Message from the Chair - STEP

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February 2016 – Vol. 2 No. 3

Message from the Chair Upcoming Ottawa Branch Programs & Events The Student Corner Holiday Party Pics Trust Issues Article: My STEP Story About Capital Accounts

In this edition:

Last summer, a client needed assistance with a tax matter relating to property in Puerto Rico. I checked the

worldwide listing but did not find a TEP in Puerto Rico. I then called the head of STEP USA for assistance. I

identified myself as a TEP and spent a few minutes chit-chatting about STEP. I told him of my need, and he

advised me that he'd recently attended a conference where one of the speakers was from Puerto Rico. He

was extremely knowledgeable—to the point the head of STEP USA was planning to try to recruit him for

STEP. Within 15 minutes of my client's call I was able to direct him to someone who could assist him at the

skill level required.

For those of you who belong to large law or accounting firms, you have your own networks. However, for

many of us, having access to accountants, lawyers and many other professions all over the world who hold

the TEP designation can be extremely helpful. The fact that the person is a TEP provides a level of comfort

that might not otherwise be there in dealing with a stranger in a different country.

Message from the Chair Michael Segal

[email protected]

613-723-9100 ext. 108

On behalf of the executive I want to welcome you back and wish

each of you a very happy New Year. I also want to take this

opportunity to provide you with a better understanding of what it

means to belong to STEP.

Many of you come out and enjoy our programs—some of you do

not. I would urge you to take advantage of being a member of our

branch and benefit from the hard work of our programming chair,

her committee, and the executive who work hard to put together our

educational programs. I want to urge each of you to not only benefit

from our branch programming but to take advantage of the fact that

STEP is in 95 countries with over 20,000 members.

If you have not attended our national conference do it once and I

am confident it will become part of your regular schedule. The

networking and educational opportunities it offers are incredible.

Each of you had your own reason for becoming a TEP, but

whatever the reason, only once you realize how global STEP is will

you be able to appreciate what being a TEP truly means.

I hope each of you has a safe, happy, healthy and prosperous

2016.

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Upcoming Ottawa Branch Programs & Events

Join us at 3:15 pm on February 10th for an engaging and

informative seminar entitled Canadian Trusts with U.S.

Beneficiaries presented by Dean Smith, PhD, CFP, CPA, CA,

TEP of Cadesky and Associates LLP, and Ian Pryor, LL.B.,

BComm., B.A., TEP of Pryor Tax Law. We asked our speakers for

a few words on what we have to look forward to from their

presentation. Here's what they shared with us:

In today’s society, multinational families are becoming more and

more prevalent. Many Canadian families have discretionary family

trusts to assist with estate planning, income tax planning and even

creditor protection. In recent years, the issue of U.S. citizenship and U.S. residency has become a hot topic. It

is not uncommon nowadays for a family to have at least one member who is a U.S. citizen or U.S. tax resident.

For example, maybe mom was born in the U.S. Maybe one of the children married a U.S. citizen and moved to

Florida to raise a family. In both cases these family members will be U.S. tax residents. What issues arise if

one or more of the beneficiaries of the Canadian trust is a U.S. tax resident? This presentation will look at the

following issues:

The U.S. reporting rules and filing obligations of the trustees on behalf of the Canadian trust;

The U.S. reporting rules and filing obligation of the U.S. resident beneficiary;

The U.S. tax consequences for the U.S. resident beneficiaries;

Canadian tax issues that arise in respect of U.S. resident beneficiaries for the trustees of the Canadian

trust;

Canadian tax issues that arise for the U.S. resident beneficiaries themselves; and

Some potential options to consider moving forward.

This promises to be an outstanding program. Don't forget registration begins at 3:15 pm and the program begins at 3:30 pm sharp!

Carol Dalgado of RBC Wealth Management – Estate & Trust Services at our January program providing updates on recent court decisions and current issues in the treatment of foreign assets held in estates/trusts.

Capital Accounts STEP Ottawa Newsletter November 2016 – Vol. 2 No. 3

Look forward to our March 9th

program:

Effective Use of Insurance in

Estate Planning

Presented by:

Susan St.Amand, CFP, CLU,

CHFC, ICDD, FEA, TEP: Sirus

Financial Services

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Chair Michael Segal

Vice Chair Zoran Vranjkovic

Past Chair Laurie Lord

Treasurer Geoff Saab

Secretary Paul Taylor

Programs Jean McDonell

Member Services Anne Patenaude

Student Liaison Kyle McDonell

Sponsorship Warren Trickey

Publicity Nicole Ewing

STEP Ottawa

Branch Executive

2015-2016

The Student Corner By Kyle McDonell

Please read on to see what’s happening in STEP Education. You’ll find out who's new and who's leaving, as well as key information about CETA, Student Mentorship, and the new essay topics.

Newly-enrolled Students: Welcome to new students who have joined a STEP student program since the last

newsletter: Angela Fallow of Cunningham Swan (Diploma), Natalie Melanson of MD Private Trust (CETA),

Alan Webb of Office of the Public Trustee (Diploma);

November 2015 Exams: Congratulations to Christine Hakim and Phil Kohnen! Both wrote the final Trust &

Estate Planning exam and graduated from the Diploma program this past fall. Christine’s upgrade application

to full membership is in the process of being approved while Phil has been approved and is now a TEP.

Students who wrote other November examinations have received their results. Awards for the highest marks in

the country will be presented to those in attendance at the National Conference in June (no winners from

Ottawa).

Certificate of Estate and Trust Administration (CETA): Eight students were registered for the CETA 2

Advanced Topics course and the January 25, 2016 on-line exam. CETA 3’s course on Tax will be launched in

the Spring of 2016 for students who have completed CETA 2. A National Student Liaison CETA sub-

committee was formed in November 2015 to discuss how STEP National can support these students and to

hear any concerns and suggested improvements to the CETA program. As mentioned in November 2015,

Kimberly Holmes of STEP Ottawa is on this sub-committee and

attended the first conference call on November 27th.

Student Mentorship – An Ottawa mentorship session for the

November 2015 examinations was held at the downtown RBC

offices on Monday, November 16, 2015. Volunteer mentors

Ormond Murphy and Paul van Galder were on hand to speak to

three student members who all happened to be writing the Wills,

Trusts and Estate Administration Diploma course. Thank you to

Tom Grozinger and Bianca Kruger of Royal Trust who also sat in

on the discussion. Warren Trickey also acted as a telephone

mentor to a student enrolled in the Taxation of Trusts and

Estates Diploma course. The next student–mentor session will

be offered in April 2016 to enable interested students to connect

with Ottawa’s volunteer mentors.

Qualified Practitioner students should be aware that the essay

topic list has changed. Please see the updated list at:

http://step.ca/joining/qpessay.aspx.

Farewell: Lisa Lue, National Education Coordinator at STEP

Canada, is moving on to other opportunities. Thank you Lisa for

all your support to our students. We wish you the best of luck in

the future.

Capital Accounts STEP Ottawa Newsletter February 2016 – Vol. 2 No. 3

http://step.ca/joining/qpessay.aspx

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Holiday Party 2015 With more than 50 people dropping in throughout the evening, our first annual STEP Ottawa Holiday Party was a tremendous success. It was a great opportunity to share a drink and hors d'oeuvres with our STEP colleagues, including Janis Armstrong (STEP Canada Director of Business Development), Michael Dodick (STEP Canada COO), and Tim Grieve (Chair of STEP Canada).


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Trust Issues: A recurring column dedicated to front-line stories from

our trust company colleagues.

In our practice it is not uncommon to find clients

vulnerable to an outsider’s influence due to

infirmity, loneliness or mental illness. The

following true scenarios demonstrate the

significant value a trust company can add to an

individual’s life and financial circumstances.

In this case an elderly gentleman asked to have the name of his friend added to his sizeable bank account.

Bank staff asked the client if he had his legal documents in place. He said he did not and was then

encouraged to speak to a lawyer. The bank branch wanted to ensure they could protect the client. As a

resource to the bank branch, the Trust Services Team was consulted. Recognizing the name of the lawyer

involved, the Trust Professional representing the bank spoke to the lawyer. It was discovered that the client

had been attempting to set up Powers of Attorney and a Will naming the friend as his legal representative and

Estate Trustee to his future estate. The lawyer, acting diligently, had the client assessed for capacity.

The outcome was not surprising; the client was determined not to have the capacity to appoint an Attorney for

Property nor to make a Will. Further, it was found that the client did have legal documents which appointed an

estranged daughter. It was discovered that the client had not been living at home for some time now, and was

in a hospital in long term care. The client was in declining health and had poor mobility. He had dealings with

at least four financial institutions, a vacant house with no insurance in place, and a tenant living in an attached

rental unit.

As the prudent approach in handling matters of capacity is to deal with the person and maintain clear and

transparent communication, the Trust Professional met with the client a few times. The "friend" was always at

these meetings and it was obvious that he had a great influence on the client. In view of this influence, and

working with the lawyer who was also concerned, the daughter was contacted to determine her involvement.

After much consideration, she decided not to get involved in the management of her father's affairs and agreed

to have the Trust Company become the legal representative for her father. The daughter understood that she

was named executor to her father’s estate, but that in the meantime she could take comfort in the fact that an

objective third party would protect her father and his assets while he was alive.

Following the court application process, the Trust Company was granted the authority to represent the client.

As this case unfolds, the client is now at a proper care facility and not in a hospital room (where he lived for

close to 2 years while under the care of the friend). His home is now protected under the blanket insurance of

the financial institution, and it will be sold in due time. Consolidation of his investment assets is taking place.

As a side note, the friend no longer has the influence he once had.


Dilia Ayala-Mayost, FCSI®, MTI, CFP®, FMA, CIM Estate and Trust Advisor TD Wealth Private Trust

Heather Richardson, TEP, Executive Trust Officer TD Wealth Private Trust

Scenario #1:

Setting up accounts or registering assets with

another person with right of survivorship has a

special and particular place in financial

planning. However, these registrations can also

expose the account or asset to abuse by

immediate family members or friends.

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Scenario #2: The Trust Company recently became involved with

a client following his admission to the psychiatric

wing of The Ottawa Hospital. One could tell from

only a brief conversation with this gentleman that

he'd had a brilliant mind at one time. At the time

we were introduced to the client he was suffering

from short term memory loss but had sufficient

legal capacity to execute and invoke a Power of

Attorney for Property naming the Trust Company.

As we took immediate steps to secure the

downtown property where he had resided, it rapidly

became apparent that following the death of his last

immediate family member many years ago, the

client had ceased to care for the property. It had

fallen into a deplorable state such that it was not

habitable. This problem was compounded by his

long term habit of hoarding. He had also taken to

living on the streets, often befriending numerous

individuals, some of whom would take him into their

home for a period of time.

How did we help?

Firstly, as a trust company whose client-base is

largely elderly we have access to and network with

multiple elder care service providers. Within two

weeks we had secured a 2-bedroom suite at a

retirement home in his community and arranged for

it to be tastefully and comfortably furnished (none

of the furniture in the house was salvageable). We

were able to arrange for the retrieval and cleaning

of several paintings which had special meaning to

him. He now has a clean and safe living

environment with oversight to ensure proper health

and nutrition.

Secondly, a trust company has no stake in an

individual’s estate and so can ensure that the

financial affairs can be managed in an objective

and impartial manner. This in no way means there

is a lack of empathy and compassion – in fact a

deep personal connection has developed between

the client and the Trust Officer. This can be

contrasted with those individuals who had offered

to assist the client in the management of his affairs

in exchange for a substantial fee which exceeded

well beyond the compensation rates provided in

The Substitute Decisions Act or for a written

guarantee of their inclusion in his Will as the

primary beneficiary.

Thirdly, a trust company will ensure that the

financial assets are professionally managed with a

documented budget and Investment Policy

Statement. Within seven months the property had

been sold and an investment strategy documented

to ensure that the client’s funds were being

managed to an appropriate investment objective

and risk tolerance level.

And finally, a trust company will ensure that not

only are the client's immediate needs met but will

anticipate future needs as well. Within eight

months (and following a capacity assessment) the

client had his first Will put in place to ensure the

smooth and effective transition of his wealth upon

his passing.


Share the wealth!

For all members who know of someone who would benefit from becoming a

TEP, we have guest passes to provide to prospective members. Contact

Michael Segal at [email protected] or 613-723-9100 ext. 108.

mailto:[email protected]

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Article: My STEP Story

Michael Kirkpatrick, BSc, CFP, CIM, FMA, TEP

Portfolio Manager & Wealth Advisor

Kirkpatrick Wealth Management of RBC

Dominion Securities Inc.

‎[email protected]

A few years ago I fired up my google machine and

searched for a way to improve my skill set. As a

portfolio manager and a wealth advisor I knew that

I could offer so much more to clients beyond basic

financial planning, but I wasn’t sure where to start.

After a few google searches I found a book called

Advisors Seeking Knowledge. What an

appropriate title!

I was fascinated after reading the first few pages

and I had so many questions that I called the

author Peter Merrick. Peter was very friendly and

gave me helpful advice. I noticed beside his name

the TEP designation so I asked him about it. He

explained what the TEP designation was all about

and told me that at the annual STEP Canada

National Conference the level of wealth, tax, and

estate planning knowledge and talent in the

conference room surpasses that of many other

industry conferences that he had been to. I also

thought it was interesting that professionals from

different backgrounds (trust officers, life insurance

professionals, lawyers, accountants and wealth

advisors) are all STEP members.

I immediately signed up for the STEP Canada

Diploma courses and embarked on a 2 year

journey of learning and professional growth.

When studying for the exams, STEP puts you in

contact with fellow students in case you would like

a study-buddy. I am still in contact with my study-

buddies who are lawyers and accountants. It is

helpful to discuss various cases and hear their

perspectives.

As a result of becoming a TEP, not only has my

professional network grown but I am able to add

more value to my clients when it comes to

discussions around tax and estate planning. I find

that when clients name an executor, they may not

spend enough time considering the consequences

of that decision and in a lot of cases the executors

have no appreciation for the responsibility

involved. Many folks do not realize how trust

companies can be of help either via their executor

services or agent for executor services.

Furthermore, when it comes to passing assets to

the next generation I see a lot of estate planning

potholes that I now make sure my clients avoid.

I find the continued support and education

provided by STEP to be very useful. Not only am I

kept up to date on new trends or changing rules

but the monthly meetings keep me in touch with

my fellow TEPs. Talking and collaborating with

other STEP members from different professional

backgrounds gives me a better understanding of

how my efforts in helping a client contribute to

their overall comprehensive estate, tax and wealth

plan.

I am very happy that I did the TEP courses and I

am impressed by the continued support via the

annual STEP conference and the monthly STEP

meetings. STEP has helped me to become a

better advisor for my clients and I would

recommend STEP to any advisor wanting to add

more value to their clients.

Do you have your own STEP Story or an original article to share with our Branch members? Contact the Editor of Capital Accounts at [email protected]


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About Capital Accounts This newsletter is published by STEP Ottawa for the benefit of its membership.

We seek to have broad representation from all of the professions represented in STEP. Learning from each

other is part of what makes STEP such an incredible organization to be a part of. We encourage members

of all of the professions represented in STEP Ottawa to contribute content to Capital Accounts.

Your feedback is welcomed and we would be grateful to receive articles, opinion, comments,

announcements and notice of events. All submissions are subject to editorial review.

Please contact the Editor, Nicole Ewing, at [email protected] or 613-783-4095.

Documents

Message from the Chair - STEP