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

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On Tuesday of this week, I blogged on s.35.1 of the Substitute Decisions Act.  This section of the Act provides that a guardian of property for an incapable person has an obligation to preserve property that is subject to a specific legacy in the incapable person's Will unless that property must be used to fund the needs of the incapable person.  As I noted, litigation can ensue on the death of the incapable person if a disappointed beneficiary is not in receipt of his or her legacy.  The disappointed beneficiary must demonstrate that the guardian knew or ought to have known the contents of the incapable person's Will.  While the Act itself  provides an imperative in this regard, it is not at all clear what other evidence would be admissible.  Specifically, the notes and records of the solicitor who drew the incapable person's Will may shed some light on whether the guardian knew of the contents of the Will.  The question, of course, is whether such solicitor's notes are privileged.

In a conventional will challenge, little thought is given to the potentially sticky issue of privilege.  Indeed, solicitor's notes and records are produced as a matter of course when the validity of a Will is challenged.  But when the notes are sought, not to challenge the Will but, rather, to establish the knowledge of someone other than the testator as to the contents of the Will, it is not at all clear whether privilege would be waived by the Court.  

As a corollary to the entitlement of a beneficiary under a Will to make enquiry under s.35.1, a recent decision which Megan Connolly blogged on supports the obligation of a guardian (who is also an estate trustee) to account to such beneficiaries.

David M. Smith

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Listen to Direct and Indirect Approaches to Estate Planning - Part 1

This week on Hull on Estate and Succession Planning, Ian and Suzana start a discussion on their global philosophy toward the estate planning process. There are direct and indirect approaches to capacity and estate planning and in this episode, Ian and Suzana explore these approaches as they pertain to the choice of attorney.

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

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Section 35 of the Substitute Decisions Act ("Act") states that "a guardian of property shall not dispose of property that the guardian knows is subject to a specific testamentary gift in the incapable person's will."  And under s 33.1 of the Act, a guardian of property needs to make reasonable efforts to determine "whether the incapable person has a Will" and, if so, "what the provisions of the Will are."

Under the authority of these sections of the Act, a beneficiary of a specific testamentary gift can legitimately make enquiry into the actions of the guardian who, more often than not, is also the estate trustee under the Will.  Take, for instance, a demonstrative legacy of a bank account at a specific financial institution.  If the account is no longer in existence at the date of death, the legacy will usually be subject to ademption: the gift has failed because the account was closed before the date of death.  But what if the account was accessed by the guardian either: (i)  for his own purposes or (ii) for the care of the incapable person when there where other assets available to fund the care of the incapable person?  In such a situation, the beneficiary of the account under the Will may seek redress. 

To prove his or her case, the beneficiary will seek an accounting from the guardian in order to ascertain to what extent his or her beneficial entitlement was wrongfully encroached upon in breach of the Act.  Given the imperative under s. 33.1 of the Act, it questionable whether the guardian/estate trustee could ever  successfully argue ignorance of the terms of the Will as a defence to such claim.

 David M. Smith

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Listen to:

The Interrelationship Between a Guardian of Property and a Trustee Under a Testamentary Trust

This week on Hull on Estates, Rick Bickhram and David M. Smith discuss the complications that can arise when an incapable person is both the subject of a guardianship order and the beneficiary of a testamentary trust.

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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Listen to Testamentary Capacity Issues

This week on Hull on Estates, Paul Trudelle and Natalia Angelini discuss testamentary capacity issues as they arise in estate matters. Wills require the highest level of capacity and testators need to demonstrate that they are of a sound and disposing mind.

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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Pursuant to Section 3 of the Substitute Decision Act, the court may direct the PGT to arrange for legal representation for a person whose capacity is in issue in a proceeding under the SDA. The SDA further states that the person so represented shall be deemed to have capacity to retain and instruct counsel. However, section 3 counsel’s position and role remains somewhat murky. In Banton v. Banton, the court considered the import of an incapable person being deemed capable to retain and instruct counsel. 

The court recognized that the position of section 3 counsel is “potentially one of considerable difficulty”. However, the court did not believe that section 3 counsel was in the position of a litigation guardian with authority to make decisions in the incapable person’s interest. According to the court, counsel must take instructions from his/her client and “must not act if satisfied that capacity to give instructions is lacking”. A very high degree of professionalism may be required in borderline cases where it is possible the incapable person’s wishes may be in conflict with his/her best interests and counsel’s duty to the court. The phrase offers precious little guidance to section 3 counsel, but does sound a cautionary note. In the circumstances, perhaps the best advice is for section 3 counsel to fully explain the situation to the court and ask the court’s advice and direction. 

Finally, as an aside, the Ontario Government has now introduced legislation that would allow people to apologize with impunity. In other words, an apology will not be held against you in court. The hope is that “The Apology Act” will go a long way to defusing a contentious situation before litigation results. Sorry may, in fact, go a long way.

As always, thanks for reading.

Justin

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Pursuant to section 79 of the Substitute Decisions Act, the court has discretion to order a capacity assessment of an individual if the person’s capacity is an issue in a proceeding under the SDA. The court must also be satisfied that there are reasonable grounds to believe that the person is incapable. 

Where a capacity assessment has already been obtained, the court will be reluctant to order a further capacity assessment of an individual, unless the court has, for example, concerns about the lack of detail or objectivity within the assessment that has already been obtained. 

In Forgione v. Forgione, the court was concerned about the adequacy of the assessment carried out by a medical doctor. The court did not know what background information the doctor had or what, if any, influence anyone other than one family member may have had on the process. The report was very brief and consisted largely of conclusions without analysis. There were a number of facts and conflicting versions of facts which, in the court’s view, warranted further examination because they raised questions about the capacity and vulnerability of the incapable. A second assessment was ordered.