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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In May, I wrote a blog about a battle between the wife of a dead RCMP officer and his mother over the burial place of his remains.  The wife learned about a policy allowing an officer to be buried in the RCMP national cemetery and applied to the Director of Vital Statistics for permission to move the deceased’s body from its current place of burial (near his hometown) to the RCMP national cemetery in Saskatchewan.

The deceased’s mother objected to this and litigation ensued.  In May, the Alberta Court of Appeal held that the wife could indeed move the body if she chose.  The deceased’s mother has since indicated she intends to appeal to the Supreme Court of Canada.

Last week, CBC News reported that the Métis National Council has now become involved (the deceased was of Métis descent). 

In an open letter to the deceased’s wife appearing in newspapers in Calgary and Regina, the president of the council implored to her not to move the body, writing “I hope you will reconsider your decision to have your husband disinterred and taken away from his people and his family…His resting place is a place of honour, an enduring testament to his selfless sacrifice and an eternal memorial to his cherished place in the hearts of his family and the Métis Nation."

It is not clear whether an application seeking leave to appeal the decision has been made yet and, if it is, whether it will be granted.  If this case does end up before the Supreme Court I would not be surprised to see the Métis National Council seek leave to intervene.

Have a great day!

Megan F. Connolly

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I recall a good deal of discussion when Leona Helmsley left millions to be held in trust in her Will last year, some of it on the Hull & Hull blogs and podcasts.

Well, the website for Estate Planning for Pets provides some interesting reading in this vein, although the kind of trust established by Ms. Helmsley is obviously rare.  My own eye was drawn to the “for skeptics” section, which admonished professionals to put their clients’ wishes first, not their own priorities.

The point seems to be that rather than focus on one’s own, subjective opinion that money to pets could be used for other purposes, it is more appropriate to consider what happens to the pet if the testator makes no provision.  Absent provision, the pet could end up abused, ignored or euthanized.  Anyone who has lost a beloved pet can probably understand why testators want to soften the blow to a pet who loses them.  

Thanks for reading.

Sean Graham

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There is no question that mental illness for the afflicted and families can be devastating.  The Globe and Mail helps to address the national scale of these illnesses in its recent excellent series entitled “Breakdown: Canada’s Mental Health Crisis”. 

Mixing personal stories, professionals’ views and some of the national consequences of the problem, the series provides a holistic perspective on the problem.

The overwhelming huge reader response speaks for itself.

To be sure, there is not much cheer to be found and much heartache, mitigated only somewhat by some success stories.  The ability of some families to pull together in awful circumstances can also offer inspiration to others.

Remarkable journalism.

Thanks for reading.

Sean Graham

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A person with more than one set of distinct interests or roles in the same estate may have a conflict of interest.  This can create all sorts of problems and issues in an estate administration and is a driving concept in much estate litigation.

Say Joe Smith is the executor of an estate but also received gifts from his mother the testator during her lifetime.  One of these gifts, say, came in the form of a transfer of a bank account into joint ownership between the two of them. 

Wearing his executor's hat (to use some traditional vernacular), Joe may have a duty to determine whether the bank account transfer was not a gift at all and actually subject to a resulting trust in which case the estate might have a claim to the asset.  Joe may need to do so because, as executor, his duty is to identify estate assets and bring them into the estate. 

However, wearing his hat as a recipient of the bank account, Joe is unlikely to want to give the bank account back to the estate. 

In short, Joe may have a conflict of interest.

In such circumstances, Joe may need two lawyers, one to advise him as estate trustee, the other to protect him personally.  Sometimes an executor’s conflict is such that he cannot continue to act as estate trustee. 

While this example may be simple enough, there is a tremendous range of conflicts that can creep into estate matters.

Thanks for reading.

Sean Graham

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Listen to The Investment Accounts.

This week on Hull on Estates and Succession Planning, Ian and Suzana conduct a quick lesson on capital encroachment and discuss the role of investment accounts in the passing of accounts.

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 the Hull on Estate and Succession Planning blog.

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Being somewhat of a late convert to the idea of taking advantage of the myriad of small-scale technological devices invading the business and legal milieus, I get to enjoy innovations long after other people have become blasé.

The ability to work from home through gotomypc is, I think, my favourite.  For the uninitiated, the program allows for users to access their network over the internet, so that what you see on your home PC is the screen you would see at work.  By providing the mechanism to catch up at home, it takes away the need for brutal hours in the office.  In my case, it means I can go home at a sensible hour, spend time with the family, then finish off some tasks once the kids are in bed.

It also allows for a break in the day, since my brain tends to start to get tired around 4:30pm, or so and after a few hours of offtime I can think clearer anyway.

Combining the gotomypc facility with saving file documents on a network by scanning them means that, for me at least, working at home has become more efficient than at the office.  It also allows for access to a file from offsite, whether in Court, a day-long mediation or somewhere else.

All of this, to my mind at least, allows lawyers (and others) to provide better more timely service, at least given a little time and patience at the outset.

Thanks for reading.

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Listen to Compensation for work done by estate trustees and solicitors.

This week on Hull on Estates, Paul Trudelle and Diane Vieira discuss compensation for work done by estate trustees and estate solicitors.

Case citation:

Rooney Estate v. Stewart Estate 2007 WL3019262 (Ont. S.C.J.), 2007 CarswellOnt 650

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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Ah, summer is upon us, and not a moment too soon. After what seemed like the longest Spring I can remember, we finally had our first genuine summer weekend.

School’s one week from being OVER, and kids are so eager they can taste the two full months of freedom headed their way.  Camps, holidays, lazy weekends at the lake beckon.

With the European Soccer (sorry, Futbol) Championships in full force, Wimbledon and the US Open in tennis and the Beijing Olympics slated for later, not a bad time to be a sports fan either.

So, here’s to a great summer all around, for kids, families, and yes, even the lawyers.  Enjoy.

And never fear, things will get plenty serious in the fall, with Canadian and US elections either certain or very likely indeed.

Thanks for reading.

Sean Graham

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Estate planning and litigation professionals are still mulling over how the legalization of same-sex marriage will affect their practices. Even more complex developments may be in the offing. 

An allegedly polygamist community in British Columbia and increased concerns about the possibility of polygamy elsewhere in all but name in other regions of the country raise any number of issues, not only of policy, but also estate planning.

For example, if someone dies leaving multiple spouses but only one legally-married spouse, what advantages would the legally-married spouse have over the others in the division of a contested estate?

How will the fact that bigamy and polygamy remain illegal play out in civil estate disputes?

If proscriptions on polygamy are or become ignored by governments, will the law evolve? And as it did in the case of same-sex marriage, what happens if bigamy or polygamy becomes legal, since families may become large enough that dependant’s support claims could exhaust most estates rendering much estate planning redundant?

Stay tuned and thanks for reading.

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Spouses commonly execute virtually identical Wills, called “mutual wills”, on the assumption that each will give the same gifts on death out of the same “family” pool of property.  Oftentimes the residue of the estate of the first spouse to die is left to the surviving spouse, as long as he or she lives at least 30 days after the death.

A problem can arise if both Wills provide for the same gifts in case of simultaneous death or death within 30 days.  If both spouses do in fact die within 30 days of each other then an unintended double legacy could result. 

The following wording might cause exactly that problem in a mutual will scenario (and perhaps should be avoided or redrafted):

1.           I direct my estate trustee to pay or transfer the residue of my estate to my said Husband ( Wife) if he (she) survives me by at least thirty days. 

2.           If my said Husband (Wife) dies before me or fails to survive me by at least thirty days, then I direct my estate trustee to pay $100,000.00 to my daughter Sue and pay or transfer the residue to my son Joe.

If both spouses have that wording in their wills, and both die within 30 days of each other, Sue might get two gifts of $100,000 for a total of $200,000 at Joe’s expense, even though only one $100,000 gift was intended.  Joe would not be a happy beneficiary.

Thanks for reading.

Sean Graham

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Mediation continues to be all the rage in Estate litigation in Toronto matters, and is increasingly common outside Toronto as well.  (For background on Mediation in general, see here.)

Mediation no doubt sounds very conciliatory and cooperative, and in an ideal world it might be.  However, estate litigation and the ideal world are not a commonly-encountered pair.  In the real world, mediation can be extremely stressful. It is not uncommon for mediations to drag on into the wee hours as the increasingly tired lawyers and parties draft away at minutes of settlement, always with the possibility that the deal may fall apart at anytime.

Some lawyers have begun to have lengthy pre-mediation meetings with clients to prepare them for mediation ahead of time so they are not taken by surprise by the stress and late nights that may occur. Even more intriguing is the possibility of mediating an estate matter before death - see our own website and a similar website in California.

However, no matter how stressful and difficult a mediation can be, it is still a far cry from the stress and ups and downs of trial – no doubt  a main reason so many mediations result in settlement.

Thanks for reading.

Sean Graham

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Yesterday I talked about Section 13 of the Evidence Act (Ontario), which mandates that before someone can bring a claim by or on behalf of an Estate, he or she must have some corroborative evidence.  The standard of evidence required was dealt with by the Ontario Court of Appeal in Burns Estate v. Mellon.

The Estate Trustees, who were arguing that a transfer to a friend of the deceased during lifetime ought to be reversed because it was subject to a resulting trust, argued that the recipient’s defence that the transfer was a gift ought to be defeated because her corroborative evidence did not remove all reasonable doubt that she had received a gift.  The Court of Appeal agreed with the recipient, finding that the strength of evidence need only succeed on a balance of probabilities:

In principle, I see no justification for applying the criminal standard in a civil action.  A criminal prosecution differs fundamentally from a civil action, and the criminal standard serves different ends and operates on different assumptions from the civil standard.  (See R. v. Schwartz, [1988] 2 S.C.R. 443 (S.C.C.), at 462, per Dickson C.J.C. and Lamer J.)  Moreover, nothing in s. 13 itself suggests that the Legislature intended to displace proof on a balance of probabilities with proof beyond a reasonable doubt.

Thanks for reading.

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Listen to The Capital Account

This week on Hull on Estate and Succession Planning, Ian and Suzana talk about taking capital out of an account and what to consider along the way.

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 the Hull on Estate and Succession Planning blog.

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Listen to becoming an executor after death.

This week on Hull on Estates, Ian Hull and Suzana Popovic-Montag, discuss becoming an executor after death and three issues that must be addressed immediately.

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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Lawsuits by and against estates often lead to arguments that there is no evidence to support the allegations. It seems to me this is part and parcel of the inherent difficulty in such lawsuits caused by the fact that one of if not the most important witnesses – the deceased - is unavailable.

To redress this unfairness, Section 13 of the Evidence Act is intended to protect estates from claims, and others from claims of estates, but requiring some corroborative evidence of a claim for it so succeed:

13.  In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.

The question, then, becomes what standard corroborative evidence must reach to meet the requirements of section 13. Tomorrow I’ll briefly touch on a case which deals with that point.

Thanks for reading.

Sean Graham

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Today’s blog is the third in my series this week on cases in the post Cummings v. Cummings era.

Today’s case is Simpson v. Leardi, [2005] O.J. No. 4282 (Ont. S.C.J.).  

In Simpson, the deceased had left a substantial estate. The plaintiff had brought an Application pursuant to the Succession Law Reform Act seeking support in the amount of $3,750 per month. The plaintiff was already receiving $1,000 per month pursuant to the deceased’s Will, leaving an alleged deficiency of $2,750 per month. The Court ordered that the Application be converted to an action and made an order awarding the plaintiff $2,750 a month in interim support.

The parties were subsequently in agreement that the plaintiff’s personal financial circumstances had improved since the interim order. The estate of the deceased was worth $10 million and the plaintiff’s assets were worth approximately $3 million.

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In yesterday’s blog I noted that in today’s blog I would mention another dependant support case decided in the post Cummings v. Cummings era.

In Reid v. Reid, [2005] O.J. No. 2359 (Ont. S.C.J.), [2008] O.J. No. 826 (Ont. Div. Ct.), the deceased was survived by her son, her daughter and her daughter’s two children (the deceased’s grandchildren).

According to the trial judge, the deceased’s daughter was a 42 year old mentally challenged individual with one of the grandchildren also being mentally challenged.

The deceased’s estate was worth approximately $200,000, consisting primarily of a house.  The deceased’s daughter and her two children resided with the deceased. The deceased’s Will left her estate equally to her daughter and son.

The daughter and grandchildren brought an application for support.

Having acknowledged the considerations set out in the Cummings decision, the trial judge found that there was a relationship of dependency such that the deceased was contributing to the support of her daughter and her two grandchildren.

The trial judge held that the son should receive $25,000 from the estate with the balance of the estate (the house) to be held for the deceased’s daughter, and on her death, the net proceeds from the sale of the house divided equally between her two children. 

On appeal, counsel for the son conceded the issue of the dependency of the deceased’s daughter and grandchildren as found by the trial judge within the meaning of the Succession Law Reform Act (s.57). Interestingly though, the Divisional Court stated:

“We also agree with the appellant…[the deceased’s son] that the trial judge fell into error by ordering that the residue of the estate pass to… [the grandchildren] without having any evidence before her as to what their needs might be at some unidentified time in the future.  Nor was there any evidence before the trial judge that either of these two applicants would still be dependant within the meaning of the Succession Law Reform Act at this unidentified future date, the date of…[the deceased’s daughter’s] death.”

The Divisional Court ordered, amongst other things, that the son be paid $25,000 from the estate (from a mortgage to be obtained on the house), the house be transferred to the daughter, the daughter and her two children may live in the house until 2018, at which time the property will be sold and the proceeds distributed equally between the son and the daughter, provided that the son’s share be reduced by the above-noted $25,000. 

Thanks for reading. 

Craig

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The Succession Law Reform Act (“SLRA”) governs the rights of beneficiaries to receive support and other benefits on death.

In Cummings v. Cummings, [2003] 5 E.T.R (3d) 81 (Ont. S.C.J.); affirmed [2004] 69 O.R. (3d) 398 (Ont. C.A.), Ontario’s Court of Appeal held that when examining all of the circumstances of an Application for Dependant’s Relief under the SLRA, the Court is entitled to take into account not only the needs of the dependants but the moral obligation of the deceased to those dependants.

Today’s blog, as well as my blogs for the balance of this week, will look at several dependant support cases in the post Cummings era. 

In Broderick v. Papathanasiou, [2006] O.J. No. 4707 (Ont. S.C.J.), Ms. Broderick contended that she lived with Mr. Papathanasiou (the “deceased”) in a common law relationship for 8 years prior to his death.

The deceased did not provide for Ms. Broderick in his Will or during his lifetime.  Ms. Broderick earned more money than the deceased during some of the years they lived together.  They lived in residences owned by the deceased.

Ms. Broderick claimed she was a dependent spouse and asked that the Court make an order for her support under the SLRA.

The Court found that Ms. Broderick’s contributions to the deceased’s personal and financial well-being, to the detriment of her own finances, should be recognized by an award from the estate.

The Court held that the requirement for “adequate provision” to a dependant under the SLRA had been expansively interpreted by the courts; it was no longer a strictly needs based analysis; the deceased’s moral duty towards his dependents was now also a relevant decision, citing Cummings.

As the estate was not large enough to make provision for Ms. Broderick’s support indefinitely, the Court found that a lump sum would support her in transition and provide for her relocation and that it was also equitable that the deceased’s daughters should enjoy the benefit of their father’s estate as he intended under the will.

In the end, the Court ordered that the deceased’s condominium be sold and Ms. Broderick receive one half of the net proceeds in recognition of her contributions to the deceased’s well-being.

Thanks for reading.

Craig

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The Ontario Bar Association (OBA), Trusts and Estates Section, year end dinner was held on May 27, 2007 at the Gardiner Museum in Toronto. 

Jordan Atin, the Chair of the Section for the past year, brought the past year to a close and the election of the OBA, Trusts and Estates Section Executive for the 2007/2008 year, was confirmed. 

The Section also paid tribute to this year’s recipient of the Award for Excellence in Trusts and Estates, Barry Corbin.

The Award for Excellence was created to recognize exceptional contributions and achievements by members of the OBA to the area of trusts and estates. The criteria for the award is demonstrated leadership in the trusts and estates bar through knowledge, experience, skill, commitment, passion and strength of character, plus all or some of the following:

·         academic excellence through teaching at the Bar Admission Course, lecturing at a law school, participating in Continuing Legal Education and/or academic writing;

·         participation in the OBA Trusts and Estates Section Executive or the Law Society of Upper Canada on wills, trusts and estate matters; and

·         contribution to the development of wills, trusts and estate law.

In addition to the Award for Excellence, Archie Rabinowitz was presented with the Widdifield Award and Corina Weigl with the Hoffstein Book Prize.

Congrats to Barry, Archie and Corina.  The venue, dinner (and particularly the Cornish Hen) and evening were all quite enjoyable.

Thanks for reading.

Craig

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The annual conference of Society of Trust and Estate Practitioners is upon us.  Yesterday’s full day of interesting talks was capped off with a tenth anniversary gala dinner at The Royal York. 

It was great to see a full house of estate, trust, accounting and tax practitioners decked out in their finest to enjoy an evening with their peers, and honouring the lifetime achievements of Professor Emeritus Donovan Waters.  Prof. Waters, a pioneer of trust law and author of the leading text of trust law in Canada, was introduced by four esteemed speakers. True to his reputation, Prof. Waters delivered a thoughtful and engaging acceptance speech.  It was a lovely evening.

The conference will wrap up after another full day of talks today. See you there!

Have a great weekend,

Natalia

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Yesterday, Hull & Hull LLP hosted one of its informative Breakfast Series.

David Smith started off the seminar with a talk on the challenge of exercising an estate’s controlling interest in private corporations.  His discussion included the following observations:

-                   the obligation of an estate trustee to exercise his or her controlling interest is that of a “reasonably prudent businessman”

-                   the trustee must determine the value of the company in as timely a manner as possible

-                   depending on the wording of the Will, the trustee must provide for the company’s continuation, sale or liquidation

-                   in order for the trustee to make such a decision he/she should review the Will, financial statements and corporate records, and should inquire with individuals who have knowledge of the company’s affairs including beneficiaries, family, directors, shareholders, employees, solicitors, accountants and bankers

-                   it is advisable for a trustee to have an active role in management by, among other things, sitting on the board of directors (despite there being no legal obligation to do so)

Sean Graham followed with a discussion on evidence in estate litigation, and Ian Hull spoke about interesting case law developments.  You can find a more thorough consideration of these topics in their presented papers.

Until tomorrow,

Natalia

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In Schwartz Estate v. Kwinter the divorce of the mother and father in 1996 divided the family, with one daughter, Elaine, siding with the father and the other daughter, Shelley, siding with the mother.  The father then made new Wills giving everything to Elaine, and the mother likewise made new Wills giving everything to Shelley.

The father died in 2003.  A dispute arose about the purported understanding between the parents in making these Wills leading Elaine to commence an action seeking, among other things, that her mother disclose the testamentary instructions given to her solicitor for the purposes of drafting her Wills, which the mother opposed on the ground that such instructions were privileged. 

The Court held that although a Will is privileged until the testator dies, and although instructions to a testator's solicitor and the related work product are also privileged, that the mother voluntarily waived privilege by producing her Wills and by swearing affidavits relying on their content.

Another approach one could perhaps take in such circumstances is to refuse to produce a Will at the outset and claim that it is a privileged document, which may then likely lead to a court determining the issue.  If one is ultimately compelled to produce their Will by court order it would likely be viewed as involuntary disclosure, and therefore any claim for further disclosure (i.e. solicitor's instructions and file documents) could again be met with a fresh assertion of privilege. 

Have a nice day,

Natalia

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In a recent edition of the OBA Estates and Trusts Section newsletter, Deadbeat, Justin de Vries wrote an article commenting on the summary trial and how it can be a way to curb the costs of estate litigation (in claims of $50,000 or less).  This article is worth a read, and I thought in today's blog I would add my voice to his chorus.

While counsel may often overlook the option of summary trial (in Rule 76 of the Rules of Civil Procedure), there is no reason that it shouldn't be invoked in certain estate disputes.  At a minimum, some thought should be given to it before the pre-trial stage, since the pre-trial judge or master can decide what mode of trial is appropriate if no agreement has been reached between the parties before that time.

Some of the cost-saving measures of a summary trial include the following:

1. Evidence in chief is to be adduced by affidavit.

2. A party wishing to cross-examine the deponent on an affidavit, which can be done orally, can take no more than 50 minutes.

3. Closing arguments can take no more than 45 minutes for each party.

Proceeding by way of summary trial may also lead to a comparatively quick result and correspondingly lower cost awards.  Something worth considering…

Thanks for reading,

Natalia

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Soulsbury v. Soulsbury is an interesting appeal from a decision of the Central London County Court about a contract dispute involving a divorced couple.

The couple had been married for 20 years, and after the breakdown of their marriage the ex-husband was ordered to make periodic payments to the ex-wife.  The couple remained on friendly terms.  The ex-husband later suggested that rather than continue to pay periodic support that he should leave £100,000 to the ex-wife in his Will.  The ex-wife agreed to this proposal and they put their agreement into effect.

The ex-husband subsequently fell ill and died, marrying another woman on the morning of his death, which revoked his Will.  After his widow refused to pay the legacy from the estate, the ex-wife brought a claim for payment.

The trial judge found in favour of the ex-wife, holding that a binding agreement had been entered into between the couple.  The widow unsuccessfully appealed.  In response to her arguments to the contrary, the appellate Court held that (i) by entering into the agreement the ex-wife had not bartered away her right to future maintenance or ousted the jurisdiction of the matrimonial court; and (ii) the agreement between the couple was governed by ordinary contract principles (not principles relating to an agreement for the compromise of ancillary relief) and therefore the principal that such an agreement does not give rise to a contract enforceable at law did not apply. 

This serves as a good reminder that when contemplating rearranging one’s support arrangements, in even the most amicable of scenarios, a contingency plan should be in place to deal with the event that either of the parties may enter into a subsequent marriage.

Have a good day,

Natalia