Writing a will is a complex endeavour, and it is essential to understand the tax consequences of certain clauses to avoid unpleasant surprises. For example, does a survivorship clause preclude a tax-free rollover of property or a registered plan as a spousal bequest?

Indefeasible vesting

The rollover of property to a spouse or spousal trust upon a taxpayer’s death is an exception to the rule of deemed disposition at fair market value of any property owned by the taxpayer immediately before death.

To benefit from a transfer, several conditions must be met, including the requirement that the property of the deceased be vested indefeasibly to the spouse, or to an exclusive spousal trust, within 36 months following the death.

When a will contains a classic 30- to 60-day survivorship clause, according to the Canada Revenue Agency (CRA), such a clause does not in itself preclude the rollover of property to the spouse, if the latter survives the testator beyond the period stated in the clause. However, the CRA also specifies that, should the spouse die within the period stated in the survivorship clause, the rollover provided by law does not apply, because the bequest would be retroactively transferred to someone else.

Registered plan bequests

Upon the death of a registered plan annuitant, tax-free vesting occurs by virtue of the premium refund concept.

At the time of death, the annuitant of a registered retirement savings plan (RRSP) or a locked-in retirement account (LIRA) is deemed to have received, immediately before death, an amount in the form of a benefit equal to the fair market value of property included in the plan. This amount should be included in the computation of the deceased taxpayer’s income.

Following the death of the registered plan annuitant, insofar as any plan amount is paid to the surviving spouse, child or grandchild financially dependent on the plan annuitant such payment will then constitute a refund of premiums that is deductible in the computation of the deceased taxpayer’s income. The end result will be tax-free vesting.

As for the taxpayer who receives the amount that qualifies as a premium refund, if the amount is transferred into an RRSP or used to acquire a life annuity for the surviving spouse, child or grandchild, the transfer is tax free, if certain conditions are met.

In the case of a registered retirement income fund (RRIF) or life income fund (LIF), the rules regarding tax-free vesting have the same characteristics of inclusion and deduction for the computation of taxable income as those of an RRSP.
In short, vigilance is a must when writing a will. When there are conditions attached to a bequest of property, it is important to verify whether such condition(s) will have a tax impact. Our will and estate planning specialists can help ensure peace of mind and financial security for both your loved ones and yourself.

The deficit of qualified and skilled labor now forces organizations to review their recruitment process to make it optimal and more performant.

Indeed, since it is getting harder to attract good candidates, it is important to make sure not to miss the available skilled resources. In a formal screening process, candidates consent to several steps, amongst others, the curriculum vitae selection, telephone interview, behavioural interview and some validation steps, such as psychometric tests, the judicial and financial records verification, as well as a delicate step, that is, employment references consulting.

This step, determining for some and common for others, usually takes place at the end of the process, just before writing the formal offer. It is used most of the time to confirm or disconfirm general impressions and perceptions experimented during the interviews. Since this critical step is at the end of the process, it is your last chance to objectivize your candidates.

As many situations may turn sour during this step, we propose to summarily clarify its proceedings for you. It is important to treat this step with meticulousness, because many candidates with a strong potential may have eluded you for various reasons. It is said that interviewing is an art; consulting references also is. What importance should you give to this step?

Validate the source

First, in order to respect the legality and ethics of this approach, the candidate must formally authorize (preferably in writing) this verification. This little, but important detail will allow you to avoid many inconveniences for the rest of the process. Usually, the candidate is the one who provides a list of people to contact, at the employer’s request.

You must understand that we do not make a judgement, but people listed as references rarely provide bad comments, since they have been selected by the candidate, who hopes to pass this step easily. We do not pretend that the candidate is in collusion with his/her references, but he/she surely prepares them for an eventual call. After all, nobody would recommend its worst enemy. This is also an interesting lead to be followed.

Too often, references are not the best people to properly answer judiciously asked questions: a former colleague that became boss, a colleague of the same hierarchical level, a supplier, a personal assistant, etc.

Moreover, the simple letter of reference is often nearly invalid. Make sure to question the signatory to confirm the facts. These letters are sometimes written to cover a tumultuous end of employment. It is crucial to validate the source and know how to balance and interpret the information received, if need be. If in doubt, do not hesitate to ask for other relevant references: a subordinate, a line supervisor, etc. An accurate analysis must be carried out.

Besides the source’s validity, what would you ask a respondent? Try, insofar as possible, to interrogate him/her with development questions instead of forced-choice items. A professional aware of the art of consulting references will be able to detect certain slippery issues and ask more specific questions to clarify any ambiguities.

If you question the supervisor of a key employee a couple of days after his departure, his/her comments will probably be bitter and cold, what could be interpreted as an average reference. However, if you examine the file and gain the resource’s confidence, you will rapidly detect that a certain disappointment due to the departure is clouding the situation.

Beware of a prodigious reference as much as a terrible one. Very good comments are not always a guarantee of success. On the contrary, negative references do not necessarily mean that the candidate is not qualified for the proposed challenge. Verify the context in which the reference is given and do not take anything for granted; ask questions and draw your own conclusions.

Reference step is a work tool

Considering the uncertainty of the information obtained during the validation of employment references, we suggest you to only give this step a relative value. Furthermore, according to some surveys, the validation of references does not get a very high rating in the forecast of a future success.

If your strategy was exclusively based on this step, we strongly recommend you to review your position and make more efforts in the beginning of the approach, that is, by favouring a structured process in which the reference step is a work tool, not a decision one.

In conclusion, remember that every step is important in a screening process and deserves to be treated with diplomacy, respect and professionalism. Thus, the next time that you will interrogate a respondent, make sure to validate the source’s credibility and the context in which the candidate worked. Ask questions regarding tasks, achievements and the termination of employment, and allow yourself to interpret and balance the message, if need be. After all, would you allow a perfect stranger to decide the future of your process, considering the efforts you invested in the previous steps?

Updated on March 3, 2023

You’ve overcome numerous selection hurdles, passed interviews and psychometric tests and we’ve checked your references. We finally confirm that you’ve been hired for the position: you’re the person selected.

Chances are, you’re very happy with this news, flattered and proud to have obtained this prestigious, respectable, and most of all, well paid job. You may, however, still harbour doubts as to whether you will live up to expectations…

While we tested how you manage stress and unforeseen events during our thorough selection process, you’re now dealing with the unfamiliar: a new team, new clients, new environment, new structure, and a new business vision and culture.

Most new managers won’t admit it, because they have to preserve their image of strength and reassure the troops, but I can assure you that inside, there’s a lot of tension. Managers are aware that there is no room for error and that trust is fragile, in their new surroundings and with new collaborators. Remember, as Mark Goldstein put it, trust is not given, it’s earned.

A tricky period

The first 100 days in a new job are not easy. It is a tricky period that is both stressful and unclear, where managers will be observed, judged and criticized by all of their collaborators. The new team eagerly awaits clear instructions and a motivating action plan that is promising for the future of the organization. The team naturally analyzes the newcomer’s every move, word and intonation from which it draws its first impression. In this context, the saying “you will never get a second chance to make a first impression” is quite fitting.

Don’t underestimate how quickly negative opinions, rumours or insinuations can spread through an organization. This is why the first 100 days are a good indicator of whether the new manager will succeed.

It’s also during this period that managers build their credibility within the company and earn the respect of the management team, shareholders and external partners such as bankers, lawyers, etc. This is why it’s important to do great work in order to set the tone.

To maximize your chances of success, here are a few recommendations to prevent this new chapter from sabotaging your professional venture as manager.

Your greatest allies: watching and listening

First, remember that you’re a stranger, so consider yourself a tourist. In your first few days of work, your greatest allies are watching and listening. Check your pride at the door and instead rely on your empathy. Start by getting to know and appreciating individuals, their tasks, opinions or requests; in short, get a feel for how things work in the organization.

You should avoid micromanaging but this step is crucial to attaining your objectives. You shouldn’t get cozy in your office, as you should be outside discussing and analyzing situations.

As for decision-making, showing your true colours and wanting to make your mark from the outset by reorganizing certain sectors or cutting jobs to show your authority are actions to be avoided as often as possible, unless, upon your arrival, the company is in financial difficulty, in which case, you would need to take charge and fix the situation as quickly as possible.

Don’t forget that people are watching you and that the first decisions you make will set the tone for anything else you wish to accomplish afterwards. Your decisions should be promising, well-thought out and strategic.

First ensure that the company is operating properly

As mentioned earlier, the purpose of these first days is not to micromanage. Ultimately, managers must define a clear vision and adopt an action plan, but they must also first ensure that the company is operating properly. To do this, it’s important that managers not be worried about operations right from the beginning. They must have faith in their management team: their first task as manager is to ensure that it is functional and ideal.

Obviously, this doesn’t necessarily mean that the new managers will preserve the senior level framework. In the short or long run, they might have to assess and decide, as applicable, whether to replace certain executives should a need arise.

Moreover, team motivation is capital. Managers must clearly share their vision, show their complete trust and, especially, inspire collaborators. They must also remain in touch with external clients and meet with suppliers, clients and partners. Their ability to listen, clarify expectations and clearly express themselves will have a beneficial impact on the company’s reputation and the managers’ success or failure at the beginning.

After a few months, you will recognize the company’s strengths and weaknesses, available opportunities or looming threats, and you will have gathered enough information from various sources (employees, managers, clients, partners, etc.) to position yourself.

Present a strategic plan

After 100 days, you will have to present a strategic plan supported by specific, concrete and measurable actions, and ensure that this plan is communicated to all. Remember that you have three months to build your trust capital. After this time, trust could dissipate quickly.

Lastly, be yourself. Don’t change your personality or management style. Surround yourself with trusted people, both internally and externally, who can help you think things over. If unsure, trust your instinct; it can’t be wrong since you were hired for this position in the first place.