Picard v. Lagotte Succession – Quebec Superior Court orders that a transfer of estate property to a beneficiary “occurred, for tax purposes, at an amount equal to its adjusted cost base”

In Quebec, as in the other provinces, the devisee or legatee of a specific bequest or devise generally receives the property without having to assume the tax liabilities of the estate (ignoring s. 160). A surviving spouse (Picard – who was not one of the residuary beneficiaries of the estate of his wife) argued that it thus was improper for the executor of the estate to choose for the devise to him pursuant to her will of an apartment building with a low tax basis to occur on a rollover basis under s. 70(6), as this foisted the property’s accrued tax liability on him. In rejecting this submission, Bisson JCS noted that the will specifically accorded the executor with the discretion to make tax elections for the benefit of any one or more legatees or for that of the general estate – so that the executor clearly was within his rights in not making a s. 70(6.2) election.

He also rejected a specious argument of Picard that a standard 30-day survivor clause in the will meant that the indefeasible vesting requirement in s. 70(6) was not satisfied, so that the rollover was busted.

The most interesting aspect is the concluding sentence in his s. 70(6) analysis:

The Court thus orders that the transfer of the 4790 Property occurred, for tax purposes, at an amount equal to its adjusted cost base [sic, cost amount], being $385,679.

Was this within his jurisdiction?

Neal Armstrong. Summary of Picard v. Lagotte Succession, 2017 QCCS 330 under s. 70(6.2).