Toronto Estate Law Blog : Toronto Estate Lawyer : Hull & Hull Law Firm : Trust Mediation and Succession Planning : Serving Ontario, Ottawa, Mississauga, Hamilton

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A recent decision out of Alberta deals with the often thorny issue of costs on an abandoned will challenge.

In Re Dool (Estate of), 2007 ABQB 122, challengers to a will decided to abandon their challenge for "financial and health reasons". They sought a discontinuance without costs. The Respondent sought costs from the challengers.

The court not only allowed the action to be discontinued without costs, but it allowed the Applicant's their costs from the estate.

The circumstances of the case leading to such an award merit closer review. The court noted that the will challengers had significant grounds which warranted judicial inquiry. The court also found that the Respondents failed to cooperate with the Applicants in addressing these concerns. The court also referred to the serious health problems of the Applicants and the effect that this had on their ability to continue with the litigation. The court went on to make significant note of the conduct of counsel for the applicant, which was "reasonable" throughout, as compared to counsel for the Respondent, which was said to be "aggressive, uncooperative and demeaning". This approach by the Respondent prevented the Applicants from effectively assessing the reasonableness of their claim, as was their obligation.

The court specifically addressed the "comportment of counsel". The judge noted that “It was not pleasant having counsel for the Respondent appear before me." Counsel's conduct was said to border on contempt. The court lamented the increasing frequent lack of civility between counsel, and the comportment of counsel in addressing the court. This clearly influenced the judge in making the discretionary costs award that he did.

One lesson to be taken from this interesting case is that, aside from the merits, the approach taken by counsel can have a significant impact on a costs award made by the court. It is quite possible that a very different approach would have resulted in a very different costs award. The Respondent may have been able to avoid an award of costs in favour of the Applicants, based on the prevailing case law. While counsel must vigorously and fearlessly advance the positions of their clients, this is most effectively done in a reasonable and civil manner.

Thank you for reading,

Paul Trudelle

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On Tuesday, March 27, 2007, I attended the Ontario Bar Association Trust & Estates Section Meeting. Kathryn Bennett opened the meeting with a discussion 2007 federal budget and how it affects individuals from an estate planning point of view. Some of these points were touched upon in our earlier blogs.

The meeting continued with presentations by Justices Greer, Croll, Perell and Spies of the estates list. They addressed what the estates bench and bar can do better. The judges touched upon the following matters:

• The Estates court will be sitting every week this summer;  
• "1 1/2" judges will be sitting every week (1 in the summer months);  
• At some point, an initiative will be put in place whereby the first appearance for long applications will be a 15 minute timetabling appointment;  
• The judges stressed the importance of advising the estates office early if a motion or application is not proceeding, or if it is to be proceeding on consent;  
• An e-scheduling pilot project will be put in place soon;  
• The judges emphasized the advisability of filing a family tree as part of the record;
• In guardianship applications, where the Public Guardian and Trustee has sent a letter raising issues, it may be advisable for a supplementary affidavit to be filed setting out how the issues raised by the Public Guardian and Trustee have been addressed; 
• Counsel should try to simplify matters by setting out in the confirmation form what materials are to be reviewed by the judge, and, possibly, by attending at the court office the day before the proceeding in order to tag what materials are to be reviewed;
• Counsel should consider the advisability of having a case management judge appointed in certain proceedings; 
• When submitting an "unusual" over the counter motion, counsel should consider sending an explanatory covering letter, and requesting that the matter be put before a judge.
• Mr. Justice Perell referred to a recent work which noted that in an information economy, what is scarce or valuable is attention. Applying this to advocacy, counsel should ensure that their message is effectively and efficiently packaged so that judicial attention is captured and focused. Counsel should have this in mind when considering the procedures to be used to determine the issues, and when preparing materials.
  

Until tomorrow,

Paul Trudelle 

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People don’t seem to have as much fun with their wills these days: not as much as they used to.

Take Charles Vance Millar, who died on October 31, 1926. Charles, a lawyer, left a Will in which he gave a share in the Ontario Jockey Club to opponents of gambling, and one to a competitor of the Ontario Jockey Club.

In another provision, Charles left shares of the O’Keefe Brewery Company to each Protestant minister and to each Orange Lodge in Ontario: staunch champions of the temperance movement.

In another provision, he left a life interest in a vacation home to three friends who deeply disliked each other.

In yet another provision, he left the residue of his estate to the woman “who has … given birth in Toronto to the greatest number of children” at the end of ten years from his death. This last clause set off “The Great Stork Derby” in Toronto. Four women shared the prize, having nine children each. (It is not known how many were left out of the money with only eight. A few disappointed contestants were also kept out of the chips as some of their children were illegitimate, and not considered to fall within the definition of “children”.)

By his own admission, Charles’ Will was unusual. The Will opens with the clause:

“This Will is necessarily uncommon and capricious because I have no dependents or near relations and no duty rests upon me to leave any property at my death and what I do leave is proof of my folly in gathering and retaining more than I required in my lifetime.”

Millar’s will set off significant litigation, with proceedings arising in relation to most of the clauses.

Take care,

Paul Trudelle

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Listen to "Trying to Protect an Elderly Parent from Financial Exploitation; The Limits on Power of Attorney"

Read the transcribed version of "Trying to Protect an Elderly Parent from Financial Exploitation; The Limits on Power of Attorney"

During Hull on Estates Episode #52, Justin de Vries and Megan Connolly discuss the central question in the case of a father and his children, McMullen v. McMullen: did the defendants improperly use their power of attorney when they transferred legal title to Mr. McMullen's condominium from his sole ownership to their joint ownership?

Justin and Megan summarize the case and cover issues such as capacity, breach of fiduciary duty and elder abuse.

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Listen to "Beneficiary Designation Considerations for Spousal Trusts"

Read the transcribed version of "Beneficiary Designation Considerations for Spousal Trusts"

During Hull on Estate and Succession Planning Episode #53, Ian Hull and Suzana Popovic-Montag build on their last podcast regarding succession planning for married couples, and turn their focus to spousal trusts.

They discuss administrative expenses surrounding trusts, the circumstances that lead to surviving spouse litigation, and methods for ensuring the balance between beneficiary designations.

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A few weeks ago, in the face of a snowstorm, I decided to work from home and avoid the messy commute to our downtown Toronto offices. I’m happy to report that I was quite productive that day, notwithstanding the lure of hot chocolate, pajamas and a good movie.

With the advent of Blackberrys, high-speed Internet, e-mail and remote computer access, more and more lawyers are changing the way they work, including where they work. More lawyers are learning to operate from home-based workspaces, at least some of the time. This allows lawyers to be more flexible and juggle the competing demands of work and family. You can get home for dinner with the family, and then catch up on e-mails and get a head start on the next day’s work. I personally telecommute every day, thanks to my Blackberry.

Is there a telework revolution afoot in the legal profession? Many studies show that teleworking two to three days a week actually increases productivity. It certainly leads to increased flexibility and mobility. However, my own view is that it would be difficult to work 100 percent of the time from home. The practice of law involves personal contact, with both colleagues and clients.

It is likely too early to tell whether a revolution is taking place. However, there’s no denying that the telework age is here, and lawyers are reaping the benefits, at least some of the time.

Have a great day!
Bianca

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In a recent decision out of Québec, Broodney v. Herzog [2006] Q.J. No. 14933, testamentary intent trumped the literal wording of a Will.

The testator had been involved in a loving relationship with Harry Broodney. They had lived together for twelve years. In a 1995 Will, the testator left Harry $25,000.00. In a 1998 Codicil, the gift was increased to $35,000.00, payable in monthly instalments of $600.00. In 1999, the testator executed a further Codicil, increasing the monthly payments to $1,000.00 but not changing the capital amount of the gift. Both the 1995 Will and the 1998 Codicil stated that the gift to Harry would lapse and be null and void, if he and the testator were “not living together” at the time of the latter’s death.

The issue for the Court of Québec was the meaning of the phrase “not living together”. At the time of the testator’s death, she had been living in a nursing home due to her deteriorating health. Her family consequently claimed that Harry was not entitled to the $35,000.00 gift.

The Court focused on the testator’s intentions. Her intent to benefit Harry was clear and uncontested. The Court held that the testator intended the phrase “not living together” to mean a “break up” with Harry. The evidence was clear that their loving relationship did not end when the testator involuntarily left Harry to reside in the nursing home. The evidence was also clear that the testator’s family was aware of the loving relationship. For the Court, the inability to physically live together could not be a reason for disinheriting Harry.

Not surprisingly, Harry asked for and received punitive damages as a result of the family’s refusal to honour the testator’s last wishes. The Court deemed the family’s refusal to be malicious and reckless.

The litigation could have been avoided by better wording in the Will. Drafting issues aside, the case is a good illustration of a Court employing common sense and testamentary intent to avoid an unjust result.

Have a great day!
Bianca

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Section 72(1) of Ontario’s Succession Law Reform Act allows a court to deem various assets that may normally fall outside of a deceased’s estate, to be part of the estate for the purposes of satisfying a dependant support claim. This usually includes “any amount payable under a policy of insurance effected on the life of the deceased and owned by him or her”. However, as demonstrated in Madore-Ogilvie (Litigation Guardian of) v. Ogilvie Estate [2006] E.G. No. 4654 (Div. Ct.), this provision will not normally capture insurance policies owned jointly by the deceased and a third party.

In Ogilvie Estate, the deceased was the father of six children (three of them minors) by five different women. Dependant support claims were made on behalf of two of the minor children. It was agreed that the deceased had failed to provide adequately for his minor children.

The issue before the court was whether a joint life insurance policy, issued to both the deceased and his spouse, could be included as part of the deceased’s estate under section 72(1) of the SLRA. The deceased and his spouse were both the owners and beneficiaries of the policy, which provided that the survivor of the two would receive the face amount of the policy on the death of the other. It was undisputed that the spouse had made the majority of the payments under the policy.

The applications judge held that the policy could be included as part of the estate. On appeal, a majority of the Divisional Court reversed this decision. The majority held that a jointly owned policy cannot be included as part of an estate merely because the deceased is one of the owners of the policy. The Court recognized that s. 72 of the SLRA was designed to counter the intentional depletion of an estate at the expense of dependants. However, there are transactions that “would be considered the normal personal commerce of an individual” and not necessarily undertaken to disenfranchise a dependant. In the case at hand, the majority ultimately decided that the contractual rights of the spouse to the joint policy trumped the needs of the deceased’s dependants.

Have a great day!
Bianca

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Listen to "The Trustee's Power to Encroach on Capital"

Read the transcribed version of "The Trustee's Power to Encroach on Capital"

During Hull on Estates Episode #51, Ian Hull and Suzana Popovic-Montag discuss the circumstances surrounding a trustee's power to encroach on capital.

Ian and Suzana cover various principles which affect the power to encroach including the Armchair rule of construction, the Evenhand approach and the concept of malafides.

They also touch on various cases including the U.K. case of Gisbourne v. Gisbourne, and Fox v. Fox Estate (1994), 5 E.T.R. (2d) 174 (Ont. Ct. (Gen. Div.))

For more information on the power to encroach, see Ian's article in Estates, Trusts & Pensions Journal, "Discretion to Encroach: Do the Beneficiary's Personal Resources Matter?"

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Listen to "The Necessity of a Will in Successful Succession Planning"

Read the transcribed version of "The Necessity of a Will in Succession Planning"

During Hull on Estate and Succession Planning Episode #52, Ian Hull and Suzana Popovic-Montag discuss the importance of having a Will in succession planning.

They cover a range of necessary Will provisions including:

• The appointment of a guardian for your children;
• How to deal with authority over your children's property and the Office of the Children's Lawyer ;
• Avoiding the Corvette effect;
• Common disaster clauses; and
• US Estate taxes.

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Anyone can discount a commercial interest they own, trading money for convenience. There is always someone looking for a bargain.

In the United States, dozens of companies are offering to buy structured settlements and trusts. In fact, it is a huge business. Most U.S. states have passed laws requiring court approval of the sale of a structured settlement. However, in many instances, courts will approve sales of structured settlements and trusts for anyone claiming financial hardship.

I am not aware of any prohibition in Canadian law stopping such a discount trade in Canada. The owner of a trust can sell it, unless the trust contains a prohibition against its sale. As another example, one can sell his/her remainder interest in a trust, at a huge discount. It will be interesting to see if this type of discount trade catches on in Canada. If it does, regulation may become necessary to protect vulnerable beneficiaries of structured settlements or trusts. For example, court approval and/or full disclosure of potential consequences may be required. However, it seems unlikely that the government will seek to stop beneficiaries who are sui juris from selling their interest in structured settlements or trusts.

Have a great day!

Bianca

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Yesterday, we set out the first of a series of interpretation problems identified by Rodney Hull, Q.C. that often arise in Wills. Today, we set out another common provision that tends to cause difficulty …

(1) THE RULE IN SAUNDERS v. VAUTIER (1841), Cr. & Ph. 240.

(2) THE CLAUSE - “The residue of my estate to A upon attaining age twenty-five years”.

(3) THE FACTS - A is nineteen years of age on testator’s death. There is no gift over in the event that A dies before attaining the age of twenty-five years.

(4) THE QUESTION -

(a) Is the gift:

(i) vested in possession?

(ii) vested in interest?

(iii) vested subject to being divested? or

(iv) contingent?

(b) When can A call for the gift?

(5) WHERE TO START RESEARCH -

(i) Theobald on Wills - page 603 - paragraphs 43 - 29.

(ii) Feeney’s Canadian Law of Wills, paragraphs 17.54 - 17.55.

(iii) Sheard, Hull and Fitzpatrick, Canadian Forms of Wills, page 214.

Interpretation Applications can be quite expensive and time consuming. To the extent that they can be avoided, with diligent research and the ultimate consent of the beneficiaries, together with the consent of the Public Guardian and Trustee and the Children’s Lawyer, if necessary, this may not be a bad thing!

All the best – Suzana.

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Listen to "The Rectification of a Will"

Read the transcribed copy of "The Rectification of a Will"

During Hull on Estates Episode #50, Sean Graham and Paul Trudelle discuss the rectification of an erroneous Will.

Sean and Paul also cover the importance of detailed documentation such as Solicitor's notes and prior Wills, as well as Intestacy and Knowledge and Approval of the Will. 

For relevant case law on rectification, please see:

• Re Black (1982), 37 O.R. (2d) 219, 38 O.R. (2d) 468 (Ont. H.C.), Tab 11.
• Re Sherin (1985), 18 E.T.R. 177 (Ont. H.C.J.), Tab 12
• Re Morris, [1970] 1 All E.R. 1057 (P.D.), Tab 6.
• Barylak v. Figol (1995), 9 E.T.R. (2d) 305 (O.C.G.D.) Tab 8

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Today, Rodney Hull Q.C. gives us some practical advice on dealing with actual interpretation problems …

(1) THE RULE IN BROWNE v. MOODY, [1936] A.C. 635 (P.C). – Direction to pay after a life interest – vesting of interest.

(2) THE CLAUSE – “Income from a trust to a son for life, and on son’s death, the fund to be divided among the daughters and granddaughter of the testatrix in equal shares, with gift over in the event that any of the daughters and the granddaughter predecease the testatrix or the son leaving issue, such issue to take the interest to which the person so dying would have been entitled had she survived the testatrix.”

(3) THE FACTS - The testatrix left a son, three daughters and one granddaughter.

(4) THE QUESTION - What interest do the beneficiaries take and when does the interest arise?

(i) On the death of the testatrix?

(ii) At the date of the Will? or

(iii) At some other time?

(5) WHERE TO START RESEARCH -

(i) Theobald on Wills - page 602 - paragraphs 43 - 26.

(ii) Feeney’s Canadian Law of Wills - paragraphs 17.8 - 17.47.

(iii) Sheard, Hull and Fitzpatrick, Canadian Forms of Wills, page 221.

…

Although Will provisions can be quite unique, assistance often can be sought from similar provisions in other documents. A review of the case law can therefore be of assistance as well.

We’ll deal with another such provision tomorrow.

All the best – Suzana.

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Listen to "Domestic Contracts and Disability Planning"

Read the transcribed copy of "Domestic Contracts and Disability Planning"

During Hull on Estate and Succession Planning Episode #51, Ian Hull and Suzana Popovic-Montag discuss estate planning for married spouses and common law relationships. They focus specifically on the nature and consequences of domestic contracts, their provision in Section 63 of the Succession Law Reform Act and the importance of full disclosure.

Ian and Suzana also discuss disability planning and the importance of naming a Power of Attorney for property and personal care.

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I am excited to be “back on”, so to speak, with another opportunity to shed some thoughts on estate matters. In particular, I have the pleasure this week of posting snippets of a wonderful article prepared by Rodney Hull, Q.C., who himself has been swept up by the whole concept of social media. Rodney has graciously allowed me to share with you the following …

RECOGNIZING SOME COMMONLY ENCOUNTERED INTERPRETATION PROBLEMS

Each problem faced by practitioners in determining the meaning of words used in a Will can be dealt with by:

(1) Identifying the problem by its name or subject;

(2) Giving an example of wording that raises the problem;

(3) Stating the facts or circumstances pertinent to the problem;

(4) Stating the questions raised; and

(5) Pointing out where the problem has been treated in a general way, i.e. where to start research of the problem.

In many cases, one cannot achieve certainty as to the meaning of words used in a Will and, in those circumstances, one is well advised to bring an Application for interpretation before the Court under Rule 14 of the Rules of Civil Procedure in order to indemnify the personal representative by acting on the Court’s interpretation (as provided in section 63 of the Trustee Act).

If such an Application to the Court is not economically viable and the personal representative is prepared to act on counsel’s opinion, counsel giving the opinion should point out the provisions of section 63 of the Trustee Act to the personal representative. He or she should consider including a clause in his or her opinion along the following lines, “While my opinion as to the meaning of the words of the Will is based upon legal principles and proper research, the matter is not without some doubt and, as I have advised you, the personal representative can only act with certainty of indemnification by seeking the Court’s advice and direction as provided in section 63 of the Trustee Act”.

...

Tomorrow, we’ll get into some actual interpretation problems …

All the best –  Suzana.

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In Ontario, the Divisional Court (by amending legislation) now has jurisdiction to hear an appeal made from a final judgment of the Ontario Superior Court of Justice for an amount of not more than $50,000 (previously $25,000), exclusive of costs. Any award over that amount is appealed to the Court of Appeal. Seems clear enough.

However, the jurisdictional issue is muddied by the provisions of the Estates Act, section 10 of which provides that, for any party taking part in a proceeding under that Act, an appeal lies to the Divisional Court. But what if the value of the amount in dispute exceeds $50,000?

Does this cause the Divisional Court to lose jurisdiction? The answer would appear to be “no.” The Court of Appeal, in Re Sinicropi Estate [2000] O.J. No. 838, by agreement of the parties, transferred an appeal from an order on a passing of accounts application to the Divisional Court in which the amount in dispute was over $60,000.00 (as disclosed in the Divisional Court decision: see [2000] O.J. No. 4493).

However, a nice question arises when an appeal is made from a judgment on a contested passing of accounts of an attorney under power of attorney for property. Is the appeal properly made to the Divisional Court? The Estates Act (s. 49(1)) specifically contemplates the passing of accounts by a “guardian.”

It is arguable that, as is the case under s.38 of the Substitute Decisions Act, (“SDA”) this reference to guardian (assuming it means “court appointed guardian”) should be read to include an attorney for property. Of course the references in the SDA significantly postdate the Estates Act, inevitably giving rise to some question as to what was the intention of the legislature when the statute was proclaimed (or whether such a procedural nicety was even considered).

Have a great weekend,

David

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Sometimes an estate trustee may get more than she bargained for.

A case in point may arise when an estate has entitlement to various pieces of artwork in an assortment of jurisdictions. How does the estate trustee locate the artwork? What constitute sufficient efforts to locate such assets? How is it valued?

All of these questions raise significant issues for the estate trustee. The advent of the internet has provided new tools to anyone making a global search for artwork. The Lost Art Internet Database is such an example. This website is a project of the German government’s central office for the recovery of lost art. Not surprisingly, a large share of such art was seized from Jewish owners by the Nazis.

In all likelihood, the estate trustee of the estate of the late Max Stern has had recourse to this website in an effort to locate lost assets to which the estate is entitled. As recently reported in the Toronto Star, the late Max Stern was the owner of an art gallery in Germany from 1913 until 1934 when he was forced to sell his holdings by the Third Reich. He escaped to Montreal in 1937 where he set up an art gallery. Upon his death in 1987, Stern named Concordia University, McGill University, and the Hebrew University of Jerusalem as the beneficiaries of his estate. The estate trustee, operating as the Max Stern Art Restitution Project, has since located many pieces originally stolen from Stern’s German gallery.

Until tomorrow,

David

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Yesterday, I blogged on the legal doctrine of “knowing assistance” as considered in a recent case out of England.

As noted, the doctrine may give rise to liability on the part of a financial institution that, through wilful blindness or bad faith, permits rogue clients to use its facilities as an instrument of fraud. When such an allegation is made, the defendant bank will plead the defence of “change of position.” This legal principle has been broadly defined as being available as a defence to a person “whose position has so changed that it would be inequitable in all of the circumstances to require him to make restitution…” (see Lipkin Gorman (a firm) v. Karpnale Ltd. [1991] 2 AC 548 @ 580).

In the case discussed yesterday, the Court found that the bank did change its position: by making payments out of its account in response to the Plaintiff’s instructions, the bank’s position was so changed that it would be inequitable to require it to make restitution.

The Court further implied that the bank acted in good faith by complying with Nigerian law as it related to money laundering. The Court stated (at p.431) that the imposition of liability in this case would “serve to motivate banks not to act for customers in areas of business which gave rise to a general suspicion of money laundering even where there was no information or suspicion that the customer was so involved. It seems to me that that is a road down which the court should not go…."

Until tomorrow,

David

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When does a bank become liable for the actions of clients who use its accounts as a vehicle for fraud?

This was the question considered in Abou-Rahmah v. Abacha [2006] EWCA Civ 1492 as reported in 9 ITELR.

A victim of fraud made payment into a Nigerian bank account through an English branch which funds were promptly removed from the bank by the fraudsters who disappeared. The victim sought damages against the Nigerian bank by way of a proceeding commenced in England.

Having lost at trial, the Plaintiff appealed, arguing that the bank had knowingly assisted in the fraudster’s breach of trust. The Court of Appeal (Civil Division) dismissed the appeal and, in so doing, comprehensively reviewed the authorities.

In short, a finding that the bank had knowingly assisted in the breach of trust would require a dishonest state of mind such that the bank had knowledge that rendered its participation “contrary to normally acceptable standards of honest conduct.”

Such a state of mind could involve suspicions combined with a conscious decision not to make enquiries. Applied to the case at hand, the Court considered that, although the bank had general suspicions that the account holder who subsequently committed the fraud was possibly involved in money laundering, the bank had no knowledge of any specific act of dishonesty regarding the transactions in question.

Until tomorrow,

David

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Listen to "More Tips for Protecting Your Children's Inheritances"

Read the transcribed version of "More Tips for Protecting Your Children's Inheritances"

During Hull on Estate and Succession Planning Podcast #50, Suzana Popovic-Montag and her guest, Jordan Atin continue their discussion on how to protect your children's inheritances, focusing on strategies to ensure that your chosen beneficiaries do in fact receive the assets left to them.

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Listen to "The Estate Trustee During Litigation"

Read the transcribed version of "The Estate Trustee During Litigation"

During Hull on Estates episode #49, David and Jason discuss issues concerning the estate trustee during litigation (ETDL). They consider the circumstances that call for an ETDL, the technical procedure for appointing the ETDL and the powers and duties of the ETDL.

For more information on this topic, see:

• Salisbury v. Dell (1993 Ont. Gen Div);
• Jordan Atin's artice, The Estate Trustee During Litigation, in Estate Litigation, volume 2. 2nd ed. (Toronto: Thomson Carswell, 2000) at p.24-1; and
• Estates Act, R.S.O., c. E.21, as amended (s.28) 
  
   
  

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It is trite law that an executor’s duty is to bring in the assets of the estate and distribute to the beneficiaries. But what if the beneficiary of an estate cannot be found or has no interest in his inheritance? Reasonable steps must be taken to locate the beneficiary of an estate. But, in rare instances, a beneficiary may not be eager to be located or may disclaim his inheritance outright.

A case in point was recently reported by the BBC. A 1,000 acre estate in Cornwall, England (worth some five million pounds) is being administered by the Official Solicitor of the High Court, generating rental income of eighty-eight thousand pounds per year. John Paget Figg-Hoblyn inherited his father’s estate on his death in 1965 but, according to the BBC, has “not agreed to take up his inheritance.”

Apparently, he was finally located in 1994, living in a trailer park in California, but has once again since gone out of contact. The estate is apparently falling into disrepair.

As is often the case with estate issues reported in the mainstream media, key details are left unanswered. It appears that Mr. Figg-Hoblyn has not disclaimed his inheritance; rather, he just doesn’t want to be found!

However, we are reminded that the whole estate law regime is predicated on beneficiaries actually wanting to receive that to which they are entitled. I don’t know why Mr. Figg-Hoblyn does not want his inheritance but certainly no one can make him accept it. If his objective is to frustrate his father’s estate plan he appears to be succeeding….

Until tomorrow,

David

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A rather unique estate battle is unfolding in Maine and Connecticut as reported on February 26, 2007 by the Associated Press.

Olive Watson took the unusual step of legally adopting her same sex partner, Patricia Spado, some fifteen years ago as a means of ensuring for Spado’s financial security and presumably to guarantee the provisions of Watson’s last will (which entirely benefited Spado) against any challenge by her siblings.

Remarkably, the adoption was apparently legal in Maine notwithstanding that Spado was a year older than Watson and the two shared a conjugal relationship. Watson and Spado subsequently amicably ended their relationship in 1992 after fourteen years.

It gets even more interesting: Watson’s father was none other than the founder of the predecessor of IBM who, on his death in 1993, left a multimillion dollar trust fund for the benefit of his eighteen “grandchildren” unaware that his daughter had legally adopted Spado. A Judge in Connecticut has found that Spado cannot share in the trust (Grandfather Watson not having been aware of the adoption when he settled the trust) and Spado has appealed. The Trustees of the trust fund have apparently also commenced proceedings in Maine to seek to annul the adoption although that prospect appears unlikely as it requires proof of deception or fraud.

To my mind, the surprising element of this story is that Spado would even assert an entitlement as a “grandchild” when the purpose of the adoption was clearly to provide certainty of her entitlement to Olive Watson’s estate. It would be interesting to examine the legal requirements of adoption in Maine in more detail. Presumably the state legislature will pause to consider amendments in the glare of the spotlight of the American media….

Have a great weekend,

David

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A legal dispute in New Brunswick has been gaining attention in the national media. At stake is the ownership of artwork having a value of over $100 million.

On one side is the Beaverbrook Art Gallery in Fredericton, New Brunswick; on the other is the Beaverbrook U.K. Foundation. Both the Gallery and the Foundation were established by the late Lord Beaverbrook (who was raised in New Brunswick and went on to become a prominent figure in British business and a confidante of Winston Churchill).

The issue appears to be simple: were paintings and sculptures once owned by the late Lord Beaverbrook gifted or merely loaned to the gallery? Apparently (and remarkably) the arrangement was not papered in any clear way. The matter is being arbitrated by former Supreme Court of Canada Justice Peter Cory and a decision is apparently expected in March.

A similar issue was considered by one of my partners, Justin de Vries, in his blog posting on September 27, 2006, in which the law relating to the making of gifts was considered in some detail. Simply put, to be valid a gift must be characterized by: (i) donative intent, (ii) acceptance by the recipient, and (iii) proof of delivery. It will be interesting to see the outcome.

Until tomorrow,

David