With the dispensation of an estate will and the impact on a government "PWD" client. What is the current inheritance

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Customer: With the dispensation of an estate will and the impact on a government "PWD" client. What is the current inheritance exemption from government PWD pension "grab-back" and how can it be farther it circumvented? Currently my inheritance is to be administered by Trustees who propose to place it in a discretionary trust of which I cannot and never will be permitted access to the funds.
JA: Estate laws vary by state. What state are you in?
Customer: I thought this was Victoria BC. Legal aid... I'm in Victoria
JA: What documents or supporting evidence do you have?
Customer: I have a copy of the will which does grant my receiving my share but at the discretion of trustees.
JA: Anything else you want the Lawyer to know before I connect you?
Customer: My position is: that, in spite of the clause that gives administration of my share of the inheritance to the executors of the will (my brother and sister,) I should myself be permitted control of all funds that do not exceed the maximum inheritance allowed before Government's PWD grab-back policies (current and future withdrawals.) I include a statement from a clause in the will that allows for this possibility: that I may be given "… all or any part of the capital and income (or either) of the “Kevin Share” as may exhaust the said capital for his benefit…" and the precedential facts of Mom’s intent when she loaned me money against the share for the purchase of a car, a camera and the years of car-insurance and groceries while she was living. These expenditures would not likely be permitted if the entire share was placed in a Discretionary Trust as is proposed …a trust that demonstrably would subsequently be of absolutely no use to (or accessible by or for) me… ever. Any amount of my remaining share that exceeds the Government “PWD” total allowable for inherited assets may indeed be placed in the administration of the executors as specified in the will as intended for the prevention of Government grab back of my pension until such time as it can be redeemed without impacting the pension or incurring withdrawal penalties.
Answered by Debra in 5 hours 1 year ago
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Debra
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Debra, Expert

Hello and Welcome to JustAnswer. My name is***** will be working on your question today and I am looking forward to our conversation.

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Debra, Expert

Please note that the experts don’t text so there may be a bit of a delay. If you don’t answer back for a while I may not be online when you do but I will never desert you and will check back often. As well, as I am working from home it is possible that I will be interrupted but I will always return back as soon as I can.

I am sorry to hear of this difficult situation.

I want to confirm that all the money is going directly into the trust which is an absolute discretionary trust. Correct?

Customer
Hi DebraI am in Victoria, BC Canada (PST) and I came upon your site by clicking on a “Legal Aid Victoria” listing on Google. I did not realize that I may have been “re-directed” to some site that may have nothing to do with “Legal Aid Victoria” until after I had submitted to it. If not Victoria, then where are you based?I do not possess a mobile phone and am content to do this with email and at each other’s leisure as opposed to phone or on-line instant messaging where our availabilities may not synchronize... at least until and unless an issue arises that makes the use one of those other forms expediently necessary.The estate has, after 2 years, just recently completed probate. The total consists of liquidated investments into a single amount of cash that is to be shared equally among myself and my 5 siblings. Two, my elder sister and brother, are the joint executors of the will and the named trustees. My sister wrote/emailed us Nov 4th saying:“We are still waiting for the tax clearance from the CRA. Apparently it has been reviewed and approved but is currently sitting on a Supervisor's desk waiting to be signed off and sent to the Accountant. The Accountant is ready and waiting for it. Hopefully this will happen very soon and we can begin the process of dispersing the money according to the Hotchpotch Clause in Mom's will.”All of us have been guaranteed their share as soon as its available to do with as they wish….except for me.Although there is no stipulation as to how my share is specifically to be invested, the will states:“ a) During [my] lifetime my Trustee is to stand possessed of share of the said “[my] share” and to invest the same with discretion from time to time to pay to [me] or apply on his behalf for the acquisition of such goods and services which generally address arising from his disability, all or any parts of the capital and income (or either) of the [my] share as may thereby exhaust the said capital for his benefit without regard to any interest, vested or not, or any other beneficiary of my estate.b) From and after the end of [my] lifetime the balance (if any) then remaining of the [my] share is to be divided equally among such of my remaining children as are living at his death.”But there’s been uncertainty with my trustee brother’s contention that I ”… can only spend under very limited circumstances with criteria that is unlikely to occur “ and it had me very worried and depressed. Now however, I’ve read and understand what is written in the will and it is that both my sister and brother simply have “possession” of my share to administrate on my behalf ….and any “limited circumstances and criteria” is completely arbitrary and at their discretion… and not in any way specifically written into the will. Giving the Trustees “possession” of my share was done simply and rightly to avoid what was… at the time… the danger of a government dollar for dollar “grab-back” of my PWD pension …which would have been the case had the inheritance been placed directly into my possession instead of theirs and she had died back then in 2000 AD when the will was dated.As I’ve been led to believe by my government liaison/advocate, the danger of government PWD pension “grab-back” evaporated a few years after when in 2007?... when the government changed the rules to prevent this sort of “grab back” when it came to inheritances. In the first change, was a new policy implementing a differentiation between “earned income” and ”inheritance,” the next, made the huge jump from a maximum of $2,500 in allowable assets before $ to $ grab-back of the pension would be instigated, (of which the limit had been at the time the will was written) to a maximum of $100,000.00 and from $50 in “earned income” per month to $500 … and the rules have kept upping the maximum allowed before grab back every time it’s been changed since, getting more and more liberal with subsequent increases until it reached whatever it stands at today. I am permitted to receive this maximum amount of the of my share without any affect on my current or future government PWD pension payments which was always Mom’s intent. I think with my brother’s “limited circumstances and criteria,” he was referring to conditions of certain Trust Funds…and the investment held therein… possessing financial penalties for early withdrawal, locked in amounts and so on .… but are of properties the Trust Funds themselves which are discretionary (theirs) but not anything to do with the will. My mother and I had hoped that the trustees would respect the intent of Mom’s will and not the letter of it …where, while they would have control of my whole share and that I would never see any of it because someone was having too much fun playing investment broker would not occur. Mom put a clause in my section of the will to prevent exactly that (in the bolded text below)As it is, this money would
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Debra, Expert

If you are on disability benefits the only way you do not lose them when you inherit is for the money to be placed in an absolute discretionary trust. They will have to give the trustees discretion so that you cannot take the position that you are entitled to the money. If you take the position that you are entitled to the money then it's your money and you will lose your inheritance. That is why the will was drafted this way.

At the same the trustees have to consider your best interest and they owe you a fiduciary duty. If they decide to put their interests first and they are in a conflict of interest position, you can apply to the court to have them removed as trustees.

If you don't trust your trustees than your best next step, without a doubt, would be to consult with a lawyer in your city with a view to having a lawyer send the trustees a letter putting them on notice that the lawyer will be monitoring the situation.

What you can do to find a lawyer is one of the following things.

You can contact the BC Branch of the Canadian Bar Association and use their Lawyer Referral Service. You will be given the name of a lawyer and can consult with the lawyer and the first half hour will be $25.

The number is:

***-***-**** or 1.***-***-****.

Or you can check on a site called lexpert. This is a legal directory of leading lawyers and law firms throughout Canada and is well-respected by the legal community.

Here's the link to their website:

http://www.lexpert.ca/directory/find-lawyers-or-law-firms/

Does that help as a starting point?

Customer
34;If you take the position that you are entitled to the money then it's your money and you will lose your inheritance"
Do you not mean:... lose the disability pension?.I've been told (and it was confirmed in a case on this site) that PWD recipients are now permitted $100,000 (and maybe the figure has increased since) before the PWD pension is either terminated or payments decreased $ for $ amounts over this limit. My inheritance has not yet been placed in trust and my trustees are still working on the old rules that allowed only $2500 in assets before this "grab back" or complete termination of the PWD pension occurred. In light of these changes in PWD rules, and before the inheritance is committed to any sort of trust fund (absolute discretionary or other) is it not possible to receive an amount up to this $100,000 maximum and place the excess into the obligatory discretionary trust to protect the pension from termination or "grab back"?At this point, it's not a lack of trust in my trustees so much as the rules governing the PDW pension and inheritance that they are working on are out of date.
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Debra, Expert

I am sorry for that typo. Yes I meant you would lose your disability pension.

That makes perfect sense. The limit is absolutely $100,000 for one person and it's $200,000 for a couple. The law has changed quite drastically.

Customer
Do you know if the exact maximum amount permitted is still $100,000 or has the ceiling gone up? (I've heard both)
Is there a source for an official document denoting this that I can take to my trustees to persuade them to release this maximum while placing the remainder in a discretionary trust?
Must it be an absolute discretionary trust or is any other type permissible?
Customer
I'll talk with my trustees and see what can be arranged before the inheritance is committed to a trust. This will help loads. Thank you so much. If you are interested, I'll get back to you with our resolve in a few days
Customer
Who is liable for the fees and taxes incurred by an absolute trust, me or the administrating trustees?
Customer
Are there taxes that must be paid on the $100,000 "release" to me of inheritance funds?
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Debra, Expert

I am sorry for the delay.

The trust will have to file a tax return each year. That has to be done by the trustees. But the trust will pay any taxes that the trust has to pay on earned income over the year.

There are no taxes on the $100,000 because inheritances aren't taxed.

And yes I do want you to get back to me and let me know how it works out!

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Debra, Expert

Thank you for trusting us to help you here at JustAnswer. I am marking this post as complete. If you would like to ask me more questions please start a new post and if you do if you say “This is only for Debra” I will be sure to give your post top priority.

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