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

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It is trite to say that estate disputes carry a tremendous financial and emotional toll on the disputing parties. A clear and up-to-date estate plan and Will are generally the best ingredients to avoid litigation. Of course, when the testator's intentions are disputed, it is often necessary to retain legal counsel. While lawyers can address the legal complexities associated with the dispute, they are not professionally trained to handle the emotional baggage that is part and parcel of the legal process.

Recently, I had the opportunity to speak at a workshop run by Linda Somers who acts as a legacy coach for individuals who seek to take control of the legacy they want to pass on to their family and friends. While a legacy coach is not versed in the intricacies of the law necessary to create a Will or an estate plan, the coach instead focuses her attention on assisting others as to how they wish to be remembered during their lifetime.

One of the most interesting aspects of legacy coaching is providing individuals with the opportunity to prepare ethical wills. It should be noted, however, that an ethical will is not a legal document. Rather, its goal is to convey a person's values, beliefs, hopes and aspirations to family and friends. The ethical will serves a unique purpose, given that it transmits the individual's "raison d'etre" during her lifetime. This information simply cannot be conveyed in the often complex and unemotional legal jargon contained in a Will.

Thanks and have a great day,

Allan Socken

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Ontario Progressive Conservative Leader John Tory recently opined that Ontario is in a recession. While Ontario's last economic downturn resulting in a recession was almost twenty years ago, many people still recollect this dismal period as a time when unemployment was high and investment opportunities appeared to be non-existent.

Difficult economic times may be an appropriate instance for trustees to encroach on the capital of the trust for the benefit of a beneficiary. In determining whether a trustee has the power to encroach, one must first look to the specific wording of the Will or the trust instrument. Once it has been determined that the power to encroach exists, it is then necessary to ascertain the scope and extent of this power.

While trustees are generally granted "uncontrolled discretion" in exercising their power to encroach on capital, the scope and power of such discretion is subject to the even-hand principle. A trustee's fiduciary obligation requires him/her to maintain an "even-hand" between income and capital beneficiaries when exercising a discretionary power, unless the trust provisions stipulate otherwise.

Let's hope our economy rights itself in the near future.

Thanks,

Allan Socken

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As we age, not only is it prudent to carefully prepare an estate plan, but consideration must also be given to the question of what happens if we become incapable of making financial or medical decisions. While the Substitute Decisions Act sets out the legal requirements for a valid power of attorney for personal care and property, it cannot address who a suitable attorney would be for a particular individual. It is for this reason that great attention and care should be taken to ensure that the attorney selected will, in fact, respect your wishes.

In the case of a power of attorney for property, the attorney has a fiduciary obligation to you and is frequently involved in your private affairs, including your banking, mortgage payments and even deciding how much money you receive on a day-to-day basis. Although there are legal safeguards to ensure that your power of attorney for property is acting in your best interest, such as requiring a formal court audit or passing of accounts to take place, there is still a great deal of trust placed in the hands of your attorney.

Thanks and have a great day,

Allan Socken

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The Court of Appeal recently rendered its decision in Madore-Ogilvie and Ogilvie v. Ogilvie Estate, 2008 ONCA 39.  One of the issues was whether the proceeds from a jointly owned life insurance policy could be included in the deceased’s estate for the purposes of satisfying a dependant’s relief claim. 

One of our previous blogs reviews the facts of the case and the appellate decision of the Divisional Court, which I will not repeat except to say that the Divisional Court reversed the application judge’s finding that the policy could be included as part of the estate, and decided that the contractual rights of the spouse to the joint policy trumped the needs of the deceased’s dependants.

Two of the minor children appealed the Divisional Court’s decision and asked that the application judge's decision be restored.  The deceased’s spouse cross-appealed. 

The Court of Appeal dismissed both the appeal and the cross-appeal, finding as follows:

-          the policy was not caught within the ambit of section 72(1)(f) of the Succession Law Reform Act;

-          the policy was not an arrangement that was made to jeopardize the maintenance of the deceased’s dependants; and

-          section 199 of the Insurance Act did not apply to the policy.

Have a good day,

Natalia

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The Canadian Centre for Elder Law (CCEL), a division of the British Columbia Law Institute (BCLI), issued a media release on February 28, 2008 advising that it has just released its Study Paper on Predatory Lending Issues in Canada.

In its media release the CCEL noted that while the subprime mortgage crisis in the United States has made the issue of predatory lending a hot topic worldwide, little attention has been paid to the legal aspects of predatory lending in the Canadian mortgage market.

Ron Skolrood, Chair of the BCLI’s board of directors, remarks in the media release, “It appears that there are no specific laws to protect Canadians from a similar crisis occurring here”...“This study paper serves as a starting point for further discussion.”

The Executive Summary of the Study Paper states, “The study paper’s focus is primarily on how predatory lending may affect older homeowners, but similar issues may arise in connection with individuals who are purchasing a home and obtaining a new mortgage.”

Parts of the paper deal with factors in the Canadian mortgage market that may encourage or deter the development of predatory lending as well as existing Canadian legal remedies for abusive lending practices.

The media release notes that while many Canadians think of predatory lending and the mortgage crisis as an American phenomenon from which they are safe, and though the lending atmosphere in Canada has historically been more cautious than in the United States, the extent to which predatory lending occurs in Canada is largely unknown.

For those interested, a full text of the paper is available on the BCLI’s website (www.bcli.org). 

Have a great day.

Craig

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Listen to Applying for Probate

This week on Hull on Estate and Succession Planning, Ian and Suzana talk about the applying for probate. They discuss some of the ways that estate administrators can simplify the process.

Comments? Send us an email at hullandhull@gmail.com, post a comment on our blog at http://estatelaw.hullandhull.com/ or leave us a message on our comment line at 206-457-1985.

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Listen to Madore-Ogilvie vs. Ogilvie Estate.

This week on Hull on Estates, Rick and Sean discuss the case of Madore-Ogilvie vs. Ogilvie Estate which was recently featured in the CCH periodical Will Power.

Comments? Send us an email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.

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There are several interesting OBA continuing legal education (CLE) events in the Trusts & Estates Section in the next two weeks.

One is a luncheon program on March 25, 2008 commencing at noon addressing the topic of Power of Attorney Fraud. This program promises to discuss this escalating problem, some recent developments in criminal fraud proceedings, and how careful and creative planning with respect to Power of Attorney documents can help avoid family conflicts as well as costly and senseless litigation.

The speakers and panel slated include several lawyers, a forensic accountant and a detective from the Hamilton Police Service, Crimes Against Seniors Unit.

The other event is a half day program on April 2, 2008 commencing at 9:00 a.m. This program looks at the latest trends which counsel are seeing in the areas of estate planning, administration, litigation, and passing of accounts as well as trust and charity law.

Topics include: The Future of Mediation: Thinking Outside the Box, The Liability of the Passive Estate Trustee – The Hidden Danger, The Limits and Limitations to a Beneficiary’s Recourse Before and After a Judgment Passing Accounts, Developments in Estate Planning, Guardianships and Settlements of Personal Injury Litigation, View from the Bench and Emerging Trends Outside Toronto.

The Chairs of this program are Justin de Vries and Eric Hoffstein.

Both programs are being held at the OBA Conference Centre, 20 Toronto Street, 2nd Floor, Toronto. Information on each program can be found on the OBA’s website www.oba.org/.

Have a great day.

Craig.

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I thought I would close off this week’s blogs with a recent decision that reviews the law on surrogate parents.

In M.D. v. L.L. a married couple wished to have a child.  Unfortunately, the wife, M.D., was unable to bear children.  So, the couple turned to a family friend, L.L., who was willing to act as a surrogate mother.  M.D. and L.L. papered the terms of their understanding in a Gestational Carriage Agreement. 

After L.L. gave birth to the child, a Statement of Live Birth had to be completed and filed with the Registrar, which statement required L.L. to place her name on the form as the “mother” of the child, notwithstanding the Agreement and the fact that M.D. and her husband were the genetic parents of the child.

M.D. and her husband sought orders declaring themselves to be the parents of the child, and declaring L.L. and her husband not to be the parents.  The Court granted the orders sought, and in so doing held that despite a statutory definition defining “mother” by reference to birth, the genetic parents were the true parents.

This decision is likely going to be the authority relied upon in surrogate parenting litigation to come.

Have a great long weekend!

Natalia

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In a recent Superior Court of Quebec decision a family’s patriarch, Leon, died intestate in 1968.  The main asset of his estate was his home (registered in Leon’s name) where he resided with his wife and son, Walter.  At law Leon’s wife was entitled to 1/3 of the home, and Walter was entitled to 2/3 of the home.  Following Leon’s death, his wife and son continued to live in the home and dealt with it as their own property.

Leon’s wife died intestate in 1983.  Her sole heir was Walter.  The home remained registered in Leon’s name, but Walter continued to live there and dealt with it as his own property.

Walter disappeared after 1992, and in 2004 was declared dead.  Walter’s maternal and paternal cousins began fighting over Walter’s estate.  While all the cousins agreed they were equal beneficiaries of Walter’s estate, the argument of the maternal cousins was that they were beneficiaries of his mother’s estate (including her interest in the home), since she died intestate and Walter had never formally accepted her estate.

After applying various provisions of the Quebec Civil Code, the Court held that Walter, by being an absentee, was deemed to have accepted his mother’s estate because an absentee can only renounce through his representative. 

This case reveals an interesting distinction between Quebec and Ontario legislation, the latter of which does not impose any obligation to accept or reject one’s interest in an estate.

Until tomorrow,

Natalia

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Listen to Personal Liability

This week on Hull on Estate and Succession Planning, Ian Hull talks about the extensive personal liability of an estate trustee.

Also, in the March 2008 issue of Canadian Lawyer, the Toronto Estate Law Blog was ranked as one of Canada's Top Ten Law-Related Blogs by Gerry Blackwell. The list also included Michael Geist's blog, Law is Cool and the Rule of Law blog from Kelowna, BC. In the same issue of Canadian Lawyer, Suzana Popovic-Montag was featured as a leader in the world of law and social media. Kudos!

Comments? Send us an email at hullandhull@gmail.com, call us on the comment line at 206-457-1985 or leave us a comment on our blog at www.hullandhull.com.

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Listen to the deemed undertaking rule.

This week on Hull on Estates, Paul and Allan discuss the deemed undertaking rule and its application to estate matters.

Comments? Send us an email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog at http://estatelaw.hullandhull.com.

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If an offer is negotiated and later accepted, how is a court to resolve a later dispute over the form of the release?  The Court in Glaspell v. Glaspell Estate, (2008) 36 E.T.R. (3d) 315 held that a release that does not commit a signatory to taking any steps other than those contemplated by the settlement agreement will suffice, even if overly wordy.  The parties had reached a settlement agreement: the evidence disclosed mutual intention to create a legally binding contract between the parties and an eventual agreement containing all of the essential terms agreed upon.    

Unfortunately, the settlement agreement did not specify the form of release.  When it came time to dismiss the action, the plaintiff refused the defendant's form of release.  So the defendant brought a motion to enforce the apparent settlement.  The judge allowed the motion and denied the plaintiff's cross-motion to amend the settlement terms, dismissing the action.  

An implied aspect of this decision is that mere form of release is not necessarily an essential or fundamental term of an agreement so long as the essential terms themselves are not altered.  The decision does not preclude the possibility in other situations though.

Enjoy your weekend.

Chris Graham

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Recently departed actor Heath Ledger (A Knight's Tale, Brokeback Mountain, The Dark Knight) left behind a young daughter.  But based on news reports, Ledger appears to have neglected to include his daughter in his Will, perhaps unintentionally.  It appears Ledger last filed a Will in 2003, before the birth of his daughter Matilda in 2005 and before his hit film Brokeback Mountain.  This Will reportedly leaves Heath Ledger's estate entirely to his father, mother and sisters, obviously with nothing to little Matilda.

Heath Ledger's father Kim has stated that little Matilda "will be taken care of".  However, Kim himself has been in litigation with his brothers, who accused him in 1994 of mishandling their grandfather's estate to the extent of $2 million.

This intriguing story also illustrates the importance and difficulty of valuing an estate.  News reports contain estimates from $2.5 million to $20 million, quite a range for an estate that spans at least two countries. 

No word yet on whether litigation will be launched on little Matilda's behalf against her exclusion from her father's estate.  Of course, other Wills may emerge...

Stay tuned.

Chris Graham

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The OBA Civil Litigation Section recently held a Continuing Legal Education seminar on the deemed undertaking rule (Rule 31.1.01(3)) and the filing of transcripts.  For those who have not had a chance to listen to our (excellent, eloquent!) podcast on this point, here is the abridged version:

Practitioners of all stripes can take solace in the fact absent a sealing Order granted under s. 137(2) of the Courts of Justice Act http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90c43_e.htm , once a transcript is filed with court by any party, it is accessible to the public notwithstanding the Deemed Undertaking Rule.  This extends to transcripts filed in support of motions, including motions to challenge a refusal to answer.  This public access principle is to be strictly applied, according to Justice Cullity's recent decision in Lewis v. Cantertrot Investments Ltd., [2007] O.J. No. 4201 (S.C.J.).

Parties to a motion may merely list a transcript along with all other relevant documents: R. 37.10(2)).  But the transcript - meaning the entire transcript - must be filed at least two days before the hearing by the party relying on it: Rule 34.18(2).  Since the consent of all parties is required to file a partial transcript (R. 38.18(3)), in practical terms the filing party itself vetoes whether a partial transcript is filed. 

After a transcript is filed, the onus is on the examinee to seek a sealing Order.  The test for a sealing Order laid down by the Supreme Court of Canada in Deganais v. Canadian Broadcasting Corp., [1994] 3 S.C.R. 835 (S.C.C.) and restated in R. v. Mentuck, [2001] 442 (S.C.C.) is very strict, however.  For an application of this test, see the recent case of Moore v. Bertuzzi , [2007] O.J. No. 5113, where a sealing Order was denied to the applicant defendant.

Conclude your review of this interesting set of principles with Rule 34.18(4), which states the Judge  "may read only the portions to which a party refers": R. 34.18(4).  So the public right to access extends to the entire transcript though the Judge only reads a portion of it. 

Another good reason to avoid trials where possible.

Chris Graham

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Listen to Getting Probate

This week on Hull on Estate and Succession Planning, Ian and Suzana discuss probate - what it is and when you need it.

Comments? Send us an email at hullandhull@gmail.com, call us on the comment line at 206-457-1985 or leave us a comment on our blog at www.hullandhull.com.

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Listen to Assisted Reproductive Technology and Succession Law

In this episode of Hull on Estates, Megan Connolly and Rick Bickhram discuss some interesting legal issues that surround assisted reproductive technology and succession law.

Comments? Leave us a message on our comment line at 206-350-6636, send us an email at hull.lawyers@gmail.com or you can post a comment on our blog at http://estatelaw.hullandhull.com/.

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It's About the House's Current Market Value, Stupid.

One of the first steps in any estates litigation matter is valuing the estate assets.  Most assets are easy to value: RIFs, bank account, etc.  But for many estates, the major asset is house.  This is particularly true in the GTA (Greater Toronto Region, for our U.S. readers), where baby boomers who bought modest homes decades ago have seen the value of their house skyrocket.

The twist for both estates lawyers and litigants is that house valuations are inherently less precise and more subjective than most assets.  Accurate information on the market value of a house can be crucial. 

The subprime fiasco in the U.S., a potential serious recession and Toronto's new land transfer tax may possibly create the unthinkable horror: a decline in the housing market.  I am far, far away from being an authority on real estate, but it may be prudent to consider attaining current appraisals where there is doubt about a home's value.  That is especially the case for matters that have dragged on for years.  Obtaining an appraisal from a reputable appraiser, for instance one certified by the Appraisal Institute of Canada (see: http://www.aicanada.ca/e/index.cfm), is one option to consider.

The information gleaned may be invaluable in driving a better settlement.

Thanks for reading and have a great week.

Chris Graham

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"It's unacceptable to the average person that you can just turn up with a bunch of heavies and steal the coffin."

Coen brothers?  Nope.  No, not Tim Burton either.  In fact, this is a statement put forth by an MP in New Zealand after the third case of body snatching in less than a year. 

As reported in the BBC news yesterday, the body of a 76-yr old woman was hijacked right out of the back of the hearse by four carloads of people including her estranged daughter.  The bizarre, but not unprecedented, scene sparked a bitter family row over the deceased's last wishes with respect to her funeral arrangements.  The deceased had been married to a Maori man but separated from him in the 1970s.  Clashes over where people are buried are apparently not uncommon in Maori society, particularly in marriages of mixed descent (e.g. Maori and European).

Incredibly, a spokesman for police national headquarters said they had limited power to intervene: "Body snatching is not against the law" since, in contrast to Ontario, a body cannot be legally owned in New Zealand.  The recent cluster of body snatching cases may lead to an overhaul of New Zealand law regarding who owns a body.

David M. Smith

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Yesterday, we read about Franz Kafka's unfulfilled wishes with respect to his manuscripts, both published and unpublished, at the time of his death in 1924.  Flash forward eight decades or so.  Dmitri Nabokov, the 73 yr old sole surviving heir of Vladimir Nabokov, continues his 30-yr struggle with his father's deathbed request that his last unpublished work, The Original of Laura, be destroyed.  The stakes are high for Laura; at one point, Dmitri referred to it as "the most concentrated distillation of [my father's] creativity."  The task of burning the manuscript was originally entrusted to Vladimir's wife Vera, but when she died in 1991 she had not yet carried out her husband's last wish.

As discussed in the Business Standard, those in favour of heeding Nabokov's wishes are not willfully destructive.  It is understood that great writers might work through countless drafts before arriving at a final product that meets their approval.  On the other hand, there's the argument that writers (including Kafka) seldom can judge their own work.

The long twisted saga may find its fate as a cliffhanger of sorts.  In a dramatic verdict, Dmitri indicated late last month that he had indeed "decided to make a decision" about what to do, but that he would "neither disclose publicly either the decision or the deed."  Apparently (or should I say apparition-ly?), Dmitri reached his decision after an imagined ghostly conversation with his dead father.  Stay tuned for the future unveiling of either a box of Laura's ashes or what might be Nabokov's greatest literary work.

David M. Smith

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The meaning of life is that it stops.  --- Franz Kafka

If you are familiar with Kafka and his short literary works, you will know that he was a tortured literary genius who was unsure of his own talent to the point of torment.  In 1924, dying of tuberculosis, Kafka wrote to his friend of 20 years and fellow novelist, Max Brod.  Kafka had made a list of his three novels and a number of stories and gave strict instructions to Brod to destroy all his manuscripts 'unread and in their entirety' and to ensure that already published works would never be re-printed.  These instructions were not contained with a formal last will and testament, rather they were a penciled note found in a drawer after his death.

Kafka's lover, Dora Diamont, partially executed his wishes by stashing away letters and notebooks until they were seized by the Gestapo in 1933. Sidebar: These papers are the subject of an ongoing international search.  Brod, however, ignored his friend's wishes and instead oversaw the publication of the works in his possession.  Brod's defence was that if Kafka had really wanted the works destroyed, he would have appointed another, more ruthless executor. Kafka, had, according to Brod, trusted Brod to not burn his writings.

Interesting question, perhaps not in the legal sense, but in a moral and ethical sense: Is it possible that Kafka undermined his own intentions by the very nature of the relationship he had with his executor?

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By my count, in the relatively short history of our website, our firm's lawyers have blogged on the transfer of wealth by the boomers to their children on six separate occasions.  See, for example, this blog and this blog.  And our blogs reflect a trend to report on the subject as the dominant sociological issue in the business media.  See, for example, this piece by Jonathan Chevreau of the National Post.

Numerous surveys have been released as to the intentions of boomers with respect to their estate plans.  The fundamental characteristic is a focus (on those in their fifties) on enjoying quality time with their families and ensuring that their estate plan properly provides for their children both before and after they are gone.  Some have suggested that this "family focus" is a departure from previous generations although I think this is open to question. Nonetheless, the statistics are illuminating, particularly respecting inter-vivos gifts to children. 

Take, for instance, the findings of a Royal Bank of Canada Poll released in November, 2007:

1.  Fifty-seven per cent of Canadians in their fifties have received or are expecting to receive money  from their parents and in-laws;

2.   Approximately three in five respondents in their fifties expect to give money, during their lifetime, to their own adult children; of those, sixty-nine per cent say they will do so because they want to see their children enjoy their lives; seven per cent say that they would not, believing that their children need to earn their own way or wait until their parent dies. 

5.   When contemplating their legacy, seven in ten respondents want to be remembered as a person who enjoyed time with their family. This family focus is also reflected in the finding that four in five of those in their fifties believe that "their children are their legacy."

David M. Smith

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Listen to Assets and Liabilities

This week on Hull on Estate and Succession planning, Ian and Suzana expand on last week's discussion about determining value. They also discuss taking an inventory of an estate's assets and liabilities.

Comments? Send us an email at hullandhull@gmail.com, call us on the comment line at 206-457-1985 or leave us a comment on our blog.

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Listen to Trustees' Rights to Indemnification.

This week on Hull on Estates, Suzana and Ian celebrate the 100th episode of Hull on Estates with the first part of a two episode discussion on a trustee's right to indemnification.

Comments? Send us and email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.

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The orderly administration of a parent's estate will often revolve around the family home.  All too often, the children of the deceased  parent will not see eye to eye on the best way to liquidate the home or whether the home should be liquidated at all.  The situation is often compounded when one of the children resided with the parent and may have developed an enhanced emotional attachment to the home. If the home is sold, it may become a challenge to empty out the contents in a timely fashion.

Such difficulties have led some commentators to espouse the viewpoint that a family member ought not to be an executor of an estate in which the family home is the most significant estate asset.  To my mind, such recommendation is a bit extreme:  each family is different and while there is no certainty as to how the children will interact with one another on the death of the surviving parent, it is worth noting that the vast majority of estate administrations are not referred to litigation counsel.

As noted in a recent article in the New York Times, the difficulties that may arise in the sale of the family home are often best resolved through the advice of a good listing agent and effective communication between the executor and his or her siblings. Such issues that may arise include: the appropriate list price, how to show the home to attract the most optimum sale price, and what upgrades (if any) to engage in and whether to use estate assets for this purpose.

David M. Smith