Principal Issues: 1. Will the amendments to the will, as set out in the Minutes of Settlement and as approved by the court, result in a resettlement of the Trusts or the Estate or a disposition of any of the property of the Estate?
2. Will the consent by the Beneficiaries, being the children and grandchildren of the Deceased, as part of the Minutes of Settlement result in a disposition of any of the their respective interests in the estate?
3. Assuming that the variation of the will results in no disposition of the property of either the trust or the estate, what provision governs the transfer of assets from the estate to the testamentary trusts?
4. Will the trust be a testamentary trust and a personal trust such that 107(2) will apply to any distribution to the beneficiaries?
5. Will the proposed transactions result in any income inclusion under 56(2), 105(1) or 246(1)?
Position: 1. No. 2. No 3. There is no disposition of property, either by operation of law or because of paragraph (f) of the definition of disposition 4. Yes. 5. No.
Reasons: 1. In as far as possible, given the uncertainty of the interpretation of the will, there is no substantial change to any of the entitlements under the will. This is consistent with prior positions taken.
2. Because of the uncertainty caused by the revocation, none of the beneficiaries have a provable right under the will. The Minutes of Settlement together with the approval of the Children's Lawyer and the Court will confirm the beneficiaries' entitlements under the will.
3. Given the stated fact that the trusts are not beneficiaries of the estate, no disposition will arise, either by operation of law or because the conditions in paragraph (f) of the definition of disposition are met.
4. Conditions necessary to meet the definition of personal trust and testamentary trust are met.
5. Since the proposed transactions do not involve the providing of any benefits to a taxpayer by a person or from or under the trusts, the provisions of subsections 105(1) and 246(1) of the Act will not apply as a result of the proposed transactions, in and by themselves. This is consistent with past positions. While subsection 56(2) does not specifically require a transfer of property in order to apply, this case can be distinguished from those in which 56(2) does apply because of the uncertainty in the interpretation of the will. Without certainty, it cannot be said that the heirs are in a position to concur or acquiesce in any subsequent transfer of estate or trust property.