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Wednesday, December 13, 2017
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Is the STEP Canada Diploma for you?

Courses covering the major areas of estate planning expertise:

  • Law of Trusts
  • Taxation of Trusts & Estates
  • Wills, Trust & Estate Administration
  • Trust & Estate Planning

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Qualified Practitioner (Essay) Route

The approved list of essay topics includes topics from four subject areas:
  1. Law
  2. Accounts and Administration
  3. Tax
  4. International
  5. Incapacity
You may choose one topic from any of the five subject areas. In order to complete the program, you must have passed three essays from any three of the five subject areas. You may NOT write multiple essays on the same subject area.

There are two cut-off dates for marking: October 1 and May 1. Each essay should between 2,500 to 3,000 words in length, not including footnotes or references.

These topics are effective for any essays submitted beginning October 1, 2017.
A Law
01 Complex family situations, such as second or third marriages, unmarried relationships, with or without children, step-children, and so on, provide challenges to the will drafter, estate planners and personal representatives (liquidators in Quebec) administering estates. Providing examples of good and poor drafting and citing both statute and case law, describe issues to be considered arising from some or all of these situations. Include a discussion about remedies available to beneficiaries who wish to challenge the will as well as planning techniques to exclude such claims. If you wish, you may include in your essay an analysis of policy considerations in dependents' relief statutes (in Quebec, alimentary support claims under the CCQ) .
02 Intestacies create special complications where the deceased had a common law partner. This is particularly the case where there are adult children, a matrimonial home and the deceased held property (real and personal) in one province that treats common law relationships as equivalent to a marriage and in another that does not. Providing examples and citing both statute and case law, describe issues arising from such a situation. Discuss the potential implications for the rights and entitlements of the common law partner and children and how they might be resolved. If you wish, you may include in your essay an analysis of policy considerations in intestacy law.
03 Testamentary trusts can serve many objectives of estate planning. Discuss the uses of such trusts in some or all of these family circumstances: (i) the minor child; (ii) the elderly spouse; (iii) the disabled family member receiving government financial support; (iv) the spendthrift child; (v) the family member suffering from substance addiction; (vi) the child with a troubled marriage; (vii) dependent parent; and (viii) any other examples selected to advance your argument. Give examples of good or poor drafting to address these issues, and refer to statute and case law as necessary to justify your conclusions. If you wish, you may comment on effective drafting to defer or minimize income tax, however, the focus of the essay must be relevant legal (i.e. non-tax) issues.
04 Sometimes, following the establishment of a trust, beneficiaries want to either change the terms of a trust or have it terminate prior to its expected termination date. There are many reasons why one or more beneficiaries [or the trustee(s)] may seek a variation of the terms of a trust. Discuss, citing jurisprudence and statute, the method or methods that might be available to vary/terminate a trust, the reasons for using the selected methods, and the issues involved with each such method.
05 [Common Law Jurisdictions Only] Planning for the eventual distribution of one’s estate is not only about making a Will. Estate planners have several “will substitutes” that may, in the right circumstances, be appropriate alternatives for use in an individual’s estate plan. Describe the following will substitutes, including what, if any, advantages and disadvantages they present as well as any associated issues:
  1. holding real property and personal property jointly with right of survivorship
  2. designating (either by Will or by separate instrument) beneficiaries for registered plans (e.g., RRSPs, RRIFs, TFSAs, pension plans, etc.)
  3. designating beneficiaries for life insurance and using insurance trusts (within the Will or by separate instrument)
  4. using alter ego trusts/joint partner trusts
  5. using secret or semi-secret trusts
06 Exculpatory clauses are often found in wills and trusts. Discuss the nature and scope of such clauses, the reasons for the use of such clauses, their effectiveness and the typical language used in drafting them with suggestions for improvements and advice concerning common errors or pitfalls. Include comments with respect to the criteria that courts have applied in determining the validity of such a clause in particular circumstances, referring to case law and doctrine.
07 Whether or not an individual had capacity to execute estate planning documents can be a sticky issue. What factors would a Court consider in a challenge to a Will and POA on the grounds that the testator/grantor did not have capacity to execute the documents? How can a practitioner help to ensure that capacity will not be successfully challenged in relation to these documents? Finally, how would you advise a client who is acting as POA for an individual who has lost capacity as far as what estate planning options are open to the incapable person?
08 From time to time, questions arise concerning the interpretation of one or more provisions in a Will. Describe, using examples from jurisprudence, the general principles or rules of construction that courts use to determine the meaning of a Will. In your description, include an analysis of the type(s) of evidence that can be admitted to court to assist the court in determining the meaning of the Will.
09 [Common Law Jurisdictions] Although “testamentary freedom” is often used to describe the scope of a testator’s ability to make a Will, the reality is that there are certain limitations imposed by law on that freedom. In addition to limitations imposed by statute (e.g., as a result of dependant’s relief requirements), the common law also imposes certain limitations, including limitations arising from public policy considerations. Describe, using examples from jurisprudence, the public policy limits that exist on a testator’s freedom to make a Will that disposes of his or her estate as he or she sees fit.

[Quebec- Civil Law] Although “testamentary freedom” is often used to describe the scope of a testator’s ability to make a Will, the reality is that there are certain limitations imposed by law on that freedom. In addition to limitations imposed by the CCQ (e.g., as a result of alimentary support requirements), the law also imposes certain limitations, including limitations arising from public order considerations. Describe, using examples from jurisprudence, the public order limits that exist on a testator’s freedom to make a Will that disposes of his or her estate as he or she sees fit.
10 [Common Law Jurisdictions Only]) Estate planning for parents may involve either or both outright inter vivos gifts to one or more children and gifts of real property and personal assets jointly with right of survivorship. In some cases, following the death of the parent, a child who did not receive such gifts or who was not made a joint owner, will challenge the inter vivos gift or the joint with right of survivorship result. Describe each of the following methods for challenging such non-testamentary estate planning:
  1. that the joint tenancy was severed,
  2. that the outright gift was never effectively made, and
  3. that the parent was unduly influenced in making the outright gift or the gift of real or personal property jointly with right of survivorship
In your answer, please include a description of the legal principles or elements involved in each of the methods (e.g., what is required at law to effect a severance of a joint tenancy, what are the elements of a gift, and what is required to prove undue influence).
11 [Common Law Jurisdictions Only] From time to time, a parent will “promise” to give a child or another individual real property on the parent’s death. However, when the parent dies, his or her Will does not actually provide for the gift of the property “as promised”. Is there any remedy available to the child to obtain the “promised” property? If so, describe the remedy as well as how and when it might apply.
B Accounts and Administration
01 A feature of trust accounting is the separation of income and capital interests. Trust accounting rules and the underlying legal principles can create challenges for trustees when fulfilling their duties and exercising their powers. Using examples, identify and explain one or more of the challenges that might arise in the context of investments and other assets a trustee / personal representative (liquidator in Quebec) may hold or acquire. Your essay should include a discussion on how a trustee / personal representative (liquidator in Quebec) can conduct the affairs of the trust/estate to address these challenges.
02 Trustees / personal representatives (liquidators in Quebec) are required to maintain certain records. Comment on the records and related information that trustees/personal representatives (liquidators in Quebec) are expected to maintain. Discuss the reasons for keeping the records/information, how they must be kept, who may see them and the issues that can arise for a trustee / personal representative (liquidator in Quebec). Additionally, in your essay elaborate on the following:
  1. whether or not trustees are required to voluntarily disclose information concerning the existence of a trust, and if so, to whom and when
  2. if the assets of the trust consist of shares in private companies, whether or not beneficiaries are entitled to information concerning the companies and, if so, what type of information is disclosable
  3. when, if at all, are the reasons for trustees’ decisions concerning matters involving the trust disclosable. Who may or can obtain such disclosure.
03 Common Law jurisdiction:
The personal representative of an estate can face a variety of challenges when dealing with the debts of a deceased and estate liabilities. Identify and discuss one or more rules related to the determination of probate fees, settling creditor claims, and dealing with payment of final income tax liabilities. Your essay should identify competing practical and/or legal issues that can arise. You may wish to address one or more of the issues from an inter-provincial perspective. Another approach would be to consider the situation where the residue includes a registered plan, an RESP, or other unique assets with special tax treatment that form a large part of the estate.
Civil Law jurisdiction: The liquidator of an estate can face a variety of challenges when dealing with the debts of a deceased and estate liabilities. Identify and discuss one or more rules related to settling creditor claims, dealing with payment of final income tax liabilities, RRSPs, etc. Your essay should identify competing practical and/or legal issues that can arise. You may wish to address one or more of the issues from an inter-provincial perspective. Another approach would be to consider the situation where the residue includes a registered plan, an RESP, or other unique assets with special tax treatment that form a large part of the estate.
04 In order for a trust relationship to work, it must be continuously administered until fully executed. The administration of a trust is generally the responsibility of the trustee, and a valid trust will not fail for lack of a trustee. But what if a trustee, after accepting the role of trustee, dies, is unwilling or unable to act, or simply wishes to retire from the trusteeship? Describe, citing jurisprudence and statute, the methods by which a trustee in your province can be removed or replaced, and issues that might be relevant when considering the removal, resignation or appointment of trustees.
05 Acting as a personal representative (liquidator in Quebec) or trustee can involve substantial time and effort, as well as incurring potential costs. Those who are appointed as personal representatives (liquidators in Quebec) and trustees will likely want to be reimbursed for any expenses or costs they incur in and about the administration of the estate or trust, and they may also decide that they should be compensated for their efforts.
Can personal representatives (liquidators in Quebec) and trustees be reimbursed for costs and expenses associated with administering the estate or trust? Can they be paid for the work they perform in administering the estate or trust? If so, what considerations or parameters are involved? In your essay, include a discussion of the following:
  1. What authority, if any, allows personal representatives (liquidators in Quebec) and trustees to pay or be reimbursed for costs and expenses incurred in their administration of estates or trusts? Are there any limitations concerning such payment or reimbursement? Are there any special considerations concerning litigation costs, tax preparation costs, and/or preparation of accounts costs?
  2. What authority, if any, allows personal representatives (liquidators in Quebec) and trustees to be paid for the work they do in administering estates or trusts? If personal representatives (liquidators in Quebec) and trustees can get paid, how is the compensation determined? Are there any limits to how much a personal representative (liquidator in Quebec) or trustee may charge or receive as compensation? Can compensation be reduced, and if so, why or how?
  3. Can a settlor or testator predetermine the compensation that a personal representative (liquidator in Quebec) or trustee will receive? If so, how?
  4. Are there any special considerations concerning compensation that affect successor executors or trustees?
  5. What does “pre-taking” mean in the context of personal representative (liquidator in Quebec) and trustee compensation? Describe any issues raised by this term.
06 Corporate shares often comprise the investments of a trust. From time to time, those shares will result in the trustee-shareholder receiving a distribution from the corporation, either in the form of money or shares (either of the corporation itself or of another corporation). An issue can arise as to how to account for such corporate distributions – are they allocated to income or to capital? Where the trust has both income and capital beneficiaries, improper allocation can result in criticism, and potential litigation. Using examples from jurisprudence and/or statute, describe the various types of distributions that corporations may make and the rules for determining the proper allocation of such corporate distributions. Include in your discussion distributions that occur as part of a corporation’s “spin off” transaction.
C Taxation
01 Graduated rate estates are new creatures under the Income Tax Act as of 2016. Providing examples and citing both statutory and any applicable case law references, define a graduated rate estate and describe, from a tax perspective, the advantages and limitations of such estates. Include an analysis of provisions that affect the tax status of graduated rate estates and trusts associated with them in respect of certain circumstances or situations that may arise.
02 Inter-vivos trusts are important tools within a tax plan for a variety of reasons. Their successful use, however, is dependent on avoiding significant income tax traps. Providing examples and citing statutory and case law references, explain some of the planning opportunities that inter-vivos trusts present, the income tax traps that can arise, and the practical solutions to such traps. Include comprehensive discussion on Subsection 75(2) of the Income Tax Act (Canada) in your explanation.
03 It is not uncommon for an estate to be divided equally among several beneficiaries, some resident in Canada, and others tax resident elsewhere. Consider a situation where a Canadian estate holds at least three of the following assets: 100% of an active private company, commercial real estate, vacant property, a principal residence, and a Canadian equities investment portfolio. The estate is to be distributed equally among 3 adult children, not all resident in Canada. Identify and explain the tax liabilities that will arise on the final tax return, and discuss options for minimizing the ultimate tax liability of the estate.
04 Charitable gift planning can be an effective tax planning tool both during a person’s life time and on death. Provide an overview of the tax implications associated with charitable giving in Canada both during an individual’s lifetime and on death. Also describe the strategies and the related tax considerations that arise with respect to such charitable giving strategies including but not limited to outright gifts to charities, gifts of publicly listed securities, Charitable Remainder Trusts, residual interest gifts, gifts of life insurance and bequests on death through a will or joint partner/alter ego trust.
05 Registered plans (RRSPs, RRIFs, RESPs, and/or RDSPs) play an important role in both the financial and estate planning of many Canadians. Describe the tax treatment of registered plans on death in the context of different family situations (first marriages, blended families from second (or subsequent) marriages, families with no children, same-sex marriages, etc.). In your discussion, please identify any estate planning opportunities for minimizing tax consequences.
D INTERNATIONAL ISSUES
01 Upon retirement, Canadians may move to other "warmer" locations where they ultimately become domiciled while not necessarily giving up their Canadian citizenship. Providing examples and citing both statute and case law, discuss the conflict issues that arise in respect of applicable inheritance laws, tax laws, and estate administration issues when a Canadian citizen dies while domiciled in another country with assets in both. Consider, for example, the situation in which such a deceased had a will dealing only with the assets in the foreign jurisdiction but was intestate with respect to the remainder of the estate in Canada.
02 A Canadian trust may have beneficiaries in Canada and other jurisdictions around the world. The UK and the USA are examples of two jurisdictions that have specific rules on how beneficiaries subject to the income tax laws of these jurisdictions must report distributions from "foreign" trusts (e.g. a trust in Canada). Explain the nature of the rules of one of these jurisdictions and discuss the implications for how a Canadian trustee might administer the trust. Alternatively, identify and explain strategies that can be included in a testator's will that would ensure that assets held in trust for children in Canada and elsewhere can be effectively managed to avoid punitive tax liabilities for the beneficiaries.
03 Trust issues requiring resolution often fall into one of the following three categories: (i) essential validity; (ii) construction (substantive interpretation); or (iii) administration. Where the trust relationship has elements involving multiple jurisdictions, a resolution of these trust aspects will involve conflict of laws. Using jurisprudence and any relevant academic authorities or statute(s), describe these “aspects” of a trust and discuss how a Canadian provincial court determines the law that applies to each of them (i.e., what are the rules for determining the relevant governing law for each “aspect”). In your essay, consider the “proper law” of a trust and discuss whether more than one jurisdiction’s law (whether another province or country) can apply to a trust (or an aspect of it), and whether the applicable law(s), once determined, can change? Also, include in your essay a discussion of clauses relating to governing law and jurisdiction in trust agreements.
04 CBEG Prize Topic: Discuss the matters to be considered when advising a testator with multi-jurisdictional assets in both common law and civil law countries. See www.step.org/qp-essay-topics
E INCAPACITY
Powers of attorney that survive the donor’s incapacity (POA”) have become a common staple for estate planning. What are the duties and obligations of an attorney appointed under a POA? In your answer, include a discussion on whether attorneys can engage in estate planning for the donor once the donor has become incapacitated.



Essay Requirements

Essay Marking
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