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 Alberta Court of Appeal recently released its decision in Johnston v. Alberta (Director of Vital Statistics), a case I had been following about the burial of a deceased RCMP officer who had been killed in the line of duty. 

The mountie, who was killed along with three other officers in 2005, was buried in his home town in Alberta.  A year after his death, his widow (who was also the executor of his estate) became aware of an RCMP policy allowing the deceased’s remains to be buried at the RCMP cemetery in Saskatchewan, which happened to be more than 1000 miles away. 

The widow applied for and was granted a disinterment permit by the Director of Vital Statistics.  After the permit had been granted, the widow advised the deceased’s mother that she planned to move him.  The mother promptly wrote to the Director objecting to the issuance of the permit. 

When the Director did not rescind the permit, the mother applied to the court for judicial review of the decision.  That application was later dismissed and the Court of Appeal has since dismissed the appeal.    

Earlier this week, the mother’s lawyer indicated that they would be applying for leave to appeal to the Supreme Court of Canada. 

For her part, the widow’s position is that the deceased would have wanted to be buried at the national RCMP museum.  However, the deceased’s mother wants the body buried in the deceased’s hometown, which is near his Metis ancestors. 

This matter has already resulted in a tense standoff – last fall the mother and her supporters prevented workers from accessing the grave to exhume the body, despite the court ruling that gave the widow authority to do so. 

It will be interesting to see if the SCC decides to hear the case.

Have a great weekend,

Megan F. Connolly

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Just a reminder that our next breakfast series seminar is being held on June 4, 2008.  It is being held at the Ontario Bar Association at 20 Toronto Street. 

There will be presentations on the following topics:

• "Recent Case Law Developments that Impact an Estate Solicitor's Practice" - by Ian M. Hull
• "Evidence of Intention and What to Watch for as the Drafting Solicitor: Key Issues and Update" - by A. Sean Graham
• "The Challenge of Exercising an Estate's Controlling Interest in a Private Corporation"  - by David M. Smith

The breakfast seminars are always fun and informative and I would definitely encourage you to attend.  If you haven’t already signed up and would like to, please contact Diane Labao, who can be reached at 416.369.1516 or dlabao@hullandhull.com.  If you have signed up already, we look forward to seeing you there.  

If you are interested in obtaining copies of papers that have previously been presented, they are available here.  In addition, we also offer audio CDs of our presentations. 

Have a great day,

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The 2008 decision in Sheldrake v. Sheldrake provides yet another example of the ways that relatives can fight over a family cottage. 

In this case, the plaintiff, who was the defendant’s son, brought a claim seeking declarations that he had a beneficial interest in two family cottages to which the defendant held title and that the two cottages were held in trust for the plaintiff’s benefit. 

The plaintiff alleged that the defendant had wanted to keep the cottages in the family and had asked that the plaintiff renovate and improve them.  In return, the defendant promised that the plaintiff would receive title to the cottage on her death.    

After a while the relationship between the plaintiff and the defendant deteriorated and eventually, the defendant obtained a writ of possession, which required the plaintiff to vacate the property. 

At trial, the plaintiff was self-represented, while the defendant had counsel.  The only evidence presented was that of the plaintiff.  No explanation was provided by counsel to the defendant as to why the defendant did not testify or call evidence. 

The trial judge accepted the plaintiff’s evidence and, drawing an adverse inference from the fact the defendant had adduced no evidence of her own, found an implied admission on behalf of the defendant that any evidence that she had would either not contradict the plaintiff’s position or not support that of the defendant. 

The judge accepted that an agreement existed between the plaintiff and defendant, but that it could not be enforced because it did not comply with the Statute of Frauds.  However, applying the doctrine of part performance, the court found that the acts relied upon by the plaintiff were referable to the contract asserted and allowed the declaratory relief sought.

Have a great day!

Megan F. Connolly

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"To visit Machupijchu, you must prepare the soul, sharpen the sense.  Forget for some minutes, the small and transcendental problems of our lives, of modern man..."   Napoleon Polo, Cuzco Peru.

 In 1911, Yale history professor Hiram Bingham III stumbled upon Machu Picchu, 'the lost city of the Incas' (click here for an incredible virtual tour).  For centuries, the treasure trove of ancient Incan art and artifacts had been lost to the Peruvian people.  Backed by Yale and the National Geographic Society, Bingham excavated nearly 5,000 objects over the course of several trips to the sacred site, including statues, jewellery, instruments and human remains.  He then sent the relics to Yale's Peabody Museum in New Haven, Connecticut.

Was their transfer a loan or a gift?

In 2003, when Yale launched a major touring exhibition featuring the artifacts, the Peruvian government commenced negotiations to get them back.  Their argument rested on the existence of a letter discovered in the National Geographic Society archives by Terry Garcia, executive VP of the Society.  The letter, written by Bingham to Yale University, revealed that the artifacts "do not belong to us, but to the Peruvian government, who allowed us to take them out of the country on the condition that they be returned in eighteen months."  The National Geographic Society concluded that the artifacts that had been removed from Machu Picchu were indeed a loan from the Peruvian government, and not a gift.

Artifact ownership is a sticky issue.  Thomas Kline, of George Washington University explained to the National Geographic Channel that if a museum returns ancient artifacts too quickly, they may not be honouring their duty to "preserve and protect objects in the collection".

Yale and the Peruvian government ultimately worked out a compromise of sorts.  Yale agreed to return most of the objects following the completion of the travelling exhibition co-sponsored by the two parties, and has since acknowledged Peru's title to all of the excavated objects.

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What he doth, he doth by rule of thumb, and not by art.

             Sir William Hope.  Page 157 of The Compleat Fencing-Master, 1692

And therein lies the earliest known citation of the phrase 'rule of thumb', defined by Wikipedia as a 'principle with broad application that is not intended to be strictly accurate for every situation'.

There are, interestingly, numerous conflicting accounts regarding the origin of the phrase:

• Although it has been said to derive from the belief that English law in the late 1700s allowed a man to beat his wife with a switch as long as it was no thicker than his thumb, the 'rule of thumb' has actually never been the law in England and this theory has been fully discredited as nothing more than rumour and hoax.  Even The Bias-Free Word Finder, regarded as the bible of politically correct language, considers this origin implausible.
• In the days before thermometers, brewmasters were said to have often gauged the temperature of a batch of wort by dipping a thumb in the brew.
• The Encyclopedia of Word and Phrase Origins indicates that the phrase stems from the ancient use of the last phalange of the thumb of an average adult male as a measuring device for roughly one inch.

Now put that ruler away and get back to work.

David M. Smith

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Law firms, such as ours, tend to emphasize the benefits to clients of their respective area of specialization. The common pitch to prospective clients is that there is less of a learning curve on each file and, as a general proposition, most problems have usually (with some variation) been seen before.

However, the flip side of specialization is that it may not always best serve the client who presents a hybrid problem spanning two or more areas of law .  In such circumstances, counsel need to candidly assess to what extent their area of specialization may limit their ability to serve their client.  On the other hand, because certain areas of law tend to overlap with considerable frequency, the client who seeks specialized advice is well-served when such counsel recognize this fact and adapt accordingly. 

Certainly, the practice of estate litigation can often overlap with family law litigation.  Take , for example, a beneficiary designation dispute.  While at first glance an estates issue, the existence of a separation agreement and its impact on the dispute inevitably gives rise to legal issues where family law counsel will have considered the issue from their own perspective.  So, too is the decision facing a surviving spouse as to whether to elect under the Family Law Act on the death of his or her spouse. Again, responsible counsel have an obligation to best serve the client.

Continuing Legal Education plays a role as well.  For instance, the Ontario Bar Association has in the past run a program entitled "Kissing Cousins."  A joint venture of the Family Law and Estates and Trusts Sections of the OBA, the mandate of this program has been to highlight practice issues in which estates and family law issues overlap.

David M. Smith

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The issue of when a missing person will be deemed to be deceased was most recently (and prominently) in the news during the search for Steve Fossett.  Notwithstanding the relatively short duration of time since his disappearance on September 3, 2007, circumstantial evidence suggested that, on a balance of probabilities, his death was a safe assumption and Fossett was declared legally dead on February 15 , 2008.

In Ontario, the Absentee Act deals with the situation in which a person is missing but about whom there is "no knowledge as to whether he or she is alive or dead."  In such a situation, the Court has the power to appoint a trust company or others to deal with that person's affairs in the interim.  Interestingly, the term "Committee" (which also used to be the title given to the person now appointed as a "Guardian" under the provisions of the Substitute Decisions Act) still is used for this purpose.

The Act provides that certain persons including the Absentee's spouse or (adult) child can make application to the court for a declaration of Absentee and the appointment of a Committee to manage such person's property. 

The question that inevitably arises in any such situation is:  what if the Absentee in fact shows up one day, alive and well, and wanting to know what has happened to his or her property?  Of course, such situations are rare but not unheard of.  In such a case, the Committee will have the obligations of a fiduciary to account for the Absentee's property.  The Committee will likely make a compelling argument that the Absentee's assets ought to be available to fund the costs of making the application and compensating the Committee for safeguarding the Absentee's assets.

David M. Smith

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We all know of ways to lead a greener life, but how about ways to go green after you leave the Earth?  Eco-friendly funerals have been steadily gaining momentum among those who wish to live, and die, in the most environmentally conscious way.

Although the rising trend in eco-funerals is a relatively new phenomenon in North America, Britain has been a leader in the area for some time.  In fact, new legislation in the UK has further encouraged the trend by requiring reductions in the mercury content of plastics and treatments used in coffins starting in 2010.  All biodegradable coffins will meet the new standards.  Recent studies have also suggested that cremation is less eco-friendly than burial, with the average male body producing as much carbon dioxide during a cremation as one dozen cars attending a funeral.

So what exactly makes a funeral eco-friendly?  Green funerals do not embalm bodies with chemical preservatives, but rather dress them in clothes made from natural fibers and place them in cardboard coffins.  Although they are more challenging to handle (especially when they are wet), they biodegrade within 3 months.  Trees or shrubs are often used to mark individual plots, rather than marble tombstones, as marble is not a renewable resource.  Irrigation and pesticides are not used.

Like any eco-friendly choice, going green comes down to values and priorities, not price.  Even the smaller details in your funeral planning, such as using fuel efficient cars instead of limousines in a funeral procession, can make a big impact if enough people take the initiative.  Find out more about eco-funerals in Canada and elsewhere around the world here.   

Be sure to notify your family and friends of your intentions if you are considering an eco-funeral, and reflect those wishes in your estate planning documents as well.

Sarah Hyndman Fitzpatrick

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Hull & Hull's web page now features a new category for "Recommended Reading" under our "Links" page.  Check in often for updates that connect our readers to timely and informative reading materials in the estates area.

In April 2008, Ian Hull suggested a recent article featured in a special section on wealth and personal finance in the New York Times titled "Families Break the Silence on Inheritance".  With everything that has been written out there lately on wealthy families electing to bequeath their estates to charities or foundations, rather than to their own children and grandchildren (i.e  such as Warren Buffett and Body Shop founder Anita Roddick), this article confirms that people are paying more attention to the values they hope to pass on to the next generation.  Recent blogs by Diane Viera and David Smith of Hull and Hull LLP canvass this issue further.

The article suggests that this fundamental shift in philosophy stems from an entrepreneurial generation that has earned its wealth, rather than inherited it.  In the estate planning context, not only are clients seeking advice on ways to transfer wealth with minimal tax impact, but they are asking more esoteric questions such as "what is the purpose and meaning of what I'm doing here, and and how do I pass those values down?".  

Keep posted for our regular updates.

Sarah Hyndman Fitzpatrick

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In recent months, I've seen more Wills than usual with provisions for RESP's.  Are there advantages to naming a successor to your RESP in your Will, and what are the risks associated with failing to do so?  For a background on the many advantages associated with RESP's and investing in your child's future, see here. 

Section 146.1 of the Income Tax Act deals with this issue, and of course it's always useful to review the specific terms of the RESP policy.  The testator should consider whether they intend to continue the plan for the benefit of the beneficiaries after their death, or whether they would prefer to wind up the plan.  If they elect to wind it up, the contributions within the plan can be returned to the estate or distributed to the intended (or other) beneficiaries.

Typically, a testator with an RESP plan has young children and opts to continue the RESP for their benefit.  Thought will need to be given to who will be the succeeding subscriber - keep in mind that the subscriber can withdraw contributions from the RESP and receive accumulated income payments, which can be rolled over into their own RRSP.  Drafting issues to highlight are providing the funding to continue the contributions, naming the intended beneficiaries, investment guidance, and limits (if any) on withdrawls of contributions by the subscriber.  If your Will fails to name a successor, current tax law allows anyone making contributions to become a subscriber.  However, if you would prefer to choose your subscriber and your intention is for the capital in the plan to be used by the beneficiary, then you should consider designating a successor in your Will.

Lastly, don't forget that if the RESP is jointly owned by parents (which is not unusual), a mirror provision should be included in both owners' Wills.

Sarah Hyndman Fitzpatrick

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The working group of the Law Society of Upper Canada's Convocation recently reported on the issue of retaining women in private practice.  The objective of the Report was not to identify the problem but rather to propose constructive and innovative solutions for the legal community.  The Report confirmed what has been widely observed for some time - although a majority of law school graduates and junior associate level lawyers are women, they are still leaving the profession in droves.  The departures of women from the law coincide with the ascent to partnership within law firms or senior leadership roles in the wider legal community (no surprise that these years often intersect with child-bearing and rearing years).   

What were some of the constructive solutions proposed?  The working group had several recommendations, including the implementation of the Justicia Pilot project for firms of more than 25 lawyers and the two largest firms in each region.  Participating firms will be asked to commit to adopting programs for the advancement of women, including tracking demographic information within firms and increasing opportunities for networking, business development and mentoring.

One interesting proposal is the establishment of practice locums, or an alternate lawyer program (already established by the B.C. Law Society).  Essentially this would involve providing access to names of those willing to provide a locum service.  This could function to assist women with small or solo firms to ensure a practice was managed by a locum during any absence, and those women looking to provide locum services could remain current, maintain an income and return to practice without having lost their skills.  The Report also cites recommendations from other industries such as business, which conclude that companies with the highest representation of women on their senior management teams not only perform better financially, but have higher employee recruiting and retention rates.

Sarah Hyndman Fitzpatrick

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Canada's premier web conference is scheduled for May 21st and 22nd in Toronto, although tickets are almost sold out so act quickly if you're planning to attend.   Now in its 3rd hugely successful year, mesh aims to connect people with enthusiasm for the web - people who "want to know more about how the web is changing the way we live, work, and interact with the world".  Speaking of how the web is profoundly transforming the way we live, work and interact- apparently many of the leading candidates for the President of the United States launched their bids with video clips uploaded to YouTube. 

Other international cities have hosted similar events - Geneva has LIFT, Paris has Les Blogs, and New York has BlogOn.  Toronto's mesh is a great way to learn more about the ways in which Web 2.0 can provide new opportunities for business and society, especially if you are looking for new ways to use web technology to "connect, share and inspire" with clients and other like-minded people.       

Watch a video on mesh or register on-line here.  Founded by Mark Evans, Mathew Ingram, Mike McDerment, Rob Hyndman, and Stuart MacDonald, mesh has a line-up of exciting key note speakers - not to be missed .

 Sarah Hyndman Fitzpatrick

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"Some day, a wise person in a position of authority will realize that a court of law is not the best forum for deciding custody and access disputes, where principles of common sense masquerade as principles of law." - Mr. Justice Joseph Quinn as quoted in the Globe and Mail.

Until that day, the fighting parents who appeared before Mr. Justice Quinn have been barred from court unless they obtain special leave.  Looking at the context, it's hard to argue they did not earn it: 25 court orders from 12 different judges over 7 years, three contempt motions, one suspended sentence, 12 different lawyers, 2000 pages of court filings. 

An apparent lack of respect for the rulings of the Court by both litigants was a factor in this extraordinary Order.   As Mr. Justice Quinn is quoted, "[b]oth sides have shown an inability to abide by court orders such that their access to this court should be restricted by the requirement to obtain leave." 

Mr. Justice Quinn is further quoted as saying "[t]he parties have gorged on court resources as if the legal system were their private banquet table. It must not happen again,".  It is easy to forget that courts are very expensive operations: rent, upkeep and salaries.  An hour before a judge in court is not cheap for society, whether or not the litigants are represented by lawyers.  As a purely editorial comment, it is heartening to see principled recognition of this fact.

The father, perhaps unsurprisingly given the reported facts, is apparently considering an appeal.

Enjoy the weekend,

Chris Graham

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The contemporary attitude is that we live in a young country.  True in some respects.  Yet we own the oldest contiguous institutions.  Trusts are one aspect of this venerable inheritance: the trust is as old as the Common Law.  Actually, a little older in some respects: the English trust finds its roots in the 12th century.  

It all started when a few knights returned from their crusades to find that the "friends" to whom they had entrusted management of their feudal lands refused to return said lands.  There was no mechanism at law to force the new untrustworthy owners to return the land so the law courts could do nothing. 

Naturally, the irate knights went to the Lord Chancellor and "asked" for justice.  One can imagine the scene: the silk-gowned Lord Chancellor looking down at the length of his shoe, then up at a selection of battle-worn armored thugs with gauntlets tapping hilts on chipped swords, over at the foppish, yawning new land-holder, then down again at the length of his shoe.  Unsurprisingly, the knights who had nothing else to live for continually won in the Courts of the Chancellory and the concept of trustees and beneficiaries was born.  I wager that trial by ordeal would have reached similar results so this must have been fate at work.

Tomorrow some interesting case law, I promise. 

Chris Graham

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Who can forget the sad case of Terry Schiavo, the poor lady who suffered catastrophic brain damage in 1990 and was kept alive in a vegetative state on a feeding tube for 15 years?  Readers will remember the anguish involved when her husband was forced to litigate against her parents in order to get the tube removed so Terry could die in peace.  This became a powerful argument in favour of a "Living Will", which is basically a document in which individuals outline their "personal choices" regarding end-of-life treatments.  Living Wills became a feel-good legal product, a perceived solution to the heart-rending situations like Terry's.

Too bad the research shows that Living Wills may not live up to the hype.  According to a recent study by two University of California Irvine researchers, Professors Peter Ditto and Elizabeth Loftus, Living Wills appear to have serious defects.  One problem is that patient preferences change over time.  For instance, one tends to be more inclined against end-of-life treatments immediately after a hospital stay, but this changes with time.  Also, positive treatment results of family members make a patient more inclined to end-of-life treatment.  Many people who make Living Wills change their preferences but forget about their Living Will, or misidentify those preferences in the Living Will. 

Perhaps the most glaring weakness is that Living Wills do not appear to provide guidance  to surrogates who have read them.  According to the study, the accuracy of a surrogate who has read a Living Will in prediciting a loved one's treatment preferences is no higher than that of a surrogate who has not read the Living Will.  So a Living Will can be totally inconsistent with the patient's most recent intentions.   

Having a Living Will apparently makes both the patients and the surrogates feel better, so it's not all bad news. 

Have a safe day,

Chris Graham

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How does one prove a negative?  This is a challenge facing many estates: after a person dies, individuals spring forth requesting compensation for services rendered on a quantum meruit basis or alleging that promises were made by the deceased.  A common example is a claim that one provided domestic services such as cleaning, shopping or laundry. 

The riddle of proving a negative is quite relevant to estates litigation because the star witness for the estate is usually, by definition, dead.  Fortunately, since estate trustees can't prove negatives, they don't have to.  Section 13 of the Evidence Act specifically addresses this scenario, requiring independent corroboration of evidence in claims against estates.   The provision is designed to prevent claims that consist of mere allegations, which are easy to make, difficult to refute and expensive to litigate.  There is a great deal of case law on what constitutes corroboration, the standard of proof and so forth but the provision is a great deterrent to frivolous claims.

It seems trite to say but the Act is worth a review, even for non-litigators.  It's full of counter-intuitive gems that are easily forgotten: for instance, section 9 the Evidence Act states that witnesses are not excused from answering questions tending to criminate them under any Act of the Legislature.   

Have a great day,

Chris Graham

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What happens when the Bill a legislature votes for is different than the Bill the Head of State signs?

A fascinating story is playing out down south: the U.S. Congress voted for a highway funding bill, which the President later signed into law.  But someone altered an "earmark" provision after Congress voted, so the bill the President signed was slightly different than the bill Congress voted on.   Specifically, a $10 million earmark was changed to redirect funds to upgrading an apparently useless stretch of road.  It turns out the locals don't even want the road built.

The Senate is seeking a federal inquiry  and Congress may seek a criminal probe.  Hopefully the constitutional aspect gets some consideration before (righteous) outrage drowns out the interesting constitutional aspect.  Is this rogue Bill a law?  Is what the President signed legally different than what the Congress approved?  What would the result be here in Canada, if a section of a regulation, for instance, was altered after a Parliamentary vote? 

One thing is certain: our friends down south will spend far more than $10 million getting to the bottom of this.

Enjoy your week,

Chris Graham

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The intense media coverage of the raid on the polygamist ranch in Texas has also generated scrutiny of Canada’s polygamous communities.

Polygamy is against the law in Canada but there has not been a prosecution of a case in over sixty years. For a background on the issues surrounding polygamy and Canadian law, read A Polygamy Primer on Osgoode Hall’s law blog, The Court.

The primer provides a link to a collection of research policy reports commissioned by the federal government exploring polygamy in the Canadian context. While the focus of the papers is on polygamy in a criminal law and family law context, the paper by Alberta’s Civil Liberties Research Centre discusses the civil case of Yew v. British Columbia (Attorney General) [1924] 1 D.O.D. 1166 (B.C.C.A.). In the case, the British Columbia Court of Appeal gave limited recognition to a polygamous marriage that had occurred in China to allow the two surviving wives to receive their annuities from their husband’s estate at a lower tax rate.

It will be interesting to see if the possible recognition of polygamous unions in the family law context will have an impact on estates law.

Enjoy your weekend,

Diane Vieira

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Dame Anita Roddick, the founder of the Body Shop, gave away her entire wealth, approximately 102 million dollars, to various charities while alive. She only left enough money in her estate to pay the inheritance tax on those charitable gifts. Once the inheritance tax is paid, the value of her estate will be nil.

Roddick had been very vocal about her intentions to give her wealth to charities and called the idea of bequeathing her estate to her two daughters obscene. Prior to their mother's death, her two daughters were interviewed and reportedly relieved to not be inheriting their mother's wealth and supportive of their mother's charitable giving.

Needless to say, Roddick's decision to leave nothing to her two daughters sparked some discussion. David Smith's previous blog on wealthy parents and transfer of wealth discusses some of the concerns such individuals have about estate planning.

Thanks for reading,

Diane Vieira