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A Royal Inheritance

Posted in Beneficiary Designations, Estate Planning, In the News, Wills

We all remember when Diana, Princess of Wales died tragically in 1997, leaving the British public devastated, but also leaving estates practitioners perplexed.

Diana left a Last Will and Testament in 1993 which was subsequently amended by Codicil in 1996. Diana instructed that her assets be held in trust for Prince William and Prince Harry until they reached the age of 25. Furthermore, her Will specified that her personal property was subject to a memorandum in which she directed her jewellery and three quarters of her personal property to pass to her sons, while the other quarter was to go to her seventeen godchildren.

Upon Diana`s death, her mother and sister became the executors of her estate. Her executors sought a variation of the Will to permit delaying the gifts to her sons until they turned 30 and giving each of the 17 godchildren one item from her estate rather than the one quarter value of her personal property (remaining after jewellery).

The executors did not notify the parents of any of the godchildren of the change, which caused controversy when they learned of the variation and Diana`s letter of wishes years later.

The clear question is how the executors got away with failing to follow Diana’s letter of wishes.  The court allowed it because it did not contain specific language and instead was considered precatory: Diana’s executors had the discretion as to whether or not to honour the gifts described in the letter.

Diana`s belongings were held by her brother, Earl Spencer, until Harry turned 30 a few weeks ago on September 15.

Among the personal property is Diana`s famed wedding dress and other items that have toured the world as a collection to raise money for charitable causes in the years since her death.

The motivations of the executors in varying Diana’s Will are unclear. It is also unclear why Diana included a letter of wishes instead of including gifts directly in her Will.

In Canada, there are also formalities required for a Will or another testamentary document to be considered binding.  These are contained in Part I of the Succession Law Reform Act.  Whether Diana`s letter would be considered legally binding or precatory by a Canadian court would depend on the format and execution of the letter.

One thing that is clear here is that Princess Diana owned many beautiful items.  A glimpse into some of these unique possessions of the beloved royal can be found here.

Thank you for reading.

Suzana Popovic-Montag

In Search of a Beneficiary

Posted in Executors and Trustees, Uncategorized

Recently at the Practice Gems: Probate Essentials 2014 program held by the Law Society, Ian Hull presented a paper on an estate trustee’s duty to locate unknown and missing beneficiaries with practice tips for how to go about this task.

It is an established common law principle that an estate trustee has a duty to ascertain all the beneficiaries who may have an interest in an estate.  The only statutory provision for this common law duty may be found in the Estate Administration Act with regard to beneficiaries who may have an interest in an estate through “birth outside of marriage”.

Section 24(1) of the Estate Administration Act states as follows,

A personal representative shall make reasonable inquiries for persons who may be entitled by virtue of a relationship traced through a birth outside marriage.

However, section 24(2) provides that an estate trustee will not be liable if the estate trustee was not aware of the existence of such a person after reasonable inquiries at the time of the distribution and a search of the parentage records of the Registrar General has failed to disclose a record of the unknown beneficiary.  According to the Frequently Asked Questions page of the Office of the Registrar General’s Online Certificate Application website, you may request a search if you do not know the exact date of an event (such as a birth outside of marriage) and this search will verify whether such an event has taken place in the province of Ontario.  There is a $15.00 fee for every 5 year period that the search is conducted for.

While a Registrar General search is easy enough to do, this step alone will not discharge an estate trustee’s duty to ascertain all beneficiaries.  What is a “reasonable inquiry” is fact specific and case law appears to suggest that more extensive inquiries are required for larger estates and bequests.  Estate trustees should be cautioned to conduct further inquiries even when the bequest is small.

Initial inquiries from those who knew the deceased such as friends and neighbours are always the first place to start.  Even WikiHow has an article that may help brainstorm ways to find relatives through the internet.  Professional researchers may also be retained to conduct more precise and thorough genealogical searches.

Thanks for reading!

Doreen So


Estate Planning for Artists

Posted in Estate Planning


                             “[A]rtists leave two bodies, their own, and a body of work.”

                                                                                             —Harriet Shorr, Artist

It is not unusual for an artist to produce hundreds of works of art over his or her lifetime. In addition to the average estate planning concerns, artists must also consider and plan for what will happen with their works after death.

If an artist dies without a Will (intestate) his or her works will be considered part of his or her general estate and, as such, will be distributed to his or her next of kin according to Ontario’s provincial intestacy laws. A previous blog dealing with the laws of intestacy in Ontario can be viewed here. According to these laws, the assets of the estate, including the artist’s works, could devolve to individuals the artist might not have chosen personally and who may not even want the art. A Will avoids intestacy and enables the artist to determine exactly who receives the estate assets, and under what terms and conditions.

Some specific questions for artists considering an estate plan include:

  • Does the artist wish any works to be preserved and presented after his or her death? If so, how?
  • Whether specific pieces should be distributed to family and friends? If so how, and to whom?
  • Whether works on consignment to galleries or on loan to museums should remain there after death?
  • Whether any pieces may/should be donated to a non-profit organization, such as a museum, university, library, hospital, or school?
  • Whether works may be sold or reproduced to provide income? If so, who is to receive the proceeds or income?

One of the first steps in the artist’s estate planning process should be to identify and create an inventory of existing works. This inventory should include at least the location (in studio, on exhibition, on loan, on consignment), date completed, title, medium, dimensions and any other descriptive information that the artist feels necessary. It is important to include complete contact information for any relevant galleries, representatives, and/or agents along with this inventory. These steps alone will go a long way in minimizing the time and financial burdens that would otherwise be placed upon the estate trustee(s), or surviving family and friends, in gathering these assets. With a comprehensive inventory of the existing art, it will also be easier to leave clear instructions as to how the art is to be divided among family members, institutions, galleries and any other relevant parties.

Another important consideration for artists relates to costs. In addition to the costs associated with settling any estate—such as funeral expenses, payment of outstanding bills, and estate taxes, if any are due—an artist’s estate often faces additional costs for storage, insurance, and appraisal of the individual art works. If it is believed that the estate will not have enough liquid funds to cover such costs, it may be wise to obtain insurance to assist in this regard.

The tax implications that arise with the disposition of art on death are also an important consideration. Art held as part of the artist’s capital collection (not intended for sale) will be entitled to capital gains treatment by which only 50% of the gain will be taxed, whereas art forming part of the artist’s inventory (created with an intention to sell) will attract full income treatment for tax purposes.  There are also special rules that apply to art donations, such that the estate may be entitled to a charitable donation tax credit that, in certain cases, can be used to offset the overall tax payable.

Thank you for reading,

Ian Hull



The Death of a Celebrity… Groundhog

Posted in Uncategorized

This blog has covered many celebrity deaths over the years such as Ian’s recent blog on the various celebrities who have made estate planning mistakes.

But what about the celebrity death of a beloved groundhog?  Stranger things have happened but the internet is currently trending with the Staten Island Zoo cover up of the death of Staten Island Chuck, the beloved Groundhog Day fur ball of New York.  Staten Island Chuck apparently fell to his death at the hands of Mayor Bill de Blasio during the last Groundhog Day on ceremony on February 9, 2014.  Mayor de Blasio accidentally dropped little Chuck to his death.  Only a select few was told that Chuck passed away from old age and the truth was hidden from the public and the Mayor until now.

Not only was Mayor de Blasio the culprit of Chuck’s demise but Chuck was, in fact, a female groundhog named Charlotte.

This strange turn of events has been labelled as a bombshell, a whodunit and even murder by the media and I couldn’t help but wish to share the news as well.  The last two links also includes a video of the tragic fall for those who are interested.

It is unlikely that Staten Island Chuck would have left a last will and testament although it certainly appears that the Zoo may have been succession planning for a very long time.


Happy Friday Everyone!

Doreen So

Hull on Estates #389 – Appointing a custodian or guardian

Posted in Hull on Estates, Hull on Estates, PODCASTS / AUDIO, PODCASTS / TRANSCRIBED, Show Notes

Listen to Hull on Estates #389 – Appointing a custodian or guardian

Today on Hull on Estates, Andrea Buncic and Paul Trudelle discuss the nuances of appointing a custodian and/or guardian of a child in one’s Will. Should you have any questions, please email us at or leave a comment on our blog page.

Click here for more information on Andrea Buncic.

Click here for more information on Paul Trudelle.

Disinheriting Killers: The Forfeiture Rule

Posted in Ethical Issues, General Interest, In the News, Uncategorized

A man in Lancashire, England was recently barred from receiving a benefit from the Estate of the person who was murdered at his hands.  Paul Chadwick stabbed his common law partner Lisa Clay and his son Joseph Chadwick to death in their home.  Paul admitted to two counts of manslaughter on the grounds of diminished responsibility.  Tragically, Lisa was 40 years old and Joseph was only 6.

Under Lisa’s Last Will and Testament, Paul is the sole beneficiary of her Estate.  As you can imagine, Paul’s claim to Lisa’s Estate was opposed by her extended family.  Interestingly enough, counsel for Paul argued that Lisa’s Estate was only modest and that this small amount of money will make a difference for Paul’s rehabilitation in comparison to the small amounts that each intestate beneficiary will receive from this  $80,000.00 Estate.

In the end, no matter how “modest” the Estate may be, the Court ruled that “the justice of this case does not require that I modify the forfeiture rule”.  The Forfeiture Rule is a UK rule in which a wrongdoer must forfeit the benefit of his/her crime.  This is in fact codified law in England known as the Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Act 2011.  Pursuant to this Act, a killer is treated as having predeceased his victim.

Accordingly, the killer’s claim to his victim’s Estate was dismissed which brought much relief to Lisa’s family.

For more on this tragic story, click here and here.

Thanks for reading!

Doreen So

Reducing Estate Administration Tax

Posted in Beneficiary Designations, Estate & Trust, Executors and Trustees, News & Events

Well known American thriller author Tom Clancy, known for novels such as The Hunt for Red October, passed away on October 1, 2013 at the age of 66.  Clancy was married to his first wife, with whom he had four children – Michelle, Christine, Kathleen and Thomas, until 1999.  After divorcing his first wife, Clancy re-married Alexandra, with whom he stayed married until his death and together they had one child- Alexis.

Alexandra Clancy is now engaged in a legal battle with Clancy’s four grown children from his first marriage over the probate taxes surrounding his $83 million estate.  She has brought proceedings alleging the estate’s executor wrongly calculated her portion of the estate’s tax burden. Ms. Clancy is the primary beneficiary of a family trust, which her lawyers argue fell under a martial deduction, following estate planning measures taken by Mr. Clancy before his death.

Mr. Clancy died in Maryland, but often individuals north of the border also take similar steps, albeit generally with much smaller estates than Mr. Clancy’s, in order to avoid leaving their beneficiaries with high tax burdens.

In Ontario, estate administration tax (“EAT”) is $5 on every $1,000 (or part thereof) of the first $50,000 of estate value and $15 per $1,000 (or part thereof) for the estate value in excess of $50,000.

One way of decreasing EAT is to dispose of assets inter vivos, i.e. giving gifts to beneficiaries during one’s lifetime.

Another method of avoiding EAT is to place cash assets into joint accounts with beneficiaries and/or placing assets themselves into joint ownership with beneficiaries.  Upon death, the surviving owner becomes the sole owner by “right of survivorship”. This means the account or asset does not pass through the estate, thereby avoiding probate taxes.

Finally, the settling of trusts, such as the family trust Clancy set up in 2013, may in some circumstances result in a reduction in EAT.

Whether Mr. Clancy intended his wife or his four grown children to pay the majority of estate taxes is central to settling disputes among the parties.

Thank you for reading,

Suzana Popovic-Montag

Giving to People Receiving ODSP

Posted in Estate & Trust

The Ontario Disability Support Program, or ODSP, provides income support to Ontarians with disabilities and assistance with finding work or starting a business.  Financial eligibility for ODSP depends both on the applicant’s level of income, and a consideration of his or her assets.  The purpose of these restrictions on income and on assets is to ensure that support is given to those who truly need it.  An unfortunate consequence, however, is that a gift or bequest given to a person receiving ODSP may unintentionally cause him or her to breach the income or asset restrictions and become ineligible for support.  If not handled carefully, a gift to a person on ODSP can do more harm than good. Fortunately, there are a few ways to give to a person on ODSP without disturbing his or her entitlements under the program.

The rules regarding eligibility for the program and what sorts of assets will result in ineligibility are under the regulations to the Ontario Disability Support Program Act, 1997.  If a person goes over a certain prescribed limit for assets, he or she could lose their eligibility.  There is also a separate limit on income.  If planning a gift to someone on ODSP, the donor will need to be mindful about both the income limit and the asset limit.

One way to support someone on ODSP is through a trust.  There are certain types of assets that a person receiving ODSP can own that do not count towards the asset limit (e.g. the value of that person’s principal residence, tools of the trade necessary for employment, a motor vehicle, etc.).  One of the exemptions is for “the person’s beneficial interest in assets held in one or more trusts and available to be used for maintenance if the capital of the trusts is derived from an inheritance or the proceeds of a life insurance policy”.  There is a limit on that of $100,000, cumulatively.  This means that it is possible to leave someone up to $100,000 under a will or life insurance policy, so long as that money is in trust or is put into a trust within a short period of time after receiving it.  As money flows out of the trust to the beneficiary, the trustee and the beneficiary will still have to be careful not to violate the income limit, even if the trust doesn’t count towards the asset limit.

Another option is a Henson trust.  This kind of trust is named after the case of Ontario (Director of Income Maintenance, Minister of Community & Social Services) v. Henson, 1987 CarswellOnt 654 (Ont. Div. Ct.).  There is no upper limit to the amount of money that can be put into a Henson trust.  What prevents this kind of trust from infringing the asset limit is that the beneficiary does not actually have any entitlement to the money in the trust; the trust is “fully discretionary”.  The trust documents give the trustee complete discretion to choose to give the money to the ODSP recipient, or not (although we hope that the trustee will choose to give the money to the ODSP recipient, of course).  Because the beneficiary has no control over whether he or she will receive anything and no right to demand payment from the trust, the money in the Henson trust can’t really be said to belong to him or her.  The corollary to this is that Henson trusts can be open to abuse.  The trustee could use his or her discretion to deny any benefit to the ODSP recipient.  Because of that, it is very important to choose the trustee carefully and to pick someone who can be trusted to do the right thing.  Again, as money flows out of the Henson trust to supplement the income of the ODSP recipient, care must be taken not to offend the income limit.

The Ontario Ministry of Community and Social services has some helpful information available online.  Their contact information is available here.

When planning to make a gift to a person on ODSP in a will, through a trust, or otherwise, a lawyer should be consulted to ensure that it is done properly.  With a little bit of careful planning, it is possible to put aside some money to help a person who is receiving support from ODSP without disturbing his or her benefits under the program.

Josh Eisen

Even celebrities make estate planning mistakes

Posted in Estate Planning

We’ve previously blogged about the importance of having a will here (and updating your estate plan here). Too often, however, individuals fail to take the steps necessary to draft a will or set up a proper estate plan; this is even true for celebrities and many people of note. Below are some examples of estate issues that could have been prevented with a proper estate plan.

Sonny Bono

The former entertainer-turned- congressman Salvatore Phillip “Sonny” Bono died in a 1998 skiing accident, leaving no will or estate plan. As a result, his surviving wife had to petition the probate court to be appointed the estate’s administrator. She was then also required to seek court permission in order to continue the various business ventures in which Sonny was involved, and to settle the multiple claims against the estate (including one from Sonny’s prior spouse, Cher).

Pablo Picasso

The iconic artist Pablo Picasso, who died in 1973 with an estate valued at over $200 million, also neglected to leave a will. As a result, Picasso’s heirs, including his widow, Jacqueline Roque, squabbled for six years over the distribution of thousands of paintings, sculptures and drawings worth millions of dollars.

Warren E. Burger  

The U.S. Supreme Court Justice Warren E. Burger, who died in 1995, apparently typed his own will (consisting of only 176 words with several typographical errors). As a result, his family had to pay over $450,000 in taxes and had to seek the permission of the probate court to complete required administrative tasks like selling real estate.

Heath Ledger

In 2003, when Heath Ledger, the notable “Dark Knight” actor died, it was revealed that he had failed to update the will he had prepared prior to his relationship with Michelle Williams and the subsequent birth of their daughter, Matilda. The will he had left gave his estimated $20 million dollar estate to his parents and his sisters, without providing for his child or Michelle, his significant other.

Marilyn Monroe

In her will, Marilyn Monroe left three quarters of her estate to her acting coach, Lee Strasberg. However, when Strasberg died, his interest in Marilyn’s estate went to his third wife, Anna, who had never even met Monroe.

Anna was able to license Monroe’s persona to hundreds of companies (including Mercedes-Benz and Coca-Cola), auction off many of Monroe’s personal belonging and then ultimately sell the remainder of the Monroe estate for an estimated $20 million to $30 million.

It’s unlikely Monroe would have wanted someone she had not even known to be able to deal with her assets and profit so handsomely. A trust would have provided for Strasberg while he was alive and then after his death could have directed the remainder of her estate to someone of her choosing.

Considering the resources and lawyers presumably available to the above individuals, as well as the significant assets at stake, each should have implemented a proper estate plan. Yet, as illustrated above, often even celebrities and people of note die with inadequate (or non-existent) estate plans.

Thank you for reading,

Ian Hull

“Death Row Dinners” – Bad Taste?

Posted in In the News

A London “pop-up” restaurant planned to recreate and sell dinners requested by death row prisoners as their last meal.  However, criticism lead to the event’s possible cancellation before it was even held.

According to the organizers, the event was to serve “a five course feast of their culinary twists on some of death rows [sic] most interesting and popular last dinners”.  The meal was to cost £50.

The MailOnline reported that the event was promoted using images of men, apparently prisoners, with menus around their necks.  (The images no longer appear on the event’s website.)  This, along with the general concept, led to a strong backlash of criticism. In response, the organizers posted a statement on their website, indicating that they are “shocked and saddened” by the response, and that they are sorry for any offence caused. The statement goes on to say that in light of the response, the organizers are considering their next steps.

It appears that the genesis of the event was innocent enough. The organizers explained that the purpose of the event was to explore the “age-old” question of what would your last meal be.  However, many were offended by the use of the inmate’s images, while others were outraged by the entire concept.

The fascination with last meals is not a new one.  In 2006, New York artist Jonathon Kambouris commenced the “Last Meals Project”.  He matched the mug shots of convicted murders with the last meals that they ate.  As observed in the New York Daily News, “No matter your thoughts of the death penalty, there is something fascinating yet creepy about the last meals of murderers.”

The last meals of death row prisoners have also been the subject of dietary studies.  A 2012 Cornell University research project analyzed 247 last meal choices, and found that last meals are typically not very health: they are, on average, high in calories. (Surprisingly, however, 26.9% of the condemned requested a salad to go with their meal.)

Bon appétite.

Paul Trudelle