​

Your Estate Matters Newsletter

​

Your Estate Podcast

Episode 17: Understanding the Complexities of Wealth Transition

In this week's episode, we welcome Cindy Radu, a family wealth transition advisor, to discuss the intricate journey of wealth transition and the importance of understanding wealth holistically. Cindy shares her unique career path and emphasizes the significance of governance structures, family dynamics, and the multifaceted nature of wealth, which includes social, human, intellectual, and foundational aspects. She provides insights into effective governance, the role of family charters, and the need for open communication and education to preserve family legacies across generations.

Your Estate Tip

The Three Circle Model of Family Business

When considering estate planning for family businesses, a systematic approach often considers three overlapping, interacting, and interdependent subsystems of family, ownership, and management. Each subsystem maintains boundaries that separate it from the other subsystems and the general external environment, within which the family business operates. This model suggests that a family business is best understood and studied as a complex and dynamic system in which each of the subsystems has a strong impact on the other subsystems and accordingly the larger system as a whole.

If a person has one role, they will be in just one subsystem or circle. However, if they have multiple roles, they will be in an overlapping sector, sitting within two or three circles at one time. Within the three circle model, there are seven distinct groups with a connection to the family business:

1. Family members not involved in the business, but who are descendants or spouses/partners of owners;
2. Family owners not employed in the business;
3. Non-family owners who do not work in the business;
4. Non-family owners who work in the business;
5. Non-family employees;
6. Family members who work in the business but are not owners; and
7. Family owners who work in the business.

Each of the seven interest groups identified by the model has its own viewpoints, goals, concerns, and dynamics. The long-term success of a family business system and effective succession to the next generation depends on the functioning and mutual support of each of these groups.

Your Estate Case

Widow to keep $102,789.52 from late husband's RRSP after court victory against Canada Revenue Agency

The Federal Court of Appeal has issued a significant ruling this week in the case of Enns v. Canada, limiting the Canada Revenue Agency’s (CRA) ability to collect tax debts from surviving spouses who receive Registered Retirement Savings Plan (RRSP) proceeds.

The ruling Tuesday said Marlene Enns is exempt from a clause in the Income Tax Act that gives the CRA power to collect unpaid tax debts from spouses or common-law partners in certain cases because, under law, her marriage ended the moment her husband died.

"A person is only a 'spouse' for the period during which that person was married and, therefore, when a marriage ends, a person ceases to be a 'spouse'," the judge wrote.

Peter Enns, Marlene’s husband, died in May 2013, leaving her as the sole beneficiary of his RRSP. The CRA discovered that Peter owed approximately $150,000 in income tax and sought to collect the full amount of the RRSP transfer, $102,789.52, from Marlene. The Tax Court of Canada initially ruled against Marlene in 2023, but the Federal Court of Appeal reversed this decision.

The court based its decision on several key points:

1. The legal and dictionary definitions of “spouse” typically refer to a married person.
2. A marriage ends at the moment one partner dies, therefore Marlene wasn’t a “spouse” when she inherited the retirement savings. As we say around here, death can be considered divorce by extreme measures.
3. The court considered the definition of “common-law partner” in the Act, which implies a living relationship.

This ruling represents a significant shift in the interpretation of tax law and may provide relief to surviving spouses who receive RRSP proceeds from their deceased partners, protecting them from unexpected tax liabilities.

Your Estate Read

The Five Invitations: Discovering What Death Can Teach Us About Living Fully by Frank Ostaseski

Frank Ostaseski’s “The Five Invitations: Discovering What Death Can Teach Us About Living Fully” offers profound insights into how embracing the reality of death can transform our approach to living. Drawing from his extensive experience as a hospice worker and Buddhist teacher, Ostaseski presents five principles that serve as guides for living a more intentional and meaningful life.

The Five Invitations

1. Don’t Wait: This invitation urges us to live fully in the present moment, recognizing the preciousness of life and not postponing what truly matters.
2. Welcome Everything, Push Away Nothing: Ostaseski encourages us to embrace all experiences, both positive and negative, as opportunities for growth and learning.
3. Bring Your Whole Self to the Experience: This principle emphasizes the importance of authenticity and vulnerability in our interactions and experiences.
4. Find a Place of Rest in the Middle of Things: Amidst life’s chaos, we are invited to cultivate inner peace and stillness.
5. Cultivate Don’t Know Mind: This invitation encourages openness, curiosity, and a willingness to embrace uncertainty.

Ostaseski writes that by maintaining an awareness of death, we can live more fully and authentically. He points out that life and death are inseparable, and by acknowledging our mortality, we can gain a deeper appreciation for the present moment.

The book is filled with poignant stories from Ostaseski’s work with the dying, illustrating how these principles can guide us through life’s challenges, transitions, and crises. His approach combines elements of Buddhist philosophy with practical wisdom, offering a compassionate and transformative perspective on living and dying.

By reframing our relationship with death, Ostaseski’s work encourages readers to live with greater intention, compassion, and openness. It serves as a gentle reminder of life’s impermanence and the importance of embracing each moment fully.

Here are some ways you can work with us: ​Book a free consultation with Heritage Trust. Download our free checklist “Essential Steps for Estate Planning.” Purchase our course "The Estate Organizer for Canadians." ​ Follow us on social: ​​​​

​

Suite 220, 545 Clyde Avenue, West Vancouver, BC V7T 1C5
​Unsubscribe · Preferences​