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 my blog yesterday, I mentioned that on April 27, 2011, I had the pleasure of presenting a paper at the LSUC’s Six Minute Estates Lawyer program. My topic was Conflicts involving the Role of Estate Trustee and Estate Solicitor. While my paper dealt with the lawyer who acts as estate trustee and estate solicitor, the case of Bott v. Macaulay, [2005] O.J. No. 3493, 76 O.R. (3d) 422, was of interest as it is also instructive on the manner of compensating an estate trustee and the estate trustee’s solicitor.

In Bott, a solicitor assisted an executor with his duties as estate trustee.  The solicitor ultimately sent two invoices, the first for his services as estate solicitor (for legal work), and the second charging a value amounting to five percent of the value of the estate, plus GST for services on behalf of the executor (even though the solicitor was not the executor).  The solicitor wished to have the second account addressed on a passing of accounts.

The Judge held that the estate trustee, and not the estate, was the solicitor's client and was personally liable to the solicitor.  The Judge further held that should the estate trustee wish to challenge the solicitor's legal fees, the proper avenue was through an assessment procedure pursuant to the Solicitor's Act, except in the case where the beneficiaries have called into question the reasonableness of the accounts as an expense of the estate trustee on a passing of accounts, or unless the estate trustee desires an order approving the right to an indemnity or reimbursement. 

These principles also were said to apply in cases where solicitors perform executor's work. In such instances, the estate trustee cannot claim compensation for that work done; compensation will be reduced accordingly.  Ultimately, the Judge held that the solicitor in the Bott case was not permitted to charge a fee amounting to compensation that might be awarded to the estate trustee (the 5% approach by the solicitor was disapproved) and that any amount to be awarded as a fee for the services intended to be covered by the second invoice must be determined on a quantum meruit basis. Even if there had been an agreement as between the estate trustee and estate solicitor regarding the payment of services rendered in such a manner, which there was not, such an agreement would bind only the estate trustee and not the “estate” or the beneficiaries.

Thanks for reading this week.

Craig R. Vander Zee - Click here for more information on Craig Vander Zee. 

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Yesterday I had the pleasure of attending and presenting at the Law Society of Upper Canada’s Six Minute Estates Lawyer Program. 

The Program was the morning in length and was Chaired by Hilary Laidlaw and Timothy Youdan. 

The papers provided, together with the presentations, were very informative and intriguing. The topics included an update on Family Law Act Amendments, Predatory Marriages, a Charities Update, Trust Residence Post-Garron, Inter-vivos Trust Audits, Pet Trusts, Common Issues for Applications on Certificates for Appointment, Administration of Multiple Wills, US Estate Tax Update, Estates and Trusts Hotspots, CPD Requirements, Cy-pres - Section 13 Orders and when to Serve the OPGT, Life Insurance and RSP Beneficiary Designations for Minor Children, Habeas Corpus and the Substitute Decisions Act, Evolution of Orders Appointing Estate Trustee During Litigation, Increasing the Odds of a Successful Mediation, Estates and Privilege, Costs and Impact of Proportionality Considerations, and Conflicts Involving the Role of Estate Trustee and Estate Solicitor. If you are interested in these materials, I understand that they can be ordered from the Law Society of Upper Canada.

The Ontario Bar Association (OBA) also has two half day programs coming up on May 10, 2011. One half day program (from 9:00 a.m. to noon) is entitled “Will and Estate Planning Essentials”, while the other half day program (1:00 p.m. to 5:00 p.m.) is entitled “Beyond Will and Estate Planning Essentials”. The first program is being Chaired by Susannah Roth, while the second program is being Chaired by Joanna Ringrose and Edward Olkovich.

If you are interested in attending the upcoming OBA programs, please contact Blossom Pangowish, OBA Sections Co-ordinator, at (416) 869-1047, ext 399, or by email at blossom@oba.org.

Thanks for reading,

Craig R. Vander Zee - Click here for more information on Craig Vander Zee.

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The Ontario Bar Association (OBA), Trusts and Estates Section, year end dinner is taking place on Tuesday, May 31, 2011 at the Archeo (Distillery District), 55 Mill Street, Building 45, Toronto. The Reception begins at 5:30 p.m. with Dinner at 6:30 p.m. As Chair of the Section, I will have the pleasure of bringing the past year to a close. As well, the Section Executive for 2011/2012 year will be announced. The Section will also pay tribute to this year’s recipient of the OBA Award for Excellence in Trusts and Estates, Mary MacGregor.

The Award for Excellence was created to recognize exceptional contributions and achievements by members of the OBA to the area of trusts and estates.

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The Ontario Government’s recent Bill 173 (the Budget Bill) deals with, amongst many other things, proposed amendments to Estate Administration Tax Act, 1998 (Schedule 14).

Estate Administration Tax is applied to the value of an estate when the estate’s representative applies to the court for a certificate of appointment of estate trustee (often referred to as probate). Currently, court staff of the Ministry of the Attorney General administer the tax. Bill 173 proposes amendments to the Estate Administration Tax Act to enhance, it has been said, compliance by integrating the administration of this tax with audit and verification functions at the Ministry of Revenue, starting January 1, 2013.

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Each year the Sections of the Ontario Bar Association (“OBA”) elect an Executive for the Section year beginning July 1, from the membership of that Section. The term of office for each position on the Section Executive is one year. Only Section members in good standing are eligible to stand for election. 

The Section Executive shall have no more than 24 members including the Past Chair position (which is not an elected position). 

The nomination deadline for the OBA Trusts and Estates Section Executive is April 29, 2011. 

If you are interested in joining the Section Executive for the OBA Trusts and Estates Section, you must complete the required nomination form. A short C.V. is to be included if this is the first time you are running for election to the Section Executive. Nomination forms are to be returned by fax or mail no later than April 29, 2011 at 5:00 p.m. to: 

Blossom Pangowish
Ontario Bar Association
20 Toronto Street, Suite 300
Toronto, Ontario M5C 2B8
Tel: (416) 869-0513 or 1-800-668-8900 Ext. 399
Fax: (416) 869-1390

The Section Executive nomination form sets out the positions that are available on the Section Executive. The responsibilities of each position are also available with the nomination form. Inquiries regarding the nomination for can also be made to Ms. Pangowish.

Thanks for reading.

Craig R. Vander Zee - Click here for more information on Craig Vander Zee. 

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Yesterday we discussed Modonese v. Delac Estate, 2011 BCSC 82 (CanLII), which considered when there is a presumption of undue influence and the factors that tend to rebut that presumption. 

One important factor is the presence of independent legal advice. But what are the considerations that come into play in assessing the kind of legal advice required to rebut the presumption? 

The function of independent legal advice is to remove a taint that, if not removed, might invalidate a transaction. There are two types of independent legal advice (See Cope v. Hill, 2005 ABQB 625):

a)      Advice as to understanding and voluntariness; and

b)      Advice as to the merits of a transaction.

Some of the factors to be considered in determining whether legal advice given to the granting party is sufficient to rebut the presumption include:

a)      Whether the person benefiting is present at the time the advice is given and/or at the time the documents are executed;

b)      Whether the lawyer was engaged by and took instructions from the person alleged to be exercising the influence;

c)      Where the proposed transaction involves the transfer of all or substantially all of a person's assets, whether the lawyer was aware of that fact and discussed the financial implications with the grantor;

d)      Whether the lawyer enquired as to whether the donor discussed the proposed transaction with other family members who might otherwise have benefited if the transaction did not take place; and

e)      Whether the solicitor discussed with the grantor other options whereby she could achieve her objective with less risk to her.

Ultimately, the adequacy of independent legal advice will always be a situation-specific inquiry and so it is important to consider all the surrounding circumstances in relation to one another.

Sharon Davis - Click here for more information on Sharon Davis. 

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In Modonese v. Delac Estate, 2011 BCSC 82 (CanLII) the deceased left her property to her two children equally in her Will but the bulk of her estate consisted of her house, which was transferred into joint tenancy with her son. The son and his wife and children had always lived with the mother in her home except for a 3-year period after an episode of violence by the son against the deceased. At the end of the day, the son was not a credible witness and the Court accepted evidence that the deceased intended her estate to be shared equally between her son and her daughter. 

Mondonese v. Delac Estate contains some useful discussion (below) regarding the “principled approach” to admissibility of hearsay evidence and the factors to be considered in determining whether there was undue influence. 

To be admissible, hearsay evidence must be:

a)      Necessary – the only available means of putting that evidence before the Court; and

b)      Reliable – there is no real concern about the truth of the statement because of the circumstances in which it was made and it can be sufficiently tested by means other than cross examination.

The two instances where the question of undue influence arises are:

a)       Where the gift was the result of influence expressly used by the donee for the purpose; and

b)       Where the relations between the donor and donee around the time of the gift were such as to raise a presumption that the donee had influence over the donor.

To rebut the presumption of undue influence, the defendant must show that the donor gave the gift as a result of her own "full, free and informed thought" in that:

a)      No actual influence was used or there was no opportunity to influence the donor;

b)      The donor had independent legal advice or the opportunity to obtain it;

c)      The donor had the ability to resist any such influence; and

d)      The donor knew and appreciated what she was doing.

Other relevant factors include undue delay in prosecuting the claim, acquiescence or confirmation by the deceased, and the magnitude of the benefit or disadvantage.

Sharon Davis - Click here for more information on Sharon Davis. 

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Listen to: Obtaining an Accounting

This week on Hull on Estates, Paul Trudelle and Nadia Harasymowycz discuss how an individual can seek an accounting. Specifically, they refer to the case Ekelshot-Kumelj, et al v. Bradley.

If you have any questions or comments, send us an email at hull.lawyers@gmail.com or leave a comment on our blog.

Paul E. Trudelle - Click here for more information on Paul Trudelle.

Nadia M. Harasymowycz - Click here for more information on Nadia Harasymowycz.

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Yesterday we looked at situations where a person is missing and there is a need to manage their property in their absence. But what if the absentee never returns? In such circumstances, an “interested person” may make an application to the Court pursuant to the Declarations of Death Act, 2002, S.O. 2002, c. 14. An interested person is any person who is or would be affected by an order declaring that an individual is dead.

The Court may make an order declaring that an individual has died if the Court is satisfied that the person has disappeared in circumstances of peril or has been absent for at least seven years. 

The applicant must show that:

a)      he or she has not heard of or from the person since their disappearance in circumstances of peril or within the 7-year period;

b)      to his or her knowledge, after making reasonable inquiries, no other person has heard from the individual;

c)      there is no reason to believe that the person is alive; and

d)      there is sufficient evidence to find that the person is dead 

The date of death will be the date upon which the evidence suggests the person has died or the date of the application, if based on a 7-year absence.

A declaration of death is not an easy one to obtain. It will apply for all purposes unless specified otherwise by the Court in the Order. 

A recent case that is helpful in considering what constitutes “sufficient evidence” for a declaration of death isRe Mezo, 2010 ONSC 4968 (CanLII). In Re Mezo, the missing person had been admitted to the hospital for psychiatric difficulties. She left the hospital on a day pass and had not been heard from for 10 years by family or friends. The Court declared her dead pursuant to subsections 2(3) and 2(5) of the Declarations of Death Act. The Court found that, on a balance of probabilities, there was sufficient evidence to find that the missing person was dead because:

a)      she left the hospital leaving important pieces of identification behind;

b)      she had not accessed her bank account or other financial assets since her disappearance;

c)      she never returned to her apartment or retrieved her car; and

d)      she had absolutely no contact with members of her family who obviously cared about her safety and whereabouts.

Sharon Davis - Click here for more information on Sharon Davis. 

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We sometimes hear reports in the news of people going missing. In such circumstances, what happens to their property? One option is for someone to apply to be a committee so that they may have the authority manage the missing person’s property in their absence. 

Pursuant to section 1 of the Absentees Act, R.S.O. 1990, c. A.3, an absentee is a person who, having had his or her usual place of residence or domicile in Ontario, has disappeared, whose whereabouts are unknown and as to whom there is no knowledge as to whether he or she is alive or dead. 

An application may be made by pretty much anyone pursuant to section 2(2):

a)      the Attorney General;

b)      any one or more of the next of kin of the alleged absentee;

c)      the person to whom the alleged absentee is married;

d)      the person with whom the alleged absentee was living in a conjugal relationship outside marriage immediately before the absentee’s disappearance;

e)      a creditor; or

f)        any other person.

Pursuant to section 2(1), the Ontario Superior Court of Justice may declare a person to be an absentee if it is shown that “due and satisfactory inquiry” has been made into their disappearance.

In the case of Kamboj v. Kamboj, 207 CanLII 14932 (ON S.C.) Justice Quinn provides an informative and instructive discussion of what is required to find a person an absentee under the Act. Here are some of the factors to be considered with respect to whether satisfactory inquiry has been made:

a)      Are the applicants the only close relatives of the alleged absentee?

b)      Does the alleged absentee have other relatives or friends in Ontario or elsewhere and, if so, do they have relevant information?

c)      Have inquiries been made at establishments that the alleged absentee frequented?

d)      Have inquiries been made at any clubs, religious, community or social organizations to which the alleged absentee belonged?

e)      Have inquiries been made with the alleged absentee’s family doctor?

f)        Has a notice been published in a local newspaper, containing the alleged absentee’s picture and soliciting information in respect of their whereabouts? Did the disappearance attract media attention?

g)      Did the alleged absentee have a will?

h)      Did the alleged absentee have any creditors? If so, do they have relevant information?

If satisfactory inquiry has been made and the missing person is declared to be an absentee, a committee will be appointed. The committee will have to submit a management plan setting out how they propose to manage the absentee’s property.

If the Court is later satisfied that the person has ceased to be an absentee, it may make a declaration to that effect and set aside the order declaring the person an absentee for all purposes, except for things done in respect of the absentee’s estate while such order was in force.

Sharon Davis - Click here for more information on Sharon Davis.

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Last Friday, the Ontario Court of Appeal released a decision on the question of whether victims, their family or their estate of crimes committed by police can sue the Special Investigations Unit (SIU).

In Wellington v. Ontario, 2011 ONCA 274 (CanLII), the court considered a claim brought by the deceased’s mother, sister and the deceased’s estate. They alleged, inter alia, that the SIU was negligent in its investigation of the police officers involved in the death of the deceased, and as a result, they claimed general and punitive damages on the grounds that the SIU’s alleged failure to conduct a competent investigation compounded the respondents' grief and distress, deprived them of the right to have a reasonable understanding of the deceased’s death, compromised their participation in the coroner’s inquest, and lessened their opportunity to recover damages in a civil action against the two officers.

The SIU brought a motion to dismiss the claim as disclosing no cause of action. The Judge below dismissed the motion, and the SIU appealed.

On appeal, the Court of Appeal agreed that the Statement of Claim did not disclose a cause of action. The Court held that there is no private law duty of care owed to victims of crime, their families or their estate by the SIU. The Court confirmed that investigations and prosecutions are matters of public law and public interest, and do not give rise to a duty of care in these circumstances. The Court considered the extension of a duty of care to the SIU. The Court found that there was nothing in the legislation that established the SIU, or any policy reason, to extend a private duty of care to the SIU. In fact, there were policy reasons not to extend such a duty.

Having so found, the Court went on to add that this conclusion should not be read as minimizing the legitimate concerns of victims and their families for a thorough and effective investigation, or excluding their participation in the legal process where appropriate.

The Court recognized that refusing to extend a duty of care to police investigations does not leave victims, families [or their estates] without appropriate or viable legal recourse.

Thank you for reading.

Paul E. Trudelle - Click here for more information on Paul Trudelle.

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Yesterday, 190 years after his death, John Horwood was to finally receive a proper burial.

According to an article in the UK Metro (and also as reported on the SWNS.com website), Mr. Horwood was executed in New Bristol in 1821, after being found guilty of the murder of his erstwhile girlfriend. Apparently, he saw her walking with another boy, became enraged, and threw a pebble at her. The girlfriend subsequently died after the wound became infected.

Following his execution, his parents sought the release of the body for burial. However, inexplicably, the body was seized by a local surgeon who performed a public dissection on the body and, are you ready for this, turned his skin into a book cover. The skeleton was kept at the doctor’s home for a number of years, and was ultimately given to the Bristol University, where it remained suspended in a cupboard, with the original noose around its neck.

A relative of Mr. Horwood tracked the remains down, and after proving a familial relationship, was declared the legal owner of the skeleton.

The burial was scheduled for April 13, 2011 in Hanham, England.

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I recently came across an excellent Government of Ontario website, maintained by the Ministry of the Attorney General, that provides reference to general information relating to estate planning and estate-related topics. 

Formatted as a series of questions and answers, the web page covers such topics as wills, estates, trusts, the probate application process, distribution of estates, the role of the Office of the Children’s Lawyer and the Public Guardian and Trustee, powers of attorney, dealing with incapable family members, finding a lawyer, and general court information. 

The site is a great first introduction to these topics, and a good, basic primer of estate-related topics, with links to other government information. Using simple language, the site simplifies the terms and processes for those dealing with these issues for the first time.

Thank you for reading.

Paul E. Trudelle - Click here for more information on Paul Trudelle.

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Listen to: Estate Planning for New Lawyers

This week on Hull on Estates Natalia Angelini and Sarah Halsted discuss the paper "How to Draft a Will - Minimizing the Risk of Liability to You" by Corina S. Weigl.  More specifically, they discuss tips for estate planning such as; how to take instructions, how to draft a will, how to see that it is duly executed and lastly, the importance of reporting to your client once the will has been executed with a final reporting letter.

If you have any questions or comments, send us an email at hull.lawyers@gmail.com or leave a comment on our blog.

Natalia R. Angelini - Click here for more information on Natalia Angelini.

Sarah Halsted - Click here for more information on Sarah Halsted.

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A Certificate of Appointment as Estate Trustee without a Will can be issued under s. 29(1) of the Estates Act to the person to whom the deceased was married immediately before death; the person with whom the deceased was living in a conjugal relationship outside of marriage immediately before death; the next of kin of the deceased, or a combination of the above.

Often, there are competing claims for a Certificate of Appointment by different individuals who may be entitled the Certificate. 

The question of how this issue of competing claims is properly brought before the Court was considered in Gardiner v. Whetung, 2009 CanLII 70510 (Ont. S.C.), a decision of Quinn J.

There, a purported spouse applied for a Certificate of Appointment. The deceased’s mother objected by filing a Notice of Objection. The mother also brought an application under Rule 14.05 of the Rules of Civil Procedure, seeking an Order appointing her as Estate Trustee.

 The purported spouse brought a motion to dismiss the mother’s application. She argued that the mother did not have a “financial interest” in the estate, and thus, could not object to the application brought by the purported spouse.

Quinn J. held that while the mother did not, in fact, have a financial interest in the estate, and thus could not file a notice of objection, she could properly bring an application to be appointed estate trustee. S. 29 of the Estates Act sets out who can apply, and a financial interest in the estate is not a prerequisite to such an application.

Quinn J. considered the legislation and the Rules and found that the Rules do not clearly set out how competing claims should be brought or decided. An Order for Assistance is not appropriate, as, there too, a financial interest in the estate is a prerequisite. 

Quinn J. concluded that the mother could have submitted her own application for a Certificate. However, this would simply mean that the registrar would have two applications, and the matter would have to be brought before a judge.

The better approach, Quinn J. observed, was to issue a Notice of Application for opinion, advice and directions of the court under Rule 14.05(a).

Thank you for reading.

Paul Trudelle

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Often, beneficiaries of an estate allege that the deceased had a large sum of money kept in cash in his or her house. Upon death, it often turns out that this money is not to be found. Suspicions are immediately raised, and the allegations fly. 

Courts have a difficult time in dealing with these types of claims. The burden is on those alleging the existence of the “money under the mattress”. That burden is on a balance of probabilities. However, to meet that burden, those alleging the existence of the money will have to lead substantial, convincing evidence. Those denying the allegation have the difficult time of trying to proving the negative.

Such a claim was considered in Barrick v. Lilliste, 2011 ONSC 1847 (CanLII). There, the deceased died at the age of 102, leaving 4 children. The court heard that the deceased was “distrustful” of banks. Following the deceased’s death, approximately $96,000 was found in a sock in the deceased’s home: a sock described as “sooty, grey, dirty and about one-and-a-half feet long with a knot closing it”.

However, three of the four children alleged that there was more; that the deceased had a box in his house that contained $210,000 or $230,000. The fourth child denied this.

The trial judge carefully weighed the evidence of all of the witnesses; and raised a number of questions about the credibility of the claim of the existence of the box. He queried, amongst other things, whether the deceased could have amassed such a fortune based on his known income and expenses; and whether, in any event, $210,000 could possibly fit into a box that was, at various points, described as a cardboard box, a shoe box, a wood box, a metal box or a “Watkins” box.

In the end, the trial judge found that he could not, on the evidence, find that the deceased had a box containing $210,000 in his bedroom, and consequently, could not find that the one child had wrongfully taken the money.

However, as the judge noted in the opening paragraphs of his decision, there will never be any happy resolution to the issue.  “[The deceased’s] once happy family is torn asunder by the very thing he did not care about – money – or perhaps the very thing he cared to much about to protect his children from their fate of being siblings squabbling over money he may have had”.

Thank you for reading.

Paul E. Trudelle - Click here for more information on Paul Trudelle.

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At issue in the recent B.C.C.A. case of Fuller v. Fuller Estate was the deceased's gratuitous transfer of an undivided one-half joint interest in real property to a long-time friend five months before his death.  

Because the transfer into joint ownership was gratuitous, the presumption of resulting trust was engaged.  As set out in Pecore v. Pecore, the trial judge could only rely on the presumption of resulting trust if consideration of all of the evidence was insufficient to establish the deceased's actual intent at the time of the transfer.

The Court of Appeal reversed the trial judge's finding that the surviving joint owner held the property on a resulting trust for the estate of the deceased.  Simply put, the finding that the transfer was made for “estate planning” purposes did not, on its own, invoke the presumption of resulting trust: "a gratuitous transfer to avoid probate fees or to make the transfer of property easier by way of an inter vivos gift does not detract from a transferor’s intention to give the right of survivorship."

Moreover, the evidence of the deceased's control over and management of the property until his death was found to be inadequate to support the trial judge’s inference that a gift was therefore not intended. The Court of Appeal's decision on this point is of particular interest:  

"The real property in this case did not have the same fluidity or the same management requirements as the joint bank account in Pecore. Therefore, it was less susceptible to the spectrum of inferences than might be drawn as to the intent of a transferor of a joint interest in a bank account. While the value of Lot 17 may have changed over time, its physical attributes did not."

David M. Smith - Click here for more information on David Smith.

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A Codicil amends an existing Will.  Although the Codicil is a separate document it is clearly tied to the Will which it amends.  Codicils are sometimes seen to be the preferred choice if a client attends at a lawyer's office to change the executor named in the Will but leave the balance of the Will unchanged.

Apparently, the whole concept of a Codicil arose as a time saving exercise given the expectations that legal documents were historically completed in original ink in the same hand.  Some on line commentators have noted that the rationale for a Codicil in places of a Will ceases to exist given word-processing technology

An interesting on line discussion of this issue among legal professionals came to my attention yesterday. The issue being discussed was when or whether it was advisable to draft a Codicil.  I was interested to see that a significant majority of those involved in the discussion appeared to favour the drafting of a new Will over the making of a Codicil.  When the Will which the Codicil amended was not drawn by the same lawyer, there seemed to generally be an even greater reluctance to draw a Codicil.

David M. Smith - Click here for more information on David Smith.

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In Chanowski v. Bauer, the Manitoba Court of Appeal recently revisited the recurring dilemma posed when the uncompromising law of insurance beneficiary designations runs up against facts that may seem to call for an equitable remedy.

The deceased had a group life insurance policy in the amount of $55,000, which he held through his employer.  When he lived with his first common-law wife (on and off for a period of four years), he executed documents listing her as his beneficiary.  However, at the time of his death, he had a different common-law wife.  Notwithstanding these facts: (i) the deceased had not had any relations whatsoever with the first spouse for some thirteen years, (ii) the first spouse had remarried, and (iii) the deceased had held his house and all assets jointly with the second spouse with whom he had lived for ten years, the Trial Judge found that the first spouse nonetheless received the benefit of the deceased's group life insurance. The second spouse appealed this finding and lost on appeal.

The Appellant's counsel gamely tried every available argument but did not succeed.  The Court of Appeal "while having much sympathy" for the Appellant, determined that it was bound by Manitoba's statute (virtually identical to Ontario's) and found as follows:

"The documents which Ms Chanowski would have the court accept as evidence of a change of beneficiary do not provide the necessary clear and express intention to remove Ms Bauer and appoint Ms Chanowski as his beneficiary.  They merely speak to Mr. Miterek’s intention to increase the amount of his death benefits and to insure the life of his current common-law wife.  One may speculate that it is unusual for an individual to increase the death benefits for a former common-law spouse, but more is needed here than speculation to override a written designation (emphasis added).

David M. Smith - Click here for more information on David Smith.

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Estates practitioners generally consider beneficial entitlements to arise from the existence of a Trust.  But section 1(1) of the Ontario Business Corporations Act defines "beneficial interest” or “beneficial ownership” as "includ[ing] ownership through a trustee, legal representative, agent or other intermediary."  Note that the definition does not exclude other means by which a beneficial interest can be established.

In Paragon Development Corp v. Sonka Properties Inc., a decision recently reported in the Ontario Reports, the Ontario Court of Appeal clearly pronounced that the definition above is to be liberally construed.  In short, beneficial ownership in shares is not limited to ownership through a trustee. Rather, the case law has adopted an expansive interpretation. 

The Court applied the 2008 decision of the Ontario Superior Court in Fedel v. Tan.  In that case, the Court held that "the evidentiary record establishe[d] a contractual obligation upon Mr. Tan to give effect to Mr. Fedel’s claim to a shareholding interest in GPI and BVI/WW. Mr. Fedel acted upon, and relied upon, the oral agreement that he was to have an ownership interest in GPI and BVI/WW. He provided both financial consideration and services in reliance upon the agreement. Mr. Tan is in breach of his contractual obligation."

The idea that beneficial entitlements flow from contractual obligations appears in other cases considered under the OBCA.  For instance,  in Abdalla v. Skalin, the plaintiff alleged that he was a beneficial shareholder because, based on a contractual agreement for the purchase of shares, he had a reasonable expectation of becoming a registered shareholder.

David M. Smith - Click here for more information on David Smith.

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Blog subscribers are already familiar with the story of my daughter, my “Pirate Princess”, who was diagnosed last summer with a severe form of amblyopia; so severe in fact, that her brain was only exchanging messages with one of her eyes. Since her diagnosis, she has become a patient in the Ophthalmology Clinic at McMaster Children’s Hospital in Hamilton.

The McMaster Children’s Hospital (“Mac Kids”) Fundraising Council has launched a $1.3 million campaign to create the province’s largest centre of excellence for specialized pediatric eye care. I am proud to be Co-Chairing the Campaign for Pediatric Ophthalmology because of the extraordinary and utterly inspiring care my daughter receives at Mac Kids and because it will help save the sight and lives of countless children.

There are 8,000 visits to the existing eye clinic each year, although it was built decades ago for adult patients, and is equipped with aging and inadequate infrastructure. The benefits of a brand new, cutting edge Ophthalmology Unit specifically designed for treating children will be truly transformational.

As Co-Chair of this Campaign, I wish to express my sincerest thanks to Hull & Hull LLP. In yet another demonstration of their community-mindedness and generosity, the firm is among the first to step forward to support the McMaster Children’s Hospital Campaign for Pediatric Ophthalmology. In doing so, Hull & Hull LLP has seized the opportunity to ensure that children in the region have access to the best care by investing in McMaster Children’s Hospital. Hats off to you for your leadership, Hull & Hull LLP!

For more information about the Campaign for Pediatric Ophthalmology, or for information about how you can support Mac Kids, please contact Jennifer Laughton, VP Development, McMaster Children’s Hospital by email (jlaughton@HHSC.CA) or by phone at 905-521-2100 ext. 75977.

Jennifer Hartman
Guest Blogger
Member, McMaster Children’s Hospital Fundraising Council
Mac Kid Mom
 

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In the days prior to the evolution of the Internet, planning and administering an estate was relatively simple as the physical belongings of the deceased could be carefully sorted through, packaged, and divided according to the Deceased’s testamentary document or the applicable legislation.

In the days since the  Internet has become a common household tool, planning and administering an estate has not been so easy. In a study commissioned by Remember A Charity, The Dying in a Digital Age, it was discovered that four in five people own digital assets, but only nine per cent have considered how these will be distributed upon their death.

According to the study, the nation's digital music collection is worth an estimated £900 million alone.

Three quarters of those surveyed for the study indicated that their digital music and photo collections had strong sentimental value, while eight out of ten said their digital assets were financially valuable.

Rob Cope, director of Remember A Charity said: ''Bank accounts, music and photograph collections are increasingly stored online…meaning families will wave goodbye to a small fortune if details are not passed on.”

There is now an entire cyber existence that both the Deceased and Trustees need to turn their mind to when planning or administering an Estate. For instance, what will become of Facebook, Twitter, Flickr and PayPal accounts? One easy solution is to subscribe to a website called Legacy Locker. Legacy Locker was created in 2009 and it maintains a master list of user names and programs for online bank accounts, social networking sites and document repositories. 

In the digital era, it is important that we consider and make arrangements for how our digital assets will be distributed, and for estate planners, it may be just as important that you consider including in your questionnaire or checklist, a question that forces a client to turn their mind to consider their digital assets. 

Thank you for reading, and have a great weekend.

Rick Bickhram - Click here for more information on Rick Bickhram.