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The New Canadian Equality:  What It Means, Exactly
Financial Planning:  Documentation Essential
ONLINE:  SATURDAY FEBRUARY 19, 8:23 PM EST (GMT-5).

The Omnibus Bill Expert Panel

Diane Harras, PFP,
Representative,
Investor's Group,
Ottawa, ON, Canada.
harrad1@investorsgroup.com, (613) 798-7700 X 460.

Ted Mann, LLB,
Mann and Associates,
Ottawa, ON, Canada.
ekmann@magi.com,
www.ggmlaw.com,
(613) 722-1500.

Grant Jameson, BA, LLB,
Partner,
Gowling, Strathy & Henderson,
Ottawa, ON, Canada.
jamesong@gowlings.com,
www.gowlings.com,
(613) 786-8663.

Dick Surgeson, BComm, CA, Surgeson Carson Chartered Accountants,
Ottawa, ON, Canada.
(613) 567-6434.


Please note:  The information in these reports is not to be taken as advice.  It has been provided by gayottawanow.com and the volunteers on the Omnibus Bill Expert Panel in the interest of the Community becoming aware of the anticipated effects of the bill.  Should you require or desire advice on this matter, please contact the informed professionals on the Panel for consultation.

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by Diane Harras, PFP.

FROM a financial planning perspective, the proposed changes in the omnibus bill will impact family relationships in the areas of investment strategies as well as tax, retirement and estate planning.

While a common-law relationship resembles marriage, we need to be aware that being able to declare a common-law partnership still does not grant the automatic division of property.  In addition, intestacy legislation does not acknowledge a common-law partner.

These legal areas - concerned with ownership of property and financial assets in the event of break-up or death - are covered by provincial laws (and noteworthy within that are the more liberal ones of British Columbia and the Northwest Territories).

Because the bill in question here is federal, it is imperative for all common-law couples - both opposite sex and same sex - to utilize cohabitation agreements, joint ownership, powers of attorney and wills.  Such documentation will both protect their assets and provide for "who owns / who owes / and who gets what."

In the event of a breakdown in the relationship or death of one partner, the financial results could be catastrophic without these agreements in place.  Bill C-23 does not change the necessity of ensuring that estate planning has been legally documented.

What Bill C-23 will do is make changes to the Income Tax Act that will allow same sex common-law partners to take advantage of income splitting strategies that their opposite sex counterparts are able to use.  As well, couples will now be better able to plan for retirement through the use of "spousal" RRSPs (I expect this declaration will be given an accommodating name change).

Additional retirement area impacts will include the expected ability to split Canada Pension Plan benefits, receive survivor pension plan benefits, and claim Old Age Security and the Guaranteed Income Supplement in the same manner as married and opposite sex common-law couples now do.

With respect to investments, the use of tax favoured strategies will be recommended as couples will now be considered a family.

On a less pleasant personal subject, most of us prefer to deny our mortality and as a result we try not to think about the future after our passing.  Those we love will feel sorrow when we go, but leaving your estate in order will hopefully eliminate their misery of not being provided for financially.

Within estate planning the bill will grant the ability to elect a "spousal" rollover of assets, including RRSPs, and the ability to protect as much of the estate as possible from taxation.
 
 
Because common-law status is not quite the same as marriage and the limited applicability of federal law in this area, estate planning continues to be necessary for proper provision for your surviving partner and family.

Within estate planning the bill will grant the ability to elect a "spousal" rollover of assets (that word again, as mentioned above) including RRSPs, and the ability to protect as much of the estate as possible from taxation.

As its name implies, the omnibus bill will indeed extend benefits to gay couples as well as increase their obligations under federal law.  The importance of planning with the use of professionals, such as financial planners, accountants and lawyers, should be noted in order to both ensure taking maximal advantage of the benefits and avoiding the disasters that can occur from lack of knowledge.

Introduction
Financial Planning:  Documentation Essential
Legal Ramifications (General):  Pre-Nups Even More Important
Legal Ramifications (Commercial): Partners to Take Greater Care in Dealings
Income Tax: Eligibility for Credits and Declaring Status Prior to 2001
Conclusion