Observations Pertaining to Estates and Trusts Law - Hull on Estates #212
Listen to: Observations Pertaining to Estates and Trusts Law
This week David Smith and Nadia Harasymowycz discuss Observations Pertaining to Estates and Trusts Law.
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David M. Smith - Click here for more information on David Smith.
Nadia M. Harasymowycz - Click here for more information on Nadia Harasymowycz.
Nadia Harasymowycz: Hello and welcome to Hull on Estates. You’re listening to episode 212 on Tuesday, July 6, 2010.
Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada. Hosted by the lawyers of
David Smith: Hi and welcome to another episode of Hull on Estates. I’m David Smith.
Nadia Harasymowycz: And I’m Nadia Harasymowycz.
David Smith: If you want to be heard on Hull on Estates, you can participate by leaving us a comment. E-mail us at hull.lawyers@gmail.com or you can visit our blog at estatelaw.hullandhull.com.
Good afternoon Nadia.
Nadia Harasymowycz: Hi David. How are you?
David Smith: I’m well. We were talking about topics for today and you and I have both noticed that over the past little while there’s been a disproportionately high number of articles in the general media of interest to estates and trusts practitioners. Top of mind, of course, has been the issue of Gail Posner who is another wealthy woman who has left a significant fortune to her three dogs and of course this reminded people of Leona Helmsley doing something similar a few years back.
We thought we might talk about that at the end of today if we have time but the more pressing issue is something you showed me in Lawyers Weekly. And what was that issue, Nadia?
Nadia Harasymowycz: There was an article in Lawyers Weekly recently about health care providers in nursing homes and the issues surrounding individuals who end up in intimate relationships with other people who are involved in nursing homes and how that could have an impact on their estate planning. It’s kind of an around-the-bush idea but I think it happens far more often than we anticipate.
David Smith: Right and its certainly an issue that with the increasing demographic or the aging demographic, we’re finding that more and more elderly people regrettably are in long-term care institutions. And what this is going to mean over time is that a lot of the issues that are swept under the carpet or not dealt with are being dealt with more openly. And, of course, the issue of sexual consent in the general population is well-known within the criminal law but certainly in the context of mental capacity and substitute decisions, it’s a lot more of an emerging kind of law, isn’t it?
Nadia Harasymowycz: It definitely is. And the article briefly touches on the idea that consent is fluctuating at given times, particularly in the early stages of dementia or Alzheimer’s or when individuals are probably being placed in homes because they need assisted care.
David Smith: And of course what this dovetails with in our practice is all of the issues that we run into relating to well-meaning sons and daughters who worry about their parents who may now be alone because of the death of one or other of the parents. And a new relationship perhaps starting and questions arising to what extent an individual’s parent, let’s say as an example, is capable of consenting to sexual relations. But I guess the other issue as well is whether the sexual relations raise other issues of undue influence and the like which may be of concern to the children.
Nadia Harasymowycz: I certainly think it’s something that we’re going to see emerging in the next couple of years in estate litigation with respect to one, Wills changing or estate planning changing because parents are upset with their children for interfering in their personal lives but also with respect as you mentioned to undue influence claims where maybe an entire estate plan is changed, not because of the children but because of the new partner.
David Smith: Right, and of course, if there’s a relationship that is sexual in nature between two people who are not married it begs the question whether they will want to marry because of the nature of the relationship. And then we run into all of the questions that arise relating to capacity to enter into a marriage and so it leads into a nice discussion, although a difficult discussion, of the various types of capacity and the various thresholds. We know that the very basic level of capacity in this discussion is the capacity to marry. Beyond that, the capacity to make a Power of Attorney for Personal Care, followed by the capacity to make a Power of Attorney for Property. And then we make a pretty significant leap in terms of the complexity required to manage property and make a Will. And at each of those steps along the ladder of capacity, if you will, there’s a different test, isn’t there?
Nadia Harasymowycz: Absolutely. And I think it’s also a question in this specific instance of not just capacity in general but capacity at any given time because you may need a specific capacity to change your Will or to make a Power of Attorney but as mentioned, that capacity is not the same for sexual consent. And the sexual consent capacity would be at any given time.
David Smith: Right. I think in some ways it dovetails with a lot of the issues we run into when clients question the capacity of an aging parent to enter into a marriage with a new individual. And I think the most interesting element of this is as we discussed at the outset, the degree to which the sexual nature of the relationship may lead to allegations of coercion, not just with respect to the nature of the relations but also with respect to the entering into of a marriage, for example. Whether the individual was doing it freely of their own consent or was under some influence of one kind or another. And so all of these issues relate to…raise questions of what is the appropriate test of capacity in the circumstances.
Nadia Harasymowycz: I think it also brings up in addition to the capacity questions the issue of the duty of care required by the home care individuals and the article in Lawyers Weekly mentions that the CBA National Elder Law Section has addressed this by its former…its past chair in specifically with respect to the various laws surrounding elder care and nursing homes.
David Smith: Right. And so we run into issues that are of concern, not just to estates and trusts practitioners but to all the legal counsel who advise long-term care facilities with respect, I guess, to issues like occupier’s liability, tort liability and all of these other kinds of liability. And it’s a real overlapping. I mean our concern in our practice quite often relates to whether someone is being taken advantage of for the purposes of taking their money or in personal care situations, being taken advantage of or abused physically in a way that threatens their well-being. And we all know that the Substitute Decisions Act is there to govern this area of law. But as you intimated, it really ties into an overlapping of all kinds of issues that are of great concern I would think to people who own and operate long-term care facilities.
Nadia Harasymowycz: And certainly I think those issues are going to be rising in our field in the next couple of years and next couple of decades, certainly.
David Smith: Absolutely. So something to be attentive to and of course Lawyers Weekly is good at always focusing on these kinds of issues although I’ve seen in the mainstream media as well that these issues have popped up. Now at the outset we talked briefly about this issue of Gail Posner who was a millionaire who left a very significant estate to her pets. We should let our listeners know that this week, Kathryn Pilkington of our office is blogging on these issues as well so feel free to check out our blog for some ideas as to…or some further discussion on this issue. But in a nutshell, what’s the problem with leaving your estate to your pets?
Nadia Harasymowycz: Well basically your pet has no controls, not a legal person. They can’t really do anything on their own. So the majority of the time, when you leave an asset or money to a pet it has to be in a trust for that animal. And there are questions of capacity again that get raised if you’re an individual leaving millions and millions of dollars to an animal but nothing to humans, which is essentially what happened in Ms. Posner’s case.
David Smith: Right, although I think a lot of dog owners might take offence to the idea that devotion to an animal is somehow a sign of mental incapacity. And I thought that was, you know, a sort of slippery edge of the slope there if it’s gonna be suggested that that’s a basis upon which to challenge things. I mean people are entitled in their Wills to do what they want. I mean freedom of testamentary disposition is such that it’s your amassed wealth. You should be able to do with it what you will without society necessarily judging you, although we do know about public policy cases where you cannot exclude a beneficiary if the basis for the exclusion offends human rights legislation, for example. So I guess, in a way, it’s that kind of issue.
Nadia Harasymowycz: Absolutely. I think all that this brings to the forefront is not that you can’t do it or that you shouldn’t do it, but if you want to do it, you have to be careful about it and make sure that it’s done properly.
David Smith: Right, and you know, you can’t help with these cases but always think the opposite. And what I mean by that is, and maybe it’s because I don’t own a dog but I mean I think generally when one hears about someone leaving such a large sum of money to a pet to the detriment of a biological firstborn child, you can’t help but think that the motive to benefit the pet isn’t so much a love for the pet as a way of trying to cause upset or really get under the skin, if you will, of someone who would otherwise expect to receive your estate.
Nadia Harasymowycz: Right. In this instance, it didn’t look like Ms. Posner had a particularly good relationship with her son and her only child actually and she did leave some funds to other individuals who were important in her life. So that may not have played a role here.
David Smith: Right. And so it’s like all these cases, right? They’re dependent to a large extent on the facts and interesting balancing of the right of testamentary, freedom of testamentary disposition against capacity issues. I don’t think undue influence was a factor here though.
Nadia Harasymowycz: Unlikely.
David Smith: Yeah. Okay, well look, that would bring an end to our podcast for today and it was a lot of fun blogging on the dog issue. And of course the more serious issue was one which, you know, we need to all be sensitive to because of the aging demographic. These are issues we’re going to run into. So thank you for taking the time to listen to our podcast. It was a pleasure, Nadia, and I look forward to podcasting with you again soon.
Nadia Harasymowycz: Absolutely. And we look forward to hearing from our listeners. You can send us an e-mail at hull.lawyers@gmail.com. Be sure to visit our blog at estatelaw.hullandhull.com where you’ll find even more information on today’s discussion and today’s practice of estate law. We hope you enjoyed the show. I’m Nadia Harasymowycz.
David Smith: And I’m David Smith. Until next week, so long.
This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.
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