Preparing for Your Estate Planning Meeting

, , ,

Estate planning is an important part of protecting your family and loved ones in the event of your death or loss of capacity. It is always a good idea to consult with a legal professional who can advise you on your rights and obligations and help you prepare your Will and incapacity planning documents. Below are some things to think about before meeting with a lawyer or notary:

Will:

1.     What are your general objectives? What do you want to achieve? What do you want to avoid? For example, you may wish to ensure your spouse and children are looked after and reduce the impact of taxes.

2.   Who do you want to appoint as executor of your Will? This is the person who will administer your estate. Often spouses are appointed as executor since your spouse likely has the most knowledge of your assets. Make sure to speak to your intended executor(s) in advance to make sure he or she is willing to act. Being an executor is not a fun job and naming a person as executor does not mean that person is obligated to take on the role. Consider who you would like to appoint as an alternate executor if your first choice is unable or unwilling to act as your executor.

3.     Consider whether you will gift any specific assets or cash to a particular beneficiary or beneficiaries – for example, a cash gift of $1,000 to a close friend or your jewellery to a granddaughter. Please keep in mind that assets will change over the years.  

4     The residue of your estate is everything that is left after payment of debts, funeral expenses, executor’s fees, taxes, legal and other expenses incurred in the administration of your estate, and following any gifts of specific assets or cash, if any. Consider how you want the residue of your estate to be distributed. You should also consider whether you want your beneficiary or beneficiaries to reach a certain age before they receive their share of your estate. Are any beneficiaries disabled and receiving government benefits? If so, it is important to develop an estate plan that does not inadvertently disqualify the beneficiary from receiving those government benefits. 

 5     If your beneficiary or beneficiaries have died before you, what happens to their share? Will it go to that beneficiary’s children, if they have any children alive on the date of your death? Will it go to a different beneficiary? For example, you may wish to leave everything to your spouse if they survive you. If your spouse has died before you, you may state that his or her share will be evenly distributed among your children (if any). What happens if one or more of your children have died before you? Do you want that child’s share to pass to his or her children or do you want that child’s share to be divided among his or her siblings who are still alive at the time of your death?

6.      How would you like your estate distributed in the event of a family tragedy where all of your beneficiaries have died before you or at the same time as you? Will your estate go to your parents? To your siblings? To a charity? To a friend?

In British Columbia, the Wills, Estates and Succession Act (“WESA”) is the governing legislation about wills and estates. Under WESA, spouses (both legal and common law), as well as natural and adopted children, can apply to court to vary the Will of a deceased spouse or parent if the Will does not make adequate provision for his or her proper maintenance and support. The court may disregard the wishes of the deceased if the reasons for disinheritance are not rational or reasonable. The court may amend the distribution to one that it thinks is fair in the circumstances. 

Power of Attorney

A power of attorney grants someone else the right to act on your behalf with respect to your financial and legal affairs. It is important to appoint someone you trust because the power of attorney is basically like a permission slip for that person to manage your assets. Once you grant someone power of attorney, they become known as your “attorney.” The scope of the authority can be as broad or as specific as you like. You may allow your attorney to manage all aspects of your financial and legal affairs indefinitely, or you may wish to restrict it to specific tasks or dates. The right to act as your attorney may be effective immediately or only in the event you have lost mental capacity and are incapable of managing your own affairs. It is important to include language in the power of attorney that the authority continues despite your loss of mental capacity in order to make it an “enduring” power of attorney.

Consider who you would like to appoint as your attorney and who you would like to appoint as an alternate attorney if your first choice is unable or unwilling to act. Consider whether you would like your attorney’s authority restricted in any way and when you would like the attorney to be able to start acting on your behalf.

Representation Agreements

A representation agreement is a legal document appointing someone to assist you or act on your behalf for health care and personal care matters. This tool gives someone the right to give consent or refuse to give consent on your behalf, if you are unable to do so yourself, to minor or major health care (including decisions about medication, tests, surgery and end of life comfort care) and the right to make decisions about your personal care, such as living arrangements, diet, clothing, exercise, taking part in activities and personal safety issues. Enhanced representation agreements include end of life decisions and give your representative the authority to refuse life support under certain circumstances.

Having a representation agreement ensures that someone you trust will have legal authority to carry out your wishes if you are incapable of giving or refusing consent. By setting out your end of life decisions in the agreement, you may provide comfort and ease the emotional anguish of those who have to decide whether life support measures should be continued or withheld.

Consider who you would like to appoint as your representative and who you would like to appoint as your alternate representative if your original representative is unable or unwilling to act. Consider whether you want life support measures continued or withheld (i) in the event you are terminally ill with no chance of recovery; and (ii) in the event you are in a permanent vegetative state with no chance of recovery. Consider whether you would want medicine administered to you in your terminal state even if it hastens your death.

Krystin Kempton is a Partner at Nixon Wenger LLP where she has a general solicitor’s practice, advising corporate and individual clients on corporate and commercial transactions, lending and borrowing, wills and estates and real estate matters.

How does Occupiers Liability apply during the COVID-19 pandemic?

, , ,

In British Columbia, the Occupiers Liability Act, RSBC 1996 c 337, sets out the legal obligations that occupiers owe to people visiting their premises.  Occupiers can be individuals or businesses who are in physical control of the premises, or those who have responsibility for, and control over, the condition of the premises, the activities conducted on the premises, and who is allowed to enter the premises.  This can include business owners, landlords, tenants, and home owners. 
Occupiers owe a legal duty to ensure visitors are reasonably safe in using their premises.  This duty applies to the condition of the premises, activities on the premises, or conduct of others on the premises.  It is important to note that there are many factors to assess when determining where the responsibility falls in the event of injury or loss.  How far this duty extends will depend on the circumstances of each situation.
You may be wondering: how does this apply during a pandemic and the current context of COVID-19?
Generally, the liability of occupiers remains the same.  However, be aware that occupiers may be found liable for the spread of the virus at their premises.  If an occupier fails to take reasonable care to respond after a person known to have been infected with COVID-19 attended the premises, the occupier may well have breached its legal obligations under the Occupiers Liability Act. 
Reasonable response efforts to ensure the safety of visitors may include:
•    immediate sterilization of the premises;
•    closure of the premises during sterilization efforts; and
•    clear and timely warnings to visitors and employees.

It is important for occupiers not to ignore applicable privacy laws in these circumstances.  While appropriate information may need to be shared, specific names should not be released.

Occupiers should also consider having a formal COVID-19 plan in place that sets out response efforts in the event of virus exposure. 

We stress that all cases are fact specific.  The information above is intended to provide some guidance during these uncertain times.  You should obtain legal advice specific to your situation if you have had a potential exposure at your premises or if you have been exposed to the virus while attending premises.

Allison is an Associate in the Civil Litigation practice group at Nixon Wenger LLP.  She has a general civil and commercial litigation practice, with an emphasis on tort related disputes, contract disputes, personal injury litigation, employment matters, and maritime, shipping, and environmental law.  Allison has represented clients at all levels of court in British Columbia, and works with her clients to find solutions that work best for them within the litigation process.    

What is a Power of Attorney and Why Do I Need One?

, , , ,

What Incapacity and Estate Planning Documents Do I Need?
We recommend you have a Power of Attorney, Representation Agreement, and Will.
What Is a Power of Attorney and Why Do I Need One?
A Power of Attorney is a legal document that you can use to appoint a trusted person(s) to make financial and legal decisions for you, in the event you are incapable of doing these things yourself while you are alive.  The person you appoint is called your “attorney”. You can give your attorney broad powers to step into your shoes as needed to deal with your finances and your real estate or your business and legal matters, OR you can place limits on the power that you give them. A Power of Attorney is a valuable part of your estate and incapacity planning.
Who Should I Choose as my Attorney?
You should appoint someone you trust because a Power of Attorney is a powerful document. Many people choose their spouse, a close family member or friend. A person does not have to agree to act as your attorney, so you should talk to them ahead of time and make sure they are up for taking on the job.
You can appoint more than one attorney, with different or the same authority. If you appoint more than one, they must act unanimously unless you state otherwise.
What Are the Duties of My Attorney?
The Power of Attorney Act of B.C. confirms that an attorney must act honestly and in good faith, must exercise the care and skill of a reasonably prudent person, keep proper records for inspection, keep your assets separate from your attorney’s assets, and always act in your best interests.
Does a Power of Attorney Allow my Attorney to Make Health Decisions For Me?
No. If you want to appoint a legal representative to make personal and health care decisions for you if you cannot make these decisions on your own, you will need to make a Representation Agreement.
Can I Cancel my Power of Attorney if I Change My Mind?
Yes. As long as you are mentally capable, you can revoke/cancel a Power of Attorney.

We at Nixon Wenger LLP specialize in estate and incapacity planning. Please contact us and we would be happy to help you prepare a Power of Attorney as part of your complete estate and incapacity plan.

Elise Allan is a Partner at Nixon Wenger LLP who works extensively with individuals, assisting them in such matters as the purchasing and selling of real estate, preparing Wills, Powers of Attorney and Representation Agreements as well as obtaining Grants of Probate.

Force majeure: Can Covid 19 release you from your contract obligations?

, , , ,

Under general principals of contract law, a party has a defense against performing under a contract where that performance becomes impossible due to unforeseeable events outside of the parties’ control.  If disaster strikes, a non-performing party can resort to a claim of “force majeure”, sometimes called “acts of God”, to forgive them from living up to their responsibilities.

A pandemic can be one of those events. Some commonly listed force majeure events include natural disasters such as floods, earthquakes, or hurricanes; war; terrorist acts; government action such as expropriations or changes in laws; union activities such as strikes and slow-downs; shortages of necessary materials… and, if the contract provides for them, also epidemics and quarantines.  

General economic conditions are not force majeure events.  Governmental restrictions may qualify, if directly related to the force majeure event, and if they directly relate to the alleged breach of contract, but reduced demand and business are usually found to be more a fact of life than an act of God:

While relatively few cases have interpreted the impact of pandemic on force majeure clauses, previous cases do offer some guidance. Courts have found that generalized economic hardship or increase in expenses, without more, does not constitute a force majeure event. As a result, it will be difficult to avoid an obligation to purchase goods or services merely because customer demand has decreased. Also, even if an unforeseeable and extreme disaster occurs, a contract’s force majeure provision will still control with regard to the parties obligations and may override other common law defenses used to avoid performance. For this reason, it is imperative that companies read contracts closely, or consider engaging counsel, to determine what rights they have before acting (or not acting) on a contract. Finally, courts are split as to whether intervening governmental acts (such as changes of regulations, emergency declarations, etc.) will excuse performance under contract, but the contract itself will still likely control as to which party bears the risk of the nonperformance.

National Law Review: COVID-19: Force Majere Event? March 19, 2020

If a contract’s force majeure clause includes terms such as “epidemic” or “quarantine” or “pandemic”, then the clause can be invoked during the current Covid-19 crisis to avoid living up to contractual responsibilities that have been rendered impossible.  Even if a contract has a force majeure clause that does not include such terms, it may still be possible to defend against an action for breach relying on the force majeure clause, if the language of the clause is broad enough to encapsulate disasters such as pandemics.  

However, in any case where such a clause is invoked, in order for the defense to work, the party invoking it must also show that they took steps to mitigate the damage and that full performance was truly impossible – together with any other contractual obligations that might be necessary to adhere to when invoking the clause.

If there is no force majeure clause at all, or if there is no reasonable way to bring the COVID-19 pandemic within the terms of the force majeure claus, then there still will be defenses to breach or non-performance on the commonlaw bases of impossibility or frustration of purpose.

All of these defenses are pretty strict.  The general principle of contract law is that the parties to an agreement assume the risk of their own non-performance unless the contract itself says otherwise.  In order to claim impossibility or frustration, the defending party has to show that the event offends, in a way that was unforeseen to the contracting parties, a foundational assumption of the agreement.  For instance: if the subject matter of the contract turns out to be non-existent, then the contract will be impossible to perform.  However, it is not a basic assumption of the parties that market conditions or financial situations will remain favourable to the parties.  

In this case the event is a global pandemic.  The problem with pandemics (well, one of the many problems with pandemics) is that they only indirectly affect businesses.  A pandemic is not that kind of natural event that destroys infrastructure or physically prevents businesses from operating.  Instead, it is the social and governmental response to the pandemic that has the effect of interfering with business viability.  Laws that are changed to address it are laws of general application that only affect your ability to live up to your contracts.

At the end of the day: contracts are enforceable.  Rent is payable. If rent is not paid, that is a breach of contract.  Force majeure is a defense available to a claim for that breach.  As identified above, general economic effects do not constitute a force majeure event.  

Unless the contract specifically defines pandemic as a force-majeure escape hatch, it seems unlikely that it would be considered one.  

However, the global nature of the coronavirus crisis lends itself to other practical considerations.  Unless there are particular circumstances that are quite significantly different than those being faced by most businesses today, it may not be in anyone’s business interests to force strict compliance with contracts right now.  After all, if all contracts are strictly enforced, that may have uncomfortable effects on the very parties who insist on strict enforcement:

As the COVID-19 pandemic continues to develop, businesses should take proactive steps to ensure continuity of operations sufficient to meet existing contractual obligations and evaluate whether their counterparties are doing the same. If companies expect that COVID-19 may result in their own or their counterparties’ inability to satisfy contractual obligations, they should assess the viability of either force majeure or common law principles of nonperformance excusal. This assessment may also be rendered more complicated by the fact that many companies will be on both sides of this issue, as the performing party in some cases or the receiving party in others… Businesses may wish to avail themselves of a force majeure clause or the common law principles in connection with certain contracts, but resist such a claim by their counterparties to other contracts. Companies will therefore need to be mindful of the broader implications of asserting these provisions and principles.

P.Weiss: Force Majeure under the coronavirus Pandemic: March 16, 2020

COVID-19 related contract breaches will cut in all directions.  If you insist on strict compliance with others, they may insist on strict compliance with you.
Andrew Powell practices a wide range of civil litigation with a focus on business or commercial disputes, including breach of contract, lease and land use issues, corporate disputes including liquidations and shareholder issues, and realization and enforcement. Andrew also practices estate litigation, including wills variation claims.

Employment Issues During COVID-19

, , ,

The COVID-19 pandemic has created unprecedented circumstances for Employers and Employees.  Many people  have questions with respect to their rights as Employers and Employees, and, particularly for Employers, potential liabilities.

The British Columbia Employment Standards Act sets out minimum standards that employers must adhere to.  COVID-19 does not change or suspend statutory rights or obligations.  Failure to adhere to these standards may result in claims against Employers and even personal liability for directors and owners of companies.  Being pro-active and getting good advice now can help avoid problems and encourage creative and pro-active solutions to preserve goodwill and morale in the workplace, and to make the best of a bad situation for all.

Don’t be fooled by one size fits all solutions.  Each situation is different and requires careful review and planning.

Don’t get caught out.  Call for assistance.

Builders Liens and Time Limits

, ,

Under the Builders Lien Act, contractors, sub-contractors, workers, and material suppliers are provided with two distinct types of liens. The first type of lien, known as a “builders lien” or a “lien against land”, is a lien against the land and buildings to which the construction professional have contributed labour or materials. The second type of lien, known as the Shimco lien (named after the case that first recognized such a lien in British Columbia) or the “holdback lien”, provides construction professionals with a lien against the holdback funds that should be retained by the person that is next highest in the construction pyramid (i.e. the funds that arise from the required deduction of 10% of the value or material as they are actually provided, or 10% of the amount of any payment made on account of the contract or subcontract).
The rights which flow from both the lien against land and the Shimco lien are powerful tools which enable unpaid construction professionals to seek compensation directly from the owner of the land to which they contributed labour or materials. However, there is a crucial catch: time limits must be respected in order for a construction professional to exercise these lien rights. If the time limits are not respected, lien rights are extinguished.
The Time Limits:
As a practical matter, if a construction professional has not provided any labour or materials to a construction site in 30 days, and payment has not yet been made by the owner, contractor, or subcontractor, that construction professional should consider having a conversation with his lawyer. As discussed below, for both legal and practical reasons, the process needed to exercise both a lien against land or a Shimco lien should be commenced as quickly as possible, as lien rights expire very quickly.
With respect to a traditonal builders lien / lien against land, the timelines that must be respected depend on whether the owner had hired a head contractor (meaning, a contractor that is engaged to perform substantially all of the construction work, or, in other words, a general contractor), whether there is an owner-developer or construction management relationship (i.e. the owner has direct contracts with all construction professionals), and whether the construction project is on a strata lot.
For contracts where the owner had hired a head contractor, construction professionals must file a document, entitled, “claim of lien”, with British Columbia’s Land Title Office, with respect to the land where materials or services were provided. The claim of lien document must be filed 45 days after the earliest of:
1.    substantial completion of the head contract;

2.    termination of the head contract;

3.    abandonment of the head contract;

4.    issuance of a certificate of completion for the head contract or any subcontract under which the construction professional had been retained; or

5.    for strata lots, the date the strata lot is conveyed to the purchaser or the date that strata unit is occupied.
Similarly, where there is there is an owner-developer or construction management relationship, the claim of lien document must be filed 45 days after the earliest of:
1.    substantial completion of the construction project;

2.    abandonment of the construction project;

3.    issuance of a certificate of completion for any contract or subcontract under which the construction professional had been retained; or

4.    for strata lots, the date the strata lot is conveyed to the purchaser or the date that strata unit is occupied.

Though there are a variety of complications that arise from these timelines, the practical questions that should be asked are:
i) has a certificate of completion been issued (this will invariably be issued by a third party engineer or architect) with respect to any part of the project?
ii) has the general contractor completed, abandoned, or terminated its contract with the owner?
iii) has the construction project been completed or abandoned? and
iv) if dealing with a strata lot, has someone bought the lot is living in the unit?
If the answer to any of these questions is “yes”, and, as a construction professional, you are unpaid, your lien rights may be on the way to expiring, and you should quickly seek to speak with your lawyer.
Finally, even after a claim of lien document is filed, an action to enforce that claim of lien, along with an associated certificate of pending litigation, must be filed within one year of the filing of the claim of lien.
With respect to the Shimco lien, the Builders Lien Act provides no express timelines that must be satisfied. However, from a practical perspective, swiftness of foot in advancing the Shimco lien is critical, because the Shimco lien can only be advanced before holdback funds have been dispersed, and the strategic usefulness of the Shimco lien lies in the fact that it can be advanced even when the typical builders lien / lien against land has expired.
The law is quite clear that the Shimco lien is extinguished if the holdback funds have been disbursed before the lien is advanced. As stated by the British Columbia Court of Appeal, in Wah Fai Plumbing & Heating Inc. v. Ma, 2011 BCCA 26:
[40]           Shimco does not deal with these circumstances.  Nor can the Act be interpreted to provide that where there is no holdback, or a holdback has been wrongfully paid out, a person whose land lien has been extinguished may later commence proceedings to enforce a lien against a nonexistent holdback.
[41]           The appellant argues there is no limitation in the Act for enforcing a lien against the holdback.  It claims that proceedings to enforce a lien against a holdback may be commenced any time before the holdback is paid out, subject only to the six-year limitation period provided in s. 3(5) of the Limitation Act, R.S.B.C. 1996, c. 266.  It argues further, citing s. 4(4) of the Limitation Act, that the amendment to the statement of claim in August 2006 to claim the holdback lien did not have the effect of commencing a new action, and its claim against the holdback should be considered to have arisen when it originally filed the writ and statement of claim in August 2002.
[42]           The appellant cites no authority for its suggestion that s. 4(4) of the Limitation Act should be given retroactive effect, and I see no basis in principle to so find in this case.  In any event, it would not change the result:  the appellant is not entitled to claim a lien against a nonexistent holdback.
Or, in other words, once the holdback funds are gone, they’re gone: The claim associated with the Shimco lien must be advanced before the holdback funds are paid out.
Considered together, the time limits associated with the liens provided under the Builders Lien Act are traps for the unwary. Whether considering a typical builders lien, or whether considering a Shimco lien, construction professionals have limited time to act to ensure that lien rights are not extinguished.
Christopher Hart is an Associate at Nixon Wenger LLP where he enjoys a wide ranging civil litigation practice, with a particular emphasis on estate litigation, commercial litigation, property litigation, and construction law.

Executors

, , ,

In your will, the executor is the person you name to settle your estate after your death. The executor is responsible for, among other things, determining what your assets and liabilities are at the time of your death, safeguarding those assets until they are distributed to the beneficiaries, paying your debts and filing your tax returns. They are also required to gather information about your beneficiaries and family members, including confirming legal names and addresses and identifying anyone under the age of 19. Your executor will apply for a grant of probate if one is required and ultimately distribute your assets according to your wishes.
It is important to choose your executor carefully to make sure your estate is settled efficiently and effectively. An ideal executor is someone who is organized, will deal with your assets and relatives objectively, and has loads of patience. Having an executor who lives in the same area as you is helpful but not necessary. It is also important that your executor survives you and has capacity at the time your will comes into effect.
Before appointing someone as your executor in your will, it is good practice to confirm that he or she is able and willing to take on that role. An alternate executor should be appointed in case the first executor can’t act.
There are a few circumstances where the intended executorship might fail:
1.    If you die before you have prepared a will, it is called dying intestate. The court must appoint someone to administer your estate. The court will look to who has the most interest in the estate – typically your closest surviving family member. (For more information on dying intestate, see Dying Without a Will

2.    If the executor named in your will declines, dies or is incapable of taking on the role, and you have no surviving or willing alternate executors, the court must appoint someone to administer your estate in accordance with your will. This person might not be permitted to act as administrator without posting an estate bond to protect creditors and beneficiaries who minors or incapable in the event the estate assets are administered improperly.

3.    If your sole or last surviving executor (“Your Last Executor”) received a grant of probate and then becomes incapable or dies before finishing his or her duties, the executor appointed by Your Last Executor in his or her will may be in a position to take over the administration of your estate. This is called the “chain of executorship” and it will not apply to all cases where Your Last Executor can no longer act before the administration of the estate is completed.

4.    The chain of executorship is broken if Your Last Executor left no will or did not appoint an executor or has no surviving willing and able executors. In those circumstances, the person with the most interest in your estate – typically a beneficiary – can apply to be substituted as the administrator of your estate.
Be sure to review your will regularly and be aware of the health and personal circumstances of your primary and alternate executors. If one or all of your executors are no longer able to act, make arrangements to update your will.

Krystin Kempton is a Partner at Nixon Wenger LLP where she has a general solicitor’s practice, advising corporate and individual clients on corporate and commercial transactions, lending and borrowing, wills and estates and real estate matters.
 

Avoid Probate Fees

, , ,

Probate fees are fees paid to the province to obtain a Grant of Probate from the British Columbia Supreme Court when a person dies. The fee is based on the value of the deceased person’s assets and can be generally estimated at 1.4% of the value of the assets. There are some adjustments, but the 1.4% provides a small overestimate of the fee. A Grant of Probate is generally required to enable the Executor to sell or otherwise deal with the deceased person`s assets.

However, not all of a person`s assets while alive may form part of that person`s estate and require a Grant of Probate to enable transfer. For example, an RRSP, RRIF, or TFSA that designates a beneficiary who survives the deceased person, will transfer directly to that beneficiary and not form part of the deceased`s estate that is subject to probate. Life insurance naming a beneficiary will go to the named beneficiary and not become part of the estate. And assets that are owned with one or more other persons as joint tenants can pass to the surviving joint tenants rather than to the estate.

Owning assets as joint tenants is a common circumstance for spouses. Most couples will own their home as joint tenants, have joint bank accounts, and often own vehicles jointly. For most couples*, it makes sense to also name the spouse as beneficiary for life insurance, RRSPs, RRIFs, and TFSAs. Consequently, upon the death of one spouse, all assets may transfer to the surviving spouse without the need to obtain a Grant of Probate.

Given the savings of time and money in avoiding a need for probate when the first spouse dies, we find that many surviving spouses are interested in adding children to title to a home or recreational property, or to bank accounts, in an effort to avoid future probate fees. While that can be effective to avoid probate, the transfer of ownership has many consequences that may not be intended.

Adding another person to title, or to a bank account, is a transfer of ownership. If the asset were a recreational property or an investment account, the transfer will be a disposition for income tax purposes and may trigger an obligation to pay capital gains tax. If you add a child to title to your principal residence and that child does not live in the residence, capital gains tax could become payable on part of the future increase in value of the home as part of the principal residence exemption may be lost. Once ownership is changed, control is lost, such that any future decision regarding a home or recreational property, including whether or not to sell or mortgage it, will require agreement of all owners. The asset would also be at risk of a claim by any creditors of the person that was added as an owner as well as claims by that person’s spouse in a family law claim.

Notwithstanding the consequences of adding a joint owner to an asset, there are circumstances where it is a good planning option. It is most important to clearly understand both the intended and unintended consequences of any change of ownership of any asset, and to clearly document the intent of any change. If one child is added to a bank account, should the balance of that account go to that child upon your death or do you intend that the balance be split among all your children. Future disputes can be avoided or minimized if intentions are well documented. A failure to properly document intentions often results in lengthy disputes that are expensive and permanently damage family relationships.

Probate fees are significant enough that it makes sense to at least consider options to avoid the need to obtain a grant of probate. But any changes in ownership should only be undertaken after careful consideration of the consequences of such change within the context of a person`s overall estate plan, and taking into account family dynamics that may create greater risks. All of these factors require a good conversation with your legal advisor to ensure any effort to save probate fees does not create problems that will be much more expensive and damaging to address.

*There are exceptions as each family is unique. You should seek legal advice that reflects your individual circumstances when planning for the eventual disposition of your assets upon death.

Tom Christensen, Q.C., has a general solicitor’s practice, assisting clients with business matters, wills and incapacity planning, the administration of estates, and real estate conveyancing and financing matters. He has a particular interest in assisting families with the transition of assets from one generation to the next through effective personal and business succession planning as well as resolving estate disputes outside of court.

Small Business Week 2018: Director Duties

,

Written by Krystin Kempton, Associate
Directors are elected by shareholders of a company to manage or supervise the management of the affairs of the company. Directors set the company’s overall direction and goals and directors appoint officers to carry out those goals. Directors of Canadian companies are required to fulfill certain duties, which can be broken down into two types: 
1. fiduciary duties, which are duties that result from being in a trust position; and
2. the duty of care, which is the expectation that a director will perform his or her duties in accordance with a certain standard.
Directors have duties imposed on them regardless of whether that person is a director of a company or a not-for-profit organization – there is no immunity for volunteers. 

Fiduciary Duties
A director is a fiduciary of their company. Fiduciary duties exist to provide protection to shareholders. There is a duty to act in good faith and in the best interests of the company, a duty to avoid conflicts and potential conflicts of duty and interest and a duty to not take advantage of company opportunities. A director is not permitted to act in his or her own self-interest or those of other people – the interests of
the company must be put first. A conflict of interest exists when there is the potential to favour personal interests, or those of other people, over the interests of the company.
Examples of conflicts of interest include:

  •     • any contract between a director and the company which could result in profit for that director,
          or which furthers the interests of that director’s relatives or friends;
  •     • accepting a gift as a token of friendship from an employee of the company before a vote about 
          that employee takes place;
  •     • disclosing confidential information about the company for personal use;
  •     • and taking part in a decision to terminate an employee of a company who has had personal issues 
          with that director’s child or spouse.
So what happens if there’s a conflict?

  •    • disclose the interest to the other directors;
  •    • leave the meeting when the matter is discussed and voted on;
  •    • don’t do anything that might influence the discussion or vote; and
  •    • ensure the conflict has been recorded in the meeting minutes.

    The other directors may approve a transaction that involves a conflict for a director, but the interested director must abstain from voting.

Duty of Care
The duty of care requires a director to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Directors with special knowledge and experience are expected to apply those skills when making decisions.
In practice, a director fulfills this duty of care by making informed decisions. Directors should always spend the time necessary to make reasonable decisions. This includes attending board meetings, learning about the issue, seeking input from the company’s officers, asking necessary questions and assessing the implications of a decision before voting.

Things to Consider When Incorporating Your Business: Part I

,

Written by: Krystin Kempton, Associate
An incorporated business is a distinct legal entity, separate from its shareholders. Once incorporated, the new entity has the ability to do anything a person of full legal capacity can do, including entering into contracts and owning property. If you have decided to incorporate your business in British Columbia, there are a number of things to consider, including what to name your company.  
If you wish for the company to be incorporated with a specific name, it has to be approved by BC Registries and Online Services. Once approved, BC Registry will not allow another company to incorporate with a name that is too similar to your company, therefore allowing your company to reserve the goodwill associated with that name.
The Business Corporations Regulation under the Business Corporations Act (British Columbia) sets out the required elements of a company name. The name must contain a distinctive component, a descriptive component and a corporate designation. Example: ABC Manufacturing Inc. (ABC = Distinctive; Manufacturing = Descriptive, and Inc. = Designation)
(1)    Distinctive element: This element differentiates you from other companies.
(2)    Descriptive element: This element describes the nature of the business. It expands the opportunity for name approval if a different company with similar or identical descriptive elements engages in different business activities, and therefore is not likely to be confused with your company for being too similar.
(3)    Designation: A corporate designation is limited to Incorporated, Inc., Limited, Ltd., Corporation or Corp., as well as French versions of each of those designations. This is a personal preference option and doesn’t make a difference to the company which designation is selected.
Up to three name choices can be submitted in order of preference. The BC Registry will review each name to confirm it contains the prescribed elements and the name will be compared to existing company names on the BC Registry. The first (if any) name choice that meets the basic criteria and will not be confused with an existing company will be approved. The BC Registry will then reserve that name for you for 56 days.
Alternatively, a company can be incorporated as a numbered company. The BC Registry will simply assign a sequential number to the company upon registration. The company can then register a trade name and be known to customers as “doing business as” that trade name, although this is not necessary. There is no name security for a registered business name. The company must be identified by its actual name (i.e., the assigned number followed by B.C. Ltd.) for all formal and legal matters, such as writing cheques and entering into contracts, but the company may use its trade name for signs, business cards and letterhead, for example.
There are a number of other considerations when incorporating, including (among other things) whether to use standard articles or revise them to suit the needs of your company, determining share structure and shareholders, electing directors, appointing officers and selecting who shall have signing authority for the company. Once incorporated, the company will have ongoing reporting requirements under the Business Corporations Act. We recommend seeking legal advice to discuss these items and to ensure the incorporation is completed properly.

#301-2706 30th Avenue
Vernon, B.C. Canada V1T 2B6

Get Directions

Hours: 8:00 am to 5:00 pm
Monday to Friday

Wheelchair Accessible

Telephone: 250-542-5353
Toll-Free: 1-800-243-5353
Fax: 250-542-7273