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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The Ontario Bar Association’s Trust and Estates Section Year End Dinner was held on Wednesday May 30, 2007. During the well-attended event, the Award for Excellence in Trusts and Estates was presented to Brian Schnurr.

Mr. Schnurr exemplifies the highest standards of an estate practitioner, and many spoke of his dedication to the law, and his remarkable career.

I wrote to the selection committee in support of Mr. Schnurr’s nomination. The following is an excerpt:

I write to support the nomination of Brian Schnurr as the recipient of the Award of Excellence in Trusts and Estates, as nominated by Rodney Hull.
…

Prior to joining the Estates Bar, and though I did not practice in the area, I was aware of Mr. Schnurr’s reputation as a leader in the field of Estate litigation.

Upon joining the Estates Bar, I have come to know Mr. Schnurr professionally, and have had a number of files where Mr. Schnurr was involved as counsel. I have come to know that his reputation for excellence is well deserved. He practices according to the highest standards: his breadth of knowledge is vast: and his professionalism is remarkable.

In addition to knowing him in a professional context, I have learned that he is a selfless individual, dedicating significant hours to professional development.

Mr. Schnurr is clearly a leader in the area of Trusts and Estates, and represents the qualities of excellence that we should all strive to achieve.

The award to Brian Schnurr is well deserved. Congratulations.

Paul Trudelle

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There has been a lot in the press recently regarding the estates of the famous and the near-famous.  Arguably, too much time has been spent by the media covering the estate issues surrounding the passing of Anna Nicole Smith and the estate implications, Similarly, the estate of James Brown has attracted a lot of media attention.

Presumably, the media is just giving their readers what they want.  The public has a prurient interest in the lives (and deaths) of celebrities.

The Internet definitely panders to this interest.  From an estate point of view, those who are interested in this sort of thing are able to find a wealth of information regarding the estates of the rich and famous.

For example, on the Smoking Gun website , one can find the last will and testament of Katherine Hepburn, John F. Kennedy Jr., Bob Hope, and Marilyn Munroe, amongst others.   At  Celebrity Collectables, surfers can purchase the wills of hundreds of celebrities.  Often, other probate-related documents are available, including asset inventories, death certificates and funeral particulars. Links to may wills can be found at Taxprof Blog. It appears that there is no rest for the famous, or respite from the prying eyes of a celebrity-crazed public.

Paul Trudelle

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While we hope for certainty in the law, the reality is often quite different.

Clients are often told that going to court is a crap shoot, and outcomes are anything but certain.

To illustrate this point, we might refer to a Superior Court of Justice decision in Mladen Estate v. McGuire (2007 CanLII 10904).

There, the deceased left a will which gave the residue of her estate to an aunt, A (50%), and two cousins, B and C (25% each). A predeceased the deceased. The deceased's intestate beneficiaries were five cousins: B and C and three others.

The question to be determined was whether A's share was to be distributed to the two residuary beneficiaries, B and C, or the five next of kin.

The Court noted that the law in Ontario is that unless there is a contrary intention in the will, a lapsed residuary gift passes on an intestacy to the next of kin.

It appears clear that there was no contrary intention in the will. The Court stated that "In short, there is noting in the language of the Will itself that would allow me to conclude that if [the testator] was predeceased by [A], that she would have intended that [A's] portion should go only to [B] and [C]."

Thus, it would seem to be clear that the failed gift to A would pass on an intestacy.

However, the Court held that it could consider the "surrounding circumstances" in order to determine whether there was a "contrary intention in the will". The Court found that the uncontradicted affidavit evidence was that the deceased considered B and C to be her only real cousins, and that the other cousins were virtual strangers to her. As a result, the Court concluded that based on this extrinsic evidence, the lapsed residue passed to B and C, and not on an intestacy.

The result appears to be contrary to what is a clear statement of the law. It illustrates that in litigation, very little can be taken as certain.

Paul Trudelle

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Listen to "The Solicitor/Client Privilege and the Duty of Confidentiality"

Read the transcribed version of "The Solicitor/Client Privilege and the Duty of Confidentiality"

During Hull on Estates Episode #61, Ian Hull and Suzana Popovic-Montag discussed the solicitor and client privilege and the difference between this concept and the duty of confidentiality in the context of estate law and estate litigation.

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Listen to "The Distribution of Assets"

Read the transcribed version of "The Distribution of Assets"

In Episode #62, Ian and Suzana discuss the treatment of assets in second marriages with children.  They cover the necessity of proper communication and documentation of intent, as well as the impact of the Succession Law Reform Act over the distribution of assets.

Ian and Suzana also discuss the strategy of using trusts to pass on assets in a controlled and managed way to desired beneficiaries.

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From time to time, we see wills that direct the testator to purchase an annuity for a beneficiary.

The courts have held that where a will directs that an annuity be purchased, the beneficiary has the right to take its full value in cash rather than the annuity payments over time. In so holding, the courts apply the principle of law in set out in Saunders v. Vautier.

As explained in Jarman on Wills, 7th ed. (1930), vol. 2, p. 1109, the annuitant is entitled to the money because the annuity could otherwise be sold by him once he has it. It would be improper to require the annuitant to take an annuity which he or she could then resell. The principle also applies where the annuity is to be held by the trustee for the annuitant.

However, if there is a valid gift over, the principles do not apply. However, the effectiveness of the gift over provision must be carefully considered.

In Lotzkar v. McLean (1979), 6 E.T.R. 245 (B.C.S.C.), the will provided that the trustees were to purchase a life annuity for each of the two beneficiaries. The trustees were given absolute discretion with respect to the type of annuity to be purchased. Of note, the will expressly provided that the beneficiaries "shall not be allowed to have the value of such said life annuity in lieu thereof". The will also provided that in the event that a beneficiary died before all the benefits from such annuity have been paid, the balance was to be paid over to that beneficiary's issue.

Was this an effective gift over? The Court said no. The Court held that because the trustees had absolute discretion with respect to the purchase of the annuity, they could purchase annuities that did not provide for any benefit payable upon the death of the annuitant. Therefore, the gift over provision was not effective. Notwithstanding the express intention that the beneficiaries were not to have the value of the annuity, the Court found that the beneficiaries were entitled to request money in lieu of the life annuity.

Will drafters must be aware of this principle when advising clients and drafting wills. If the intention is to provide a regular income for a beneficiary on an ongoing basis, the simple direction to purchase an annuity in a will may not give effect to this intention. One of several techniques must be employed in order to insure that the beneficiary is not able to call for the immediate payment of the lump sum.

Paul Trudelle

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Both of the recent Supreme Court of Canada joint account/resulting trust decisions of Pecore v. Pecore, [2007] SCC 17 and Madsen Estate v. Saylor, [2007] SCC 18 involved joint accounts between deceased and child.

It is worth considering whether the decisions will impact cases involving joint accounts between deceased and non-children. (And please note I'm not addressing the impact on situations involving children, which is considerable and needs much more analysis than a blog).

The SCC's strong statements confirming the presumption of resulting trust do not necessarily change the law as it pertains to non-children situations. However, the rarified source of the decisions could help Estate Trustees asserting resulting trusts over joint accounts with non-children. Consider:

The presumption of resulting trust therefore alters the general practice that a plaintiff (who would be the party challenging the transfer in these cases) bears the legal burden in a civil case. Rather, the onus is on the transferee to rebut the presumption of resulting trust. (Pecore, para 25)

Of course, the presumption of resulting trust means that it will fall to the surviving joint account holder to prove that the transferor intended to gift the right of survivorship to whatever assets are left in the account to the survivor. Otherwise, the assets will be treated as part of the transferor's estate to be distributed according to the transferor's will. (Pecore, para 54)

Not really different from pre-existing caselaw, but the SCC rarely enters the realm of Estates and Trusts law. When it does, lawyers pay rapt and lasting attention. Even confirmation of pre-existing common law can have quite an effect.

No doubt every Estate Trustees claiming resulting trusts over joint accounts by a deceased with non-children will be referring to these cases.

Thanks for reading.

Sean Graham

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This Singapore decision demonstrates how estate litigation can be a fascinating mix of facts and law.

In 1895, Sultan Abu Bakar of Johor ("Bakar") made a Will (the "Will") calling some of his property 'state property' and leaving it to his son and heir, Tunku Ibrahim ("Ibrahim"), 'for his use and possession as Sovereign Ruler'.

Ibrahim succeeded his father as Sultan for more than 60 years, dying in 1959.

One of the 'state properties' mentioned in the Will was real estate known as Tyersdall. In 1990, Tyersdall was compulsorily acquired by the state, in return for an assessed $25 million in compensation. The issue was who should get that compensation. The candidates were:

1. The great-grandson of Bakar and current Sultan (the "Plaintiff"), wanting the money paid either to him as head of state or directly to the state ; and

2. A great-great-grandson of Bakar and other relatives, all of whom claimed an interest as beneficiaries of Bakar's Estate.

The essence of the second group's claim was that Bakar's Will violated Muslim law. Since Bakar was a Muslim when the Will was made, whether a Sultan or a commoner, he could not contravene Muslim law. The Court, without difficulty, decided that Muslim law could not apply to overrule the civil law of Singapore in 1895.

In 1895, English common law was in force in Singapore. Bakar intended to bequeath Tyersall to the reigning Sultan. The Plaintiff won.

All in all, quite a mix of fact and law and well worth the read.

Thanks for reading.
Sean Graham

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It is often taken as a given when applying for guardianship of an incapable person under the Substitute Decisions Act (SDA) to apply for both property and personal care guardianship.

Property guardianship is dealt with in sections 22 to 42 of the SDA, and personal care guardianship in sections 55 to 68. Procedure on guardianship applications is dealt with in Part V of the SDA.

Guardianship of property is usually necessary, but in many cases guardianship for personal care is not. Often the guardian may already have the power to make health care decisions under the Health Care Consent Act, or the subject of the guardianship application may have capacity to make some or all health care decisions. Personal care decisions can be made in some or all of the following areas:

1. Health care;

2. Shelter;

3. Nutrition;

4. Safety;

5. Clothing; and

6. Hygiene.

The Office of the Public Guardian and Trustee may be satisfied that guardianship of property is warranted, but not personal care. This can lead to situations where a dispute over personal care guardianship can stall the key issue, property guardianship.

Therefore, it is well worth considering at the outset whether personal care guardianship is really necessary.

Thanks for reading.

Sean Graham

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"I must pay heed to the requirement (under section 64) that the applicant be in need of and entitled to support"…

"Such an interpretation would effectively deprive dependants of any interim relief if any question were raised as to entitlement except as to quantum."

 "where the applicant has put forward substantial evidence to support her claim as a dependant, and that the testator was domiciled in Ontario, application for interim relief should be heard even if [status as a dependant] are in issue on the final hearing of the substantive application."

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Listen to "Using Insurance Instruments for Effective Succession Planning"

Read the transcribed version of "Using Insurance Instruments for Effective Succession Planning"

During Hull on Estate and Succession Planning Episode #60, Ian and Suzana discuss how  term policies and whole life policies can apply to succession planning.

They cover three important aspects to consider when reviewing your insurance policies, especially in a separated spouse situation including the funding of support obligations, the designation of the policy's beneficiaries, and how the policy will be funded after death.

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Listen to "Mutual Wills"

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During Hull on Estates Episode #61, Sean Graham and Paul Trudelle discuss mutual wills and mirror wills. They discuss examples where a mutual will and a binding agreement would be used, such as second marriages.

They also cover the importance of documentation of intent and discuss potential drawbacks of the mutual will.

For more information on this topic, see the article by Debra L. Stephens, "Mutual Wills: A Primer", which was presented at The Six Minute Estates Lawyer 2007, on April 10, 2007.

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With the long weekend nearly upon us, what better time to discuss the family cottage?

If you transfer your cottage to your children while you are living, you will be deemed to have disposed of it at its fair market value and be liable for the resulting capital gains tax which, depending on how long you have owned the cottage and how much it has appreciated, might be astronomical.

One way of reducing tax liability is to take advantage of the principle residence exemption. In doing so, the size of the capital gain will be calculated using a formula involving the number of years you have owned the cottage and the number of years it has been designated as the principal residence.

Keep in mind, however, that after 1982, spouses could no longer designate different properties as their principal residences and, as a result, consideration should be given to the increase of value in your city residence – if the capital gain on it is greater than on your cottage, designating your cottage as your principal residence may end up increasing, not decreasing your tax liability.

Another option, of course, is to simply allow your children to inherit the property after both you and your spouse have died. At that time, there will hopefully be sufficient assets in the estate to pay the capital gains taxes which arise.

In any event, if you have a cottage which has increased substantially in value, it might be worth your while to discuss ways to reduce tax liability with an expert in estate planning.

Have a great long weekend!
Megan Connolly

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I recently blogged on the Supreme Court of Canada's decisions in Madsen Estate v. Saylor and Pecore v. Pecore.

Specifically, I discussed the ruling that funds in accounts jointly held between parents and adult children will be presumed to form part of the parent's estate if the parent dies; i.e., there will be a presumption of a resulting trust.

The adult child must then prove that the deceased parent intended to gift the funds to him or her by naming him or her as a joint owner.

In Pecore, the Supreme Court addresses the evidence that may be used to defeat the presumption and prove that the parent intended to gift the funds in the account, including the following considerations: 

•  Whether the banking documents pertaining to the account show the parent's intent; 
•  Who controlled and used the funds prior to the parent's death? 
•  Whether the deceased parent had a power of attorney. If so, this would suggest that the account may not have been held jointly for banking purposes; and 
• Who paid the taxes on the account prior to the parent's death?

The Supreme Court points out that these considerations are fact-sensitive and that the trial judge must consider the totality of the evidence and the weight to be placed on any particular factor.

Thanks for reading,

Jason Allan

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If a deceased's Will cannot be found, there are a number of ways to determine whether the deceased in fact had a Will and, if so, its current location. The following are among common techniques for locating a deceased's Will: 

1. A thorough search of the deceased's personal papers, safety deposit box, office, etc. If the search does not reveal a Will, it may reveal the lawyers who the deceased may have used to draft a Will. Further inquiries with those lawyers may then be made.

2. Contacting the deceased's accountant or financial advisor. Often, these individuals will discuss estate planning with their clients and may therefore have some idea as to whether the deceased had a Will.

3. Contacting the person or persons believed to be named as executors in the deceased's Will. A testator will frequently give copies of her Will to the executor.

4. Advertising in the Ontario Reports, which is a regular publication sent to Ontario Lawyers. The ad may request for any lawyer having knowledge of the Will to make contact.

Hopefully, one of these inquiries will result in a Will being found. However, in the event a Will is not found, an Application to Court may be made to administer the deceased's estate on an intestacy. The Application would include a supporting Affidavit, establishing that a Will cannot be found.

Thanks for reading,

Jason Allan

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Listen to "Joint Accounts"

Read the transcribed version of  "Joint Accounts"

In Hull on Estates Podcast episode #59, David Smith and Jason Allan discuss the Supreme Court of Canada's decisions on joint accounts in Pecore v. Pecore, 2007 SCC 17, and Madsen Estate v. Saylor 2007 SCC 18.

These two decisions concern joint bank accounts and the decision of right of survivorship, as well as the question of presumptions resulting trust and advancement.

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Listen to "Joint Accounts"

Read the transcribed version of  "Joint Accounts"

During Hull on Estate and Succession Planning Podcast  Episode #60, Ian and Suzana discussed a recent case, Pecore v. Pecore, 2007 SCC 17, from the Supreme Court of Canada. This decision concerned the issue of jointly held accounts.

Ian and Suzana discussed the consequences of joint accounts for adult children, minor children and dependent adult children.

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One of the complaints I often hear from estate administration counsel is that applications they submit for a Certificate of Appointment of Estate Trustee are rarely approved on the first try and are at times returned more than once with different corrections.

This issue was the subject of a paper recently presented by Malcolm S. Archibald at the Six-Minute Estates Lawyer 2007. A few of the suggestions he makes to ensure your application is accepted included the following:

• have total uniformity of names and addresses in the materials with the way they appear in the Will;
• identify when someone is known by another name or incorrectly referred to in the Will;
• serve a notice of application on all beneficiaries entitled to a share in the estate;
• do not send a notice of application to a beneficiary in care of someone else;
• set out in detail the reasons why you have been unable to serve any beneficiary with the notice of application; 
• if you have undervalued the value of the estate or missed an asset, file a solicitor's letter and affidavit explaining the true value of the estate and the reason for the change and provide payment for the increased tax payable; and
• if you are submitting a holograph Will, file an affidavit attesting to the handwriting and signature as well (preferably not sworn by a beneficiary).*
  

If you are unable to resolve an issue with respect to the application with the court office, Mr. Archibald recommends writing a letter setting out your position addressed to the Registrar to be given to a judge for consideration.

I understand that efforts are being made to standardize the estate court office’s approach to such applications. So, if you have ever completed an application correctly and had it returned to you, there is a chance that you will encounter this problem less frequently as greater consistency in the approach at the court office is established.

Enjoy the rest of the week.
Natalia Angelini

* For additional guidelines, you can obtain a copy of the Estates Procedures Manual from the Ministry of the Attorney General.

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At their death, people often want to continue to support those causes that were so special to them in life. However, despite a testator’s good intentions, there are times when it is impossible for their estate trustees to give a gift to the named charity. This might occur in situations where, before the gift vests, the charity has ceased to exist, never existed, been misnamed in the Will, or simply can’t be found.

The rule that applies to most gifts in a Will is that those which cannot be given effect will fail. In other words, the beneficiary will be out of luck. However, this is not necessarily the case with charitable bequests. Instead, the estate trustee has the option of applying to the court for advice and direction and asking it to determine whether what is referred to as the cy-pres doctrine will apply.

Under the cy-pres doctrine, the court will look for an intent that is exclusively charitable and if it is clear that the testator wished to devote property to charity then the court will substitute another charity to carry out as closely as possible the intentions of the testator.

Keep in mind that a mistake in recording the name of a charity will not necessarily require a cy-pres application. This is because, in the case of a misdescription, it’s not impossible to give effect to the gift and, generally speaking, the court will go to some effort to identify the charity the testator had in mind.

Have a great weekend!
Megan Connolly

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With the purchase of second, and even third, homes becoming more common, it is not unusual to encounter situations where an individual dies residing in one country, but owning property in another. Issues can arise when the laws in each country are disparate.

In determining the law of succession that should apply, there are two main issues: where the Deceased was domiciled at the time of his death and the nature of the property that was owned. The concept of domicile coincides with the concept of a “permanent home” and is generally the jurisdiction in which an individual resides intending to remain there permanently.

The disposition of movables (assets other than land) at death is dictated by the law of the domicile of the deceased. For example, if a Deceased were domiciled in Ontario, its domestic law would govern any movables.

The disposition of immovables (land including real property) is governed by the law of the place where the property is situated. For example, if the Deceased owned any land in France, its disposition would be governed its internal law.

A conflict in laws will not necessarily mean catastrophe, especially if there is a well drafted Will in place. However, in cases where issues do arise it is important for the estates practitioner to know what law to look to.

For more information on the conflict of laws, as it relates to domicile, I’d suggest taking a look at:

• McCallum v. Ryan Estate, [2002] O.J. No. 1088 (SCJ);
• Re Montizamber Estate, [1973] O.J. No. 1035 (SCJ); S
• Smallman v. Smallman Estate, [1991] O.J. No. 1718 (OCJ – Gen. Div.).
  

Have a great day!

Megan Connolly

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I know the blogs on this site are generally about estates-related issues, but for today’s blog I thought I’d talk about something a little different. On Sunday, April 29, many of the lawyers at this firm attended Fanconi Night in Canada, a dinner and silent auction held to raise money for Fanconi Canada, an organization committed to funding research and hopefully finding a cure for Fanconi’s Anemia.

For those of you not familiar with the disease, Fanconi’s Anemia (FA) is a common form of genetic anemia, which often leads to progressive, severe bone marrow failure. Besides the physical problems the disease causes, people who suffer it are also at an increased risk of developing leukemia and other cancers.

While the disease is equally prevalent in males and females and is found in all ethnic groups, it generally first appears in children and often occurs in the form of birth defects. Some of the more common of these include low birth weight and failure to thrive, kidney problems, developmental delays, and heart defects. The average life expectancy of someone with the disease is 22 years and many children who develop the disease do not survive to adulthood.

While research has lead to great strides being made in identifying the genes related to the disease and identifying potential treatments, there is still no cure. Hopefully fundraisers like the one we attended will help raise the funds the organization needs to continue the important work it is doing.

Have a great day!
Megan Connolly

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In early April I attended the The Six-Minute Estates Lawyer 2007, a seminar conducted by the Law Society of Upper Canada.

Ann Lalonde, Senior Counsel for the Office of The Children’s Lawyer gave an interesting presentation on Will drafting errors that her office commonly sees. While the paper she presented included 11 errors, I’ll focus on her top five:

1. No residue clause or residue given away multiple time

• The testator makes three bequests of $25,000.00, says nothing else in the Will, then dies with an estate worth $100,000.00

2. The Will requires an asset to be held without considering the consequences that may result

• The testator dies leaving an estate that consists mainly of shares in a major bank. The Will says that the trustees should “hold the shares”, but gives no further direction.

3. The Will contains a gift to a class, but does not include a certain closing date

• The testator leaves a gift to his grandchildren which is distributable when “the youngest grandchild attains the age of 25 years.”

4. Failure to account for future adoptions or non-adoptions

• The testator leaves a gift to his children. At the time of death he has step-children that he has always treated as his own, but never adopted.

5. Staggered distributions with no gifts over

• The testator provides for a legacy to his grandchildren with a staggered distribution at ages 18 and 21. There is no provision for what happens if the grandchild doesn’t reach age 21.
  

From a practice standpoint, it is important for the lawyer to discuss gifts that are being made in detail and to ensure the client understands the implications of the Will that has been drafted. It is also essential for the lawyer to proof-read her work and ensure that any disputes that result after death are not because of avoidable mistakes.

Have a great day!

Megan Connolly

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Listen to "Separation Agreements in the Context of Estate Planning"

Read the transcribed version "Separation Agreements in the Context of Estate Planning"

During Hull on Estate and Succession Planning Podcast #59, Ian and Suzana discuss Separation Agreements and the general elements of estate planning upon separation from a spouse.

They cover many important aspects of a separation agreement that should be considered when turning your mind to estate planning, including joint assets, joint debts, property, and disability planning.

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Listen to "The Use of Contempt Motions in the Estate Context"

Read the transcribed version of "The Use of Contempt Motions in the Estate Context"

During Hull on Estates Podcast #58, Craig Vander Zee and Bianca La Neve discuss the use and basis for a contempt motion and refer to the Court of Appeal's confirmation in Forrest v. Lacroix Estate (2000), 187 D.L.R. (4th) 280, (Ont. C.A.) and Forrest v. Lacroix (1999), 460 O.R. (3d) 364 that contempt motions cannot be used to enforce the payment of monies. 

Craig and Bianca also refer to Rule 60.05 and Rule 60.11 from the Rules of Civil Procedure which govern contempt motions.

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Last week, Jason Allan blogged on the principle of ademption. I thought I’d take the opportunity blog on the similar, but distinct, principle of abatement.

Whereas ademption refers property devised in a Will ceasing to exist at the date of death, abatement refers to the reduction of legacies that occurs when, after payment of debts, there are insufficient assets in the Deceased’s estate to satisfy all of the gifts provided for in the Will in full. As a result, absent a contrary intention in the Will, the beneficiaries will receive their bequests at a reduced amount, if at all.

The type of legacy provided for in the Will determines the order in which the gifts will abate. The order of abatement is as follows:

• First, residuary personalty;
• Second, residuary real property;
• Third, general legacies, which include pecuniary bequests from the residue;
• Fourth, demonstrative legacies, which are bequests from the proceeds of a specific asset or fund, such as a bank account, which does not form part of the residue;
• Fifth, specific bequests of personalty; and
• Sixth, specific devises of real property.

The assets at each level will abate rateably until they have been exhausted, at which point the assets at the next level will start to abate.

Keep this in mind when planning your clients’ estates. I recently had a case where the assets in the estate were a home and some bank accounts. Because of debts, the cash assets ended up being exhausted. At the end of the day, one beneficiary walked off with a $250,000.00 home. The others got nothing. One wonders if this is what the testator had intended.

Have a great day!
Megan Connolly

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The Supreme Court of Canada released decisions in Saylor v. Brooks ("Saylor") and Pecore v. Pecore ("Pecore") yesterday, which are seminal cases on the issue of joint accounts.

As many of the readers will know, joint accounts are a hotly debated topic in estate litigation. When an account is held jointly between two individuals, both hold an equal, undivided share. If one of the joint owners dies, the other is left with the entire interest in the account.

Previous decisions on the issue of joint accounts have varied but courts typically approached the issue by presuming that if the account was held jointly between a parent and a child, the parent intended to gift the money to the child (the presumption applied even if the child was an adult and financially independent). It was then up to the challenger to prove otherwise.

In Saylor and Pecore, the Supreme Court essentially reversed the presumption in the case of adult children.

The Supreme Court ruled that because it is very common for elderly parents to hold accounts jointly with adult children for banking purposes, the starting presumption should be in favour of including the funds in the parent's estate. The adult child will then have the onus of proving that the parent intended to gift the funds to him or her.

In the case of minor children, the old presumption of a gift will still apply, based on the assumption that parents intend to support their minor children.

While the clarity of a final ruling on how to approach joint accounts will likely be welcomed, there may remain some uncertain as to the evidence necessary to rebut the presumption. And hence, more litigation to come.

Have a nice weekend,
Jason Allan

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Wills are often challenged on the basis of allegations that the testator lacked capacity or was under the undue influence of another individual. When such claims are made, medical evidence is usually offered to either support or impugn the testator's mental state and/or the role of a potential undue influencer.

However, while doctors and lawyers rely on common cognitive screening tests for capacity, such as a Mini-Mental State Examination, there is no standard medical instrument for testing capacity.
The May issue of the American Journal of Psychiatry  includes an article which advocates the need for standard criteria to evaluate capacity in the context of the testator's specific personal circumstances.

The article, published collaboratively between a number of psychiatric specialists and estate lawyers, including Ian Hull, argues that there is a fundamental interrelationship between the mental ability to create a Will and the testator's personal situation. When the testator is on the verge of incapacity, the influence of persons close to him or her may serve to vitiate his or her ability to make an independent decision.

The article suggests that certain questions should be asked of the testator to query both his or her capacity and circumstances, including questions directed at:

• The rationale for any dramatic changes or deviations from prior wills; 
• An appreciation of the consequences and impact of a particular distribution;
• The testator's understanding and appreciation of any conflicts or tensions in his or her environment; 
• The nature of any family or personal disputes or tensions; and 
• The testator's motivation for distributing the estate as instructed.
  
  

Such questions should be in addition to standard questions to test a testator's capacity and intentions.

Thanks for reading,

Jason Allan

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A milestone in Canada society recently passed: the Canadian Charter of Rights and Freedoms (the “Charter”) turned twenty-five.

The April edition of Canadian Lawyer featured an article in which the Charter was acclaimed as the single most important piece of legislation to the practice of law. Certainly, the Charter and the principles it enumerates has had a tremendous impact on all areas of Canadian law.

An area of estates law in which the Charter may have an impact in the future is in regard to statutory distinctions between common law and married spouses. In particular, the statutes that apply when individuals die intestate.

In Ontario, the Succession Law Reform Act  provides that where a person dies intestate and is survived by a spouse, the surviving spouse is absolutely entitled to the deceased’s spouse’s property.* This is not the case for unmarried, common law spouses, who are treated no differently than a stranger to the deceased when it comes to the distribution of the deceased’s estate.

Also, under the Family Law Act, a surviving spouse may elect to receive either their entitlement under the deceased spouse’s Will or a share of the deceased’s net family property under an equalization (the same entitlement they would receive in an equalization under a divorce proceeding). The election is not available to common law spouses.

Arguably, the statutory distinction between common law and married spouses, as outlined above, may offend the equality guarantees under section 15 of the Charter. Although now that same-sex partners have the right to marry, there may not be as much enthusiasm over this issue.

There are also many claims available to a common law spouse against the estate of a deceased partner, including claims for support and trust-based claims to the assets of the deceased.

Jason

* Provided the deceased was not survived by children, in which case the spouse receives the first $200,000.00 of the deceased’s estate and shares in the remainder with the surviving children.

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Listen to "Separated Spouses and Estate Planning Issues"

Read the transcribed version "Separated Spouses and Estate Planning Issues"

During Episode #58, Ian and Suzana discuss estate planning and separated spouses including the equalization process, the importance of valuation on the day of separation, and how issues of spousal support and child support can dovetail into estate planning.

Suzana mentions the case of  A.A. v. B.B., 2007 ONCA 2 from the Ontario Court of Appeal, wherein a child may have three parents.

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Listen to "A Dutch Treat; Conflict of Laws and Estate Administration - Which Law Governs?"

Read the transcribed version of "A Dutch Treat; Conflict of Laws and Estate Administration"

During Hull on Estates Episode #57, Justin de Vries and Megan Connolly discuss an ongoing client matter which has come out of the Netherlands.  This matter raises issues of conflict of laws, the Divorce Act, the Succession Law Reform Act, R.S.O. 1990, c. S.26, and dependant support claims.

For more information on the conflict of laws, as it relates to this case, please see:

• McCallum v. Ryan Estate, [2002] O.J. No. 1088 (SCJ)
• Re Montizamber Estate, [1973] O.J. No. 1035 (SCJ)
• Smallman v. Smallman Estate, [1991] O.J. No. 1718 (OJC - Gen. Div.).