By Barrie Hayes, Partner 

As our society grows  older the increasing incidence of dementia and Alzheimer’s have led to a corresponding increase in  the court appointments of guardians of property and guardians of the person.

In a situation where a person, because of the onset of mental illness, dementia or otherwise becomes incapable of managing his or her property or of making decisions involving his or her health care unless the person, while he or she was capable, has executed a continuing power of attorney for property or a power of attorney for personal care, the incapable person will require a court-appointed guardian of property to manage his or her financial affairs and a guardian of person to make decisions of personal care on behalf of the incapable person.

Anyone can make application for appointment as a guardian of property and  guardian of the person although the incapable person’s spouse and family are the most frequent applicants. More than one person can apply for these guardianship appointments.

The presumption laws that a person is presumed capable to  manage his or her affairs or to make care decisions unless evidence  satisfies the court on the balance of probabilities that the person is incapable. An affidavit from the incompetent person’s physician or the report of a certified capacity assessor are  commonly accepted as evidence confirming incapacity.

The person applying for appointment as guardian of property will be required to file an affidavit which among other issues ;addresses the factual background of the incapable person, whether the applicant is requesting a judgement dispensing with the requirement that the applicant post a security bond and confirming that the incapable person has been informed of the nature of the application.

The applicant is also required to include as an exhibit a completed management plan which details the incapable persons assets, describes the care arrangement to be made for the benefit of the incapable person , the cost of such care arrangement and details the investment plan the applicant has made for the benefit of the incapable person.

The appointment of guardianship of property provides the guardian with the authority to do anything in respect of property that the incapable person could of done, if capable, except make a will. The guardian of property is a fiduciary whose powers and duties are to be exercised and performed diligently with honesty and integrity and in good faith for the incapable person’s benefit.

The guardian for property is required to keep careful accounts in administering the incapable person’s financial affairs and to have such accounts reviewed and approved by the court from time to time.

The application for the appointment of a guardian of the person is similar in form to the guardianship of property but it’s focus is on whether the incapable person can make appropriate decisions for his or her care. The order appointing the guardian of the person will define the scope of the decisions for personal care of the incapable person to be made by the guardian of the person.

The guardian of the person is required to execute his or her duties diligently and a good faith for the best interest of the incapable person.

In situations where a person becomes incapable and no person is prepared to be appointed guardian of property or personal care for the incapable person the Office of the Public Trustee and Guardian will become the statutory guardian for the incapable person.

 By Graydon Ebert, Associate 

When multiple parties purchase a property one of the important considerations to be made is how the parties’ should take title to the property. There are two options: Joint Tenants or Tenants In Common.

For the parties to take title as joint tenants there must be what is termed the “four unities”: possession, interest, title and time. The unity of possession is present where the parties each have an equal right to possession of the property. The unity of interest is present where the parties’ interest in the property is identical in size and duration. The unity of title requires that the parties’ receive their title to the property from the same document and the unity of time requires that the parties acquire their title to the property at the same time. If the four unities are present, the parties have a concurrent interest in the property in which all of the joint tenants have a unified right of possession to the whole of the property with a right of survivorship.

What is a right of survivorship? Essentially, if one of the joint tenants dies, his or her interest in the property would pass to the remaining joint tenants and would not get distributed pursuant to the provisions of a will. For example, if Adam, Bob and Chris own a property together as joint tenants, upon the death of Adam, his interest in the property would be assumed by Bob and Chris and not to a beneficiary under Adam’s will. If Bob then dies, Chris would be the sole owner of the property.

Taking title as tenants in common is different. When parties take title as tenants in common, they take title to an undivided fractional share of the whole property and do not have a right to survivorship. Tenancy in common only requires a unity of possession. Tenants in common can leave their share of the property to someone in their Will or transfer their separate interest to a third party. Using our above example, if Adam, Bob and Chris own a property together, with each owing a 1/3 interest as tenants in common, when Adam passes away, he can leave his share by Will to his wife Debbie. Then Debbie, Bob and Chris are the owners of the property.

It is important to note, that there are instances where a joint tenancy can be converted into a tenancy in common. If the joint tenants die in a manner where it is unclear as to who survived who, they will have been deemed to have been tenants in common in equal proportion unless there is a very specific intention to the contrary.

Also, a joint tenancy will end if any of the four unities required for a joint tenancy are destroyed. This would result in a tenancy in common and an end to the right of survivorship. The most common instance would be where one tenant transfers his interest in the property to another party. In this case, there is no longer unity of title or time as the third party has acquired his interest at another time and by another document. In this instance, the new party holds a proportionate interest in the property as a tenant in common and the remaining joint tenants will hold the remaining interest in the property as joint tenants. Using the above joint tenants example, if Adam decided to sell his interest in the property to Ernie, Ernie would hold a 1/3 interest in the property as a tenant in common which he could further transfer or bequeath by Will. Bob and Chris would remain joint tenants in respect of the further 2/3 interest in the property and there would remain a right of survivorship, such that if Bob were to die, Chris would own the full 2/3 share of the property as tenant in common with Ernie.

The most common instance where more than one party holds title to a property is where title to the property is held by two spouses. In this instance, the spouses will usually take title as joint tenants as this allows the property to automatically be held solely by the surviving spouse upon the death of the first spouse without the property becoming property of the first spouse’s estate.

Every situation is different and a discussion with a lawyer as to how title should be taken to the property being purchased is worthwhile so that future planning considerations can be made. The Real Estate lawyers at Barriston LLP are available to help you figure out the best way for the parties to take title to the property.

by George Craig, Partner 

A move from one home to another can be a great undertaking for anyone, but moving with children can be especially challenging. Follow these steps to ensure your move is as least-disruptive to your child/children’s routine as possible:

• Positive Experience: Whether you’re moving out of province or just around the block, children and adolescents typically aren’t thrilled about moving. Most experts agree, however, that any move with children can be a positive and rewarding experience if appropriate plans are made to ease the transition.
• Timing: If possible, plan your move during the school year so your children can meet new friends.
• Consultations: Children can and should be consulted with respect to their view on the move. The reasons for a move should be explained to your children and the positive aspects stressed. If your children are older, perhaps involve them in the selection process of the new home. Let them know you will take their comments into consideration when making a final decision, and keep them posted in the process. Have a celebration when you finally know you have gotten the house.
• Informing Children: Be sure that your children hear about the move from you first -explain why you’ll be moving and ask for their feedback.
• Permanence: Ensure that your child takes along any items which are special and emotionally supportive (toys, games, animals, collections, etc.).
• Purge before Packing: Let the kids know that now is an optimal time to cut through the clutter. Get your kids to help you sort through the house and identify what you should keep or toss. Let them know that, if you hold a yard sale, they make money off the sale of their old toys and clothing. Allow the kids to choose something they wish to purchase for the new home using the profits from a yard/moving sale.
• EnRoute: If you are moving further than around the block, particularly with young children, pack a bag of toys and activity books, blankets, pillows and snacks for the car ride. Prepare for moving day the same as you would for any other road trip.
• Neighborhood Tourist: Once you’ve begun to settle in the days following your move, treat your new neighborhood as a destination. Find out where the nearest parks, museums, ice cream shops, etc. are and engage your children to show them all that your new neighborhood has to offer.

We hope that some of the above suggestions will be helpful to you and your family in your move preparations.

As your moving day draws closer, revisit your checklist and ensure that you have completed all of your preliminary organizational tasks. At this point, you should have made arrangements with your insurance, moving, cleaning & utility companies – most of which can be dealt with over the phone or internet in the months/weeks preceding your move. All that remains to be done at this point concerns the physical move to your new home. Set aside some time to complete the following tasks:

 

• Arrangements with Movers: Touch base with your moving company. Ensure that you know what your responsibilities are and what, if any, assistance or information they require from you at this stage.

• Layout Your New Home: Draw a floor plan of your new home and indicate the location of where you would like your furniture placed. This will help the movers on moving day, and also give you a good idea of what furniture you need to purchase/discard. If you can get the furniture placement right the first time, it will save you having to move large items throughout your new home when the movers are long gone.

• Plants and Frozen Foods: Make specific arrangements for the moving of items which require special care including plants, frozen food, mirrors and glass. If you can make these arrangements ahead of time, you’ll have less to worry about on your moving day. Remember that the movers are there to help you – organize and delegate tasks accordingly.

• Clean up: The clean-up of basements, garages and tool sheds are often left until the end of the packing process, and may be overlooked completely. It’s a dirty job, but it needs to get done – set aside a block of time to sort and clean out your garage, basement and tool shed.  Check with your local Municipal Office about discarding hazardous waste, electrical items, tires, and other items that require special disposal. You may also want to look into ‘junk’ removal companies who may be able to dispose of these items for you.

• Valuables: Gather all of your most valuable possessions, pack them securely, and set them aside. You should plan to move these items with you on moving day.

• Mirrors and Pictures: Mirrors and pictures that are breakable should be left on the walls or in their normal location until you are ready to actually move them. Your movers may be able to help with the removal and wrapping of mirrors and other framed items – ask the pros when it comes to fragile items.

 

Before you know it, your movers will be arriving to collect your packed belonging and furniture. Follow the above-mentioned steps to prepare for their arrival on moving day.

By Joanne McPhail, Partner, Specialist in Corporate Commercial Law 

So your accountant has advised you to add your 18 year old child on as a shareholder of your corporation, because he is off to Harvard, tuition is high, and you could use the company to help fund his expensive fine arts education.  There are some strong tax reasons to have a look at this as an option (dividends taxed in the hands of adult students with little or no income can have favourable tax consequences), but there also some legal questions to be dealt with, before jumping in head first.  Will the shares be voting or non-voting?  Is the child mature enough to handle the funds received in a responsible way?  How much of the future growth in value of your business might be attributed to those shares?  Will your child remain a resident of Canada?  Can you get the shares back in the event of a problem down the road?  These are all important issues to discuss with your advisors.  Ontario legislation does confer certain rights on all shareholders, even minority non-voting ones, so it’s important to understand what a disgruntled child’s rights may be in the event that he wants to make your life miserable.  There are opportunities to structure shares that you want to sell to family members so that they are nonvoting, re-purchasable and dividends are completely discretionary.  A good talk with your lawyer and accountant, and then your child, is prudent, before making any decisions about issuing shares to your kids.

You will likely need a location from which to carry on your new business. Many businesses can run from home these days. Even so, you may need a place to meet with clients and hold meetings. In the recent past, businesses have opened offering office suites/meeting rooms for rental. Other formats may include clustered offices with shared reception, photocopying services etc.

Keeping overhead, particularly fixed overhead, low is a mantra of business. Err on the side of too little, or too plain when starting out.

Your business may however need space. If your space has high visibility it will likely cost more, but may be worth it if the goods or services you sell might be purchased by a passerby on impulse. If your goods or services are specialized, (e.g. making harps), visibility is not as important as the public will seek you out.

Most of us cannot purchase space when we are starting out, so a lease is required. As with business associates,  a reputable landlord is essential. Ask around. A lease a foot thick will not be of much assistance if the landlord is slippery or simply doesn’t care.

Leases generally charge base rent (for the use of the space) and add additional rent to address the costs associated with running the tenancy. This is sometimes referred to as M.I.T., being maintenance, insurance and taxes. If an offer to lease speaks of the lease being net and ‘carefree to the landlord’ it means nearly all the costs associated with the lot, building or plaza, as the case may be, are passed along to the tenant(s). If the offer to lease is silent on the amount of M.I.T.,  have the landlord put an estimate (capped) of the M.I.T. so you  know what it the lease will really cost.

Never sign an offer to lease which stipulates you will sign the landlord’s standard form of lease, subsequently. Ask to see the ‘standard form of lease’ before you sign the offer. If the formal lease puzzles you, see a lawyer.

If you are in a multi-tenanted facility, be sure your obligation to contribute to the M.I.T.is a percentage of the rentable area (not the rented area) of the facility.

Consider the term of the lease carefully. A long term gives you protection from unanticipated rent increases, or being obliged to move. On the other hand, you are committed to that term and the rent associated with it. Even if you assign the lease, you remain ‘on the hook’,  (the legal term is ‘on the covenant’),  until the term expires. This means that if the person you assign to fails, you must pay.

When you are starting out, a way to minimize risk is to negotiate a relatively short lease, (perhaps two years) with one or two options to renew of perhaps five years. This arrangement gives you both security in your tenancy, and an ‘out’ if the business venture does not go well.

A word on guarantees. If you have a company, the landlord will almost assuredly demand a personal guarantee from you, and is unlikely to be flexible. A good response in such situations is to provide the guarantee, if you want the space, and request you be relieved of the guarantee at the termination of the initial term, if you have upheld all your promises under the lease. If a landlord wants to rent his space, he may go for it.   Be sure such understanding is written in to your lease or offer to lease.

Finally, all understandings that are important to you must be written into your lease. Verbal understandings that are not included in your lease will be unenforceable.