the surviving spouse with a choice: where there is a Will, the surviving spouse can either take what they are given in the Will or decide to take what they are entitled to under Section 5 of the Family Law Act.

2. What happens if your spouse dies without a Will?

When a spouse dies without a Will, Part II of the Succession Law Reform Act states what a spouse is entitled to receive: a surviving spouse is entitled to receive the first $200,000.00 of the estate, this is called the “Preferential Share” of the Estate.  In addition to the Preferential Share, the surviving spouse is entitled to the following:

  • If 1 child: one-half of what is remaining after the Preferential Share (i.e. the “Residue”); and
  • If 2 or more children: one-third of the Residue

Section 6(2) again leaves the surviving spouse with a choice: where there is no Will the surviving spouse can either:

  • Elect to Equalize the net family property; or
  • Elect to take the Preferential Share plus their portion of the Residue.

3. Considerations for Common Law Spouses

It is important to note that this is not available to Common Law couples. As such Common Law couples should:

  • Make sure they have a Will in place; and/or
  • Sign a Cohabitation Agreement, which will specify how property will be dealt with in the event of the death of one spouse, and what the couple agrees will not happen.

4. Considerations for Separated Spouses

Furthermore, the above-mentioned elections are still applicable if the spouses have been separated for a length of time. As such it is important to either:

  • Get a legally binding Divorce, or
  • a legally binding Separation Agreement.

To find out more about how to protect yourself or your spouse contact us by phone at 905-471-6161 or email us at info@eruditelaw.com.

Those who are currently renting in the Greater Toronto Area know that it is very challenging to find good value in this market.

A study by the Canadian Mortgage and Housing Corporation (“CMHC”) shows that the vacancy rate of rental properties in the GTA is the lowest it has ever been in 16 years. With rental properties becoming more scarce in the GTA and the average cost of rent increasing, some landlords are looking to get around the 2.5 percent rent increase cap as prescribed by the Ontario Fair Housing Plan through creative means.

Personal Use Evictions

Procedure

The Residential Tenancies Act (“RTA”) governs non-commercial, residential tenancies.

According to the RTA, if the landlord requires the property for “personal use”, a landlord may apply to the Landlord Tenant Board (“LTB”) to terminate the tenancy and evict the tenant. Personal use involves use by the landlord, the landlord’s family member, or a person who provides or will provide care services to the landlord or the landlord’s family.

To initiate a personal use eviction, the landlord will file a “Notice to End your Tenancy”, and deliver it to the tenant. The termination date in the notice must be at least 60 days after the landlord provides the notice to the tenant.

If you have a month to month tenancy, the termination date must be on the last day of the rental period. In the alternative, if you have a fixed term tenancy, the termination date must be on or after the last day of the fixed term. An incorrect termination date would render the notice of termination defective.

Key Requirements to Note

In evicting the tenant for personal use, the landlord must be acting in good faith. The landlord must demonstrate to the LTB that the landlord (or the landlord’s family member) will indeed move into the unit within a reasonable time after the rental property becomes vacant.

The unit also must be used for “residential occupation” post eviction. For the most part, this means that the unit cannot be left empty, used as storage of items for the landlord, or be turned into a home office or study (a common occurrence for basement rental units).

Finally, for notices given after September 1, 2017, the landlord must compensate the tenant for eviction. This amount will be equal to one month’s rent. The compensation must be made before the termination date.

Remedies

If the landlord terminated your tenancy in bad faith or otherwise, you could apply to the LTB for certain reliefs.

Amongst other things, the LTB can provide relief from eviction, a specified sum for increased rent that you may incur for one-year after vacating the rental unit, reasonable out-of-pocket moving expenses and more.

If you feel that your tenancy has been unfairly terminated, the lawyers at Erudite Law LLP may be able to help. Please drop us a line at http://Eruditelaw.com/#contact. We look forward to hearing from you!

By: Jimmie Z. Chen

Employee deductions and expenses as an owner-employee.

While employees at arms-length have been permitted to deduct certain employment expenses pursuant to section 8 of the Income Tax Act, the Canada Revenue Agency has taken issue with employees who are also shareholders of the corporate employer.  That is, employees who are sole directors, shareholders and officers of the corporation have been increasingly scrutinized by the CRA.

Back in 2009, the case of Adler v. R, 2009 TCC 613 (informal procedure), the Tax Court of Canada held that since the appellant was the sole officer, director and shareholder of his employer, a refusal to incur the job related expenditures would yield no adverse consequences for him.  On the basis of this reasoning, the Court dismissed the appeal.

  1. So can I deduct my employment expenses?

It is arguable that this case should be limited to its facts and possibly not applicable in all situations.  Firstly, the decision in Adler is silent on whether there was an employment contract in place explicitly requiring the employee to incur certain costs.  Secondly, the Courts interpretation of “adverse consequences” is quite narrow indeed, appearing to be limited to an action for breach of contract, disciplinary action, and / or poor performance review – quite simply, this cannot be true as there may be negative financial consequences such as lost profits, inability to meet third party obligations, or the inability to pay salary to arms length employees.

  1. What is required before I deduct employment expenses?

One thing is certain, section 8 of the ITA details some specific requirements before any employee can deduct certain employee expenses – among other things, a good starting point is to always have an employment contract with specific provisions detailing what are the requirements of the job is and what expenses the employee may be responsible for without reimbursement.

If you are a sole director, shareholder, and officer of a corporation and are considering becoming an employee of your corporation, let the lawyers at Erudite Law LLP assist you in reviewing your options.  Please feel free to contact us – https://eruditelaw.com/#contact.