Trusts and Estates Practitioners Need to Be Aware of Family Law Act
Cross posted at AvoidaClaim.com
There is a fantastic article by John Harvey at page 12 in the October 26 issue of Law Times. (Sorry I can’t give you a public link – unfortunately it is locked up for Law Times subscribers – they can access it in the Law Times Digital Edition here.
While written for Ontario lawyers as it references the Ontario Family Law Act (FLA), the risk issues the article highlights are equally applicable to lawyers in other provinces and territories.
The article has some great comments and quotes from Lorne Wolfson of Torkin Manes LLP. The closing quote of the article says it all: “Estates practitioners must be extremely cautious when advising clients with respect to the potential consequences of estate planning techniques in the event of a separation of their clients and/or their client’s children”.
The article advises trusts and estates practitioners to think about the impact of the FLA when creating trusts. Trusts can certainly help with the deferral of taxes, but the FLA can throw some curves into the mix if the marriages of the clients or their beneficiaries end. In the event of a marriage breakdown the FLA dictates what counts as matrimonial property, and by extension, income if the issue of support in on the table.
The article has a good discussion of some of the issues and law in this area. It also makes another key point – estates practitioners shouldn’t dabble in family law – they should get some help from a lawyer that understands and can advise them on the potential FLA issues.
If you are a Law Times subscriber, pull the Oct 26 issue out of your inbox and read this article – it could help you AvoidAClaim.
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