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iPhone Wills: There’s No App for That

Posted in Uncategorized

I was recently at a cocktail reception when a young couple asked me about their “iPhone will”. The couple had recently taken their first trip out of the province without their young child and had intended to prepare a will in advance. However, life got in the way, and it was only when they were sitting in the airport that they remembered they had forgotten to prepare a will. Worried about their lack of succession planning, they pulled out their iPhone and drafted a basic document setting out their desires for their estate should anything happen on their trip.

Unfortunately for this young couple, this attempt at drafting a will was likely ineffective. The formalities of a valid will are set out in the Succession Law Reform Act, R.S.O. 1990 c. S.26. For a formal will to be valid, it must be in writing (s.3). Additionally, a will is not valid unless: (i) it is signed by the testator at the end of the document (or their representative); (ii) it is signed in the presence of two witnesses and (iii) the witnesses sign the will in the presence of the testator (s.4(1)).

Certain of these formalities are not necessary where a testator makes a “holograph will”. A holograph will is valid if it is made wholly by the testator’s handwriting and signature without formality and without the presence or signature of a witness (s.6). However, in this case the couple was unable to sign the will (even digitally) due to the limitations of the phone’s program.

We are not aware of any cases that have considered whether a digital signature can satisfy the signature requirements of the Succession Law Reform Act or whether digital “handwriting” can satisfy the holograph will requirements. It will be interesting to see what a Court will decide in a situation where a testator attempts to sign a will digitally.

In conclusion, while it would have been effective for this couple to quickly write (and sign) a holographic will on a napkin, their attempts were foiled by the limitations of their iPhone. While it will be necessary for the Courts of Canada to adapt to technological advancements, for now this is an area where pen and paper remains the safe choice.

Thank you for reading.

Andrea Buncic

Proposed Law Would Assist Estate Trustees

Posted in Executors and Trustees

Guelph’s MP, and former Estate lawyer, Frank Valeriote, recently tabled Bill C-247, the Service Canada Mandate Expansion Act (the “Bill”).  If enacted the Bill would require the Minister of Employment and Social Development to establish Service Canada as the single point of contact for the Government of Canada in respect of all matters relating to the death of a Canadian citizen or Canadian resident.

Under our current system, estate trustees are often required to contact a multitude of government departments upon the death of an individual. These departments can include (to name a few):

  • Service Ontario for Old Age Security and CPP Benefits, Employment Insurance and in relation to the Deceased’s Social Insurance Number Card;
  • The Canadian Revenue Agency in relation to the completing of the Deceased’s final tax returns;
  • Passport Canada if the Deceased had a valid passport at the time of death; and
  • The RCMP if the Deceased had firearms.

There is little if any communication between the various government departments and each generally has unique documentation and procedural requirements that must be deciphered and complied with by the estate trustee.

Valeriote indicates that “the creation of ‘one point of contact’ at Service Canada would bring efficiency to the system and would remove the guess work for survivors and estate administrators who may not be fully aware of the deceased’s obligations to the federal government.”

He goes on to state that the Bill “will reduce the possibilities of benefit overpayments and costs to the federal government to retrieve such expenditures… and avoid the possibility of requests arriving years later from the federal government demanding repayments or penalties”.

Under the proposed Bill, an estate trustee need only advise Service Canada of the death once. This one contact would trigger a notification to all relevant departments, who would then be required to advise the deceased’s estate trustee of the specific procedures and responsibilities applicable in relation to the cancellation of benefits, the return of identification documents and access to any survivor benefits.

A similar system has been successfully implemented in the United Kingdom called “Tell Us Once.” The process in the UK allows an estate representative to report a death to most government organizations with just one communication.

The Bill comes on the heels of the 2013 Fall Auditor General’s Report titled “Access to Online Services”. In Chapter 2 of this report, under ‘delivery of services to Canadians’ the Auditor General examined the current practices and procedures relating to death notifications and highlighted the lack of coordination and communication between the various departments.

Valeriote says “the current system is far too cumbersome for those who have lost their loved ones. Should the Bill be passed people will finally find some comfort in knowing they won’t be facing an endless labyrinth of frustration in wrapping up the affairs of their loved ones which sometimes leads to higher legal bills.”

The Bill passed its second reading in the House of Commons Oct. 8, 2014, and was referred to the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities for further study.

If the Bill becomes law, the Minister of Employment and Social Development will have one year to establish Service Canada as our single point of contact.

Thank you for reading,

Ian Hull

Art & Taxes

Posted in Estate Planning, In the News

Almost everyone is required to pay some sort of tax.  As such, it seems logical to set up a method to allow as many people as possible to pay their taxes.  Where does it make more sense than in Italy, the land of Michelangelo and Raphael, to allow people to use art to pay tax.

A recent article indicates that Italian citizens are able to transfer cultural treasures in lieu of tax payments.  Apparent offerings include paintings, sculptures, historical works of art, donations of property that have an archaeological value, contemporary artworks, antique books, and villas.

Not only has a panel been created to assist in calculating the value of the offered works, but it seems that all taxes can be paid including income and inheritance tax.  Put rather succinctly, the Italian Minister of Culture and Tourism mentions that “…not only does it allow people to fulfill their tax obligations by selling works of art, on the other hand, [Italy] regains its historical and artistic assets”.

Apparently this procedure is already in place in Britain where recently, the family of Sir Winston Churchill offered 38 paintings actually painted by Churchill himself in lieu of inheritance tax.

When it comes to estate planning in Ontario, it is often suggested to have some liquidity in order to pay any estate administration tax owing (there being no inheritance tax on distributions in Ontario).  Otherwise, as was the case in Ireland, a beneficiary may be forced to sell real property in order to pay inheritance taxes owing.  However, by accepting art may limit the need to have liquid assets.

While I admit to not having watched an episode of Antiques Roadshow Canada recently, it is entirely possible that Ontario could one day adopt such a practice.  For all we know, art classes may advertise one day that paintings posthumously pay taxes.

Noah Weisberg

Hull on Estates #392 – Murder’s impact on the devolution of estates

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

Listen to Hull on Estates #392 – Murder’s impact on the definition of estates

Today on Hull on Estates, Paul Trudelle and Moira Visoiu discuss the issue of murder and how that impacts the devolution of estates. Should you have any questions, please email us at hull.lawyers@gmail.com or leave a comment on our blog page.

Click here for more information on Paul Trudelle.

Click here for more information on Moira Visoiu.

Simplified Procedure for Small Estates…Continued

Posted in Uncategorized

On Monday, Ian Hull blogged about the application process for a Certificate of Appointment of Estate Trustee (formerly referred to as Probate) and when a probated Will is generally required.  Ian also discussed the fee incurred (also known as estate administration tax or death tax) and how it is calculated.  Lastly, Ian discussed the role that the Law Commission of Ontario is taking in reviewing this application process.

Currently, regardless of the size of an estate the application process is the same.  There is no differentiation between a large estate and a small estate.  Given that other provinces have already adopted a separate procedure for smaller estates, being Saskatchewan and Manitoba, the LCO is seeking feedback from the legal community as to whether Ontario should be adopting such a process.

As most of you reading this blog likely have some experience dealing with probate applications, whether it be positive or negative, it is important to voice your opinion in order to address areas for change, if needed.  As such, we encourage you to provide your feedback to the LCO so that it can be properly considered whether Ontario requires a change to its probate process.  There are at least three possible ways to contribute:

First, Ian’s blog included a hyperlink to the LCO consultation questionnaire.  The questionnaire is relatively straightforward and can easily be completed over a morning coffee.

Second, the LCO in conjunction with Hull & Hull LLP have arranged a focus group for November 4, 2014.  Call in access is available, and anyone interested in attending can contact Sue Gratton (Research Lawyer at the LCO) at (416) 650-8437 or myself at nweisberg@hullandhull.com.

Third, Sue Gratton can be contacted should you wish to participate further.  Perhaps you would like to arrange a focus group or assist in the distribution of the consultation questionnaire.

I encourage you all to participate!

Noah Weisberg

Estate Planning – More Than Just a Will

Posted in Estate Planning, Power of Attorney

Thanksgiving was an opportunity for many Canadians to reflect on the blessings in their life.  It may also have been a chance to reflect on how they wish to benefit loved ones in the future.

There are a surprising number of aging Canadians that do not think they have done enough when it comes to estate planning, according to recent survey discussed by CBC here.  After all, estate planning does not just consist of the execution of a Will.

Other documents that should be included in a proper estate plan are powers of attorney for personal care and for property.  Powers of Attorney allow for the appointment of someone to legally make decisions on your behalf.  Sometimes this appointmentis triggered by incapacity, and other times it becomes effective upon execution of the document.  Choosing an attorney is an important decision that requires consideration of factors such as trust, geography, and communication skills.  It is also important to decide whether you wish to appoint one or more attorneys for your personal care or property.  If you choose more than one, consider whether your attorneys will be able to act severally or only jointly with each other.  In either case, it’s important to choose attorneys that can communicate effectively and work together in your best interest.

If you have children that could be left behind before they reach the age of majority, it is important to choose a guardian for them (subject to a court appointment) as part of an estate plan.  Otherwise, as is the case when powers of attorney are not executed, someone else decides for you.

The management of a business is also an important consideration during estate planning. Specific instructions should be communicated so as to avoid surprises among family or business partners.

While it is not typical holiday dinner table talk, more and more advisors and practitioners are recommending that people talk to loved ones about their wishes.  A family meeting is a good way of addressing awkward topics, like money and assets, as well as managing expectations of the parties involved.

Estate plans also need to be updated incrementally.  This can be done on a regular schedule, but must also take into account when certain events take place that call for an updated plan.  A birth, marriage or separation are some examples of these events.

Like any other big decision, an estate plan can be done without the help of a professional but there are many available and it is certainly advisable that advice and assistance be sought.

Thank-you for reading,

Suzana Popovic-Montag

Simplified procedures for small estates?

Posted in Estate Planning, Executors and Trustees, General Interest

When a person dies in Ontario and leaves a Will, his or her named Estate Trustees often need to obtain a Certificate of Appointment of Estate Trustee (previously known as “probate”) in order to deal with the Estate’s assets.

The Certificate serves as:

  • proof of the deceased’s death;
  • authentication of the propounded Will as the deceased’s last Will (important as a later Will revokes an earlier one); and
  • proof of the authority of the named Estate Trustees to act in accordance with the terms of the Will.

Third parties (like banks, investment institutions and persons buying the deceased’s real or personal property from the Estate Trustees) will often require that the Estate Trustees obtain a Certificate.  The Certificate provides comfort to these third parties and protects them from liability, as it effectively certifies the person(s) with whom they are dealing are authorized to deal with the assets.

The application for a Certificate is made by the Estate Trustee(s) to the Superior Court. When this application is made, a fee (often referred to as a ‘probate fee” or the “estate administration tax”) is payable to the Court. Ontario has the highest probate fees of all the Canadian provinces, starting at $5 per $1,000 for the first $50,000 of the estate assets and $15 per $1,000 thereafter.

Where the value of an estate is relatively small, the cost of obtaining the Certificate is often perceived as prohibitively expensive.  As a result, the Estate Trustees of these small estates often administer the assets without the protection of probate and, in some cases, choose not to administer the estate at all and abandon the assets altogether.

The Law Commission of Ontario (“LCO”) is actively considering whether a simplified procedure for small estates would make sense for Ontario and recently released a Consultation Paper on the issue. The Paper describes Ontario’s existing probate process and compares it to the specialized small estate processes currently being applied in other jurisdictions.

The release of this Consultation Paper, has initiated the public consultation process.  The LCO is currently accepting submissions from the public, including estate representatives, beneficiaries, creditors, financial institutions, policy makers, estate lawyers and anyone else who has been or is involved with Ontario’s probate system. Submissions can be made, formally and informally, until December 11, 2014.

In addition, the LCO has also released a short Questionnaire for Ontarians who have administered what they consider small estates and wish to be involved, but who may not wish to make a formal submission.

With the benefit of this consultation process, the LCO will prepare a final report with recommendations on whether a simplified process would facilitate the administration of small estates in Ontario and, if so, the suggested design for that process.  The LCO will benefit from the responses of the professions and others who have had direct experience with small estates in Ontario.  The submissions are important to the success of the project and we encourage you to share your experience and views with the LCO.

Thank you for reading,

Ian Hull

 

Aunt Jemima Goes to Court

Posted in Estate & Trust, In the News, Litigation

A Chicago federal court will soon hear a matter involving the estates of two women whose likeness is reproduced on boxes of pancake mix and bottles of maple syrup worldwide.

A claim has been commenced by the great grandsons of Anna S. Harrington.  Anna Harrington and Nancy Green are believed to have played a part in the early days of the multi-billion-dollar instant pancake industry.  As beneficiaries of her estate, Harrington’s descendants seek damages for the non-payment of two billion dollars in royalties allegedly promised by Quaker to their great grandmother in the late nineteenth century.

The plaintiffs argue that the character of Aunt Jemima was not only based on Harrington and Green, but that they were also instrumental in discovering the potential of powdered milk to add fluffiness to instant pancakes.  The plaintiffs state that Green and Harrington were told that they would receive a share of the money generated by the Aunt Jemima brand, but that Quaker never honoured this arrangement.

Quaker, the defendant to the proceedings, argues that neither Harrington nor Green served as inspiration for the image of Aunt Jemima and that  the company never entered into a contract with either of the purported Aunt Jemimas.  Media reports indicate that Quaker intends to rely upon the limitation period issue, as the lawsuit was commenced approximately ninety years after Green’s death, around the time when Quaker first acquired rights with respect to the pancake brand.

Have a great long weekend.

Nick Esterbauer

Aging population could have its benefits

Posted in Elder Law, In the News

Suzana Popovic-Montag has previously blogged about the impact of Canada’s aging population on the healthcare system, the prison system, and various industries, such as farming.  The aging workforce has the potential to leave jobs unfilled, while many believe that our health care system, in its current state, does not have the capacity to deal with the anticipated demands of increasing numbers of seniors.

The reality is that, by the year 2050, approximately one third of all Canadians will be aged 60 and above.  Reports indicate that the percentage of Canadians over age 60 will increase from 21.7% to over 30% by 2050, the result being that our country will be significantly “older” than it currently is.  Taking into consideration the strain that the shift in the average age of Canadians will have on public services and the labour workforce, it may be hard for some to see the benefits associated with living in a country with an aging population.

A recent article by the Globe and Mail, however, highlights the opportunity that an aging population could bring to Canadians.  The article describes an international study by a team of researchers, who observed the economic, social, and environmental consequences of population dynamics in Germany, as a potential indicator of the impact of an aging population.  After Japan, Germany is the country reported to have the second “oldest” population in the world, with an average age of 44.3 years, which could give Canadians a glimpse of what is to come as our population ages.

In short, the results of the study suggest that Canadians may be able to look forward to the following benefits that have been associated with an aging population in Germany:

  • Reduced energy consumption and carbon dioxide emissions as a result of a smaller population size;
  • Those individuals who can expect to receive an inheritance may do so later in life, at times when money that is received is more likely to be used to fund retirement or provide assistance to adult children rather than quickly spent;
  • Individuals are not only anticipated to live longer, but to spend a greater proportion of their lives in good health; and
  • Increases in overall quality of life, as a result of less time spent working and/or performing housework.

Only time will tell which of the above anticipated benefits and consequences will be realized as Canada’s population continues to age.

Thank you for reading.

Nick Esterbauer

Communicating Wishes for your Digital Property

Posted in Estate Planning

The Toronto Estate Law Blog has covered the topic of digital assets here and here, as well as electronic registries here. This subject is getting increased attention with the clear shift to reliance on digital documents, assets and accounts.

An interesting aspect relating to the management and ownership of digital property is the designation of trusted recipients to take control of that property upon death. As discussed in yesterday’s blog about the launch of Estate Assist’s beta version for smartphones, it can be tricky for family and friends to deal with a deceased person’s online presence post-death for a variety of reasons.

Another concern is that family members or friends may be at a loss as to what the deceased person’s wishes were in regards to their online and/or social media presence.

Via Estate Assist, users can designate one or more persons that will be granted, either immediately or at a later time, access to important documents and passwords. This designation process would, at the least, alleviate some of the issues associated with leaving digital documents, assets and accounts without an authority to take control of them. However, there remains the issue of one’s wishes regarding their digital legacy.

Communication with those who one has entrusted to handle their property upon death is an important aspect of estate planning, both for digital and non-digital property. As with all estate planning decisions, it is important to think rationally about the best person to designate for each role. One may want their spouse to be the executor of their estate but designate one of their children or a lawyer to deal with digital  assets due to their spouse’s lack of technological knowledge and skill. Regardless of the situation, informing a family member or friend of your wishes is often recommended in order to avoided surprises and confusion.

Furthermore, by designating someone to deal with one’s digital legacy upon death, one is able to adequately give instructions as to the preferred manner of dealing with this unique asset class. For example, while one person may want their social media accounts deleted immediately, another may prefer their online presence carry on for a specified or indefinite period of time after death. By designating someone to deal with online assets and giving them the tools needed to do so, a good deal of time and energy can be saved.

Thank-you for reading,

Suzana Popovic-Montag

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