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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

UPDATE: Cowderoy v. Sorkos Estate Revisited Revisited

Posted in Estate & Trust, Hull on Estate and Succession Planning

On September 7, 2012, we blogged on the trial decision of Cowderoy v. Sorkos EstateAt trial, the court found that the deceased had repeatedly promised his step-grandchildren his farm and two cottage properties.  Applying the doctrine of proprietary estoppel, the trial judge ordered that the promised properties be conveyed to the grandchildren. This had an effect on a separate proceeding, being a claim for dependant’s support by the deceased’s spouse.  There, the trial judge considered the size of the estate, excluding the farm and cottage properties.  He also, without explanation, reduced a bequest to the spouse from $250,000 to $150,000.  The trial judge had also denied a request to have the two proceedings tried together.

The decisions were appealed, and the appeal decision was released on September 3, 2014.

The Court of Appeal received fresh evidence to the effect that the transfer of the properties to the step-grandchildren would leave the estate without sufficient assets to satisfy the spouse’s dependant support claim. 

With respect to the issue of consolidation, the Court of Appeal held that the judge erred in not consolidating the claims. 

With respect to the proprietary estoppel claim of the step-grandchildren, the Court of Appeal upheld the finding of proprietary estoppel. However, the Court of Appeal held that the promise was to bequeath the properties upon the deceased’s death, not to convey the properties. This had an impact on the appropriate remedy.  The properties were to be deemed to have been bequeathed to the step-grandchildren. The upshot of this is that the properties remained in the estate, and may be subject to the dependant support claim of the spouse.

I say that the properties “may be” subject to the dependant support claim because of the impact of s. 71 of the Succession Law Reform Act.  This section provides that where a deceased has entered into a contract to bequeath property, the property is not liable to a dependant support order, “except to the extent that the value of the property exceeds the consideration therefor”.  This would require that the value of the consideration for the properties, being the value of the services provided by the step-grandchildren to the deceased, be determined, along with the values of the properties.  If the values of the properties exceeded the consideration, then this amount would be available to be charged with the dependant support order.

In the end, the Court of Appeal ordered a new trial of the spouse’s dependant support claim, taking into account the value of the properties, and to determine the extent, if any, to which the properties are to be attached to secure any dependant’s relief order.

Thank you for reading.

Paul Trudelle

Service of Unborn and Unascertained Beneficiaries

Posted in Executors and Trustees

When someone applies for probate in Ontario, the process involves issuing an application with the court for either a Certificate of Appointment of Estate Trustee with a Will or a Certificate of Appointment of Estate Trustee without a Will, depending on the circumstances. In both cases, all persons entitled to a share in the distribution of the estate, whether it be under the provisions of the will or under the intestacy provisions set out in Part II of Succession Law Reform Act, are required to be served with the application.

Rule 74.04 of the Ontario Rules of Civil Procedure governs the process associated with the Certificate of Appointment of Estate Trustee With a Will. The Rule also sets out the mandatory notice that is to be provided. In particular:

(2) Notice of the application shall be served on all persons entitled to share in the distribution of the estate, including charities and contingent beneficiaries; however, notice need not be served on the applicant

(4) If a person who is entitled to share in the distribution of the estate is less than 18 years of age, notice of the application shall not be served on the person, despite subrule (2), but shall be served on a parent or guardian and on the Children’s Lawyer. 

(4) If a person who is entitled to share in the distribution of the estate is less than 18 years of age, notice of the application shall not be served on the person, despite subrule (2), but shall be served on a parent or guardian and on the Children’s Lawyer.

Service on the Children’s Lawyer in circumstances involving unborn and/or unascertained beneficiaries is important for two reasons: (i) the testator’s wishes, and (ii) to ensure that all beneficiaries are represented. Therefore, it is crucial at any early stage to make a determination as to whether the interests of any unborn or unascertained beneficiaries are being affected.

Unborn and unascertained beneficiaries may arise when a class of beneficiaries has not yet closed at the date of death of the testator. For example, if there is a gift over to grandchildren and the testator has some grandchildren but there is a possibility of more being born.

Thank you for reading,

Suzana Popovic-Montag

Best Time to Argue Your Case?

Posted in Hull on Estate and Succession Planning, Litigation

Does justice depend on what the judge had for breakfast?  To some extent, the answer is, perhaps, yes.  Or, perhaps more accurately, it is dependent on when they had breakfast and when justice is sought.

In a 2011 study by Shai Danziger, Jonathan Levav and Liora Avnaim-Pesso, it was found that  in the context parole hearings, there is a good time and a bad time to have your hearing held.

The study, published at Extraneous factors in judicial decisions, Proceedings of the National Academy of Sciences of the United States of America, vol. 108, no. 17 (April 26, 2011), found that the percentage of “favourable” rulings dropped gradually from 65% to 0% as the morning went on. The favourable ruling percentage shot up again after the morning break, and the afternoon break, only to drop as the day’s sittings went on.

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The authors conclude that their results indicate that extraneous variables can influence judicial decisions. Further, they conclude that their findings support the view that “the law is indeterminate by showing that legally irrelevant situational developments – in this case, merely taking a food break – may lead a judge to rule differently in cases with similar legal characteristics.” 

It is not clear how this may apply to civil litigation, where one litigant’s “favourable decision” is another litigant’s “unfavourable decision”.

Thanks for reading.

Paul Trudelle

Should you discuss the contents of your Will?

Posted in Estate Planning, Wills

A study published by Fidelity Investments, Fidelity’s Intra-Family Generational Finance Study, reveals that many adult children and their parents avoid having family discussions about estate planning. The study surveyed parents who were 55 years or older, with an adult child of 30 years or older. Parents had to have a minimum of $100,000 in investable assets, and the adult children who participated had to be at least 30 years old and have a minimum of $10,000 saved.

According to the study 4 out of 10 families had not had any discussions on important topics such as retirement finances, elderly care or will and inheritance issues. Yet, the study revealed that 93% of parents who had discussions with their children about wills and estate planning felt it brought them greater peace of mind, and 73% said it would help their children’s emotional state of mind when the time came.

Far too often in our practice we see estates litigated due to lack of clarity or poorly communicated intentions. While most people are reluctant to talk about estate planning with their loved ones, having these discussions early may provide the clarity needed to prevent misunderstandings or hard feelings as well as the potential for costly litigation after your death.

These discussions are particularly important where you will be gifting a family business, cottage or vacation home, or where you intend to leave one child substantially less due to financial support provided during their lifetime. An unequal allocation, or gift of a particular asset to only one individual, may be more readily accepted if you take the time to explain your reasoning before your death. In addition, through these discussions you may also obtain a better understanding of your children’s wishes, and this may in turn help determine the best way to distribute your assets amongst them.

If you take the time to draft a will, it is extremely beneficial to communicate your intentions as this will ensure your children understand your wishes and may prevent costly litigation after your death.

Thank you for reading,

Ian Hull

 

End of Life Battles Continue

Posted in Uncategorized

A recent article in the National Post discusses the case of Douglas DeGuerre who died from cardiac arrest in 2008 at Sunnybrook Health Sciences Centre.

Mr. DeGuerre’s daughter, Ms. Joy Wawrzyniak, had requested a “full code” response on her father’s behalf.  She later learned that her request had been overruled by a do-not-resuscitate (“DNR”) order authorized by two of the hospital’s doctors.  When Ms. Wawrzyniak walked into her father’s room on the day he died, he was struggling to breath and said he was drowning.  Ms. Wawrzyniak, who is herself a nurse, franctically tried to assist her father while the hospital team observed but did not respond.  Ms. Wawrzyniak later complained to the College of Physicians and Surgeons (“the College”), and twice they found that the doctors had acted properly and that the DNR order was clinically and ethically appropriate.  However, the Health Professions Appeal and Review Board (“the Board”) has rejected that decision as unreasonable. The article states that this is a rare event, since the Board typically upholds the decisions of the College.

Ontario’s Health Care Consent Act (“HCCA”) requires doctors to get agreement from the patient or from their substitute decisions makers with respect to any medical treatment, and to ask the Consent and Capacity Board to resolve any disputes.

Pursuant to section 10(1) of the HCCA, doctors are required to obtain consent before administering treatment. Section 2(1) of the HCCA defines the term “treatment” as “anything that is done for a therapeutic, preventive, palliative, diagnostic, cosmetic or other health-related purpose, and includes a course of treatment, plan of treatment…”

The term, plan of treatment, means a plan that:

(a)   is developed by one or more health practitioners,

(b)   deals with one or more of the health problems that a person has and may, in addition, deal with one or more of the health problems that the person is likely to have in the future given the person’s current health condition, and

(c) provides for the administration to the person of various treatments or course of treatments and may, in addition, provide for the withholding or withdrawal of treatment in light of the person’s current health condition. (emphasis added)

The Board does not have the power to actually find misconduct on the part of the doctors.  It can only find that the College’s decision was unreasonable. The Board directed that the College re-open disciplinary proceedings against two of the physicians that were involved in the complaint, and that it bring is own policies in line with the legislation.  The decision of the Board can be found here.

This case is one of many recent cases across the country where individuals and their family members are engaged in battles over end-of-life decisions with physicians and law makers.

Thanks for reading!
Moira Visoiu

Cost of Future Care Reports

Posted in Uncategorized

 

When a dependant of a deceased person brings a support claim against the deceased’s estate under the Succession Law Reform Act, one of the factors that a court will consider in determining the quantum of support to be awarded is the current financial needs of the dependant.  In cases where the dependant has medical or health issues, which may result in increased needs in the future, the court may also consider the needs of the dependant into the future.  This is necessarily an uncertain exercise, however there are organizations that can help with this analysis.  These companies often prepare expert reports for personal injury litigants as well. An occupational therapist, doctor or other professional will meet with the individual and assess their needs.  They will review the individual’s medical records and will create a table setting out the services that person needs now and may need in the future and the estimated cost of each.  The needs of the individual could include: therapeutic interventions, medical services, attendant care/personal support, medical equipment and supplies, medications, housing modifications, housekeeping and property maintenance services. These reports are then submitted to the court in support of the dependant’s claim. If the matter proceeds all the way to trial, the expert will often be called to give testimony about their report. Depending on the level of detail involved these reports can cost anywhere from $3,000 to $10,000 but will often carry significant weight with the court and should be considered wherever a claimant has medical health issues that may lead to increased financial needs in the future Thanks for reading! Moira Visoiu

Hull on Estates #388 – Setting up trusts for children

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

Listen to Hull on Estates #388 – Setting up a trust for your children

This week, Moira Visoiu and Andrea Buncic discuss setting up trusts for children. If 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 Moira Visoiu.

Click here for more information on Andrea Buncic.

What Happens If The Assets Are Not Enough?

Posted in Estate Planning, Executors and Trustees, Wills

When there is a shortfall between what payments an estate is required to pay and the value of the estate, some problems can arise. Two such situations include: (i) when the estate assets are insufficient to satisfy the debts and (ii) when the estate assets are insufficient to distribute specific bequests.

Firstly, sometimes a deceased’s person’s debt is greater than the assets of their estate. It is the executor’s duty to pay all debts out of estate assets and often that means liquidating assets such as real properties and investment accounts. If an estate is insolvent, the executor retains control and is usually involved in negotiations with creditors for settlement of debt.

However, if the estate does end up falling into bankruptcy, the executor must surrender control to a Trustee in Bankruptcy who deals with the estate going forward. It is, however, of some comfort to know that beneficiaries of a bankrupt estate, are not personally responsible for the estate’s debt obligations.

Secondly, when a testamentary document (i.e. a will) gifts to beneficiaries without the adequate assets to support the gifts, an executor may have to proceed with the process of abatement. Abatement, when it comes to debts and legacies, refers to the reduction of gifts. The specific gift is partially satisfied from funds remaining in the estate after payment of debts and the legacies are reduced on a pro rata (proportionate) basis. For example, if an individual gifts each of their two children one million dollars but after liquidation of the estate, the estate only has net assets of one million dollars, both children cannot possibly receive the full gift and therefore each will receive a lesser amount.

Abatement is to be distinguished from ademption- the occurrence of a specific gift of personal or real property in a Will that no longer exists at the date of death. In the case of ademption, the gift fails. The distinction between the two is discussed by David M. Smith here.

Thank you for reading,

Suzana Popovic-Montag

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