This bulletin is current as of March 24, 2020. Due to the nature of the COVID-19 pandemic's impact on the law, we will be updating this bulletin to reflect any future legal changes.
As a result of the growing COVID-19 pandemic, the Government of Canada and the Government of Ontario, in addition to the Law Society of Ontario, have made, and will continue to make, significant changes to numerous areas of the law relevant to Ontarians. In light of a rapidly-shifting legal landscape, the purpose of this bulletin is to provide you with a summary of notable changes in taxation, trusts, and wills and estates law, as well as to serve as a reminder that we are here to support you in organizing your personal affairs. Specifically, this bulletin will summarize Government of Canada changes to income tax deadlines and requirements, Government of Ontario changes to court and document preparation processes (with a focus on estate administration), existing witnessing requirements for wills and powers of attorney, and the importance of having a valid Power of Attorney for Personal Care in place.
The world's reaction to COVID-19 has been nothing short of unprecedented. While historically humanity has been no stranger to disease outbreaks, never before has the world experienced a pandemic while being so globalized and so interconnected. Life for societies in all nations is changing, and as such, it is important that people prepare themselves in the event of further changes to their day-to-day activities.
As humans, our minds may first turn to securing the bare necessities, evidenced by the empty shelves at grocery stores and rationing of certain items. However, once immediate physical and practical needs are met, it is important to consider arranging one's personal affairs.
Government of Canada Makes Changes to Income Tax Deadlines and Requirements
As part of the COVID-19 Economic Response Plan, the Government of Canada has announced that it is "providing greater flexibility to Canadians who may be experiencing hardships" during the pandemic. As such, Canada Revenue Agency ("CRA") has extended several key taxation filing and remission deadlines:
- for individuals (other than trusts), the original return filing due date of April 30, 2020, will be deferred until June 1, 2020;
- for trusts having a taxation year ending on December 31, 2019, the original return filing due date or March 31, 2020 will be deferred until May 1, 2020; and
- taxpayers will be able to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after March 18, 2020 and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act ("ITA"). No interest or penalties will accumulate on these amounts during this period.
Additionally, effective immediately, CRA will recognize electronic signatures as having met the signature requirements of the ITA as a temporary administrative measure. This provision applies to the T183 and T183CORP authorization forms. CRA has done this in an effort to reduce both the necessity of Canadian taxpayers having to meet in-person with tax planners and overall administrative burden.
Lastly, on a somewhat-related note, the Government of Canada response plan notes that the government has asked financial institutions to assist Canadians through this tumultuous time, stating that "banks in Canada have affirmed their commitment to working with customers to provide flexible solutions, on a case-by-case basis, for managing through hardships caused by recent developments".
While losing a loved one in itself is often a difficult time for anyone, having to worry about administering their estate can be all the more overwhelming. Having do so during a global pandemic can only exacerbate the already-existing stresses. That being said, the Government of Ontario has announced changes to certain court procedures that all who are involved with an estate administration (or other related court proceeding) should know.
Where an executor of an estate seeks to obtain a Certificate of Appointment of Estate Trustee with a Will or a Certificate of Appointment of Estate Trustee without a Will, this requires the preparation of certain court documents (both processes being referred to herein as "Probate"). Once the executor or applicant has prepared those documents, they will need to sign the documents in the presence of a commissioner for taking oaths and affidavits. On March 18, 2020, the Law Society of Ontario confirmed that, in light of COVID-19, it is interpreting the Commissioners for Taking Affidavits Act as permitting alternative means of commissioning such as commissioning via video conference, so long as the commissioner takes all steps to ensure that the person swearing the application can prove their identity. Once the executor or applicant, with the commissioner's assistance, finalizes the package of documents, they must then file such package, including the deceased's original will (if applicable), with the court.
In response to Fasken's inquiries, the Toronto Estates Court has confirmed that as of March 23, 2020, the Ontario Superior Court of Justice has closed its doors to in-person filings, but will accept filings of new Probate applications, as well as other filings for matters that are to be considered by the court in writing (including motions for consent orders and ex parte orders) by mail or courier (assuming that couriers are still operating). This means that law firms are unable to send either process servers or their own members to any Superior Court location to file any new Probate applications.
Furthermore, the Superior Court has confirmed that it has suspended all hearings related to estates matters, effective March 17, 2020, until after June 1, 2020. Such matters are not, as of the date of this bulletin, currently being rescheduled. It is also worth noting that, pursuant to a new regulation to the Emergency Management and Civil Protection Act(PDF), the Government of Ontario has suspended limitation periods and procedural time periods generally, retroactive to March 16, 2020. That being said, the Superior Court has agreed to continue to hear certain urgent matters, particularly those relating to COVID-19. For filing relating to urgent matters, the Toronto Estates Court has advised that its counter services are open from 10:00 A.M. to 12:00 P.M. and again from 2:00 P.M. to 4:00 P.M. The Toronto Estates Court has emphasized that individuals are only able to attend in person during these hours if their matter is urgent.
What remains uncertain is whether applications filed in the normal course that require an order from a judge (for example, proving a will in solemn form or an order for a Certificate of Appointment of Estate Trustee with a Will Limited to the Assets Referred to in the Will) will be addressed during this time. This could be an issue, as certain individuals may have trouble accessing an original will because it is stored in a location that is now closed because of COVID-19 (i.e. a bank or a law firm). Normally, where an original will cannot not be located, one has the ability to file a motion asking for a copy of the will to be proven in solemn form with proof of any attempts made to locate the original will. If there is an urgent issue surrounding such will (or lack thereof), there may be the ability to bring an urgent motion to be heard by the court, although the extent of this ability at this time is unclear.
No Current Changes to Witnessing Requirements for Wills or Powers of Attorney
While the Government of Canada, Government of Ontario, and Law Society of Ontario have announced measures to reduce the necessity of Canadians having to meet each other in person for various types of matters, it is notable that none of these entities (specifically, the Government of Ontario) have announced any changes to the witnessing requirements for wills and powers of attorney.
With respect to wills, section 4 of the Succession Law Reform Act states that a will is not valid unless it is signed by the testator "in the presence of two or more attesting witnesses present at the same time", and that such witnesses must also sign in the "presence" of the testator (unless the will is a document both completely handwritten and signed by the testator, in which case there is no witnessing requirement for such will to be valid). Similarly, subsections 10(1) and 48(1) of the Substitute Decisions Act dictate that a power of attorney document must also be signed by the grantor in the "presence" of two witnesses, for powers of attorney for property and powers of attorney for personal care, respectively.
As Ontario law takes a relatively strict approach to the execution formality requirements for the validity of such documents, absent any contrary direction from the province or a court, it is not advisable to sign these documents electronically or to witness them by means of a video conference. In fact, subsection 31(1) of the Electronic Commerce Act expressly states that its provisions with respect to electronic signatures do not apply to wills or powers of attorney.
However, in light of the COVID-19 pandemic and the changes to document signing requirements in other contexts (such as the process for commissioning documents, as outlined above) the "presence" requirement and lack of electronic signature provisions for wills and powers of attorney seem particularly restrictive when considering that certain people cannot or should not act as witnesses for such documents (for example, a beneficiary of a will cannot be an attesting witness to that will or their entitlement under the will shall be void). Although it is not impossible that these witnessing requirements may change, individuals looking to execute such documents should seek the assistance of a lawyer to put together an arrangement that prioritizes safety while still ensuring the validity of such documents.
The Importance of Powers of Attorney
On the topic of powers of attorney, as concerns relating to COVID-19 continue to grow, readers may be reflecting on their support system. Such support system may include family, friends, neighbors, and the larger community who have come together (while maintaining a healthy physical distance) to support each other's needs. In addition, for many readers it may be comforting to have documents in place that legally authorize someone of their choosing from within their own support system to make decisions about their property or personal care in the event that they are unable to do so; in other words, to have powers of attorney.
For readers who are unfamiliar with powers of attorney, note that there are two types: a power of attorney for property ("POAP") and a power of attorney for personal care ("POAPC"). The document itself is referred to as the "power of attorney", and the term "attorney" is used to refer to the person(s) (or in some cases, an entity such as a trust company) that the "grantor" (the person giving the power of attorney) appoints. POAPs allow a grantor to provide an attorney with the authority to do anything with the grantor's property that such grantor would be able to do themselves, except make a will. A POAPC provides an attorney with the ability to make decisions with respect to a grantor's personal care, including decisions relating to health care, nutrition, shelter, clothing, hygiene or safety.
Naturally, one can imagine why a POAPC in particular would be important to have in place in the event of a pandemic. While a full overview of the law relating to POAPCs is beyond the scope of this bulletin, readers may wish to consider our top five reasons for having a POAPC:
1. A POAPC Enables You to Choose Who You Wish to Make Personal Care Decisions on Your Behalf
A POAPC provides you with a mechanism for choosing who you want to make personal care decisions—including critical medical decisions—in the event you are unable to so. With a POAPC, you may appoint a single attorney, multiple attorneys, and alternate attorney(s), if you so desire. Alternate attorneys may act if the original attorney(s) is or are for any reason unwilling or unable to act.
2. Without a POAPC, a Costly Guardianship Application May be Necessary
In the absence of a POAPC and in the event that you are incapable of making personal care decisions on your own, if a person (such as a loved one) requires the authority to make such personal care decisions on your behalf, below, such person may need to bring a guardianship application to court (although there is an exception for certain medical treatments, as described below). A guardianship application would seek to appoint such person as your guardian of the person, and there can be multiple such guardians. However, guardianship applications can be very costly and time-consuming. Furthermore, the difficulties surrounding such applications may be exacerbated during this time, in light of the changes to the court system as outlined above.
In addition to the cost, until you have an appointed guardian of the person, some personal care decisions may be in limbo. For example, long-term care homes may require an individual to have the legal authority (whether as an attorney or a guardian) before they can act on such individual's instruction. Lastly, note that guardianship applications also pose the risk that a person who applies to be and a court subsequently appoints as your guardian for personal care may not be whom you would have chosen, before you became incapable, to make your personal care decisions.
3. The Health Care Consent Act May Lead to Undesired Results
That being said, if you become incapable, subsection 20(1) of Ontario's Health Care Consent Act ("HCCA") provides a hierarchal list of people who may consent or refuse "treatment" on your behalf. The HCCA defines "treatment" relatively broadly, including everything from palliative treatments to cosmetic treatments.
While the HCCA provides a default decision-maker for treatments, similarly to the issue regarding guardianship applications outlined above, such person may not be whom you would have chosen to make your treatment decisions had you been capable of choosing such person.
4. You Can Provide Personal Care Directions in a POAPC
A POAPC enables you to include a detailed list of medical directions indicating what medical care is to be provided in the event a given medical condition arises. Generally speaking, these directions are binding on the attorney, except in the event that a given direction is impossible to carry out at the time at which the attorney is directed to do so.
5. You Can Choose Quality or Quantity of Life with a POAPC
Lastly, and perhaps most integrally, a POAPC allows you to express your wishes concerning end-of-life treatment and care. For example, this may include a wish to "pull the plug" (i.e. not applying heroic measures to prolong your life), or an express wish not to do so.
We're Here to Help
As members of the Private Client Services group at Fasken, we know that encouraging our clients to draft or amend their wills and/or powers of attorney can be a challenging process. None of us, including our clients, enjoy contemplating illness or demise, but as death and incapacity are realities of life, the presence of a pandemic highlights the need for planning to be completed.
So, as many are in self-isolation, now is the perfect time to assess how we can reiterate the importance of succession and incapacity planning to our clients. Government entities are now changing some of the procedures related to these types of planning with little to no notice, making it all the more necessary to seek guidance in navigating this evolving area of the law. This is particularly so when considering the delays that these changes will generate; for example, the Probate process in the usual course is relatively lengthy, and now with reduced Superior Court operational capacity, individuals will undoubtedly face longer-than-usual processing times for Probate matters.
As the title of this bulletin suggests, we are here to help. Whether you are seeking to plan your own estate, administer someone else's estate, draft a power of attorney or arrange for a tax-efficient means of managing your family wealth, we can assure you that we are keeping abreast of any changes in the law, with a view to ensuring that you achieve your goals related to maintaining both your own well-being and your loved ones' well-being.