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 Arkansas blogosphere is abuzz over the colourful facts of Heirs of F.D. Goza, Jr., et al. v. Estate of William E. Potts, Deceased, a decision of the Arkansas Court of Appeals.  Relatives of the testator tried to propound a photocopy of his Last Will, arguing that he lacked testamentary capacity and was under insane delusions when he destroyed the original.  The Appelate Court affirmed the decision of the trial judge that the deceased validly revoked his Will and died intestate. 

The evidence of revocation was overwhelming: The testator wrote such phrases as “void”, "bastards" and "get nothing" over each paragraph, applied Liquid Paper over the names of the beneficiaries, and later shredded the document in front of his insurance agent.  The Court held that ”the evidence clearly showed that [the testator] was an irascible, angry, suspicious, controlling, profane, and difficult man for most of his adult life; however, we cannot say that the trial court erred in refusing to find that he labored under insane delusions.”

The remarkable aspect of this case is the fact that there was a credible and disinterested witness to the shredding of the original Will.  This fact certainly bolsters the presumption of destruction that exists in Ontario when the original Will can not be located on the death of a testator. 

David M. Smith

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

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The requirements of formal validity have, on occasion, bedeviled the Courts.  Presented with overwhelming evidence of testamentary intent, the Court's hands may nonetheless be tied by uncompromising legislative requirements.  

In Nova Scotia, the legislature proclaimed (on August 18, 2008) an amendment finally permitting the making of Holograph Wills.  Moreover, the amendment also permits Wills to be admitted to probate that do not meet the requirements of formal validity if the Court is satisfied that a flawed document nonetheless reflects the testamentary intentions of the testator. 

Lawyer's Weekly just reported on MacDonald v. MacDonald, a decision out of the Nova Scotia Supreme Court.  In this case, the testator made a Will entirely in her own handwriting but left it unsigned.  It was, however, witnessed and the two witnesses gave evidence that the testator had attested to it as her last Will in their presence.  The testamentary document before the Court in MacDonald therefore fell within both branches of the amendment to the provincial statute.  However, the Will was not admitted to probate because it was made prior to the proclamation of the amendment to the Wills Act.  Unlike Ontario's Succession Law Reform Act which provided for retroactivity to 1978, the Nova Scotia amendment did not have a similar clause.

David Morgan Smith

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Yesterday’s blog spoke to the issue of an Application for Psychiatric Assessment (Form 1) under the Mental Health Act R.S.O. 1990. To review, upon completion of the psychiatric assessment, the patient must either be released or admitted as an involuntary patient, a voluntary patient, or an informal patient.

• Involuntary Patient: Before you become an involuntary patient, a doctor must assess you and place you on a Form 3 (Certificate of Involuntary Admission), which lasts for two weeks. The Mental Health Act speaks very specifically to the legal criteria that must be met in order for such a Certificate to be completed. An involuntary patient is not permitted to leave the hospital or psychiatric facility.

• Voluntary Patient: There is no portion of the Mental Health Act that authorizes a psychiatric facility to detain a voluntary patient. In this regard, a voluntary patient can leave the facility at any time, as long as they do not pose a risk to themselves or others. If they were to be identified as posing a risk to themselves or others, then they must be made an involuntary patient (by means of a Form 3) in order to be detained.

• Informal Patient: An informal patient is either a child under the age of 16 years, or someone who is incapable of making treatment decisions for themselves (as defined by the Health Care Consent Act) and who therefore has been admitted to the facility under the consent of another person (i.e. ‘substitute decision-maker’; usually a concerned family member). The informal patient cannot be held against their will in the hospital, however, an informal patient can be made ‘involuntary’ if a doctor deems that a Form 3 is necessary.

Jennifer Hartman, Guest Blogger

 

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Under the Ontario Mental Health Act, a Form 1 refers to an Application by Physician for Psychiatric Assessment, or APA.  A Form 1 allows a doctor to hold a patient in a hospital or psychiatric facility for up to 72 hours in order to complete a psychiatric assessment.  In order to sign a Form 1, the doctor must have examined the patient within the 7 day period prior to the Form 1 being signed, after which the Form 1 expires.  In addition, the doctor must find that the patient meets one of two sets of criteria, depending on whether or not they are deemed capable of consenting to treatment in a psychiatric facility within the meaning of the Health Care Consent Act. 

The physician’s clinical opinion can, in consideration of what is appropriate in the circumstances, be based on their own observations, or in combination with facts communicated to the physician by others (e.g. family members, friends).

Once the Form 1 has been signed, anyone can bring (or force) the person into a psychiatric facility for assessment within the 7 day period before the Form 1 expires.  Upon completion of the psychiatric assessment, the patient must either be released, or admitted as an involuntary patient, a voluntary patient or an informal patient.  Tomorrow’s blog posting will explore these options in greater detail.

Jennifer Hartman, Guest Blogger

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Recently on our website, Bianca La Neve blogged on the uncertainty surrounding the U.S. Death Tax and Jennifer Hartman blogged on Nabokov's unfinished work "Laura" which the author had wanted destroyed but which his executor published anyway. 

One would be forgiven for thinking the two blogs could not possibly have anything to do with one another. 

But the recent death of J.D. Salinger, notoriously reclusive author of "Catcher in the Rye," has caused at least one commentator to consider the dilemma posed to the estate of a deceased author in the context of the legal uncertainty that Bianca recounted in her blog.  As Richard A. Behrendt, self-described "tax geek" observes (as quoted in Floyd Norris's blog posted on the New York Times website on January 29, 2010):

"Many have predicted that the representatives of the estate of someone who dies [during the period between January 1, 2010 and the date of implementation of any retroactive death tax] would mount a constitutional challenge to the retroactivity of the law.... Another unique issue [with respect to Salinger's estate] is valuation. Some reports have hinted that Salinger had anywhere from 2 to 15 unpublished novels in his safe. Not to suggest that there is an unpublished “Catcher in the Rye” lying around (which has sold 60 million copies), but the possibility raises some really interesting valuation questions, namely, how much is an unpublished Salinger novel worth for federal estate tax purposes?"

For another interesting consideration of Salinger's estate from an estate law perspective see this link.

David Morgan Smith

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I recently read an article composed by The Children’s Lawyer, Debra Stephens, named Minor Settlements: How to Ensure Court Approval. I found this article to be particularly helpful as the article speaks to the role of The Children’s Lawyer in litigious matters and explains the common issues that arise during settlements involving minors.

Fundamentally, it is important to understand the role of The Children’s Lawyer with respect to their involvement in settlements concerning minors, which Ms. Stephens describes as: “The Children’s Lawyer is not a party to the proceeding and is not in an adversarial role with any of the parties. Rather, The Children’s Lawyer acts as an advisor to the court, making recommendations to assist the judge in determining whether to approve the proposed settlement”.

In her article, Ms. Stephens talks about a few issues that commonly arise during settlements involving minors. One of those issues that Ms. Stephens touches on is legal fees. Ms. Stephens states that legal fees are an important factor in determining whether to approve a settlement on behalf of a minor. Factors that are relied on when considering the reasonableness of a solicitor’s account are set out in the Court of Appeal decision Cohen v. Kealey and Blaney and include:

1.                  time spent;

2.                  legal complexity;

3.                  degree of responsibility assumed by the lawyers;

4.                  monetary value of the matter in issue;

5.                  the importance of the matters to the client;

6.                  degree of skill of the lawyers, results achieved;

7.                  ability of the client to pay; and

8.                  expectation of the client with respect to the fee. 

Also, another factor not mentioned in the case above is ensuring that access to justice is obtained for parties under a disability. I found Ms. Stephens’ article to be particularly useful in my practice and I would certainly recommend it to any practitioner who ordinarily runs into issues involving The Children’s Lawyer.

Thank you for reading.

Rick Bickhram

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As most of us return to our offices from a long weekend, I would like to share with you an interesting case, which I read over the weekend and deals with an Application to declare a family member unworthy to inherit. S.R. (Succession de), 2008 QCCS 4015, is a decision released by the Quebec Superior Court.

In, S.R. (Succession de), the Deceased was survived by his spouse and four children.    The Deceased was a savvy businessman who, during his lifetime, was quite successful. In 1995, the Deceased asked a notary to prepare a Will. A draft Will was sent to the Deceased for his review but it appears that he never executed the Will. In 2000, the Deceased was diagnosed with cancer and subsequently died in 2003.

After the Deceased died, the children looked for their father’s Will in the home and at the Deceased’s office with no success. We are given to understand that all of the children, searched, under the bed, every closet, every brief case belonging to the Deceased, but were unable to recover a Will.   

One of the daughters prepared a proposal requesting the siblings to acknowledge that the Deceased promised to transfer a certain property to her. This would have the effect of increasing her entitlement under the Deceased’s estate. Her siblings refused to sign the acknowledgement, which led to the ensuing dispute. The disgruntled daughter, subsequently informed everyone that she had in fact, located a Will of the Deceased in an old briefcase, which was allegedly in the bedroom closet of the Deceased’s residence.

The discovered Will was similar to the draft Will prepared earlier, except that it included two additional provisions which favoured the disgruntled daughter, in the amount of $2.4 million dollars and was apparently executed by two witnesses from New York. 

The disgruntled daughter tried to probate this Will, but it was contested by her siblings and it was ultimately ruled that the Will could not be probated by the Honourable Justice Gagnon. Justice Gagnon held that there were all the sorts of question marks surrounding the validity and execution of the Will. 

After the Application for probate was refused, the disgruntled daughter then produced a document which was a blank cheque allegedly signed by the Deceased and which purported to give the disgruntled daughter her share in a building that she coveted and various other monies for her home. The siblings refused to admit the authenticity of the blank cheque and commenced proceedings against the disgruntled daughter to have her declared unworthy to inherit under the Deceased’s estate. 

Under the section 621 of the Civil Code of Quebec, it states that a person “may be declared unworthy of inheriting where a person is guilty of cruelty towards the deceased, and where the person has concealed, altered or destroyed in bad faith the Will of the deceased, or a person who has hindered the testator in the writing, amending or revoking of their Will.” 

In relying on this provision, the children advocated that the disgruntled should be precluded from inheriting because she concealed and altered, in bad faith the alleged Will of the Deceased. 

The court held that the disgruntled daughter had likely altered the Deceased’s Will, had taken the draft prepared by the notary and added some typewritten additions that benefited her to the detriment of her siblings and mother. The court further held that the disgruntled daughter likely had taken the blank cheque from the Deceased’s home and also forged that after his death.

Accordingly, the disgruntled daughter was declared unworthy to inherit and her claims against the estate were dismissed.

An interesting point, in Ontario we do not have any similar case law or legislation that would actually allow someone to commence a proceeding, seeking to have someone else precluded from receiving their entitlement absent criminal activity such as murder.

Have a great day,

Rick Bickhram

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On December 15, 2009, the Good Government Act, 2009 received royal assent. This statute amended or repealed over 300 pieces of legislation, ranging from the Accumulations Act to the Off-Road Vehicles Act. There are various amendments that should be of particular interest to those of us who practice estate, capacity and trust litigation.

The Crown Administration of Estates Act is amended by adding a new section 5.1, dealing with the enforceability of compensation agreements. A “compensation agreement” is defined to mean an agreement with an heir of an estate that provides for compensation, directly or indirectly, to one or more persons or entities on the location, recovery or distribution of any interest in the estate to which the heir may be entitled. In cases of estates administered by the Public Guardian and Trustee, there must be fair disclosure before a possible heir is asked to sign a compensation agreement. In addition, there is a cap on compensation of 10 per cent of the value of the possible heir’s interest in the estate. Click here for the complete text of the Act.

The Health Care Consent Act, 1996 is amended to increase the time allowed, from two days to four days, for the Consent and Capacity Board to issue written reasons for decisions. In addition, the Act is amended to allow the Board to direct Legal Aid Ontario (instead of the Public Guardian and Trustee or the Office of the Children’s Lawyer) to arrange for legal representation for a person who may be incapable with respect to a treatment, managing property, admission to a care facility or a personal assistance service. Click here for the complete text of this Act.

Bianca La Neve

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Testators choose their executors.  The choice of executor is commonly assumed to be a very personal choice predicated on trustworthiness.  But in the face of this assumption, can the beneficiaries of an estate ever agree amongst themselves to oust an executor in the absence of any recognized basis for removal?  A pending case in the U.K., as reported in The TimesOnline, addresses this question.

A firm named Will Drafters in the U.K. was named executor in the Will of a deceased.  The beneficiaries named in the Will are not happy with the compensation Will Drafters is entitled to under its contract with the testator.  The beneficiaries have brought this so-called "test case" to see if the Court will order the removal of the named executor based simply on the fact that all beneficiaries seek its removal in favour of another company, Final Duties, which will apparently charge a lesser rate of compensation.  Not surprisingly, Will Drafters takes the position that they contracted with the testator for their services at an agreed rate of compensation and ought not to be removed. Certainly there is no indication that there are any of the factors that give rise to the removal of an executor (in Ontario, this would proceed under s.37 of the Trustee Act)

Quite apart from the legal issue of when the Court ought to remove an executor, the case has sparked a debate respecting whether "will-writing companies" (as they are called in the U.K.) such as Will Drafters and Final Duties, ought to be regulated. As the Times notes: "The only will-writing association to offer accreditation — the Fellowship of Professional Willwriters and Probate Practitioners — says that its research shows that two thirds of people wrongly thought the willwriters they used were all trained solicitors. A recent report on regulation of legal services by Lord Hunt of the Wirral expressed concern about the “fringe legal market” in will-writing, probate and claims handling."

On a final note, to all who read yesterday's blog, please see this link for a revised version of that blog now posted in its place on our website

David M. Smith

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

 

 

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What follows is a revised edition of this morning's blog which inadvertently created confusion between the principles of Abatement and Ademption. I apologise for any confusion caused by the initial version.

On Monday, I blogged on the payment of debts of an estate and the steps that an estate trustee ought to take to protect him or herself from any personal liability.  Today's blog is a sequel of sorts (it would have been posted yesterday but a Groundhog Day tie-in was too good to resist).

The issue today is Ademption and Abatement, words that will only be found in a law dictionary.  Ademption occurs when a specific gift of personal or real property in a Will is no longer in existence at the date of death, in which case the gift fails.  If specific legacies of cash can be partially satisfied (as detailed below) from the funds remaining in the estate after payment of debts, then there is an Abatement of such legacies.

For greater clarity, where there are debts to be paid, the residuary beneficiaries take the hit first. If the debts can be paid and still leave something in the residue, than the specific cash legacies can be paid in full.  However, when the residue is exhausted by the payment of debts, and there is a shortfall between the amount remaining and the amount required to fully fund the specific cash legacies, the principle of abatement dictates that these legacies are reduced on a pro rata basis.

The situation gets considerably more complicated if an executor is faced with a cash poor estate and a Will that contains combinations of cash legacies, gifts of real estate, gifts of personal property, and gifts of personal bank accounts (sometimes called general or demonstrative legacies).  In such a case, good legal advice is critical.

David M. Smith

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It is a trite principle of estate administration that "debts must be paid before beneficiaries."  Assuming this maxim is followed, the estate trustee will not assume any personal responsibility for the debts of the deceased. On the other hand, if the estate trustee distributes the estate without due consideration to creditors' entitlements, the estate trustee may be left personally exposed unless the beneficiaries return their entitlement to the estate trustee to fund any unpaid debts.

To be fully relieved from personal liability, the estate trustee must make reasonable efforts to locate and satisfy the creditors of the deceased.  Advertising for creditors is therefore an essential step in protecting the estate trustee from liability and ensuring that the creditors of the deceased have had the opportunity to be paid. But the importance of the advertisement ought not to be overstated.  If an estate trustee can be proven to have had independent knowledge of a creditor who does not claim (for whatever reason) in response to the advertisement, and if the estate trustee distributes in the face of this knowledge, he or she could conceivably be personally responsible to such a creditor.

The bottom line is that the estate trustee, understandably focused on his or her fiduciary duty to the beneficiaries, stands in the shoes of the deceased and must give more than a passing regard to the creditors of the estate.

David M. Smith

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A recent article in the Financial Post, “Eight Tips for Feud-Free Estate Plans”, provides helpful advice on how to minimize family-infighting over one’s estate (or retirement) plan. 

The article is a must-read for anyone planning for the future as well as those who advise them. 

Here are a few of the tips that are offered:

1.      Give some thought to how you will fund future long term care

The idea of going to a retirement or care facility is something a lot of people don’t like to think about. However, this does not mean it will never happen – and if it does, the cost can be high. 

Longterm care insurance is offered by various companies and, for a relatively low premium, can provide the funding needed to pay for care costs when and if they arise.   

 

2.        If you own a vacation property, give special consideration to how it will be distributed on your death

 

Fights over a family cottage happen quite often and can easily result in lengthy and costly litigation. A frequent source of tension is when one sibling wants to keep the cottage in the family (“because that’s what mom would have wanted…”) while another sibling is happy to see it sold and to receive part of the proceeds. 

To avoid this it is worthwhile discussing with your children (if they are to be beneficiaries of your estate) what to do with the property before doing your will. 

 

3.      Make sure to keep your will up to date

 

You might be surprised how many people forget to change their wills when their circumstances change (for example, leaving gifts to three grandchildren, and neglecting to update the will when more grandchildren are born, leaving some out in the cold). 

Whenever your family structure changes (by birth, marriage, divorce, death) it would be worthwhile to contact the lawyer doing your will to see if revisions would be advisable. 

It is always suggested that you discuss your plans with those who will be affected – this is a good way to help avoid fighting down the road.

Have a great day!

Megan F. Connolly

Megan F. Connolly - Click here for more information on Megan Connolly.

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Huntington’s disease (HD) is a progressive, degenerative brain disorder that causes certain nerve cells in the brain to waste away. Huntington’s is inherited, and if one of your parents has Huntington’s disease, you would have a 50% chance of getting the gene for the disease. Everyone who carries the gene will develop the disease. Since the HD gene was isolated in 1993, one can be tested to see if they are a carrier, however because there is no cure for HD, some people choose not to be tested.

About 1 in 10,000 Canadians has HD.

There are two types of HD: i) adult-onset, the most common form, with symptom onset in the mid 30s and 40s; and ii) early onset, which accounts for about 16% of all HD cases, with symptoms developing in childhood or adolescence.

Huntington’s disease is associated with three types of symptoms:

· Movement symptoms, referred to as chorea, which consist of jerking, involuntary movements (‘tics’) of the limbs, trunk or face;
· Cognitive symptoms including a gradual impairment of concentration, memory, judgment, reasoning, decision-making and learning. This cognitive decline starts in a very subtle fashion, but eventually results in dementia; and
· Psychiatric symptoms may include depression, and psychotic behaviours such as delusions, hallucinations, paranoia and inappropriate outbursts.

HD usually runs its course in about 10 to 30 years, with a strong correlation between an earlier onset and a more rapid progression of the disease.

Jennifer Hartman, Guest Blogger
 

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I came across an article when thinking about blog topics for this week.   It appears that a recent Australian study from the Baker IDI Heart and Diabetes Institute in the state of Victoria concluded that watching television can increase risk of death.

The study, published in Circulation: Journal of the American Heart Association, followed the lifestyle habits of 8,800 adults who were age 25 or older at the commencement of the study. It was found that each hour spent in front of the TV daily increased the risk of dying earlier from cardiovascular disease, as well as creating a 9% higher risk of cancer related death.

 

Although the study focused on Television watching, it seems from the publication that the conclusions may be even more related to a sedentary lifestyle. While this may seem like a logical conclusion, this result is to be distinguished from any previous knowledge of the positive effects of a healthy active lifestyle. It appears that we now have evidence which assures us that spending time sitting, particularly in front of the television may cause additional harm to our bodies, even if we generally live an active lifestyle.

 

I can’t personally advocate on behalf of any of the articles to which I’ve referenced, but what I do know, is if there is any truth to the possibility that television viewing can shorten a life, it seems to be a pretty simple solution to get outside, enjoy the beautiful weekend forecast and go for a walk.

 

Have a nice weekend, thanks for reading,

Nadia

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

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Jimi Hendrix's family and Sony Commercial Music Group have collaborated and the result is a new album featuring Hendrix music.  Mark this day in your calendar as this album should hit the stores on March 9, 2010.

The Hendrix legacy is closely protected by Experience Hendrix LLC, a family run company, currently being run by Janie Hendrix, Jimi's sister.  She has indicated that the Estate 'had enough material for "a decade's worth" of new releases, both music and video.'  

The currently slated release will be titled "Valleys of Neptune", and will include never before heard recordings.  The music will mostly be taken from a four month studio session in 1969, a year before Hendrix died, at the young age of 27.

With his estate in possession of so much fresh artistic material, it looks like we may be able to look forward to many more Hendrix albums.  Shockingly, Hendrix may release more in death than in life.

Until Tomorrow,

Nadia

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Franz Kafka left a will instructing his friend, Max Brod, to burn his manuscripts and not to publish them.  However, Brod spent much of his life editing Kafka's work for publication, making Kafka's writings into very influential pieces of fiction.  However, Brod's life work, and his alleged actions are currently under scrutiny in Israeli courts.

It appears that certain Kafka manuscripts have fallen into the hands of two sisters who received them from their mother.   Their mother, Esther Hoffe, received them from Max Brod, some 20 - 30 years after Kafka's death.   The sisters allegedly sold some manuscripts for millions of dollars and shared the profits with their mother.   Others purportedly remain in a safety deposit box.

This matter is currently before Israeli courts and it appears that there is some debate about the manner in which the manuscripts were received.  It further appears that true ownership of the documents is being contested, and the courts have given the parties involved, including the State of Israel and the National Library, an opportunity to settle this matter out of court.  The settlement deadline expired last week.  If the parties have not yet reached a settlement, the courts have indicated that they will order the safety deposit box where the manuscripts are being held to be opened, potentially damaging the manuscripts and reducing their value.

The outcome of this litigation will surely be interesting from an Estate perspective, but also may provide us with several new literary works from a truly famous author.   Only time will tell if the world will be gifted with such new works. 

Until Tomorrow,

Nadia

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

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Although the name "Miep Gies" may not be familiar to you, she was a key player in a story you almost certainly know.  Miep Gies, together with four others, provided a hiding spot for Anne Frank and her family as well as 4 others during WWII.  This act would have been enough to make her a hero.  Mrs. Gies' role did not stop there: without her help there is a good chance the world would never have seen Anne Frank's diaries published.  Mrs. Gies discovered Anne's diaries and gave them to Anne's father at the end of the war, allowing for their eventual publication.  

I am sure that, for many, reading Anne's diary was a memorable experience.  It certainly was for me.  So much so, that when I visited Amsterdam I sought out the Anne Frank Museum to view the hiding place which Mrs. Gies and her fellow protectors risked their lives for to provide to the Frank family.   It was a truly humbling experience.

Mrs. Gies was the last survivor of both the protectors of Anne and her family.  She was the last living connection to the 'Anne Frank story'.  While she maintained that her actions did not make her a hero, I beg to differ.  Her courage and thoughtfulness will live on forever through Anne's story, and although her passing is a true loss, it allows us to remember and once again reflect on her heroism. 
 

Until tomorrow, Nadia

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

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Korsakoff’s syndrome is a brain disorder usually associated with chronic, excessive alcohol consumption. At the physiological level, Korsakoff’s is caused by a thiamine (vitamin B1) deficiency, which ultimately affects the brain and the central nervous system. In the context of alcoholism, this thiamine deficiency comes about as a result of poor diet as well as an impeded ability of the stomach lining to absorb vitamins.

Korsakoff’s predominantly affects men between the ages of 45 and 65. Women tend to develop the disease at an earlier age than men. According to the Alzheimer’s Society UK, it takes about 20 years for the disease to develop in men, whereas it takes about half that time to develop in women.

At first glance, one with Korsakoff’s syndrome may appear fairly normal. An in-depth assessment, however, would reveal symptoms including:

· Memory loss, particularly of events post-onset of the disease;
· Impaired ability to acquire new information;
· Lack of insight into the condition;
· Perseveration (repetitive comments or questions);
· Eye movement disorders; and
· Confabulation, or ‘falsification of memory’ in which the sufferer makes up events to cover up their inability to remember events.

Once Korsakoff’s develops, recovery is unlikely, however the progression of the disease can be halted with abstinence from alcohol. Treatment for Korsakoff’s is comprised of thiamine therapy, as well as the administration of medications usually given to people with Alzheimer’s disease.

Jennifer Hartman, Guest Blogger
 

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Each year the Ontario Bar Association (OBA), Trusts and Estates Section, considers candidates for its Award of Excellence. Last year, the Section paid tribute to Barry Corbin as the recipient.

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

Any Trusts and Estates Section member of the OBA in good standing, as well as former members of the section who have retired or been appointed to the bench, but not including current officers of the Executive of the Trusts and Estates Section or the Executive of the OBA, are eligible to be nominated.

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I think it’s fair to say that the Internet has severely disrupted the traditional value chains in regards to how we obtain our media content. The value of content, starting with music, movies, TV shows, news and most recently books are being redefined for the Internet age.

I recently read an article published by the BBC News Magazine entitled “Page-turning Passion”, which details the culture of book reading and particularly how we have obtained and received the content from books. 

In the 1640s, books were more than just a tool to obtain information. It was a “treasured personal possession, and object whose loss would be keenly felt. To their privileged owners they were coveted objects, symbols of conspicuous consumption to be displayed alongside paintings, sculpture and silverware”.

Over time, manuscripts were replaced with printed books. Noticeably, printed books lacked that unique quality that gave each manuscript its touch of art. After all, printed books were simply copies produced on the production line. I am a product of the printed book era and have thoroughly enjoyed reading. I reject the idea that some have asserted indicating that printed books are impersonal volumes. As a reader, we find creative ways to make them ours, by underlining and highlighting in these books. I can dog ear pages if I want to.  I can rip out pages.  I can draw pictures in them. 

Now we have entered into a new era, the e-book era. If you have not yet heard of the Kindle, it is Amazon’s wireless reading device. The Kindle also has applications for most smart phones, which makes downloading and reading even more convenient and, unlike the 1640s, the Kindle is simply a tool to obtain information. 

Rush, scuttle and hurry seems to be the ear marks of today’s society. As an urban commuter, rarely do we have the time or the space to pull a book out while crammed onto a subway. Now it is as simple as purchasing a book while on my way to the subway and doing all of the reading off of the smart phone while I am on the subway.

There will always be advocates against the growth and importance of technology, but as an urban resident and a commuter, if it weren't for phone reading, I wouldn't be reading at all.

Thank you for reading,

Rick Bickhram

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

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The Toronto Star recently reported on Alzheimer’s disease, stating that “cases of the mind-robbing disease will more than double to 1.25 million within 30 years as baby boomers age”. 

With the numbers pointing upward as the population grays, a recent report by the Alzheimer Society, entitled Rising Tide: The Impact of Dementia on Canadian Society suggests the following steps to help reduce the impact of dementia:

1.                  Prevention programs based on healthy diet and physical activity that can delay the onset of dementia by two years, with a potential cost saving of $219 billion over the 30-year period.

2.                  Enhanced skill-building and support programs for family caregivers, many of whom suffer financial hardship because they must leave jobs to look after a relative with dementia.

3.                  Assigning a case manager to each newly diagnosed dementia patient and their caregivers, which could help the person remain at home longer and lessen the strain on the long-term-care system.

Today, annual funding for Alzheimer’s is approximately $24 million. The Toronto Star reports that if “nothing changes, this sharp increase in the number of people living with dementia will mean that by 2038, the total costs associated with dementia will reach $153 billion a year”. 

We have already seen a substantial influx with respect to Will challenges, particularly because there has been a big question mark about the testator’s capacity. The grim realty is that this will be a continuing problem that Estate Solicitors are going to have to tackle.

Thank you for reading.

Rick Bickhram

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As we are in the beginning of a new year, a quote from one of my favourite poets, T.S. Eliot, comes to mind:  “For last year's words belong to last year's language and next year's words await another voice.”  

I recently came across an article entitled "The 8 Life Stages of Estate Planning", authored by G.M. Filisko.  In his article, Mr. Filisko points out the obvious - during our life we will go through different phases and our estate plans should reflect these changes. Mr. Filisko lists the following stages to consider regardless of the phase one may be currently in:

1.      Young, single and carefree
2.      Single, but committed
3.      We’re Engaged
4.      Just Married
5.      The Joys of Parenting
6.      Divorce (if unfortunately applicable)
7.      The Middle Ages
8.      The Golden Years

Regardless of where one may fall in this spectrum, it is never to late to get started.

Since making New Year’s resolutions seems to be the theme around this time of the year, let’s make a resolution to be more organized this year and spend some time considering our estate plans.

Thank you for reading.

Rick Bickhram

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

Continue Reading...

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After Alzheimer’s Disease, Lewy body Dementia (LBD) is one of the leading causes of dementia in the elderly, accounting for up to 20% of cases of dementia.

In Lewy body Dementia, abnormal protein structures called Lewy bodies develop in regions of the brain responsible for thinking and movement. These Lewy bodies were first described in 1912 by Friederich Lewy, a colleague of Alois Alzheimer.

LBD symptoms closely resemble those of both Alzheimer’s disease and Parkinson’s disease. The Alzheimer’s-like symptoms of LBD include fluctuating levels of attention and alertness, and a progressive loss of memory, language, reasoning and higher mental functions such as calculation. The Parkinson’s-like symptoms of LBD include rigidity, stiffness, stooped posture and a shuffling gait. Complex, well-formed, but oddly unthreatening visual hallucinations are one of the earliest and most common (>80% incidence) symptoms of LBD and usually consist of people, children or animals.

Here are some more quick facts about LBD:

· LBD is slightly more common in men than women. The average age of onset is 75 to 80 years of age.
· There is no single test to diagnose LBD. Like Alzheimer’s disease, a diagnosis of LBD is considered ‘possible’ or ‘probable’ after other possible diagnoses are considered and eliminated.
· Lewy body Dementia usually has a rapid onset and rapid progression. The average span of time between diagnosis and death is about 5 to 7 years.
· There are no know therapies to slow the progression of LBD, nor is there a known cure. The goal of treatment is to control the cognitive, psychiatric and motor symptoms of the patient.

For additional information, click here for the Alzheimer Society of Canada or here for the Alzheimer Society of Toronto. The Lewy Body Dementia Association is also an excellent resource.

Jennifer Hartman, Guest Blogger
 

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A “Living Will” or “Advance Directive” is a document that indicates the grantor’s preferences with respect to health conditions and treatment, including the level of medical intervention. It is a guide for the person who must communicate with physicians and make health care decisions in the event the patient is not able to do so him or herself. It is different from a Power of Attorney for Personal Care, which is a document naming a specific person to act on your behalf.

An Advance Directive can be very detailed and tailored to the individual’s personal circumstances. For example, on the University of Toronto Centre for Bioethics website you can find information on a Cancer Specific Advance Directive. 

Given the complex medical nature, it may well be that the specifics of such a directive lay more comfortably in the bailiwick of the health care professional rather than the legal professional.  Ideally, the Power of Attorney for Personal Care should include a detailed health care directive. This approach offers the assurance that the grantor’s wishes are taken into account without the wording in the Advance Directive inadvertently voiding his or her Power of Attorney for Personal Care.

A Power of Attorney for Personal Care may also include conditions or restrictions other than Advance Directives such as limiting the attorney's ability to act until a confirmation of incapacity has been obtained, and determining the method of assessing capacity.

If a person becomes incapable of making personal care decisions and has no Guardian of the Person or Power of Attorney conferring the authority to make health care decisions, the Health Care Consent Act of Ontario provides a statutory hierarchy of persons who can provide consent on the incapable person's behalf in descending order of authority as follows:

1. Spouse or partner
2. Child or parent
3. Brother or sister
4. Any other relative

Therefore, it is especially important to prepare a Power of Attorney for Personal Care if you would not want your spouse, child or parent to make health care decisions on your behalf should you become unable to make them yourself.

For further information on this topic, see Q & A on Powers of Attorney and Living Wills by the Office of the Public Guardian and Trustee for Ontario, or this book about Living Wills by M. Dianne Godkin.

Thanks for reading.

Sharon Davis

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

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As all litigators in the province of Ontario likely know by now, January 1, 2010 ushers in not only a new decade but New Rules of Civil Procedure. The New Rules apply to all matters, regardless of when they were commenced.

The amendments to the Rules effected by Ont. Reg. 438/08 are the most extensive and significant since the Rules were adopted in 1985. The fundamental goal of the reform is to make the civil justice system more affordable and accessible for Ontarians.

Some of the more significant changes are as follows:

Proportionality – In April of 2009 we saw a movement toward proportionality of time and expense with the interests at issue in estate litigation upon the introduction of the New Practice Direction for the Estates List of the Superior Court of Justice in Toronto. New Rule 1.04(1.1) brings this factor into play for litigation in all jurisdictions and mandates that Court Orders and Directions be proportionate to the importance and complexity of issues and amounts at stake.

Summary Judgment – Rule 20 expands the Court’s discretion to assess credibility, weigh evidence, conduct mini-trials with oral evidence, and award substantial indemnity costs against a party acting unreasonably or in bad faith.

Expert Evidence – Experts must provide fair objective and non-partisan opinion, give opinion evidence only on matters that are within their expertise, and assist the Court as reasonably required. This duty to the Court prevails over any obligation experts owe to the party who retained them. Expert reports must be filed 90 days before the pre-trial conference and responding expert reports must be served 60 days prior to the pre-trial conference.  

Discovery – Among the many changes regarding discovery is a new definition of relevance. The phrase “relating to any matter in issue in the action” has been replaced with “relevant to any matter in issue in the action”. This changes the test to one of simple relevance. Proportionality comes into play again in Rule 29.2, which sets out the considerations that must be made in determining questions to be answered or documents to be produced. Parties must agree to a written discovery plan (Rule 29.1) and there is a 7-hour time limit on oral examinations for discovery (R. 31.05.1).

Time – Calculation of time pursuant to Rule 3.01(1)(b) for notice periods of 7 days or less excludes holidays. There are also earlier deadlines for service and filing of materials for motions (Rule 37) Applications (Rule 38) and appeals from interlocutory orders (Rule 61).    

If your New Year’s resolution is to learn the New Rules and their impact on your estates practice, you should attend the OBA Trusts and Estates Section Seminar, "Stay on top of the New Rules of court" on January 6, 2010.

Program Chair, Jane Martin, and speakers,  Mr. Justice David M. Brown and Madam Justice Lois B. Roberts of the Superior Court of Justice, and Hull & Hull’s own Suzana Popovic-Montag, will guide you through the changes and provide an opportunity to ask questions regarding implications for estates practitioners.

For more on this topic see Gary Watson’s summary of the amendments and Marni Pernica’s recent article in OBA’s Deadbeat magazine.  Previous Hull & Hull commentary by Rick Bickhram and Paul Trudelle can be found here and here.

I suspect that following the New Rules is one Resolution you will be sure to keep!

Sharon Davis

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

 

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Pseudodementia is a dementia syndrome which resembles dementia, but is actually the result of an underlying psychiatric disorder, most often depression. While the presentation of pseudodementia in the elderly varies widely, it closely mimics dementia in that common symptoms include:

· poor attention and concentration;
· a reduction in speed of cognitive response;
· compromised problem-solving and decision-making; and
· impaired immediate recall.

The two identifying hallmarks of pseudodementia are: i) there is no known neurological condition to otherwise explain the symptoms and ii) the cognitive deficits show considerable improvement, or even reverse, when the psychiatric illness is treated.

The concept of pseudodementia is a controversial one, in that it is considered a ‘soft diagnosis’, as there are no explicit diagnostic criteria; a physician’s checklist, if you will. There is no validated test, or group of tests to differentiate depression-related cognitive dysfunction from degenerative conditions such as Alzheimer’s Disease. Compounding the confusion surrounding pseudodementia is the fact that depression is frequent in patients with irreversible dementia. As a result, pseudodementia is often misdiagnosed as simply ‘true’ dementia.

In the context of estates litigation, a diagnosis of pseudodementia has the potential to significantly change the landscape of a capacity challenge. As an example, an article in the Bulletin of the American Academy of Psychiatry and the Law describes a nearly successful attempt to defraud a patient of their estate during her ‘presumed’ dementia, when in fact, she suffered from pseudodementia from which she later made a dramatic recovery.

Jennifer Hartman, Guest Blogger
 

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This is our last blog of 2009!

Thank you for reading our blog posts over the past year. We have enjoyed preparing them. We hope that we have been informative.

With the close of 2009, we turn and look to the promises of 2010. While there is no doubt many things are to be considered for the new years, from a family perspective, perhaps this is the year to resolve to consider, or reconsider, whether your family’s legal affairs have been properly planned.

On behalf of everyone at Hull & Hull LLP, I would like to wish you a wonderful new year. We hope that you have a safe, restful holiday. 

Happy New Year.

Rick Bickhram

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Without understanding what the term “social media” is, it can sound intimidating to those in our industry who are not computer literate. But what is social media? Wikipedia defines social media as “media which are formed mainly by the public as a group, in a social way, rather than media produced by journalists, editors and media conglomerates." In an article, composed by Gary Edgar of LawPro, he defines social media as anyone looking to engage, connect and network with others online.

Gary Edgar does point out that one thing social media is not, is a fad.   Social Media is fundamentally changing the ways we interact and communicate with others and it will be interesting to see how this form of media continues to evolve. 

Social networks can be used to learn, exchange ideas and collaborate on projects. I have participated in numerous forums where I have learned how to troubleshoot many problems that I may have encountered with my automobile and computer, moreover, I have also learned neat little tips on some home renovations.  Social Media can also be used as a form of marketing. As Gary Edgar points out in his article, 15-20 years ago, the options for self promotion were limited to newspaper ads, the yellow pages, a radio or TV. Now with the concept of social media, our options have multiplied and the costs for self promotion have been drastically reduced.

However, the social media world is not the flawless paradise that we all would like it to be. There have been instances of online imposters, questions as to how much of my real life persona should I share online, how many people are seeing the things I post and who owns the information that is placed online?  These are all very important questions that will become clearer as this form of media continues to evolve.

Until next time,

Rick Bickhram

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As our year winds down and we prepare for the New Year, we have much to look forward to as our judicial system has undergone a minor facelift to reflect the changes in our society.  One such change has been the implementation of new legislation, The Apology Act (the “Act”), which came into effect on April 23, 2009.

The Act would permit the communications of expressions of sorrow or regret without worrying that the comments can later be used adversely in a civil court. Under the Act, an apology is defined as:

An expression of sympathy or regret, a statement that a person is sorry or any other words or actions indicating contrition or commiseration, whether or not the words or actions admit fault or liability or imply an admission of fault or liability in connection with the matter to which the words or action relate.

Proponents of the Act, suggest that the new legislation will enhance the dispute resolution process, promote accountability and enhance the affordability and speed of justice by shortening or avoiding litigation. The rationale for the implementation of this Act is similar to the rationale for the changes to the Rules of Civil Procedure, which is to make our system accessible, cost effective and efficient.

I agree with the purpose, the idea behind implementing this act, however I question .. has our society become so litigious that we now require the legislature to protect us from apologizing?

Thank you for reading my blog, until next time, 

Rick Bickhram

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For those of you with one eye on the next page of the calendar, Hull & Hull LLP will be posting our third series of medical/health blogs starting on Monday January 4th, 2010. The series will run every Monday thereafter in the month of January, for a total of four blogs. The following subjects will be featured:

• Pseudodementia
• Lewy Body Dementia
• Korsakoff's Syndrome
• Huntington's Disease

We hope this series proves both useful and informative. Please feel free to contact us at nonley@hullandhull.com with your feedback.
 

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Attorneys for property who receive gifts from grantors tomorrow will have to give them back, unless they have good evidence supporting the fact of the gift.  The rule that fiduciaries (including attorneys for property) must prove purported gifts is stated in Cooke v. Lamotte(1851), 15 Beav. 234 at page 239.

Justice Sheard applied this rule in Kee v. Yip [1995] O.J. No. 2879, disallowing a series of transfers by an attorney to himself, stating with respect to one such transfer, “The burden on Tom Kee to show that his mother gave him the $20,000 is a heavy one. His evidence, simply the assertion that this transaction, one of many that he did under power of attorney, was intended by her as a gift to him falls well short of discharging that burden of proof. Under the principle stated in Cooke v. Lamotte, supra, the $20,000 cannot be allowed as a gift and must be refunded." 

Even more recently, in Volchuk v. Kotsis, 2007 CanLII 28527 (ON S.C.) Justice Langdon disallowed a series of purported gifts (cheques and money transfers) effected by an attorney, noting in addition that attorneys were precluded from relying solely on their own evidence by section 13 of the Ontario Evidence Act, which provides that the claimant “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.” 

 

In estates litigation, this rule is very useful in passings of accounts initiated pursuant to section 42 of the Sustitute Decisions Act by disappointed beneficiaries of an estate against the deceased's former attorney for property.  Of course, this rule forms part of the Common Law and is not confined to passing of accounts proceedings.

Merry Christmas to fiduciaries including attorneys, and enjoy your presents.

Chris Graham

Christopher M.B. Graham - Click here for more information on Chris Graham.

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Testamentary instruments, that is.

A common burr among beneficiaries is that the estate trustee often resists disclosing the deceased's Will or other testamentary instruments.  Without reviewing the entirety of the testamentary instruments, beneficiaries may never feel certain of the extent of their interest in an estate.  This strategy tends to add fuel to pre-existing distrust among the parties. 

Fortunately, there is a simple solution.  By section 9(1) of the Estates Act, any person may be forced to produce any testamentary instrument, and by section 9(2) any person with knowledge of a purported testamentary instrument can be forced to answer questions about the document:

9.  (1)  Whether a suit or other proceeding is or is not pending in the court with respect to a probate or administration, the Superior Court of Justice may, on motion or otherwise in a summary way, order any person to produce and bring before the registrar, or otherwise as the court may direct, any paper or writing being or purporting to be testamentary that is shown to be in the possession or under the control of such person.

(2)  If it is not shown that such paper or writing is in the possession or under the control of such person, but it appears that there are reasonable grounds for believing that he or she has knowledge of such paper or writing, the court may direct such person to attend for the purpose of being examined in open court or before the registrar or such person as the court may direct, or upon interrogatories respecting the same, and to produce and bring in such paper or writing, and such person is subject to the like process in case of default in not attending or in not answering questions or interrogatories or not bringing in such paper or writing, as the person would have been subject to if he or she had been a party to a suit in the court and had made such default, and the costs of such motion or other proceeding are in the discretion of the court.

With these provisions, motions are often not necessary.  A simple letter bringing the provision to the attention of the estate trustee along with a polite request to produce the document(s) is all that should be required.  By the same token, estate trustees (or anyone else with possession or knowledge of documents purporting to be testamentary) have no justification for secrecy.  Happily, this provision creates a powerful incentive for information-sharing, which is often a prerequisite to ending or preventing an estates dispute.

Have a great day,

Chris Graham

Christopher M.B. Graham - Click here for more information on Chris Graham.

 

 

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In the spirit of gift-giving, I offer some optimism:

Canada's economic data is fairly good, according to this National Post report.  Growth is strong and consistent, retail levels are almost back to pre-recession levels.  Very happy news after two brutal years for a lot of people.  Gasoline prices were down.  S&S/TSE Composite Index up 51% from March 9 through November 30, 2009.  Even Ottawa has a good outlook for next year.

No hurricanes this year, no tsunamis, no asteroid strikes.  Enough snow on the ground to qualify as a white Christmas, but mercifully the cold just hit last week.    And in December, the odds against the Maple Leafs making the playoffs improved this month, to "infinity minus 1 to1".  All in all, things to feel positive about, and signs of hope.

The United States may be building up incomprehensible debt, China's vast reserves of "international currency" built up over the past 20 years may be a prisoner to a falling US dollar, Europe may be stalling and slipping, Dubai may be insolvent, but not to worry: Canada is faring quite well, relatively speaking of course.  So we're the best.

Enjoy your day,

Chris Graham

Christopher M.B. Graham - Click here for more information on Chris Graham.

 

 

 

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When is a potential witness incapable of being examined?  Price J. examined this issue in Vokes Estate v. Palmer, 2009 CanLII 70132 (ON S.C.) in the context of a motion to compel a party to attend an examination under oath, where that party's solicitor had earlier refused to allow him to take the oath or give a solemn affirmation.  

Ultimately finding the witness capable of taking an oath and giving evidence, Price J. reviewed the authorities.  The leading case of McGowan et al v. Haslehurst et al. (1977), 17 O.R. (2d) 440 (H.C.J.) states that parties should be able to avoid attendance at examinations for discovery on the basis of unsoundness of mind only in the clearest of cases.  The onus of proof of unsoundness is on the party seeking to avoid the examination (Barnes v. Kirk, [1968] 2 O.R. 213 (ON C.A.).

Price J. also applied the principles applicable to testing the competency of witnesses giving evidence at trial.  Under section 18 of Ontario's Evidence Act, any person is presumed competent to give evidence, and therefore the onus is on the person to establish incapacity.  The presiding judge must examine the proposed witness. Section 16(1) of the Canada Evidence Act prescribes questions for such an inquiry, namely: whether the witness understands the nature of an oath or solemn affirmation, and whether the witness is able to communicate evidence.

As a sidenote to this decision, Price J. reviewed and rejected a capacity assessment that found the potential witness incapable of giving evidence.   

A review of this decision will be helpful to any practitioner dealing with questions of a potential witness's capacity to give evidence.

Have a great week,

Chris Graham

Christopher M.B. Graham - Click here for more information on Chris Graham.

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We are very saddened by the loss of our beloved founding partner, mentor and friend, Rodney Hull, who passed away on December 5, 2009.  Rodney leaves behind a legacy that will forever be cherished, fostered and maintained.

 For over 50 years, Rodney’s reputation has been synonymous with outstanding excellence, dedicated professionalism and pure passion.  He has set the standard for our profession, and we are all privileged to have had the opportunity to know and to have worked alongside him over the years.  We will honour Rodney’s legacy and his memory, and the leader, the advocate and the gentleman that he was.   

 Our thoughts are with the Hull family during this very difficult time.

 The lawyers and staff of Hull & Hull LLP.

 
 

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In a Probater article, my colleague, David M. Smith, mused on “in contemplation of marriage” clauses in Wills legislation, which preserve Wills in the face of marriages. As noted by David, to avoid revocation by an impending marriage, a testator usually must include a clear and unambiguous declaration in his/her Will that it is made in contemplation of marriage. The language used must clearly evidence the testator’s contemplation of marriage to a particular person (who is undoubtedly a beneficiary under the Will).

A recent decision out of British Columbia dealt with whether or not a marriage had the effect of revoking a Will where the existence or intent of a “contemplation declaration” was ambiguous. In MacLean Estate v. Christiansen, the testator and Ms. Christiansen began dating in April 2003, and living together in August 2003. In 2005, the testator finally divorced his former spouse, with whom he had had four children. In 2006, Ms. Christiansen and the testator announced their engagement to family. The testator then executed a Will and power of attorney in favour of Ms. Christiansen in June 2007. In August 2007, the couple married but the testator died shortly thereafter. 

The June 2007 Will provided that for Ms. Christiansen by way of a spousal trust. One of the clauses in the Will stated, in part: “to deliver to my spouse, Karen” (i.e. Ms. Christiansen). The issue became whether this clause could be construed to be a declaration that the Will was made in contemplation of the testator’s marriage to Ms. Christiansen. 

The court ultimately held that the June 2007 Will had been revoked by the subsequent marriage. The court held that the reference to “my spouse” was not a declaration that the Will was made in contemplation of the marriage to Ms. Christiansen. It was a reference to their common-law relationship; Ms. Christiansen was the testator’s common-law spouse at the time of execution of the Will. As held by the Court, “the Will could not survive the conversion of a marriage-like relationship, which is accorded all of the rights and obligations attached to a legal marriage, to one of legal marriage”.

Interestingly, it was the named executor who applied for the determination as to whether the June 2007 Will was revoked by the subsequent marriage. The children of the first marriage on the one hand, and Ms. Christiansen on the other hand, each advised the Court that they did not wish to assert that the Will be submitted for probate. The situation was likely non-adversarial due to the fact that whether the estate devolved by Will or an intestacy, all of the children and Ms. Christiansen would benefit (to varying degrees). It should be noted that the new Wills, Estates and Succession Act will abolish the “contemplation of marriage” provision in British Columbia.

Thanks for reading,

Bianca La Neve

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In a decision earlier this year, Justice Harris in Binkley Estate v. Lang, (2009) 50 E.T.R. (3d) 44, looked at the construction of wills and fundamental issues giving effect to the testatrix’s intent. The decision involved a 92 year old testator who was both capable and in control of her affairs. The testatrix made a will in 1996 which provided a legacy of $2,500, for each of the three respondents in the action. In 2006, the testatrix elected to make minor changes to her will.

After her death, it was discovered that the 2006 revision of her will increased each legacy to $25,000. The Estate Trustee brought an application for a declaration that the clause which amended the bequest was not reflective of the testatrix’ true intentions. The Applicant asserted that the intended bequest was $2,500, and not the increased amount. The testatrix informed her friend that she intended to change her will with respect to only three issues, other than the bequest at issue. The drafting solicitor later stated that he inadvertently amended the bequests at issue to $25,000. Prior to signing, a friend of the testatrix and the drafting solicitor reviewed the will and the testatrix appeared to have read the will and none noticed the inadvertent error.

Rectification, an equitable remedy which seeks to prevent a written document from being used as an engine of fraud or misconduct "equivalent to fraud", was at issue this case. It was stated that the court’s task in a rectification case is corrective and not speculative and is to be utilized with abundant caution. Further case law supports that where a Will was not read over to the testator and the mistake is made in circumstances in which the Court may omit words or dispositions, the mistake may be established on the balance of probabilities.

Upon review, the judge determined that it was improbable that the testatrix increased this legacy ten fold without notifying her trustee or making comment. As such, the court decided to rectify the will to reflect the intentions of the testatrix and reduced the bequest to $2,500.

Thanks for reading,

Nadia

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

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In Estate Litigation we are faced every day with feuding families.  Is the fight avoidable or inevitable?  For those of you with siblings, I'm sure at some point in your lifetime you've gotten upset and yelled those words which for some reason really hit home: "Mom always liked you best".  On some level, favouritism, or the perception of it, is at the heart of Estate Litigation. 

A study released by Cornell University of child favouritism surprisingly discovered that mothers may have distinct preferences amongst their children.  This may not be shocking to some, but I was frankly a little surprised that they admitted it.  It shouldn't come as such a surprise given the feuding I see everyday, and I'm sure some of you are feeling validation right about now for all those years where you thought it, but had no proof.  I can already hear the 'I told you so's'.

On some level this favouritism is rooted in reasonableness.  The study claims that the favourite is generally the child whom the mother feels closest to, who is most similar in attitude and values.  Of note, is that this child is generally a daughter.  Also, it's often the child who has provided the most support in the past.

While the after effect of such favouritism is evident in Estates, the effect of this preferential treatment starts earlier than that.  Often these feelings come to light when attorneyship becomes an issue.  While the rationale for the decision can likely be explained to your children in a manner which could be understood, we tend to hide these feelings and let it come as a surprise.  Maybe we should reconsider that and let our feelings show through, so at the end of the day we can understand our parent's decisions and ask about them before it's too late.

Nadia

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

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I'm sure there are a few people who are holding out and refuse to join facebook, or some other virtual world.  Yet for the majority, checking online accounts is merely part of an everyday routine.  What happens when you are no longer around to check these accounts?  This may seem like a trivial factor when dealing with the loss of a loved one, but seeing posts on a facebook wall belonging to a recently deceased family member can be extremely painful.
 
In a recent episode of The National, our own Ian Hull articulated that an online presence is something which we increasingly need to consider when dealing with Estates.   This presence can cause difficulties for Estate Trustees.  Online accounts generally require passwords; passwords which are not necessarily shared with anyone.  In fact, recently, I signed up for an online account and was specifically instructed not to share my password.  Then the dreaded words appeared on the screen: 'Please pick a question which will be provided to you in the event that we need to verify your identity.'  I had to pick and answer a question three times before my password could be set.  I'm not sure if the people closest to me would know the answers to those questions.  How could they, it took me a while to think of questions I was certain I would remember the answers to.  What would happen if my family had to access my accounts and I wasn't there to help them? 
 
This issue was explored in a recent article in the New York Times.   The article suggests naming a digital executor to get around the problem of passwords.  I've yet to explore this personally, but it is certainly intriguing. This concept is new and how it will play out in estate planning, administration and litigation is yet to be seen.  I'm not sure I'm willing to give my passwords to a complete stranger at yet another website, but at the very least, I've reconsidered sharing some of my more obscure passwords with my family.  Something to think about. 
 
Until Tomorrow,
 
Nadia

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

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A recent article in the Toronto Star discusses the possibility of immortality.  Not just a distant possibility, but a real possibility within our lifetimes.  It even suggests that the first 1000 year olds are almost certainly already alive.  According to the article, there is the possibility that we would simply replace our bodies as they deteriorate.  If this process goes according to the theories of scientist Ray Kurzwell, we would not stop the aging process, but merely transfer our brain contents into a newer body.  The reality of this makes me cringe.  Does this mean that my grandma would suddenly look like a sister?  Its a little too much to digest.

This article goes on to mention that recently the Nobel Prize in medicine was awarded to American scientists for research on the "immortality enzyme".  This enzyme allows cells to multiply without damage.  It shows promise in the fight against cancer, but apparently also holds great promise in the fight against mortality.

The implications of immortality on an estates practice are rather obvious.  However, the realities of living forever are not.  I can't even begin to imagine the global impact this would have on our society, or how we would adapt.  A life without end still seems a far fetched idea to me.  I suppose only time will tell.

Nadia

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

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The 12th Annual Estates & Trusts Summit, took place late last week on November 12th and 13th, 2009 in Toronto.  This program, organized by the Law Society of Upper Canada, presented a variety of issues which are of interest to anyone practicing in the Estates and Trusts field.

The summit spanned two days, and dealt with topics running the gamut.  Some of the Topics and Speakers included:

• Estate Planning in Recessionary Times (Heather Evans)
• U.S./Canada Cross-Border Planning (Beth Webel & Jim Yager)
• Family Law and Your Estates Practice - An Update (Daniel S. Melamed, C.S.)
• Drafting Multiple Wills (Clare A. Sullivan)
• Estate Administration Issues (Rosanne T. Rocchi)
• Creating Insurance Trusts to Minimize Probate Tax on Life Insurance (Robin Goodman)
• The Exercise of Trustee Discretion (Bernadette Dietrich)
• Practice Management Issues for Estates Practitioners (Louise F. Christofolakos)
• Constructive Trusts and Quantum Meruit (Elizabeth A. Bozek)
• The Standard of Care and Will Drafting (Ian M. Hull, C.S)
• Duelling Powers of Attorney (Jordan M. Atin, C.S.)
• The Latest Costs Issues (Shael Eisen)
• Remedies for Non-Compliance with Court Orders (Kimberly Ann Whaley, C.S.)
• The Top 10 Decisions Released by The Honourable Mr. Justice David Brown (Timothy G. Youdan)
• Representing the Incapable Person (Marshall Swadron)

For a full list of speakers and topics visit the Law Society of Upper Canada Website.  If you were not able to attend, contact the Law Society of Upper Canada to obtain materials.

Nadia M. Harasymowycz

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The creating of a legacy is not just about the size of an estate left behind by a testator.  A publication of Imagine Canada entitled Philanthropic Success Stories details the nature of philanthropy and gives all of us pause to consider how best to create a lasting legacy.  As the authors note, philanthropy is best defined by heart, time and spirit rather than one's bank account balance.

Imagine Canada is a charitable organization which has as its mandate the fostering of non-profit and charitable causes.  The authors of Philanthropic Success Stories observe that Philanthropists (in the traditional sense) are being replaced by people better defined as: "champions, advocates and volunteers"  The authors specifically note that philanthropy is being pushed out in new directions that embrace such adjectives as: risk-taking, pioneering, innovative, and being "ahead of the curve."

As an example, the authors refer to the Caledon Institute of Social Policy which is credited for spearheading, among other things, the implementation of the National Child Benefit.

Have a great weekend!

David M. Smith

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In considering a topic for today's blogs, I had a number of competing ideas and decided that the best approach would be just to muse on a couple of issues that I have had pause to consider over the past couple of weeks.

On a Motion for Court Approval of Minutes of Settlement under Rule 7 of the Rules of Civil Procedure, the written consent of any minor over the age of sixteen is required "unless a judge orders otherwise."  It is a somewhat curious requirement in that the person whose written consent is required is nonetheless under the jurisdiction of the Children's Lawyer (subject to the supervision of the Court).  It is difficult to imagine a scenario in which the Children's Lawyer does not object to the form and content of Minutes of Settlement yet the Court refuses to approve the settlement if one of these more "senior minors" withholds their written consent.

And what about this one:  The presumption of advancement as between married couples is enshrined in the rather curious wording of the Family Law Act.  Yet how does this presumption dovetail with the obligations of a spouse, not as a spouse, but as an attorney for property under a Continuing Power of Attorney for Property?  It is a difficult issue especially when there is uncertainty as to the capacity of a donor spouse to make a transfer into joint ownership.  Can a spouse benefit from the presumption of advancement in circumstances where he or she is added as a joint owner to an account while arguably acting under the Power of Attorney?

David M. Smith

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Did you know that there are tools available on our website that will allow you to get more mileage out of our blogs and podcasts?

• EMAIL THIS - allows you to email the blog to a third party, for example, a client or colleague
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We thank you for your continued loyalty to the Toronto Estate Law Blog and welcome your suggestions and comments regarding how we can continue to serve you best.

Your Team of Hull & Hull LLP Bloggers and Podcasters

 

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Sunnybrook Health Sciences Centre houses Canada’s largest Veteran’s care facility, offering care to a current population of 500 vets, a few from the Korean War, but the majority of whom are from World War II. Residents are housed in two wings: the Kilgour Wing which promotes independent living, and the George Hees Wing with supportive care. Innovative dementia care is provided for Veterans in the Dorothy Macham Home, which is a therapeutic environment based on a residential model.

An article in last Saturday’s Toronto Star highlighted the unique challenges presented when a history of wartime service is coupled with a present day diagnosis of dementia. The hallmark of dementia is a (usually) progressive loss of memories, starting with the most recent memories formed. In a nutshell, this is why patients with dementia ‘forget’ that their spouse has died, or ‘forget’ that their children are now adults. For some of Sunnybrook’s Veterans, this means the war is not over. It is here. And it is now. According to Dr. Jocelyn Charles, medical director of the Veteran’s centre, behavioural problems in Sunnybrook’s dementia patients are twice as prevalent as the provincial average. In fact, in a study of Sunnybrook’s Veterans, 16 percent still showed active symptoms of PTSD, such as ‘distressing dreams, flashbacks and anxiety.’

Canada’s WWII veteran’s are dying at the rate of 400 a week.

Will you remember?

David M. Smith

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Medical Records are one of the most important categories of evidence available to the estate litigator. In most cases, medical records from health care providers who treated a testator in and about the time a Will was made will be seen as the most persuasive evidence available because the author of such records will be seen as both (i) possessing some degree of expertise related to the assessment of capacity and (ii) exhibiting complete objectivity as a witness (unlike the family members who may be contesting capacity).

In Ontario, the College of Physicians & Surgeons of Ontario (“CPSO”) has posted a policy on its website providing the public with information concerning medical records and what they are required to contain. Not surprisingly, security and privacy of medical records is one of the foremost concerns. Of particular interest is the fact that one of the “principles” of good record keeping as mandated by the CPSO is to maintain “information essential to others for a wide variety of purposes…including legal proceedings”

For its part, the Ministry of Health and Long-Term Care has stringent requirements for the production of Claims Reference Files providing details of all health care providers who have provided services to a deceased client. Typically, a Certificate of Appointment of Estate trustee With a Will or a Court order will be required to obtain a Claims Reference File for a Deceased.

David Smith

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The formal requirements for execution of a will, or any testamentary instrument in Ontario, are governed by Part I of the Succession Law Reform Act ("SLRA").  The definition of "will" in s. 1 of the SLRA includes a testament, codicil, will, or other testamentary disposition.  The most critical form requirements are that the will must be in writing, signed by the testator and two witnesses.  Other requirements exist, of course.

Many jurisdictions contain dispensation clauses relaxing the formal compliance requirements, if the court is satisfied that a document or any writing on a document embodies the testamentary intentions of a deceased.  For example, s. 23 of Manitoba's Wills Act  or California's Probate Section 6110-6113.  Not so with Ontario, except for holograph wills and for members of the Canadian Forces on active service.  While there is wiggle room in terms of the interpretation of the execution requirements, for instance what constitutes "in writing" or "signed by the testator", if the formal requirements are not met and no specific exemption applies, there is no saving provision based on testator's intention, and therefore no testamentary instrument.

This can have harsh consequences, by invalidating otherwise perfectly good wills on narrow technical grounds.  On the other hand, the SLRA provides time-tested, black-letter legal clarity.  Time tested, because the formal requirements descend from the Wills Act, 1837.

Have a great weekend,

Chris Graham

Christopher M.B. Graham - Click here for more information on Chris Graham.

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Prosecutors have dropped the charges of kidnapping and carrying a concealed weapon against the shopkeeper accused David Chen.  Readers will remember Mr. Chen as Toronto's Chinatown shopkeeper who arrested a shoplifter, with the help of two employees, then got charged himself.

Mr. Chen, owner of Chinatown store Lucky Moose Mart, had spotted the thief and with the assistance of his employees, tackled the thief, bound him in twine and detained him in a delivery truck until the police arrived four minutes later.  The thief had allegedly victimized local stores, and has a criminal record going back 32 years, all according to this news report.  Incredibly, this record includes - according to the news report - stealing from Mr. Chen's own store and a neighbouring store, including on that same day.  Truth being stranger than fiction, the thief was granted a plea-bargain sentence of 30 days in relation to his theft from Mr. Chen's store in part because he agreed to testify against Mr. Chen and the two employees. 

The Crown's theory seems to be that because the arrest was not contemporaneous with the crime, the thief having returned to the store about an hour after committing the theft, the arrest is not protected by citizen's arrest provisions.  Mr. Chen has apparently rejected a plea bargain - he had videotape evidence of the theft. 

Mr. Chen is married with 2 children, aged 2 and 6, and has become a bit of a folk hero.  How hot is this story?  The Globe and Mail reported at 12:13pm yesterday, the National Post at 4:03 pm, CBC at 2:54pm, the Toronto Star right away too. 

Have a good day,

Chris Graham

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Successful motions for summary judgment are rare occurrences, and any guidance on costs awards is welcome.  Justice Mesbur's costs endorsement in the personal injury case Asmassu v. John (2009), 2009 CanLII 58579 (On S.C.) is a straightforward application of costs principles on a successful motion for summary judgment by co-defendants.   

This motion arose in a claim that was one of a series of lawsuits by the plaintiff against the co-defendants, all arising out of the same set of facts.  As the pleadings disclosed no reasonable cause of action, in that context, the proceeding amounted to an abuse of process.  The claim included allegations of serious professional conduct and the relief sought included damages of $50 million.  As Justice Mesbur wrote,

"He cannot make claims like this without expecting that they will be vigorously defended, with significant costs being incurred as a result.  Given the level of the claim, the importance of the issues to the parties, and all the other factors enumerated under the rules, I am of the view that the amounts claimed for costs are fit and just in all the circumstances."

Justice Mesbur awarded the full partial indemnity costs claimed by both co-defendants.  The hospital's solicitors had reduced their partial indemnity rates from $32,000 to $20,000, and Justice Mesbur emphasized this reduction in awarding the full $20,000.  The doctor's solicitor was awarded claimed partial indemnity costs of $10,393.35, lower than the hospital since the hospital's solicitor had made most of the submissions.    

Have a great day,

Chris Graham

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A private member's bill that would decriminalize medical practitioners assisting with suicide is about to get its first reading in the House of Commons.  

Bill C-384 would amend sections 222 (homicide) and 241 (assisted-suicide) of the Criminal Code.  Currently, these provisions criminalize (or confirm the criminal liability of) medical practitioners who participate in patients' suicides by providing their services.   Bill C-384 would create an exception to criminal liability for medical practitioners if prescribed elements were met:  patients would have to be 18 years of age, suffer from a terminal illness or be in severe pain without prospect of relief (though a patient who refuses pain-killers still qualifies), provide 2 written consents to die "while appearing to be lucid" at least 10 days apart, and provide a written designation of another person to act on his or her behalf if he loses lucidity.

The phrase "while appearing to be lucid" rings alarm bells off their walls.  The test implies a very low capacity threshold by comparison to say, testamentary capacity, but does not deliberately fit anywhere identifiable on the capacity threshold scale.  From a estates law perspective, there is no requirement in the bill that medical practitioners consult personal care guardians or attorneys before going about their business.  There is no requirement for a guardian or attorney to even consider these issues, but such legal possibilities might dramatically complicate the duties and obligations of a guardian or attorney.     

From this quick analysis, this bill appears to have been written without input from the estates bar (which is unsurprising - it is the first reading of a private member's bill in a criminal law matter in federal jurisdiction).  This is a good example of how broad the estates/capacity field is and the potential effects of developments in other areas of law on estates/capacity law.

Have a great day, and enjoy every day you get,

Chris Graham

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A testator who suffers from "insane delusions" may not have testamentary capacity.  The case law provides numerous definitions and tests for insane delusions, but there is no single dedicated leading case.  Perhaps the best way to grasp this principle is by starting with the classic statement from Banks v. Goodfellow (1870), L.R. 5 Q.B. 549 on testamentary capacity:

"It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects;  shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and with a view to the latter object no disorder of the mind shall poison his affections, pervert his sense of right or prevent the exercise of his natural faculties;  that no insane delusion shall influence his will on disposing of his property, and bring about a disposal of it which would not have been made otherwise."

An excellent recent examination of various statements of the principle is found in Royal Trust Corporation  of Canada v.  Saunders (2006), 2006 CanLII 19424 (On. S.C.), while Banton v. Banton (1998), 1998 CanLII 14926 (ON S.C.) provides a precise, thoughtful application of the principle. 

My favourite case of a will invalidated by the testator's insane delusions occured in Great Britain in 2007.  The disinherited son of Branislav Kostic successfully challenged Mr. Kostic's will, which gave 8.3 million pounds to the Conservative Party.  Mr. Kostic had become a believer that the redoubtable Prime Minister Thatcher would "save the world from satanic monsters and freaks".  Mr. Kostic had apparently written to Ms. Thatcher, appealing to her that she was the only person who could save the world from bestial creatures.  Mr. Kostic also believed the female members of his family were out to do him in (poison), among other things.    

Enjoy the week,

Chris Graham

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It can be easy to tell your children what to do ... when they're still young.  Its not quite so easy as they grow up and leave the nest - both from a practical and legal perspective.  Have you thought about whether your university-aged child is fully prepared in the event of a medical emergency?  Can you, as a parent, get access to medical information on behalf of your child who is over the age of majority?  This concern, particularly in the context of mounting fears over the spread of the swine flu (H1N1) virus, was considered recently here, and is worth some discussion in the context of our own provincial laws.

In Ontario, once a child has reached the age of majority (18 years), they have the full legal privileges and responsibilities of an adult in most matters.  This means that parents cease to have legal authority over their child's financial decisions, despite the fact that the child may still be dependent on them in some respects (i.e. attending college or university).  With respect to medical matters, while Ontario's Health Care Consent Act provides that a person who is capable and has attained the age of 16 years has the capacity to give advance instructions, there is no specific age for consent.  Any child is presumed to have capacity to give or refuse consent.  

In Ontario, we have several related estate planning documents to consider in these circumstances.  First, the Continuing Power of Attorney for Property is a written authorization given by someone (the grantor) to a person (the attorney or attorneys) who is entitled to do anything on the grantor's behalf in respect of property that the grantor could do if he or she were capable, except make a will.   The Power of Attorney for Personal Care is a written authorization given by the grantor to an attorney who will make personal care decisions regarding health care treatment, if he or she is unable to do so. 

So, although you may not be able to sway your adult children either way on the issue of whether or not to vaccinate, it would be wise to ask them to consider signing powers of attorney, so that parents are authorized to make medical and financial decisions on their behalf in the event of an emergency.     

Sarah Hyndman Fitzpatrick

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Mark your calendars now for the upcoming 12th Annual Estates & Trusts Summit, scheduled for November 12th and 13th, 2009 in Toronto.  This program, organized by the Law Society of Upper Canada, has been described as "vital for anyone carrying on an estates practice".

Spanning two days, the program is structured as follows - "Day One" deals with issues surrounding estate planning in recessionary times; and "Day Two" considers the impact of the current economic climate on estate litigation.  Specific topics include (note that the list is not exhaustive and is subject to amendment):    

• Estate Planning in Recessionary Times
• US/Canada Cross-Border Planning
• Essential Charity Law Update
• Creating Insurance Trusts to Minimize Probate Tax on Life Insurance
• The Exercise of Trustee Discretion
• Constructive Trusts and Quantum Meruit
• Standard of Care and Will Drafting
• Duelling Powers of Attorney
• Latest Costs Issues
• Representing the Incapable Person
• Estate Trustees During Litigation (ETDL’s) –Alternatives to Corporate Trustees

So, if you plan on attending or viewing the live webcast from your home or office, register now here.  Hardcopy materials for anyone interested will also be available for sale after the conclusion of the program.

Sarah Hyndman Fitzpatrick

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A little knowledge goes a long way.  In the context of insurance policies and your overall estate plan, understanding the nuances of a testamentary insurance trust can provide enormous benefits down the road.  Simply taking out insurance on your life - or even naming a specific beneficiary other than your "estate", does not by itself capitalize on the various benefits that may be available by the creation of  testamentary insurance trust.  Proper use of an insurance trust can ensure that the proceeds do not form part of the residue of your estate, but may still be dealt with in a way that is consistent with your overall testamentary objectives. 

This issue is front and center for experienced estate planners, and as such has been dealt with in various contexts on our blog here and here. 

Tim Cestnick, writing for tax matters in a recent article for the Globe and Mail, reminds us of the benefits of creating a separate testamentary insurance trust with life insurance proceeds.  The article, entitled "Your Heirs Will Thank You", highlights six benefits to the insurance trust:

1. Managing distributions to minors;
2. Protecting insurance proceeds from creditors;
3. Tax savings for beneficiaries;
4. Avoiding probate fees on insurance proceeds;
5. Privacy can be attained; and
6. Preserving provincial disability benefits.

One further caveat.  Although not binding in Ontario, a recent Saskatchewan case (Re Carlisle Estate) has created some trepidation for estate planners on the issue of using an insurance declaration in your Will, as opposed to outside of your Will (i.e. by means of a separate declaration).  Until there is some indication as to how this will impact the law in Ontario, make your intent clear by ensuring that the proceeds do not vest in your executor as beneficiary, but are rather held by the executor in trust for the designated beneficiaries.

Sarah Hyndman Fitzpatrick

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Last week, Mr. Justice Brown released an Endorsement involving an Application for Confirming of Resealing of Appointment, in which he directed the Estates Registrar to offer to Applicants for Certificates of Appointment the option of communicating with the Estates Office by e-mail.

Lawyers with experience in obtaining Certificates of Appointment of Estate Trustee (and other related probate documents) are familiar with the standard form corrections notice issued by the Toronto Region Estates Office, and the inherent delays that may result from dealing with such correction notices.  Refer to our firm blog (by Natalia Angelini) and podcast (by David Smith and me) for further information on this issue.  The practice to date has been for the Toronto Estates Office to send a standard form corrections notice to the Applicant which identifies the deficiencies in the filed materials.  Frequently there arises a back-and-forth between the Applicant and the Estates Court via regular mail while the Applications are rectified and processed. 

The issue before the Court on this matter was whether the Toronto Region Estates Office could communicate by e-mail with Applicants for Certificate of Appointments to inform them of their corrections, and to receive corrections from them.  As Mr. Justice Brown remarked in his Endorsement, the Court is relying on "snail mail" to conduct its business in 2009.  He suggested that real access to justice requires the provision of a variety of ways to communicate, and; "more fundamentally, the time has come to recognize the stark reality that our court ...  lags unacceptably behind in the use of electronic communication with our court users".  The Court concluded that it could not find anything in the Rules of Civil Procedure prohibiting reliance on electronic communications, and therefore on a "go forward" basis the Court should offer every Applicant the option of communicating by e-mail with the Toronto Region Estates Office in respect of corrections to deficiencies in the Application. 

The Rules of Civil Procedure should be interpreted to secure the "most expeditious" determination of every civil proceeding (Rule 1.04(1)).  This welcome and progressive initiative should go a long way towards realizing that objective.

Sarah Hyndman Fitzpatrick

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An Italian Prince and Princess are squabbling over their late mother's inheritance, which includes an extensive art collection with works by Caravaggio and Raphael, and a palace in Rome.  The sister (Princess Gesine) has asked an Italian Court to exclude her brother's (Prince Jonathan) children as heirs because his children were conceived with surrogate mothers and she does not "approve" of his homosexual lifestyle.  The Irish Independent has reported on the story and has indicated that under Italian law, the surrogate children "are not recognized and have no legal rights on the family fortune".  Read more about the story here. Notably, the Prince and Princess themselves don't have royal blood but were rather "plucked from obscurity" and adopted from a British orphanage by their Italian Princess mother.

In Canada, adoption is a matter of provincial jurisdiction and according to s. 158(2) of the (Ontario) Child and Family Services Act once an adoption order is made, the child becomes the child of the adoptive parent, and ceases to be a child of the person who was his or her parent before the adoption order was made.

Wills in Ontario frequently provide clauses excluding children born outside of marriage, as both persons born inside and outside of marriage are entitled to share equally in an estate (s. 1 of the Succession Law Reform Act and s. 1(1) of the Children's Law Reform Act ).  Therefore, it is not uncommon to include a clause excluding illegitimates, if the person making a will has a contrary intention to what is mandated by the existing legislative framework.  Practically, an exclusion of illegitimates clause in your will can also make the life of a trustee a little easier by narrowing the scope of inquiry for members of class gifts that may be illegitimate (which can be costly and time consuming).  However, this kind of clause may have the undesired effect of excluding children born of common law relationships.  Including a further clause, to the effect that an exclusion clause shall not apply where the parents have demonstrated a "settled intention" to treat such person as a "child" of the union, can help to avoid such unintended consequences.

Sarah Hyndman Fitzpatrick

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Litigation lawyers live in fear and sober respect of the limitation period. We all know that missing a statutory limitation period can be the kiss of death. Given the right circumstances, however, there is one light in the dark that can overcome the shadow of both statutory limitations and common law laches arguments.

Fraudulent concealment is a common law doctrine that operates in equity to defeat  limitations defences where:

1)      The defendant and plaintiff are engaged in a special relationship with one another;

2)      Given the special or confidential nature of their relationship, the defendant's conduct amounts to an unconscionable thing for the one to do towards the other; and

3)      The defendant conceals the plaintiff's right of action, either actively, or as a result of the manner in which the act that gave rise to the right of action is performed.

Fraudulent concealment is not a rule of construction like the discoverability rule. It is an equitable principle that prevents a limitation period from operating “as an instrument of injustice”. It is aimed at preventing unscrupulous defendants who stand in a special relationship with the injured party from using a limitation provision as an instrument of fraud. See Giroux Estate v. Trillium Health Centre, 2005 CanLII 1488 (ON C.A.)

The fraudulent concealment necessary to postpone a limitation period need not amount to deceit or common law fraud. It is sufficient if the conduct, having regard to some special relationship between the parties, is an unconscionable thing for the one to do towards the other. See Guerin v. The Queen, [1984] 2 S.C.R. 335

For more information on limitation periods and an excellent in-depth analysis of the effect of the Limitations Act, 2002, see Anne Werker, “ Limitation Periods in Ontario and Claims by Beneficiaries” (2008) 34:1 The Advocates Quarterly, 1.

 

Perhaps now would be a good time to take a minute to check on a few limitation periods - just in case!

Sharon Davis

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Whether it's technology or tv trends, Japan seems to be light years ahead.  And we play catch-up (ok, not so with the stupid game shows).  Japan's median age is 43.5, Canada's is 39.1.  But since Japanese live longer (life expectancy of 82.12 versus Canada's [still respectable] 81.23), we're really only a few years behind.  So what can we learn from their population, which is a few years ahead of ours in dealing with an aging population?

The answer is: forget about cars, dvd players and even robots.  Funerals are very, very big business in Japan.  According to this Bloomberg article, the Japanese funeral industry is worth US$18 billion.   Last year, 1.14 million Japanese died, and funeral companies charge about $26,094.62 per funeral.  By 2040, 1.66 million will be dying every year.  Future growth is in death, and as Bloomberg notes, "everyone from railway companies to retailers wants a slice."   Funeral companies are stampeding towards Japan.

Unfortunately, things won't be so rosy in Canada.  This is because Japanese funerals are mostly Bhuddist funerals, which are elaborate multi-day events involving chanting monks, flowers, meals, cremation ceremonies, jade urns and the like.  They are elaborate, exhausting events.  Our funerals are fast-forwarded commercial breaks by comparison.  But it is still a glimpse into the future.

Have a great weekend,

Chris Graham

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The concept of reviving a revoked will seems clear enough.  But what is the difference between a revival and a republication, and why does it matter? 

Revival means reactivating a revoked will.  Note that section 19(1) of Ontario's Succession Law Reform Act requires a revival to be in accordance with the provisions of Part I of the Act.  So an oral declaration that a revoked will is valid does not suffice.  A destroyed will cannot be revived, unless the reviving instrument contains a copy or the terms.  On the other hand, at Common Law, a codicil referencing an existing will "republishes" that will, furnishing evidence of the testator's considering his will as then existing.  And because the Wills Act, 1837 did not abolish the doctrine of republication, the principle still operates.  Both revived and republished wills are deemed executed on the revival or republication date. 

An attempt to revive a will that was never actually revoked may have the result of republishing that will at the time of the attempted revival.  However, attempting to republish a revoked will not revive a revoked will, unless the acts of republication also satisfy the requirements of a revival (which include the form requirements of the Succession Law Reform Act.  Specific uses of the doctrine of republication are discussed in detail in Macdonell, Sheard and Hull on Probate Practice, 4th ed., Rodney Hull, Q.C. and Ian M. Hull (Carswell: Toronto, 1996), pp. 116-119. 

Have a good day,

Chris Graham

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Rule 45 of Ontario's Rules of Civil Procedure contains mechanisms by which a party can freeze assets that are in issue or relevant to the proceeding.  However, this should be done prior to the close of pleadings because once the matter is set down for trial, Rule 48.04(1) applies.  Rule 48.04(1) requires that any motion brought after the close of pleadings have leave of the court.  Leave will only be available where there has been a substantial or unexpected change in circumstances.

A recent example of Rule 48.04(1) barring a motion for interim preservation occured in Trapukowitcz Estate v. Royal Bank of Canada.  In this case, an estate trustee was seeking an order that the proceeds of a GIC and a bank account be paid into court pending determination of ownership.  Justice Harris refused to grant leave to bring the motion because, on the basis of the admissible evidence, the estate trustee had not shown a substantial or unexpected change in circumstances. 

Justice Harris followed Machado v. Pratt & Whitney Canada Inc. (1993), 16 O.R. (3d) 250, which requires strong affidavit evidence to demonstrate a "substantial and unexpected change in circumstances to the extent that to refuse the order would be manifestly unjust".  The grounds in the moving estate trustee's affidavit were unconvincing. 

As importantly, viva voce evidence given in submissions was not considered.  To do so would be unfair to the respondent, particularly since the evidence had been available since June 4, 2009 and the hearing took place in August 6, 2009.  Therefore, Justice Harris cited Rule 37.06(b), which stipulates that every notice of motion must state the grounds to be argued, and refused to consider the viva voce evidence. 

There is no requirement under Rule 45 to prove the assets are actually at risk, so a R. 45 freezing order is easier to get before the close of pleadings.

Enjoy your day,

Chris Graham

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Settlement privilege excludes communications made in furtherance of settlement from the record.  Settlement is a fundamental component of our trial system for trite reasons.  Virtually every litigation proceeding has a parallel settlement component that the court does not and usually ought not to see, until after the main proceeding. 

In Re Hallman Estate, the applicant had filed an affidavit including a letter that was a settlement offer from respondent trustees.  The letter was marked "Without Prejudice".  The trustees brought a motion to expunge that part of the affidavit.  The applicant asserted that the trustees had impliedly waived settlement privilege by relying on the letter in exercising their discetion when, at a trustees' meeting, they had discussed the letter then refused to pay trust income to the applicant, and later disclosed the minutes of the meeting to the applicant.  Also, the trustees sent a letter to the applicant's counsel noting that the letter had been discussed and offering to provide redacted minutes.  The issue was whether this constituted implied waiver.

No waiver was found.  Settlement privilege can be waived expressly or by implication.  A clear intention is not always necessary.  The privilege can be waived by conduct (waiver by implication), even in the absence of intention, and one situation where this occurs is where fairness requires it (for instance, taking a position inconsistent with the maintenance of privilege).   

But here, it was the applicant asserting the waiver who first filed the Minutes referencing the letter, not the trustees relying on the privilege.  Second, the communication to the applicant's lawyer of the reliance on the letter constituted confirmation of non-waiver, not the opposite.  Finally, there was no evidence the trustees actually did rely on the letter to exercise their discretion as trustees, only that they had discussed the applicant's lack of reply to the letter during the meeting.  On this final point, the decision does not unequivocably state that such reliance would have been sufficient.        

The onus for proving waiver of the privilege rests with the party asserting the waiver, but that should not prevent litigants from fastidiously maintaining the privilege (as the trustees did in this case).

Have a great week,

Chris Graham

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Off with the cufflinks. Roll up your sleeves. Grab your joystick and get ready for what may be the ultimate way for the estates and trusts practitioner to spend their lunch hour: Nintendo DS Safecracker.

                                                  

As an expert safecracker, you have been hired by the wealthy family of a recently deceased billionaire in order to search for the Last Will and Testament of their late relative, oil tycoon Duncan W. Adams. Adams, both an avid safe collector and an eccentric recluse, has hidden the deed to his riches in one of the 35 safes scattered in his lavish 40-room, 3-storey mansion.

Of course, what last testament tale wouldn’t include a nod to the complexities of family dynamics? In addition to his Last Will, Adams has strewn around the mansion various snippets of information about himself and his descendants: letters, notes, postcards and even a diary, all of which allude to the inner workings of the family. 

Game on!

Jennifer Hartman, Guest Blogger

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Hugh Lawford, co-founder of Quicklaw - the world's first online legal database - recently passed away.  

As noted in Mr. Lawford’s obituary, he created the project at Queen's University in 1967 when he realized that legal documents could be computerized and made available in a database. This insight led to his creation of QUICKLAW Inc. together with Professor Richard von Briesen in 1973.

Mr. Lawford spent virtually the next thirty years dividing his time between teaching law at Queen's University and building QUICKLAW into a household name in the legal community. It was a system that without a doubt revolutionized the practice of law, putting an end to long days of cumbersome legal research.  

In 2002, QUICKLAW was sold to LexisNexis. By that time, it had over 200 employees in a dozen offices in North America.

Some of Mr. Lawford’s other noteworthy achievements are:

·                    He was chosen as Rhodes Scholar for Alberta in 1955.

·                    He obtained his Bachelor of Civil Law degree from Oxford University.

·                    Returning to Canada, he joined the new Law Faculty at Queen's University in Kingston, Ontario, and became Queen's youngest Associate Professor, teaching International and Administrative Law; and

·                    He was Special Assistant for a time, first to the President of the Privy Council and then to the Prime Minister.

An interesting article on his life can be found in the Globe and Mail.

Have a great day,

Natalia

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Having recently posted a blog on bad neighbours, you can well imagine my shock when I rounded the corner this week and saw what appeared to be an OPP paddywagon parked in front of a house on a fairly white bread, middle class street in Nothing-Ever-Happens-Here-ville, Ontario. A white box van with blue and red stripes – you know the one. As I slowly passed the van, admittedly hoping to glean some fodder for juicy neighbourhood gossip, nothing prepared me for the words ‘CRIME SCENE CLEANERS’ on the side of the vehicle.

Crime & Trauma Scene Cleaners Inc., a division of Biohazard Canada, and a licensed member of the Canadian Association of Decontamination Specialists, operates in Ontario, Quebec, Manitoba, Saskatchewan, Alberta and B.C. Their website states that they are ‘committed to helping people when tragedy strikes’ and that their objective is ‘to restore safety to an environment in the most professional and discrete manner possible. This relieves family members or employees of the emotional and traumatic task of cleaning up after a suicide, homicide, decomposition, accidental death, etc.’ For those of you reading this blog on your lunch hour, feel free to defer your perusal of the graphic photo gallery of various before and after crime scenes. Very Dexter, indeed.

The company, and their 34-year old president, Christian Cadieux, who has occasionally been referred to as ‘Death’s Janitor’, are getting wide and witty press coverage:

· “And You Thought Your Job Stunk” – Toronto Sun
· “Out, Damn Spot” – Eye Weekly
· “Behold, The Grim Sweeper” - Toronto Star

Cost? In an interview with George Stromboulopoulos on The Hour, Mr. Cadieux mused that the cleanup of the accidental backseat head shot in Pulp Fiction would set one back about $4,000 to $5,000. Although I’m still trying to figure out how you would explain this kind of expense to your insurer….

Jennifer Hartman, Guest Blogger

 

 

 

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The Toronto International Film Festival brought stars to town and brought an estate issue into focus. The Art of the Steal  received accolades as a “thrilling whodunit” about the world-renowned Barnes art collection, valued in the “billions and billions.” Dr. Albert Barnes assembled art in the twenties and housed it in the suburb of Merion, Pennsylvania.

On his death in 1951, Dr. Barnes’ will gave control of the collection to the trustees of Lincoln University, the first black university in the United States. However, according to the film’s producer, in the nineties, a scheme was hatched to permanently remove the collection from Merion that some would later call the heist of the century.

The trustees’ decision to move the exhibit to downtown Philadelphia was met with legal challenges that did not succeed.  On a site called The Barnes Letters  it seems interest groups used the courts to deviate from Dr. Barnes’ express wishes to focus on “an educational organization designed to promulgate a unique way of teaching art appreciation.”

At an opening ceremony for the new site, protestors marked the occasion with signs advocating that Barnes’ “…Will Should Be Honoured.”

Art disputes relating to trusts and foundations are not uncommon. Here in Canada, one example involves a long-standing legal dispute between the U.K. Beaverbrook Foundation which claims that it only loaned art to a New Brunswick gallery – art that originally belonged to New Brunswick newspaper baron Max Aitken.  (See Paul Trudelle's September 14, 2009 blog).

These examples point to the idea that a testator’s expressed wishes for certain assets may not always be respected. Dr. Barnes wanted his art to stay put, while it was alleged that Lord Beaverbrook’s art was gifted to the people of New Brunswick.

Have a good Monday.

Jonathan Morse

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I conclude my blog week by writing about the late Michael Jackson who was finally laid to rest on September 3, 2009. Ten long weeks after his death, Michael Jackson’s coffin was placed in a mausoleum in the Forest Lawn Memorial Park, which is located outside of Los Angeles.

If reports are to be believed, his body has been placed in the Holly Terrace, which is a large hall at the centre of Forest Lawn's monolithic grounds. Although the fascination of Michael Jackson will continue long after his death, the mausoleum is policed by private guards and is rumoured to be among the highest security resting places in the world.

There have been reports indicating that the price of grave-plots close to Michael Jackson's tomb have gone up $2,000 - $3,000 in value since Michael Jackson joined the neighbourhood.

Some reports have indicated that some private parties have asked for substantially more, with one person rumoured to have asked for $34,000 for a double unit inside of the Michael Jackson mausoleum. Even after death, Michael is still making headlines, this time in the cemetery world.

Thank you for reading and I hope you have an enjoyable weekend!

Rick Bickhram

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Planning your estate feels a lot like preparing for your taxes. It takes time and it’s something the average person hates to turn their mind to. Nevertheless, a solid estate plan is, without a doubt, the best defence against the potential threats to hard earned wealth posed by disgruntled family members or tax authorities.

Recently, I read an article written by Hyman Darling, an Attorney in the State of Massachusetts, in regards to the top 10 issues regarding wills. Mr. Darling states that the top 10 issues that are frequently being considered by the average person are:

1.                  Should I have a Will?

2.                  What kind of Will should I have?

3.                  How does a Will work when I die?

4.                  What if I have a Will but am not satisfied with it?

5.                  Do both spouses need Wills?

6.                  Is it possible to set up a Trust under my Will?

7.                  How can I include a charity in my Will?

8.                  How can a charitable bequest benefit me?

9.                  How much does a Will cost?

10.              How do I go about getting an attorney?

Mr. Darling does an exceptional job at considering each issue and I certainly recommend that everyone considering an estate plan review his article.

Thank you for reading,

Rick Bickhram

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It should come as no surprise that we live in an aging society. As our society continues to grow old, family members should be concerned about their loved ones who live with disabilities.  

I recently read an article (found here) that describes the obstacles that our law enforcement and emergency professionals are confronted with when responding to an emergency involving a disabled or elderly person.

The article describes stories where law enforcement and emergency professionals were not aware or misunderstood the unique limitations of people with disabilities and were unable to offer the best assistance during their need for help. For instance, the article describes “a California man who, while waiting for his bus home from work, was beaten by officers who mistook his folded white cane for a martial arts weapon and a Florida man dumped from his wheelchair by a deputy who didn't believe he was paralyzed.”

The focus of this article should be for family members to be prepared for emergencies. Some helpful tips to becoming prepared are:

1. Instructing family members with disabilities to contact family members right after emergency professionals;

2. Keeping relevant health records in an easily accessible location and instructing family members to give the materials to emergency professionals; and

3. Enlisting your neighbours and nearby friends to offer assistance in emergency situations.

There is no full-proof method of preventing some of the tragedies that the article describes but our family members are the most important people in our lives and we can protect them from traumatic and life-threatening events through careful planning.    

Thank you for reading.

Rick Bickhram

 

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After a long and relaxing weekend, most of us now return to work geared to face the challenges of our week.  I start my blog by discussing the recent issue of the Probater.

The Probater is a quarterly newsletter that is prepared by the lawyers at Hull & Hull LLP and is provided to the community as an information service.  Our most recent newsletter was released in September 2009.  In the September 2009 issue, Jonathan Morse writes about the fundamental principles behind Rules 74 and 75 of The Rules of Civil Procedure, but more particularly focuses his article on the purpose behind Rule 74.15.

Rule 74.15 allows “any person who appears to have a financial interest in an estate” to obtain orders that would assist them in administering an estate. There is an abundance of case law that defines financial interest and clarifies the threshold question as to who may have a financial interest in an estate.

In his article, Jonathan does a good job in explaining the application of such orders and concludes by referring to a recent decision of the Honourable Justice Brown in Barletta v. Donne, which highlights the recent application of Rule 74.15. 

Thank you for reading,

 

Rick Bickhram

 

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Palliative care is a specialized kind of health care for people living with life-threatening illness, usually in the advanced stages. The foremost goal of palliative care is to achieve the highest quality of life (for the patient and their family) in its end stages. This comfort care is multidisciplinary, should be highly individualized, and ideally incorporates best practices in the following aspects of end-of-life care:

· Pain management: Commonly viewed as the single most important aspect of palliative care, it is also one of the most challenging. The majority of palliative analgesic drugs have sedating effects that can undesirably impact the patient’s lucidity and mental functioning. However, when terminally ill and conscious patients are experiencing intolerable symptoms that are not relieved with expert palliative care, then implementation of palliative sedation, with the intent of inducing unconsciousness, can be considered with the patient’s (or substitute decision maker’s) consent.

· Symptom management: Distressing symptoms other than pain that are aggressively managed include gastrointestinal symptoms, respiratory symptoms, insomnia, confusion and agitation.

· Psychosocial support: An effective palliative care model places paramount importance on the respect of the patient as an individual; one who deserves support, sensitivity, compassion, the preservation of their integrity and dignity, together with consideration of their spiritual and cultural values.

· Caregiver support: Palliative care, if it is to be approached holistically, includes the patient’s support network. Mirroring the patient, friends and family may also be experiencing a loss of control, fear, anger and anxiety, all of which can be exacerbated if they have been, or continue to be, actively involved in a caregiving role.

The patient best defines the quality of their own life and should therefore actively participate in directing the course of their care.

Jennifer Hartman, Guest Blogger
 

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Walter Cronkite’s last will and testament has been revealed – and he left his girlfriend out in the cold. 

Cronkite, the legendary newsman perhaps best known for anchoring the CBS Evening News for almost 20 years, dated Joanna Simon, sister to singer Carly Simon, for the four years prior to his death.  However, it appears that he did not provide for her in his will. 

Instead, he divided his estate amongst his children and some former colleagues from CBS.  His alma mater, the University of Texas, is to receive certain personal effects relating to his broadcast career (incidentally, U of T has a nice video tribute to him on its website). 

Cronkite’s reason for not leaving his girlfriend anything was apparently because he had provided for her well in his lifetime.  In addition, a motivating factor appeared to be that he did not want to share his estate with his girlfriend out of respect for his deceased wife. 

No word on whether Cronkite’s girlfriend intends to advance any claims against his estate.  His  will was filed with the surrogate court in Manhattan and any claim she had would be governed by the relevant law in that jurisdiction. 

Had Cronkite died resident in Ontario, his girlfriend could potentially have sought dependant support under the Succession Law Reform Act.  Part V of the SLRA provides that if a deceased does not in his will provide sufficient support for a dependant (which includes a common law spouse) who is in need of and entitled to support then that dependant is entitled to dependant’s relief. 

Have a great day,

Megan F. Connolly  

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Traumatic Brain Injury (TBI) is defined as sudden damage to the brain, occurring after birth, as a result of an external force (e.g. crash, assault, fall). The effects of TBI are determined by the location and severity of the injury, as well as the age and general health of the individual. Thus, TBI results in a very broad spectrum of disabilities, and may include problems with cognition, communication, sensory processing, behaviour and mental health. Severe TBI can result in a long-term unresponsive state such as coma. [Note: ‘Acquired Brain Injury’ is the larger, umbrella term which includes not only TBI, but also brain injury caused by a non-traumatic event such as a stroke or an aneurysm].

TBI statistics are staggering:

· 11,000 people die each year in Canada as a result of a Traumatic Brain Injury (over 4,000 in Ontario alone). Annually, another 6,000 Canadians will become permanently disabled after a TBI.
· Most TBIs in Canada are caused by motor vehicle crashes, sports related injuries, falls and bike accidents. In the United States, firearms rank as the second-leading cause of TBI.
· The age group with the highest rates of TBI are the 15-24 year olds. TBI risk also spikes after the age of 65. TBI is the leading cause of disability among children and is the third most common injury leading to hospitalization in older adults.
· TBI affects men at twice the rate of females. Men are also more likely to suffer severe injuries, and thus incur a higher mortality rate.

TBI prevention has evolved tremendously over the years to address issues such as seatbelt use, driving under the influence, helmet use, pedestrian safety, shaken baby syndrome and elderly falls prevention.
 

Jennifer Hartman, Guest Blogger

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David M. Sherman's Basic Tax and GST Guide for Lawyers 2008-2009 (Toronto: Carswell, 2008) is a helpful resource for lawyers not specializing in tax law.  The section on Wills and Estates (chapter 7) is concise, easy to follow, and the annotations are precise.  The style is rule-driven and not overly burdened with qualifications (these appear in the Preface); it is not cluttered with lengthy paragraphs or run-on sentences. 

One criterion I use to rate general texts is how helpful or interesting they are to me in areas outside my field.  This book scores well on that basis.   See, for instance, the section on deductibility of legal fees or health club memberships. 

This text is highly recommended.

And my Friday blogs are always short for you.

Enjoy the weekend,

Chris Graham

 

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Q:  How is a will actually revoked, other than by marriage or making a new will?

A:   See section 15 of Ontario's Succession Law Reform Act ("SLRA"), which enumerates revocation events (marriage depending on the will, making a new will, a proper written revocation, and destruction of the will).  See also the later provisions in the SLRA, especially ss. 16-19.

Revocation by destruction (s. 15(d) of the SLRA) is perhaps the most legally interesting revocation technique.  To revoke by destruction, the testator must have the intention to revoke the will (animo revocandi), and perform an act of destruction qualifying under section 15(d).  Both requirements must be present: acts without intent are not sufficient, nor are intentions without action (Cheese v. Lovejoy (1877), 2 P.D. 251 at 253).  The testator must not be of unsound mind (which extends to scenarios other than just general lack of testamentary capacity, so for instance, a very drunk testator might not have requisite capacity to revoke the will). 

How is the act requirement met?  What amounts to a "burning, tearing or otherwise destroying" of the will?  The caselaw is rich in unique fact scenarios on this issue, but clearly the entire will need not be comprehensively annihilated.  For instance, in Hobbs v. Knight (1838), 1 Curt 768 at 780-781, a signature that was obliterated so that it could no longer be read would amount to a revocation of the will, because the signature is an essential part of the will.   

The caselaw, much of which predates section 15 and the related sections in the SLRA (and the entire SLRA), is still very much relevant.  For a detailed discussion of revocation of wills in light of the SLRA, see Chapter 4 of  MacDonell, Sheard and Hull on Probate Practice, 4th ed. (Carswell: Toronto, 1996), edited by Ian Hull and Rodney Hull.

Have a great day,

Chris Graham

 

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Part V of Ontario's Succession Law Reform Act ("SLRA") establishes a mechanism whereby qualifying dependants can claim support from the estate of a deceased.  Section 72 of the SLRA is a deeming provision that includes certain non-estate assets as part of the estate for the purposes of calculating the value of the estate, and allows such assets to be charged ("clawed back") by a support Order made under section 63 of the SLRA. 

The recent case of Simson v. De Bartolo 2009 CanLII 38493 (ON S.C.) interprets section 72(1) and applies Cummings v. Cummings 2004 CanLII 9339 (ON C.A.), the Court of Appeals decision holding that support awards are subject to moral considerations.  One issue following Cummings has been whether moral considerations justify a support award in and of themselves, or whether moral considerations are merely relevant to quantum of support following a determination that a support award is appropriate.

The applicant in Simson v. De Bartolo was litigation guardian for her child, born out of wedlock to the deceased and the actual support claimant.  When the applicant told the deceased's wife about their relationship and the child, the deceased transferred these properties to his wife (from joint ownership) and made a will disinheriting the child.  Later, the deceased died virtually penniless.  At issue in a motion was whether properties transferred by the deceased to his wife 10 years prior to his death could be deemed part of the deceased's estate under any enumerated grounds in section 72(1). 

Justice Lemon held that these assets could not be "clawed back" under s. 72(1).  Most particularly, a transfer of land to another party in the absence of an express written trust instrument does not fall within section 72(1)(e).  Of course, the transfer may still be impressed with a trust, as Justice Lemon pointed out, and if such trust pulls the asset into the estate, the SLRA provides for protection of the dependant pursuant to section 67.  Moral considerations were relevant in determining quantum of support, but not whether an asset forms part of the estate.

The facts in Simson v. De Bartolo appear to have precluded the court from addressing the Cummings question, at least in the motion being heard.  However, section 72 has been clarified.

Enjoy your day,

Chris Graham

 

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Wang Yung-Ching died at the age of 91 in New Jersey without a will (so far).   Of course, New Jersey has intestacy laws.  But according to the New Jersey's Star-Ledger, Mr. Wang owned a multi-national conglomerate worth around US$7 billion (the basic American Dream story: immigrant founds Formosa Plastics)... with at least nine children... by at least two different women in long-term relationships, none of whom was Mr. Wang's surviving married wife of more than 70 years... and one son has filed court documents alleging additional assets transferred by 2 half-sisters and a cousin, including $7.5 billion in Cayman Islands trusts and $1 billion to a bank in Switzerland ... and while Mr. Wang's corporate headquarters were in New Jersey, he also held approximately $1.7 billion in cash, stocks and real property in Taiwan... and a potential fourth spouse has emerged in Taiwan, with 3 more purported children.  

Mr. Wang's eldest son, Winston Wong (same surname, just different spelling), has applied to be appointed as the estate administrator in New Jersey.  According to an Associated Press report, last week a judge adjourned a motion made by one of Mr. Wang's daughters to dismiss Winston Wong's application on the grounds New Jersey was not the proper jurisdiction. 

Winston Wong also has been granted powers of attorney by Mr. Wang's wife, and he is applying or petitioning to be appointed her guardian (the reports go no further on this issue).  This is being contested by some other siblings.  The guardianship issue is less hashed out in the reports but with Mr. Wang's wife entitled to around 50% of her deceased's husband's estate if New Jersey's intestacy laws apply, what are the odds of that changing?   

There's enough money at stake to ensure every possible issue (or non-issue) gets litigated, across the globe. 

Have a great day.

Chris Graham

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While employed in management in the assisted living field, I was tasked with the facilitation and implementation of the personal care decisions of my residents. Where the resident was capable, they of course directed their own personal care, including scoping out their vision for advance directives, should the future need arise for these to be considered. Some residents, however, were no longer capable of making their own personal care decisions and the legal responsibility for doing so was passed to another party by a previously conceived Power of Attorney for Personal Care (POAPC).

While simple in concept, complications emerged when more than one person had been appointed under the POAPC. As an example, one resident had appointed all five of her children to make personal care decisions in the event of her incapacity. Well-intentioned, no doubt, as I imagined that she had done so in order to ‘keep the peace’ amongst the five adult siblings. In practical terms, however, the children spanned three countries and nine timezones and an equal breadth of opinion regarding how their mother’s care plan was to evolve, especially as her health declined. Attempting to reach consensus about any facets of her personal care was onerous and time-intense, and understandably emotional for the family. Factors such as the sibling’s interpersonal relationships (including where they felt they fell within the family pecking order), their own beliefs and values regarding end-of-life medical intervention, as well as the ‘baggage’ they each carried regarding their relationship with their mother, impacted, if not directed, their decision-making.

If one feels it both necessary and appropriate to appoint multiple Attorneys under a POAPC, prudence dictates that a prior detailed discussion, including written documentation, be undertaken to ensure that one’s wishes have been effectively communicated and understood.

Jennifer Hartman, Guest Blogger

 

 

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Polypharmacy refers to the taking of multiple drugs by a single patient. As more and more drugs are introduced on the market that address the diseases and chronic conditions associated with aging, it is no surprise that it is the elderly who are most affected by polypharmacy. According to a Toronto Star article that appeared as part of their 2008 Atkinson Series, 23% of seniors over the age of 65 take at least five drugs, while 12% are taking 10 or more drugs. Generally, these individuals are seeing more than one specialist for more than one ailment and the issue is simply a lack of oversight in order to keep the ‘larger picture’ in view.

Delving deeper, however, USA Today cited a report by the Center for Substance Abuse Prevention that 17% of Americans over the age of 60 are abusing prescription drugs. In such instances of substance abuse, it is not unusual for the individual to visit numerous physicians ('doctor shopping') and process their prescriptions through a variety of pharmacies in order to hide the abuse. Particularly addictive drugs in the elderly population are the benzodiazepines (prescribed for anxiety and insomnia) and narcotic painkillers. Risk factors include a prior history of alcoholism or substance abuse. The effects of prescription abuse include confusion, memory impairment and an increased incidence of falls. In 1995, the Canadian Medical Association Journal reported that the doctors who wrote the most prescriptions also had the highest death rates amongst their patients.

So where does one draw the line between prescription use and prescription abuse? When a drug is used for a non-prescribed purpose or when use increases beyond the prescribed dose, then addiction is an issue. If you have a concern about an aging relative, stay connected and informed and periodically check for drug compliance (this is as simple as looking at the fill date and counting the number of pills thus far consumed). Assess alternatives (a pain management specialist, perhaps) and if necessary, express your concerns to the prescribing physician.

 

Jennifer Hartman, Guest Blogger

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Although one of the perils of running an estate blog over the past month has been (with apologies to CNN) the risk of over-reporting on the estate of Michael Jackson, the media frenzy has nonetheless served to shine a light on certain aspects of estate planning that otherwise go unnoticed.

A clause appointing a guardian for one's child(ren) is not always one that younger testators choose to put in their wills. This may in part be due to the statistical unlikelihood of both parents dying before a child reaches the age of eighteen.  In such a tragic eventuality, and as Natalia Angelini noted in her recent blog on the subject, the ultimate decision on guardianship is in the court's discretion.

A recent article posted online by the Canadian Press comments on the difficulty that couples may encounter in trying to agree on a guardian for their child(ren).  Some will want a friend; others will insist on a family member.  Complicating any decision may be such considerations as the likelihood of the proposed guardian relocating to a foreign jurisdiction or remarrying someone who, in hindsight, may not prove to be a good parent to the children.

It is always a good idea to plan for any statistical anomaly.  The Courts will typically respect the choice of the testator and assign great weight to his or her wishes.  The alternative of leaving the decision completely unfettered by such wishes is not one that any parent of a young child would want to contemplate.

David M. Smith

 

 

 

 

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Hull & Hull LLP will be posting our second 'health series' of blogs starting on Monday August 10th.  The series will run every Monday thereafter in the month of August, for a total of four blogs.  The following subjects will be featured:

• Polypharmacy and Seniors
• Multiple Attorneys for Personal Care
• Traumatic Brain Injury
• Palliative Care - an Overview

We hope this series proves both useful and informative.  Please feel free to contact us at nonley@hullandhull.com with your feedback.

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I recently had the opportunity to meet with a gentleman named Franco Lombardo from Vancounver B.C. who has pioneered the concept of "authentic wealth" in the context of succession planning.  Franco has written two books:  Life After Wealth and Money Motto both of which deal with and elaborate on his core concepts of devising strategies for individuals who want to create a meaningful personal legacy. 

In Lombardo's words: "Authentic Wealth involves seeing, understanding and releasing fears around money, and, at the same time, embracing a deeper understanding of who we are, why we are here, and how we create meaning through the choices we make every day"

Franco has founded Veritage, a company through which he consults with clients with a view towards a more holistic succession planning strategy.   The concept of collaboration between a testator and his or her beneficiaries in realizing family objectives has also been explored by Ian Hull of our office and his concept of the Family Conference as a means of avoiding estate litigation. 

David M. Smith

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The gradual demographic shift to an aging population is causing governments to reevaluate how to ensure that appropriate funding is in place to provide for long-term care.

A recent article on the BBC website references the work of a task force commissioned by the British government to consider the feasibility of three different models for the funding of post retirement long term care.

The three plans are:

Partnership - The state guarantees a base level of care, leaving the individual to fund the difference; 

Insurance - The same as partnership, except that the government would help set up insurance schemes for people to pay into to cover the difference; and 
 

Comprehensive - Payments of up to £20,000 to be paid by an individual after retirement.  In exchange, all social care, except accommodation costs, would be paid for by the government.  The payment by the individual could be paid in a lump sum, through installments, or garnished from his or her pension.

The authors of the proposals note that many people will be better off under these models as the average cost of social care for a 65-year-old is £30,000 over the rest of their lifetime. Another aspect of the proposals allows deferral of the costs of residential care until death when the outstanding bill would be a charge against the individual's estate.

Of course, the accepted model will depend on the outcome of a vigorous political debate that will have to weigh the sacrifices required to fund the costs of caring for an aging population.

David M. Smith

 

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The moment of death is obviously the seminal triggering event in the context of estate and trust law.  As but one example, a Will speaks from the moment of death.

A recent article in the National Post raises an interesting question regarding when death actually occurs and how it is defined.  There is a medical difference between "cardiac death" and "brain death."  As the article notes, the issue is of most concern in the context or organ donation. Simply put, the cardiac death protocol provides that declaration of death may be made 5 minutes after cardiac death.  However, in extremely rare instances, case have been reported of a "Lazarus syndrome" and "auto-resuscitation" as long as ten minutes after cardiac death.  In any event, a person may still have brain activity for a period of time after cardiac death.

As Jocelyn Downie, an ethicist at Dalhousie University notes: "It is only after the declaration of death that certain things can happen:  we can take your organs, we can bury you, we can do an autopsy...we can trigger all sorts of things around your property."  Downie advocates a more rigid definition. 

Legislation in most provinces suggests that death is to be determined by physicians according to "current medical practice." PEI's law is more specific (death can "include brain death").  In Quebec, there is no legal definition at all:  the matter is left completely to the physician.

Ontario's Trillium Gift of Life Network endorsed the new donation-after-cardiac-death (DCD) protocol only after extensive research and consultation that ensured it is a moral and medically appropriate practice.

David M. Smith

 

 

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Everyone knows that you should make a list before going to the grocery store. If you do not, you will inevitably forget some essential basic that was not interesting enough to remember. It will be the very thing you went to the store for in the first place.

The same thing is true of checklists in your practice. Save time and angst with a comprehensive checklist that sets out the steps and considerations required – even on the simple, straight-forward files. The first time you do something, it is a learning experience. The next time is quicker and easier if you put your learning to good use. Do a post mortem: Write down the steps and think about what you could have done better, faster, more efficiently. What did you forget? What would you add? Follow your list to breeze through the next similar matter. Make lists once and, with a little maintenance, benefit for many files to come.  Have a look at the ILA checklist by Philip Epstein on the LawPRO website to get the general idea.  

If you are still not convinced, check out this article in the New Yorker about the sustained ability of simple checklists (wash hands, use sterile things) to virtually eliminate infection and dramatically reduce death rates and costs in intensive care units. Saving 1,500 lives and $175M in 18 months is nothing to sneeze at. 

If it works for doctors, it can work for lawyers, proving that anyone without an eidetic memory stands to benefit from a checklist. Since the vast majority of identified eidetikers are preadolescent children, chances are slim that you fit into this category. Total recall is not a learned skill and, even if it was, isn’t just making and following a checklist a whole lot easier?

Next on your "to do" list:  Have a great weekend!

Sharon Davis

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As previously blogged on by Paul Trudelle, the evidence required for the court to properly consider whether an administration bond should be dispensed with was clearly set out by Brown J. in the Re Henderson case 2008 CanLII 69136. But what if the answer is no and you must post a bond?    

One option is to go to the Ontario Lawyers Probate Bond Service. It was designed by Gamble & Associates Insurance Ltd. with their over 50 years experience in providing Probate Bonds. There is a simple 7-step process that walks you through the Fiduciary Bond Application and asks questions that you can fill in quickly and easily. There is 24-hour turnaround in most cases. The system was made possible through close association with The Guarantee Company of North America, a well-respected licensed surety company.

Click here for a list of the Gamble & Associates offices. If there is a bond coming soon to an Estate Trustee near you, you can give them a call to set up an account and access the service online.

For more information on administration bonds see Natalia Angelini’s paper, The Tricky Business of Administration Bonds, presented at Hull & Hull LLP’s Estate Trust and Capacity Law Breakfast Series. 

Thanks for reading!

Sharon Davis

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Ever wonder if (or wish that) you might be the lucky beneficiary of a hefty life insurance policy left to you by some benevolent benefactor? Well now you can find out if your wishes have come true. 

A life insurance policy locator service created and maintained by MIB Solutions Inc. allows you to search 170 million records to see who may have named you (or your client) as a beneficiary. The database includes policies collected from virtually every North American carrier involved in life insurance. The hit rate is 30%. An executor, administrator, a surviving spouse or other relative eligible for appointment may be entitled to order the report.  Policy Locator can make it easy to discover life insurance benefits you may not have realized existed.

How to Submit a Request

1. Download the search request form and fill in the required information. 
2. Include an original death certificate, containing an official seal, with the request form.
3. Include a $75.00 check (payable to MIB Solutions, Inc.) or money order in U.S. currency.
4. Mail the above items to MIB Solutions at the address listed below or supplied on the form.

Your Policy Locator search report and the "Policy Locator Research Primer" will be mailed to you shortly thereafter.

Mailing Address:
MIB Solutions, Inc.
50 Braintree Hill Park
Suite 400
Braintree, MA 02184-8734

Good Luck!

Sharon Davis 

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As mentioned in Craig Vander Zee’s recent blog on Contested Passing of Accounts, preparedness is the hallmark of success in an estates practice. Responding at a moment’s notice with facts, documents and other relevant evidence from your trial binder will show well not only for your client’s case but for you as well. Impressions on the judiciary are long-lasting. Providing well-organized, helpful information will endear you to any judge faced with the need to sort out a myriad of facts, issues, law and parties in order to dispense proportionate amounts of justice. 

The new Practice Direction Concerning the Estates List of the Superior Court of Justice in Toronto  that came into effect on April 1, 2009 encourages all efforts that assist the court to do its job expeditiously and well. Where there are multiple appearances and/or complex or voluminous proceedings, a Compendium of Documents containing key materials such as extracts of documents, transcripts, previous orders and authorities must be prepared. Highlight relevant portions and consult on a joint Compendium if you can (cooperation with the other side also wins points). Use diagrams, family trees, lists of persons, corporate org charts, chronologies and any other helpful synopses of complex or technical evidence; here is your chance to be creative. Visuals are particularly effective and providing graphic representations can cut the time required to sort out complex relationships or complicated timelines.   

The person starting a case is responsible for filing and maintaining an Endorsements/Orders Record, a red three-ring binder containing endorsements, orders and reasons for judgment. You have five days from issue to provide copies along with numbered tabs and an updated table of contents to the Estates Office.

While you are creating material for the court’s use, you can make copies for your trial binder and include extra information for optimum use by you – the most organized/best counsel in the room! 

Be a trail blazer with your trial binder and you will see that it can be an effective tool to help you win friends (and cases) and influence people (and judges).

Cheers,

Sharon Davis

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The Ontario Ministry of the Attorney General Website posts answers to frequently asked questions about estates matters like how to find a copy of a deceased person’s will and how to calculate the amount of estate administration tax. 

There is a public database on site at the Toronto Estates Office at 330 University Avenue that contains information on wills deposited with the court for safekeeping or provided through an application for a Certificate of Appointment of Estate Trustee with a Will. 

Wills deposited with all Ontario Courts from 1996 forward can be searched through the Toronto office. Wills deposited in Toronto can be searched back 40 years. You must contact the individual court offices in other jurisdictions for wills pre-dating 1996.

You can search the name of the deceased and the date of death in order to obtain the file number and review the original will. Searching is free. If the file is located there is a $10.00 fee to retrieve it, $61 if it is in storage, and $1.00 per page for photocopies of the will.

As for estate administration tax, the formula for calculation is set out in s. 2(6) of the Estate Administration Tax Act, as follows:

·         $5 for each $1,000, or part thereof, of the first $50,000 of the value of the estate, and

·         $15 for each $1,000, or part thereof, of the value of the estate exceeding $50,000.

Or, perhaps you might want to consider a Joint Last to Die Insurance Policy, insurance designed for couples with the specific purpose of providing sufficient funds to pay taxes that will be owed by the estate; the policy pays out the total death benefit upon the death of the surviving spouse. Click here for Sun Life Financial’s version.

Death & taxes: You might not be able to avoid the former but, with a little planning, you can insure against the latter.

Thanks for reading.

Sharon Davis

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A recent decision of C.L.B. v. J.B.addressed when it is appropriate for a court file to be sealed. The case involved two minors who had lost a parent in the 9/11 terrorist attacks and had received victims’ compensation. The court ordered that the funds be held in trust and set out a timeline for when the trustees would be required to pass accounts. 

When the trustees later applied to pass accounts, they also brought a motion that the court file be sealed so as to protect the minors’ privacy. 

In considering the motion, Brown J. pointed to the importance of an open and transparent court system. This is not just because public policy favours openness as a way of encouraging the public’s faith in the court system but in addition the public’s right to obtain information about the court system is protected by s. 2(b) of the Charter of Rights and Freedoms. 

Brown J. found that a sealing order should only be granted in the following circumstances:

1.      When there is a serious risk  to an important interest and there is are no reasonable alternatives to preventing the risk; and

2.      When the benefits to granting the order outweigh the negative effects, having regard not just to the interests of the litigants but also the rights of the public. 

Ultimately, Brown J. found that in the circumstances a sealing order was unwarranted. Although the matter involved minors, he pointed out that legal proceedings frequently do and it is far from the norm for the court to order a file sealed. Moreover, he found that there was insufficient evidence before the court that there was a risk of serious harm if the order was not granted. 

He also expressed concern about the possible “deleterious effects” that shielding settlements involving minors or matters involving a fiduciary’s management of a minor’s assets would have on the necessary transparency of a court’s review.   

Finally, he found that a “reasonable alternative” existed – rather than sealing the file, he ordered that the title of proceeding be amended and that any materials filed with the court list the trustees, the names of the trusts, and the minors using only initials rather than full names.  

Have a great day!

Megan F. Connolly 

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The recent decision of Pachaluck Estate v. DiFebo provides a useful example of the costs exposure that parties can face on an application to pass accounts.  

In this case, a beneficiary had objected to the compensation the estate trustee had taken.  The court agreed to an extent – it ordered compensation be reduced (by about $9,700), but not by as much as requested by the beneficiary.    

The court then had to decide the issue of costs.  The executor argued that he had been prudent in his administration of the estate and while the beneficiary was successful in a partial reduction in compensation, she was unsuccessful with regard to most of the objections she had raised. The executor sought fully indemnification for his costs from the estate and argued that the beneficiary should receive partial indemnity costs. 

The beneficiary argued that because she was successful in obtaining a reduction in compensation and because she was unable to get a full accounting until the court had ordered one be produced, her costs should be fully paid by the executor.

The court found that there was a mixed result in its determination of the application to pass accounts.  While the court  agreed the executor had acted in good faith, a reduction in compensation was nevertheless ordered and the court was satisfied that a full accounting would not have been provided absent a court order.

The court was critical of the fact that neither party had served an offer to settle and found that to the extent the estate trustee and beneficiary were entitled to receive costs from the estate it should be on a reduced basis.  Ultimately, the court awarded each less than half the costs that were sought.  

This case is a reminder of some of the perils involved in pursuing a contested passing of accounts.  To begin with, both parties were stuck paying more than half the costs each had incurred personally and, as such, were "out of pocket" in the litigation.  Second, the compensation that was repaid to the estate as a result of the litigation was less than the legal fees that ended up coming out of the estate to reimburse the parties, which begs the question of whether the beneficiary was worse off for pursuing the litigation in the first place.  

Have a great day!

Megan F. Connolly

  

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They bound me with masking tape until I looked like a mummy. It took them
quite a while because they ran out of breath. When they loaded me into the
car I thought I was a dead man.
- James Arnburn, financial adviser and alleged kidnapping victim

Having lost their savings to Florida’s boom-and-bust property market, and apparently sporting one heckuva grudge, Roland and Willy, ages 74 and 60, respectively, reportedly clobbered their financial adviser, James Arnburn, with a walker, bound him with duct tape, then took him for a long drive in the trunk of their Audi. After arriving at Roland’s home a mere 300 miles away, they were joined by retired doctors Gerhard and Iris, ages 63 and 66. The foursome proceeded to hold Mr. Arnburn captive in an unheated cellar for four days, during which time they allegedly burned him with cigarettes, beat him with a chair leg, and even threatened him with the Russian mafia. Armed commandos were eventually scrambled, the house was stormed and Mr. Arnburn was rescued from his ordeal.

According to the Daily Telegraph, this is only the latest example of what is being referred to as ‘silver crime’ – ‘the violent backlash of pensioners who feel cheated by the world.’ To wit, the Times Online reported that over the course of nine years, a group of pensioners dubbed the Grandpa Gang and 'armed' with carrots in their pockets, robbed 14 banks across Germany in an attempt to boost their retirement savings and alleviate their disgust over the size of bankers’ bonuses. The trio won’t be back at the bridge table for about ten years, possibly less for good behaviour.

Jennifer Hartman, Guest Blogger

 

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Tomorrow is July 1^st.  It makes me think of Hatley, a small village in Quebec’s Eastern Townships and its annual Canada Day Celebration. (My wife grew up nearby.)  Across Canada, flags fly high and memories abound. 

If you will allow this segue, memories are often a significant part of estates that are easily overlooked.  When an estate arises, we often focus on assets without putting our mind to the deceased’s legacy.  For many of us, our papers and personal files do not amount to much. But it’s a different story for politicians.

An interesting paper from the Faculty of Information Quarterly at the University of Toronto compares the treatment of Presidents’ papers versus Prime Ministers’ papers. The retention of U.S. papers seems to be more statute driven, although presidential Executive Order can govern the ultimate treatment of documents.

Apparently, on his first day on the job, President Obama overturned President Bush’s order that had limited access to presidential papers. 

In Canada, Prime Ministers’ papers fall into two categories: government/institutional records and personal/political records. Former Prime Ministers receive tax credits for the value of the personal papers they donate to Library and Archives Canada. That value is not disclosed.

Similarly, in the U.S., some financial incentives exist for Presidents: in 2000, the Justice Department paid the Nixon estate $18 million to compensate for records seized in 1974.

In both cases, restrictions regarding the release of certain documents might apply. For example, apparently here in Canada, for 2.5 million records in the National Archives, one must write to Mr. Mulroney directly for permission. 

Have a safe, relaxing Canada Day.

Jonathan

 

 

 

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Today’s blog is the last in my series this week addressing certain aspects of preparation for trial in a contested passing of accounts.    The items discussed this week were certainly not meant to be, nor were they, exhaustive. Preparation necessary for a hearing/trial with narrow issues, few documents, few evidentiary concerns and an uncomplicated Estate will obviously be different than a case with numerous issues, voluminous documents, evidentiary issues and a complicated administration. The critical aspect of trial preparation is that it begins at the beginning of a case; not literally, but certainly in the sense of being mindful at pre-trial stages of the evidentiary considerations and how the evidence is to be marshalled and presented.

Continue Reading...

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In yesterday’s blog, I mentioned that the election of the Ontario Bar Association (OBA), Trusts and Estates Section Executive for the year 2009-2010 was confirmed at the Section’s year end dinner on May 28, 2009. 

Suzana Popovic-Montag is the incoming Chair of the Executive and I happen to be the incoming

Vice-Chair. The balance of the slate is as follows:

 

Past-Chair:                   Kimberly Whaley

 

Secretary:                      Ed Esposto

 

Members-at-Large:     Ann Elise Alexander, Clare Burns, Robert Coates, Vincent De Angelis, Shael Eisen, Jan Goddard, Eric Hoffstein, Danielle Joel, Sean Lawler, Mitchell Leitman, Jane Martin, Deborah Petch, Joanna Ringrose, Liza Sheard, Susan Stamm, Dina Stigas, Sender Tator, Ed Upenieks, Laura West and Melanie Yach.

 

I look forward to again working on the Executive and having a successful year.

 

Before turning the page on this past year, though, I would like to sincerely thank Kimberly Whaley for all of her efforts, hard work and counsel as the Chair of the Executive.

 

Have a nice day.

 

Craig

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The Ontario Bar Association (OBA), Trusts and Estates Section, year end dinner was held on May 28, 2008 at the Gardiner Museum in Toronto. 

Kimberly Whaley, 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 2009/2010 year, was confirmed. 

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

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, C. David Freedman was presented with the Widdifield Award and Kimberly Whaley with the Hoffstein Book Prize.

Congrats to Tim, David and Kim. The venue, dinner and evening were all quite enjoyable.

 

Thanks for reading.

 

Craig

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Actually, reading this blog really will help you live longer.  One secret to living longer is to have a "higher purpose", according to researchers at the Rush Alzheimer's Disease Center (which is part of the Rush University Medical Center in Chicago).  Patricia Boyle, Ph.D. states in the news release announcing the study:

"The finding that purpose in life is related to longevity in older persons suggests that aspects of human flourishing—particularly the tendency to derive meaning from life's experiences and possess a sense of intentionality and goal-directedness—contribute to successful aging,".    

The study found a correlation between longevity and participant's level of agreement with 3 particular statements in a "Purpose of Life" questionnaire:

1. “I sometimes feel as if I’ve done all there is to do in life;”
2. “I used to set goals for myself, but that now seems like a waste of time;” and
3. “My daily activities often seem trivial and unimportant to me.”

Guess whether the correlation was positive or negative?  Or read the study here, when it becomes published (it's not posted yet, but this at least rates a reminder in Outlook) .  

TGIF and find purpose in your weekend.  You'll live longer.

Chris Graham

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The recent case of Re Henry (2009) CanLII 12329 (ON S.C.) is an excellent illustration of how a court scrutinizes evidence in a will challenge. 

In Re Henry, the deceased died on May 28, 2005.  Two weeks earlier, on May 12, 2005, he had made a Will designating his second wife as his sole beneficiary.  The deceased's son from a prior marriage challenged the will on the grounds of undue influence, lack of testamentary capacity and lack of knowledge and approval of the contents of the will.   

The trial judge found in favour of the second wife on all issues: due execution was shown, the deceased had testamentary capacity along with full knowledge and approval of the contents of the will.  The challenger's evidence, which consisted largely of his and his sister's testimony, did not bear scrutiny: some of it was inadmissible, testimony appeared reconstructed as opposed to remembered, testimony contained factual inconsistencies, legal submissions contained errors of law and so on.  By contrast, the evidence brought by the second wife was accepted in whole.

No new law is generated in Re Henry, at least not per se.  But there is a concise consideration of the applicable standard of proof which will be helpful for any lawyer making submissions regarding evidence in a will challenge.  Newbould J. points out that the principle in Vout v. Hay, [1995] S.C.R. 6 that evidence of suspicious circumstances must "be scrutinized in accordance with the gravity of the suspicion" may no longer be good law as a result of F.H. v. McDougall, 2008 S.C.C. 53.  F.H. v. McDougall states "[t]here is only one legal rule and that is in all cases, evidence must be scrutinized with care by the trial judge."  So which is it: Vout v. Hay or F.H. v McDougall? 

Having laid out the jurisprudence, Justice Newbould states:

"I need not decide in this case whether the passage from Vout v. Hay that I have referred to is still good law because in my view the evidence is the same regardless of whether the evidence is scrutinized with greater care in accordance with the gravity of the suspicious circumstances.  I have taken care to scrutinize all of the evidence".

Have a great day,

Chris Graham

 

 

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While the global financial system totters, unemployment soars, government deficits shatter records set during the Cold War era, towns and communities fight for their lives, the global trade system appears threatened, our lifestyle looks to be set for major changes, it is reassuring to know that trust law marches on.

The states of the Great Republic to the South maintain their composure like Cool Hand Luke, calmly assessing the great issues of the day (for trust lawyers) and knocking them down like ducks at a carnival. To wit: Connecticut is set to become the forty-first state to pass a statute for pet trusts (my colleague Megan Connolly blogged on Maryland's pet trust law here).  California made time to pass its own highly evolved Pet Trust Statute last year.  Here’s a link to Pet Trust Law Blog, which has a broad range of resources on Pet Trust Law.

Ontario has yet to divert its attention to such measures.  Estates lawyers would like very much to see legislation making it possible for lawyers to meet their clients' wishes to provide for their beloved Rovers, but it appears that we may have to wait with baited breath.

 

Have a great day,

 

Chris Graham

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Compensation is a factor in every estates file.  The Divisional Court recently confirmed in Church v. Gerlach (2009) Court File No.: DC-07-0038-00 (Div.Ct.) that compensation for an estate trustee during litigation ("ETDL") is determined by the same principles as compensation for executors generally.   Compensation for an ETDL is not determined by applying a solicitor's hourly rate to the time spent.  

In Church v. Gerlach, the ETDL was appealing the trial judge's fixing of compensation at $13,000 inclusive of GST.  The ETDL asked for $23,203,54 plus costs.  The ETDL had originally claimed $35,805.30 plus $2,973.30 for the costs of the application. 

The general provision authorizing compensation to ETDLs is s. 28 of the Estates Act: the ETDL "shall receive out of the property of the deceased such reasonable compensation as the court considers proper".  Section 61 of the Trustees Act authorizes "such fair and reasonable allowance for the care, pains and trouble, and the time expended in and about the estate, as may be allowed by a judge of the Superior Court of Justice." 

According to Ontario's Court of Appeal in Liang Estate v. Hines (1998) CanLII 6867 (ON C.A.), 41 O.R. (3d) 571, the proper approach is to start by applying percentages to the estate (customarily 2.5% of capital receipts and disbursements, 2.5% of income receipts and disbursements, and an annual care and management fee of 0.4% of gross value of the estate).  Then, each percentage is considered against five factors enumerated in Re Toronto General Trusts Corporation and Central Ontario Railway (1905), 6 O.W.N. 350 (H.C.):   

1.  the magnitude of the trust;

2.  the care and responsibility springing therefrom;

3.  the time occupied in performing its duties;

4.  the skill and ability diplayed; and

5.  the success which has attended its administration.

Applying this approach, the ETDL was awarded half of the usual percentages: he ought not to be fully compensated as if he was required to perform all of the functions of an Estate Trustee, and the reduction also took into account the complexity of the estate. 

As a general practice note on costs of appeals, while the ETDL had paid his lawyer more than $15,000 to prepare the appeal, given the amount in dispute, the relatively simple issues on appeal and the reasonable expectation of the appellant ETDL, costs were fixed at $5,000 all-inclusive.  

The Divisional Court also noted that the standard of review for appeals under s. 10 of the Estates Act on a question of law is correctness.

Have a great day,

Chris Graham

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Death planning now includes options like buying your coffin at your favourite retailer, purchasing jewellery keepsakes that hold a loved one's ashes, and even treating mourners at your funeral to ice cream.

For my final blog of the week, I thought that it would be appropriate to discuss Death Planning. In my limited experience, I recognize an ingredient of success is the ability to adapt to change.   Changing ideas about traditional funeral and burial practices are bringing change to this industry. A recent article in the New York Times by Gabrielle Glasser discusses personalizing your funeral service. 

Despite being in financially weary times, Glasser notes that your funeral is your last chance to be a big spender. Peter Moloney and his six brothers own six funeral homes on Long Island and have catered to customers who wish to have a customized send-off. For instance: “Bike lovers pay an extra $200 or so to take their last ride in a special hearse towed by a Harley-Davidson motorcycle. Gardeners select wildflower seed packets to include with their funeral programs. One gentleman wanted to be remembered for comforting his grandchildren with ice cream, so, after the funeral, mourners were greeted by a man in a Good Humor truck, handing out frozen treats.”

I have yet to hear of a funeral home that caters to customized send-offs north of the border, but I presume that we may be a little bit more reluctant to abandon our traditional religious funerals in favour of secular ceremonies.

Before I sign-off, I would like to point out that tonight is the final game of the Stanley Cup Playoffs. Two of the greats will be playing tonight for Pittsburgh, Sid the Kid and Evgeni Malkin. If you tune in tonight, I am sure that you will get the opportunity to see them outskate the older, and slower Detroit Red Wings. Looking on with anticipation…

Go Pittsburgh!

Rick Bickhram

 

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Being immersed in the world of law, we're constantly confronted with upsetting and often depressing stories.  It feels good to occasionally resurface to hear about a positive story.  

In the London Evening Standard, David Cohen writes about the new queen of Soho, a 23 year old, named Fawn James.  For those of you who are not familiar with the area, Soho is located in the centre of the West End of London, England, in the City of Westminster.  

Fawn James inherited £75 million from her grandfather Paul Raymond, who was well known as Soho's property tycoon.  Paul died approximately one year ago.

In his article, Fawn James is described in a manner that we can all relate to at some point in our life, a student living on a budget.  One year later, Fawn is £75 million richer and both her and her family now controls 60 of Soho's 87 acres.

In her first interview since inheriting her grandfather's treasure chest Fawn says that her "first mission will be to make Soho greener.  We're looking at retrofitting our entire stock of buildings to make them more environmentally friendly".   She's also committed to her community, "I think it's important to support charities operating Soho and in the coming months I'll be assessing which one we want to assist."  As she reflects back on her time with her grandfather her only concern now is "to make him proud".  

Thank you for reading,


Rick Bickhram

 

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An article published in The Columbus Dispatch, an Ohio publication, shows us how vulnerable seniors can be to fraud through the purchase of financial products that are technically legal but not in their best interest.

An 83 year-old woman had her life savings placed in an annuity but was subsequently solicited to cash in her existing policy and buy a new one. The 83 year-old suffered from partial blindness as a result of diabetes, dementia and she had recently moved into a nursing home. After being convinced to purchase a new annuity, the woman died two weeks later. She received one monthly payment of $1,500 before she died. 

The beneficiaries of her estate received half of what they thought they should have from the new annuity and sought to recover from the investment company. The arbitration panel of the Financial Industry Regulatory Authority sided with the deceased’s estate and awarded the beneficiaries of her estate compensatory damages.

The article states that this is not an uncommon practice. In January 2008, the Financial Industry Regulatory Authority fined the broker $225,000 for “making unsuitable sales of deferred variable annuities to 23 customers”. 

Annuities can be great investments, but BUYER BEWARE. If there are questions about the age and health of the potential purchaser, it may not be in their best interest to purchase the annuity.

Thank you for reading,

Rick Bickhram

 

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The Ontario Lawyers Gazette recently published a helpful article titled “Succession Planning Protects You and Your Clients”, which reminds licensees of the importance of planning for the future.

According to a 2006 survey, 80% of sole practitioners do not have a plan detailing who would service their clients in the event of their death or incapacity. This is an alarming number of sole practitioners who are putting themselves at unnecessary risk.

Under the provisions of the Law Society Act, the Trustee Services department of the Law Society may intervene in a practitioner’s practice and obtain a variety of orders which would have the effect of winding up the practitioner’s practice in the event that the practitioner became incapacitated or deceased. Margaret Cowtan, manager of Trustee Services states that “it can be a very intrusive and often expensive undertaking if Trustee Services is required to resort to an order to enable a practice to be wound up.” 

One alternative that we can consider in planning for our future is to “name a licensed lawyer as a limited trustee in their wills for the sole purpose of winding up the practice. By appointing another lawyer as a trustee for the purposes of the practice, on death, that lawyer can not only take professional responsibility for the trust account and make appropriate distributions to clients he or she can review client files, continue matters should clients elect to engage them, or return files to clients as appropriate.” We can also give signing authority on the trust account to another lawyer in the event of an emergency. Only licensed lawyers or paralegals are permitted to deal with trust accounts.

If you are interested in learning more about planning for your future, please click the following link which will take you to the Law Society’s Succession Planning Toolkit.

Thank you for reading,


Rick Bickhram

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 As an aging society, we are likely to see an increase in issues surrounding abuse of our elderly. Just simply take a look at our recent estate and trust literature and you will notice that there has been an increase in articles about elder law. 

Recently, I read an article labeled “Putting the Brakes on POA Fraud.” This article can be found in Briefly Speaking which is the official magazine of the Ontario Bar Association. The article is authored by David Freedman, who is an associate professor at Queen’s University faculty of Law.  In his article, Professor Freedman looks at the common situation in which elder abuse is likely to occur wherein he states: “The prototypical example is the situation in which the elderly parent resides with one child who is to take principal responsibility for the parent’s care and who has been given a POA by the parent over his or her assets. Perhaps it is the siblings or a third-party care-giver who complains about the exercise or non-exercise of the POA, but there are many cases in which the assets are misappropriated.” Of course there is a strong public interest in protecting our elderly against financial exploitation, but what can we do?

For those of us who practice in this area of the law, how often have we heard of a family member approaching the police  to make a complaint about an elderly person who has been taken advantage of and being told “it’s a civil matter”? False. Section 331 of the Criminal Code of Canada addresses the issue of “Theft by a Person Holding a Power of Attorney.” In addition to the Criminal Code, there are civil remedies that are founded on the principles of restitution. Professor Freedman states that regardless of the type of case (criminal or civil) “the interest is the same, stripping the wrong-doer of any illicit gain and restoring the victim as much as it is possible to do in the circumstances.”

Thank you for reading,

Rick Bickhram

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Pre-nuptial Agreements, Co-habitation Agreements, Marriage Contracts and Separation Agreements can make for added complexity in any estate dispute.  Considering the disproportionate rate of estate litigation in families were there have been second marriages (or spousal relationships), it is inevitable that such contracts will continue to impact our practice.

In the recent edition of the Trust Quarterly review published by STEP, the authors of a paper note that "Pre-nuptial agreements are currently not legally binding in England and Wales, but can be taken into account as one of the circumstances of the case."  In contrast, the authors note that agreements made after the date of marriage are likely to be binding, subject to the principles of contract law. 

In Ontario, claims advanced under Part V of the Succession Law Reform Act are evaluated based on the existence of a number of factors including, under section 62(1)(m), "any agreement between the deceased and the dependant."  Certainly there appears to be a trend towards more careful drafting of agreements which may involve the parties contracting out of statutory entitlements they may assume on the death of the other.  Given the gravity of contracting out of such significant entitlements, any challenge to such a contract must consider such factors as: (i) the existence of ILA; (ii) the degree of disclosure; and (iii) the presence of any degree of coercion, to name just a few.

Have a great weekend!

David M. Smith 

 

 

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Our first house together was a rental duplex in High Park. We knew something was awry when we collected the mail from the common mailbox one afternoon and saw that first letter. It was from the Attorney General’s office and was addressed to the neighbour who lived upstairs. Over time, the letters increased in frequency; the envelopes became increasingly colourful and the font size of the word ‘URGENT’ also ballooned to quite incredible proportions. That was 15 years ago, and we periodically wonder if he’s still on the lam from the law. So when I recently saw a link on the Toronto Star website to an article entitled, “Next Door to Trouble: Neighbours as Nightmares”, I was tickled by the prospects of reading about the camaraderie of the shared experience of the nightmare neighbour.

The article waded through the usual neighbourhood conflicts of noise (parties, pets), garbage, and other common by-law violations such as too-tall fences, too-long grass and too-overhanging trees. But the meat of the article, and by far the most entertaining portion, referred to a number of websites designed to help one navigate the muddy waters of personal relationships, whether they be at home, in the community, or at work. Ahhhh – now we’re cooking with gas.

First up is civilityexperts.com, a Winnipeg-based website offering seminars and tips ‘aimed at fostering respect and communication’. Some 10 percent of the emails it receives are related to bad behaviour in the ‘hood, citing the example of the family who returned from vacation only to find the neighbours in their pool. The Americans have rottenneighbour.com while the Brits have Neighbours from Hell. These websites serve as ‘early warning systems’ for those in the market for a new home. Clever. New, from the creator of civilityexperts.com is youresorude.com, a website that charges a very affordable $2 to send a nasty anonymous email to your neighbour on your behalf.

We’ve moved around a lot since High Park and now count ourselves blessed that our worst complaint about our neighbour is that he has the best damn lawn on the block.

 

Jennifer Hartman, Guest Blogger
 

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The BBC recently reported on a case in which an actress appealed from a decision of the High Court, seeking CDN$1.6 million from the estate of a 92-year old deceased woman who had left her a mere CDN$5,000 in her estate.  The claimant alleged that the deceased had been in a lengthy lesbian relationship with the claimant's mother and treated the claimant as her own daughter.  The Court of Appeal dismissed the appeal, apparently concluding that she was not a dependant. (As an aside, the fact that the actress was noted to be the former wife of director Ken Russell apparently made the case newsworthy).

As has been noted in numerous past blogs, the common law recognizes various arguments that may be advanced against estates.  In Ontario, a claim under Part V of the Succession Law Reform Act is the clearest example of the legislature recognizing obligations that can be binding upon and enforceable against estates, trumping even testamentary intention.

But of course, testamentary intention does matter where a claimant advances an argument based not on allegations of dependency but, rather, on allegations that he or she falls within a class of relative of the testator.  Where, for example, a testator leaves his or her estate to "nephews by blood", a claim advanced by one who claims to fall within that class on the basis of the nature of the relationship (rather than being a blood relative) will almost certainly fail to oust such clear evidence of a contrary intention. 

David M. Smith

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On April 7, 2009, I blogged on the decision of Justice Strathy in Richardson (Estate Trustee of) v. Mew.  In that decision, His Honour considered the situation where a deceased’s first spouse was unexpectedly the named beneficiary of a life insurance policy owned by the deceased, the second spouse seeking to remedy what she argued to be an unjust situation. As I noted, His Honour, while not exercising his jurisdiction to rectify the policy, left open the possibility that, in the right set of circumstances (i.e. clear evidence of a mistake), the court could properly employ such a remedy.

The Ontario Court of Appeal released a unanimous decision on May 14, 2009 upholding Justice Strathy's decision.  Of particular significance to the trusts and estates bar, the Court of Appeal clearly stated that, after the mental incapacity of the donor, the attorney under a power of attorney was not permitted to change a beneficiary designation even in circumstances where there was compelling evidence that the donor would have done so if capable:  "As a fiduciary in a role rising to that of trustee, [the second wife] was bound to use the power only for Mr. Richardson's benefit."

In commenting on the case, The Lawyer's Weekly has noted that counsel for the disappointed second wife is seriously contemplating an application to the Supreme Court of Canada for leave to appeal.  In question: is there ever a situation in which the attorney under a Power of Attorney ought to have power to act in the best interests of the donor to effect a testamentary disposition that accords with his or her last known intentions before becoming incapable?

David M. Smith 

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At present, there is no single diagnostic test for Alzheimer’s disease. Instead, the diagnosis is reached when the medical practitioner (e.g. psychiatrist, general practitioner, geriatrician, or neurologist) has eliminated all other possible causes of the symptoms being experienced; an overview of these symptoms is provided in a previous Hull & Hull LLP blog of February 17, 2009. As a result, the diagnosis is generally coined ‘probable Alzheimer’s disease’ and this thin wedge of uncertainty often leads to an inability to accept the diagnosis as well as resistance to care and treatment. An autopsy is currently the only means of confirming the diagnosis of Alzheimer’s disease.

The Associated Press reported last week, however, that the first commercial version of a test designed to detect Alzheimer’s disease in its early stages could be available in as few as 12 to 18 months. According to Dr. Daniel Alkon, scientific director of the Blanchette Rockefeller Neurosciences Institute (the Institute has teamed with Inverness Medical Innovations Inc. for this endeavour), the test works by detecting abnormal function of a protein that is known to be involved in memory storage.

Early diagnosis will have a multitude of benefits: incorrect diagnosis of the disease based primarily on a patient’s behaviour can be greatly reduced, lifestyle changes can be made which may slow the progression of the disease, the patient and their family may gain valuable time to plan for the future, and those with a family history of Alzheimer’s disease will have tangible information with which to move forward.

Jennifer Hartman, Guest Blogger

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"I regard large inherited wealth as a misfortune, which merely serves to dull men's faculties. A man who possesses great wealth should, therefore, allow only a small portion to descend to his relatives. Even if he has children, I consider it a mistake to hand over to them considerable sums of money beyond what is necessary for their education. To do so merely encourages laziness and impedes the healthy development of the individual's capacity to make an independent position for himself." – excerpt from the last will of Alfred Nobel, 1833-1896

Born in Stockholm on October 21, 1833, Alfred Nobel was the third son of Immanuel Nobel, an engineer and inventor, and Andriette Ahlsell. After being sent abroad for study, Alfred became best known for mixing siliceous earth with nitroglycerine, forming it into a rod, and coining it ‘dynamite’. In addition to his obvious attraction to science, innovation and industrialism, Nobel was also drawn to social issues, as touched upon in a previous Hull and Hull LLP blog .

On November 27, 1895, Nobel signed his third and last will in Paris. It was handwritten on a yellow notepad, with notes scribbled in the margin, and Nobel had discussed it with no one. (Click here for the full text of the will).

                                   

After he died of a stroke at his villa in Italy in 1896, shock and controversy ensued when it was discovered that Nobel had bequeathed the bulk of his fortune (the equivalent of $214 million in today’s money) for the establishment of what would come to be known as the Nobel Prizes: coveted and prestigious annual prizes in five categories, awarded without distinction of nationality. Ragnar Sohlman and Rudolf Lilljequist, two of Nobel’s young engineers, were named as executors, and one of their first tasks was to collect Nobel’s far-flung assets and move them quickly back to Sweden before French authorities could make claim to the money. Nobel’s shares, bonds and documents were rounded up and hurried to the Swedish consulate in Paris by horse-drawn cab, escorted by Sohlman, who was armed with a revolver ‘at the ready in case of direct attack’.

The will was incredibly controversial, and was indeed flawed, imprecise and legally deficient. Apparently Nobel had had such negative experiences with lawyers (‘niggling parasites’, as he referred to them) when defending his dynamite patents that he had drawn up the will himself. Initially, Nobel’s permanent domicile could not be easily determined since he had lived in so many countries. To complicate matters, the executors were left the task of forming the Foundation, which was done in Sweden where the will was eventually probated. Nobel had not even consulted the various Prize-awarding institutions to seek their consent to participate in the awarding of the Prizes. Most surprisingly for Nobel’s relatives, this third will contradicted an earlier will in that Nobel’s heirs, instead of receiving twenty percent of the estate would now only receive specific legacies. Two bitter nephews quickly challenged the will and tried to have it declared null and void, however, another nephew residing in Russia told Sohlman about the Russian concept that the executor is ‘the spokesman of the soul’ of the testator. King Oscar II of Sweden added fuel to the fire when he dismissed Nobel’s wishes as ‘nonsensical’ and ’not patriotic minded’ because his property would now be dispersed internationally. King Oscar II later recanted his disapproval when he realized that publicity about the prizes might, in fact, benefit Sweden, and in 1902, handed out the first prizes to the laureates on December 10, the anniversary of Nobel’s death.

Jennifer Hartman, guest blogger
 

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In Maryland, legislation was recently enacted that allows pet owners to establish trusts for their pets, making it the 40^th state to allow pet trusts.  Previously, people could not leave gifts to pets because, at law, pets were chattels and could not inherit property. 

There are some limitations to the law.  To begin with, people can only leave funds for pets living at death – they are not allowed to provide for “future generations” of animals.

In addition, while the pet owner must name a trustee for a trust, it must also name a caregiver for the pet (the caregiver and trustee can be one and the same).  If, after the pet owner’s death, the pet is not properly cared for or the trust funds are not being administered appropriately, the law will provide that an outside party can apply to the court to get the trustee or the caregiver replaced. 

The pet owner should also specify to whom the remainder of the trust should go when the pet dies (the article suggests that the caregiver or trustee should not be left the remainder, in case it becomes a disincentive to keep the pet alive). 

The law is set up so as to avoid the type of litigation that ensued after Leona Helmlsey’s death (Helmsley, as you might remember, left $12 million in trust to her dog Trouble, while leaving nothing to two of her grandchildren).  While it does not specify a maximum that a pet owner can leave in trust, it does provide the funds should be sufficient to care for the pet.  It also gives the court the discretion to vary the trust if a beneficiary challenges it as being excessive. 

I can’t say the trend towards providing for pets in an estate plan is all that surprising, given how attached people can be to their pets.   

Have a great day!

Megan F. Connolly  

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Ker Estate v. Stevenson, a recent decision from the Ontario Court of Appeal, considered whether an annuity left to a beneficiary under a will could be encroached upon by a judgment creditor. 

In this case, the deceased directed that half the residue of her estate be used to purchase a non-commutable life annuity for her daughter.  On the daughter’s death, what remained in the annuity was to be used to purchase a non-commutable annuity for the deceased’s grandson. 

After the deceased’s death, the daughter had been involved in litigation which resulted in a judgment against her.  Prior to the annuity being purchased, the judgment creditor sent a notice of garnishment to the executors requiring them to satisfy the judgment.

The executors sought the court’s direction as to, in part, whether the share of the deceased’s daughter could be encroached upon to satisfy the judgment. 

The motions judge found that the funds available for the daughter’s benefit vested in her on the deceased’s death and were available to satisfy the judgment. 

The grandson (who had an interest in the remainder of the annuity) appealed the decision on a number of grounds, a major one of which was that the court erred in finding that the annuity vested in the daughter on the deceased’s death. 

The Court of Appeal examined the nature of an annuity and, in its review of the jurisprudence, found that it could best be characterized as a legacy.  The fact that it was “non commutable” was not sufficient to persuade the court it should be characterized otherwise.  Moreover, the Court pointed to case law which suggested that the beneficiary of an annuity under a will had the right to call on the payment of the cash value of the annuity prior to its purchase. 

As a result, it affirmed the motions’ judge’s finding that the right to the annuity vested in the daughter at the deceased’s death and could be encroached upon by the judgment creditor. 

Have a great day!

Megan F. Connolly 

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The recent decision of Pachaluck Estate v. DiFebo is a useful illustration of when the court is willing to reduce compensation awarded to the trustee for the administration of a simple estate. 

The main assets of the estate were the deceased’s condominium and several bank accounts.  Her will provided that the condo would be sold and its proceeds would be divided amongst several grandchildren; cash bequests would be made to several individuals; and the residue of the estate would be divided amongst the deceased’s two daughters. 

When the administration of the estate was near completion, the estate trustee brought an application to pass accounts.  One of the residual beneficiaries objected to the accounts in part on the basis that the compensation claimed was over and above that what was warranted in the circumstances. 

In determining what compensation should be allowable, the court considered the five factors articulated in Re Toronto General Trusts and Central Ontario Railway:

(a)   magnitude of the trust;

(b)  care, responsibility, and risks assumed by the fiduciary;

(c)   time spent by the fiduciary carrying out obligations;

(d)  skill and ability required and displayed by the fiduciary; and

(e)   results obtained and degree of success associated with the efforts. 

The court found that while the five factor were useful guidelines, the analysis should be fact specific and sensitive to the specifics of the estate administration in question.  The court also found that the application of a percentage in determining compensation should not be set in stone but should be fact specific. 

In the end, the court decided to reduce compensation.  In considering the sale of the condo, the court found that the administration of the estate with respect to this asset was uncomplicated and straightforward.  With respect to the cash bequests, the court also found that distributing them was simple.  As a result, it ordered the compensation associated with the sale of the condo and the distribution of the proceeds to be reduced to 1.5% while it ordered compensation related to the balance of the estate reduced to 2.0%. 

Have a great day!   

Megan F. Connolly 

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I couldn’t help but do a double-take when I came across an interesting article in the Globe and Mail by Anne McIlroy with the above-captioned title. 

Ms. McIllroy comments on the latest advances in stem-cell research, which indicate that it may be possible for someone to become a biological single parent - the source of both the egg and the sperm! 

How it seems to work is that adult skin cells can be turned into stem cells, and once they have been reprogrammed, these cells can be turned into many of the specialized cells that make up the human body. If some of the reprogrammed stem cells were transformed into sperm, and others into eggs, together they could be used to create an embryo. 

It hasn’t happened yet, but the possibility has made this a hot topic.   While it may be a discussion the Canadian legislature is not yet prepared to engage in (we have one of the more restrictive laws governing stem cell research), I would expect that if and when things change, advancements such as this will have widespread impact. 

I wonder how it can affect the estate planning area: Would it simplify estate planning by carving out spousal bequests and/or claims? Would it impact on how children of a testator are defined and/or treated? Would it increase the strength of a dependant support claim by the biological single parent child versus that of a competing child born with two biological parents?

I find the concept of biological single parenthood to be bizarre, unnatural and a little scary.  But perhaps I'm just too much of a traditionalist to keep up with this rapidly changing world of ours. 

Have a great weekend!

Natalia

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Trusts can be varied or terminated prematurely in two ways: (1) through the operation of the rule in Saunders v. Vautier; and (2) under the powers of the court given by way of the Variation of Trusts Act.  There is also potentially a third method - by a trustee’s exercise of his absolute discretionary power given by the trust document.  

This third method begs the question: is a trustee’s discretion truly absolute? Debra L. Stephens, The Ontario Children’s Lawyer, comprehensively reviews this topic, several relevant authorities and the law in other jurisdictions in her paper given at The Six-Minute Estates Lawyer 2009, entitled "Trusts: When is a Termination a Variation?".

Ms. Stephens gleans the following principles from the authorities: that payment of all of the capital of a trust to the beneficiaries is an improper exercise of discretion where it is not in keeping with the primary intention of the settler. However, it can be justifiable where it appears the circumstances of the beneficiaries are such that payment would further, rather than frustrate, the settlor’s intentions.

Ms. Stephens also notes that the circumstances surrounding the exercise of discretion will have a large impact on its perceived propriety - each case will be examined on its unique facts i.e. the wording of the trust document, the needs of the beneficiaries and the value of the trust.

It is noteworthy that The Children’s Lawyer (Ontario) takes the position that a trustee’s “termination” of a trust is, in essence, a “variation” if there are contingent interests involved. As such, even if the discretion is absolute the trustee does not have the right to transfer the capital to beneficiaries without first giving notice to The Children’s Lawyer and securing court approval. 

Obtaining the necessary consents and court approval is something I agree with in every circumstance of a trust variation or termination by way of a trustee's exercise of his/her discretion.  It is surely the best way a trustee can avoid exposure to future litigation on the matter.

Have a great day,

Natalia Angelini

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It's Friday in late April. The May long weekend and all that cottage fuss is just around the corner.  (I like the cottage, but understandably a lot of people choose the backyard.)

In Ontario, we do not have inheritance tax like they do elsewhere, including the United Kingdom. In some cases, the several-generation home has to be sold to cover a £14,000 tax bill or, in one instance, a painting donated in lieu of inheritance tax of £700,000.

To be certain, we have taxes here. At death, often there is a deemed disposition of property unless steps have been taken in advance. An article from last year provides some thoughts on how one might plan to avoid the situation where the capital gains tax cripples an estate or the next generation.

Apparently, and maybe not surprisingly, the cottage market may be down by about 20% this season. Good news for buyers. Maybe it is also good news for those who are looking at estate planning this year. 

If the goal is to keep a cottage in the family, relative to the previous few years it might be an opportunity to trigger a disposition by transferring the property this season and, presumably, incurring a lower capital gain. Each situation requires specific tax advice. 

The economy is lousy but it might be a chance to avoid financial strain and family tension for the next generation.

Have a safe weekend, wherever you spend it.

Jonathan

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In keeping with yesterday’s blog on a British Columbia real estate matter, today I focus on another BC case - Albas v. Gabriel 2009 BCSC 198 - that involves the Indian Act, a federal statute. 

For a quick recap of the interplay between provincial and federal jurisdiction regarding estate matters and First Nations people living on reserves, I refer to David Smith’s 2007 blog: The Administration of Estates under the Indian Act. 

Albas v. Gabriel involved an action by the plaintiff, as executor of the estate, for a declaration proving the deceased's Will in solemn form.  The defendant beneficiaries appealed to the Minister of Northern and Indian Affairs because the Minister has jurisdiction to approve a Will made by an Indian and to confirm the appointment of an executor to administer the estate. Specificially, the Minister’s authority is provided by section 43 of the Indian Act.

A member of an Indian Band and a resident of a reserve, the deceased operated a trailer park and he was a “locatee” of the land because he owned “certificates of possession”: valuable assets that he left equally to his daughter and two step-children. This was just one of the businesses with which the deceased was involved.

The daughter challenged both the validity of the Will and the administration of the estate. The judge determined that the daughter believed that if the Will was declared invalid, she would inherit the entire estate.

Because of the Will challenge, the Minister transferred jurisdiction over the estate to the Supreme Court of British Columbia pursuant to s. 44(1).

Ultimately, the Court found that the Will was valid because it was not forged and the testator had capacity as well as knowledge of the Will which he approved.

Enjoy your day.

Jonathan

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Often in the context of estate matters issues arise around real estate because it is often one of the largest assets comprising an estate.   A recent decision in British Columbia is a case in point.

Last week the BC Court of Appeal overturned a lower Court decision that found a defrauded financial institution was to be reimbursed by the unsuspecting widow whose home had been fraudulently mortgaged.  A direct link to the BC Court of Appeal decision is helpful. The citation is Re Oehlerking Estate, 2009 BCCA 138.

This case is especially relevant to estate law in that the widow attempted to transfer the property, held in the name of her deceased husband, to her own name in 2006 and only then realized a fraud had occurred whereby a mortgage had been taken out on the property after it was transferred to someone else. The lower Court decided the property should be returned to the widow but she was liable for the mortgage. The Court of Appeal did not agree.

There are significant issues at stake, not least of which is the increased risk to financial institutions which may lead to an appeal to the Supreme Court.  Similar cases have occurred in Ontario.

A web search on real estate fraud led me to a Criminal Intelligence Service Canada assessment of mortgage fraud, prepared in 2007.  Further, the Ontario government provides tips on its website to protect against real estate fraud.

Estate Trustees ought to be vigilant regarding mortgage and real estate fraud especially because identity theft often occurs after a recent death. 

Thank you for reading. 

Jonathan

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Estates litigation is full of wonderful little procedural differences from general civil litigation.  The most basic differences are found in Rules 74 and 75 of the Rules of Civil Procedure.  Take for example motions.  One would think a motion is fairly straightforward, but...

The general provision governing motions is Rule 37, of course, which requires motions made on notice to be served at least 4 days before the hearing (R. 37.07(6)).  But in estates litigation, often a mere 4 days is not sufficient.  The handy all-purpose Rule 74.15 Order for Assistance requires service at least 10 days before the hearing, even though a mere motion.  So does a motion (or an application) for Directions under Rule 75.06. 

Not only that, "any person who appears to have a financial interest in the estate may move" under R. 74.15 for Assistance or under R. 75.06 for Directions, so the usual standing arguments may not apply.  In estates litigation (depending on the jurisdiction), even the family dog has standing (sometimes).  I'll leave the rest for another blog, but as a reminder, R. 75.06(2) requires service on "all persons appearing to have a financial interest in the estate."  But that's a topic for another blog.

Enjoy your day.

Chris Graham

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A current Georgia case vividly illustrates the legal, emotional and moral complexity often involved in estates litigation.  According to the reports, Harvey Strother died at age 78, having succumbed to progressively severe alcoholism brought on by the tragic death of his daughter at age 23.  Strother had built up a formidable nest of car dealerships around Georgia, dying with a net worth of about US$37 million.  And a mistress 30 years his junior. 

At issue are 3 amendments to Strother's 1988 will in favour of his mistress.  The will had left the bulk of his estate to his wife, their children and grandchildren.  But one amendment gave his mistress a $7,900 monthly allowance, a second gave her health insurance and an island condo in Florida.   The third - signed about a month before Strother's death - gave her a Cape Cod cottage, a Florida boat slip and a Florida condo to her son.  By that time Strother was drinking 1.5 gallons of wine a day (about 6.8 liters, or 9 bottles of wine).

At trial, the jury upheld the first two amendments, worth about $4.5 million to the mistress.  However, the third one was invalid.  Strother, was allegedly drinking even before he signed it and brought to the lawyer's office by his mistress, and his signature was illegible. 

The family is appealing the two amendments that were upheld, one on the basis that the witnesses were not even present (the mistress is appealing the third amendment struck out by the jury).  Interestingly, the family is represented by Georgia's ex-Governor Roy Barnes, who points out that the requirement for two witnesses "is an elementary part of the law that has been there since the time of Edward II."  FYI, King Edward II, 1284 - 1327: yes, we deal with old law in estates litigation. 

Have a great day,

Chris Graham

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Howard J. Feldman made a presentation on the circumstances where a net family property ("NFP") equalization can set aside an estate feeze.  He also discussed structuring the estate freeze transaction to qualify as an exclusion from the transferee child's NFP. 

To refresh: the classic estate freeze is a transaction involving a business-owning parent and his or her child.  The parent transfers the equity shares in the business to the child but retains control of the company through preferential shares ("prefs").  The prefs have a fixed redemption and liquidation value, so all capital growth is with the equity shares transferred to the child.  The parent "freezes" his own level of equity in the business, leaving future capital growth to the child.  The goal is to avoid the child receiving the equity in the company on the parent's death, because the capital gains tax liability would presumably have grown significantly.  Capital gains tax is payable when the parent transfers the shares under the estate freeze transaction, but presumably smaller than it would be on the parent's death.  

The problem is that an estate freeze during the transferor parent's marriage potentially removes assets from that parent's property for the purposes of the NFP equalization.  This can conflict with the philosophy of the NFP equalization payment, which is that marriage is a partnership and spouses' collective increase in net worth during the marriage should therefore be evenly divided between the spouses at the end of the marriage.  The parent's subsequent death or divorce can trigger a challenge by the spouse of the estate freeze. 

Among Mr. Feldman's points and recommendations:

• the form of the transaction and relevant documents is critical (see the paper for reasons)
• the solicitor must have a well-documented file and written instructions from the client, due to the risk of the transaction being challenged
• Declarations to Revenue Canada and financial institutions are not considered binding in family law
• a gift of shares under a corporate reorganization may not excluded where there is not family trust, but beware that sooner or later the leading cases may be overturned (with a plethora of qualifications and circumstances detailed in the paper)
• gifting shares or the cash to buy the shares are subject to numerous, complex considerations (no pun intended)

This barely scratches the surface of the summary and recommendations.  It is well-worth the read.  The entire Six-Minute Estates Lawyer 2009 program can be purchased here.

Have a good day,

Chris Graham

 

 

  

 

    

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For my final blog of this week, I thought I would give further consideration to the unique legal issues arising out of life insurance beneficiary designations.

Because of the increasing complexity of insurance structures, it is not always easy to determine what "property" is held by a policyholder at the time of his death. The question is relevant when one considers that, in Ontario, Estate Administration Tax is levied on the value of "all property that belonged to the deceased at the time of his or her death." In this context, there is good reason to question when a contract between the deceased and his insurer morphs into a legal obligation owed by the insurer to the beneficiary.

While the contractual obligation between the deceased and his or her insurer has been described by at least one court as a "species of property", that property (if we are talking about term insurance) only realizes its true value after (as opposed to "at the time of") the death of the deceased policy owner. More than one commentator has noted that the value of term life insurance before the death of the deceased is arguably nominal.  However, in Re Carlisle Estate, discussed yesterday, the Court stated: "No one would suggest that the value of a winning lottery ticket is the price paid for the ticket.  The value of an insurance policy is the amount paid to the beneficiary by the terms of the policy."

Have a great long weekend!

David M. Smith

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As a segue from yesterday’s blog (which considered the issue of beneficiary designations of life insurance policies), today’s blog considers issues arising from the characterization of life insurance proceeds as trust assets in the context of an overall estate plan. Life Insurance Trusts can be created for specific purposes where the owner of the policy has clearly defined testamentary intentions respecting the use of the funds.

In his recent presentation at the Six-Minute Estates Lawyer, Robin Goodman noted a recent Saskatchewan case, Re Carlisle Estate, in which the Court considered whether a declaration in a Will creating a life insurance trust had the effect of excluding the proceeds from probate under Saskatchewan legislation. In that case the Court determined that, regardless of a clearly stated intention to the contrary, the appointment of the executor of the estate as the trustee of the insurance trust (and, more importantly, as the designated beneficiary of the insurance proceeds) meant that “no exemption from probate fees can be claimed.” However, in a gloss on this case, the decision in Sun Life Assurance Co. of Canada v. Taylor (also a Saskatchewan case) clarified that, where the insurance proceeds did not vest in the executor as beneficiary (albeit as trustee for others) but, instead, were simply held by the executor in trust for the designated beneficiaries, the insurance proceeds were not to be considered as estate assets.

As Goodman notes in his paper, it is not clear how these decisions will impact the law in Ontario. In any event, the decisions serve to give any estate planner pause to consider how best to structure an insurance trust whether inside or outside of a Will.

David M. Smith

 

 

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Declarations of beneficiaries of Life Insurance policies are sometimes thought to be “unassailable.” However, where a deceased’s first spouse is unexpectedly the named beneficiary of a life insurance policy owned by the deceased, the second spouse may have recourse to various legal remedies in an attempt to remedy what is argued to be an unjust situation. Inevitably, a Separation Agreement between the deceased and his or her first spouse is central to any such argument.

The recent decision of the Honourable Justice Strathy in Richardson (Estate Trustee of) v. Mew considered such a situation. The case also stands as an excellent summary of the recent jurisprudence that has developed in this area.

In short, the disappointed spouse can seek the remedies of either constructive trust or rectification. Justice Strathy points out that “except in exceptional circumstances” the Insurance Act requirements for the change of a beneficiary designation must be strictly interpreted. His Honour clearly had difficulty with understanding “how the designation of a beneficiary under a life insurance policy could be anything other than a juristic reason for an “enrichment.” Although he did not find this to be a case for the exercise of the court’s jurisdiction to rectify the policy, he left open the possibility that, in the right set of circumstances (i.e. clear evidence of a mistake), the court could properly employ such a remedy.

David M. Smith

 

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Who is the third who walks always beside you?
When I count, there are only you and I together
But when I look ahead up the white road
There is always another one walking beside you
- T.S. Eliot, The Waste Land, 1922

I just finished reading a fascinating book authored by John Geiger called The Third Man Factor: The Secret to Survival in Extreme Environments. When faced with edge-of-death circumstances, numerous people throughout history have encountered what is commonly referred to as ‘the Third Man’. Confronted by life at its extremes, these people have had the sense that they were suddenly joined by a friendly, trusted presence – a guardian, if you will, who “led them out of the impossible”. The Third Man Factor details many of these remarkable experiences, highlights the common threads of extreme physical and mental distress, monotony and isolation, and explores the domains of physiology, sociology, religion, neurology and psychology to flesh out the meaning of the appearance of the Third Man.

In 1895, while attempting to complete the first solo circumnavigation of the world, Joshua Slocum’s sloop-rigged fishing boat Spray was caught in a violent storm. Slocum became convinced of another on board who steered the boat through the gale while Slocum huddled in the boat’s cabin, sick with food poisoning, but unworried. Slocum had experienced the Third Man phenomenon, someone to whom he referred as his ‘invisible helmsman’. An account of Slocum’s surreal encounter was published in the Boston Globe on October 14, 1895, under the headline “Spook on Spray”.

Other Third Man experiences include:

· Reinhold Messner, legendary Italian mountaineer and the first man to summit Everest solo and without supplementary oxygen. In 1970, after having summited Pakistan’s 8,126 metre Nanga Parbat with his younger brother Günther, the two became separated on the precarious descent, and Messner soon came to the horrific realization that Günther had been swept down in an avalanche. It was then that Messner encountered a lone phantom climber calling out to him, comforting him and eventually guiding him down the mountain to safety.
· Ernest Shackleton, British explorer, and head of the Imperial Trans-Antarctic Expedition of 1914-1916. After his ship Endurance became trapped in ice and was destroyed, Shackleton (pictured below) set off on a perilous 36-hour trek across the mountains and glaciers of South Georgia in an attempt to seek rescue. In his book, South: The Endurance Expedition, Shackleton wrote that “...it seemed to me often that we were four, not three.” He referred to this fourth man as a ‘Divine Companion’. It was Shackleton’s experience that actually inspired T.S. Eliot in The Waste Land.

· Charles Lindbergh, early aviator. In 1927, during the first solo, non-stop trans-Atlantic flight from New York to Paris, Lindbergh encountered ‘vague outlined forms, disembodied beings’ aboard the Spirit of St. Louis while desperately trying to stave off profound exhaustion. These forms not only reassured Lindbergh, but discussed navigational problems and advised him on his flight.

Hallucination? Divine intervention? Sensory illusion? Visit www.thirdmanfactor.com to join a forum for a more in-depth discussion of this phenomenon.

Jennifer Hartman, guest blogger
 

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One of the essential objectives of estate planning is to reduce the amount of probate tax payable on your death.  Ontario has a higher rate of probate tax than many other jurisdictions in Canada - it amounts to approximately 1.5% of the value of the assets in the estate (excluding real estate outside of Ontario and other exempt assets that pass to a named beneficiary or by right of survivorship).  Therefore, probate tax in Ontario on a $1 million estate will be $14,500.  

While this figure may seem high, lawyers are all too aware that this figure is nothing compared to the expense that may arise to your estate as a result of the trigger of capital gains tax, or the income tax consequences of certain assets (i.e. a second property such as a family cottage, for example)  if your affairs are not properly structured.  Furthermore, while the objective of reducing the amount of probate tax on your estate is important, its not always the case that obtaining probate should (or could) be avoided.  The act of obtaining a seal of probate from the Court can start the clock running (i.e. limitation periods) on potential claims against your estate and also certifies the validity of your Will and confirms the powers that your Will grants to your executors (estate trustees).

Assuming that your Will may be subject to probate (and accordingly exposed to the payment of probate tax), the following are some strategies that may, in the right circumstances, reduce the amount of exposure to the tax: 

1. Designating a beneficiary in a life insurance policy, RRSP/RRIF, or pension plan;

2. Multiple Wills (i.e. shares of a private company can be dealt with in a Secondary Will that does not require probate); 

3. Joint ownership of assets with right of survivorship;

4. Transferring legal title to a bare trustee, i.e. a corporation;

5. Making gifts prior to your death; and

6. Establishing an alter ego or joint partner trust.

While these tax avoidance mechanisms have advantages, they can also have disadvantages (i.e. such as the loss of control and a trigger of income tax liabilities that may occur when property is transferred to joint ownership).  Therefore its always wise to consult tax and estate professionals to ensure that the benefits of avoiding the estate tax outweigh the risks.  It may well be that 1.5% on the value of your assets doesn't seem like that much after all, compared to the alternatives available.

Sarah Hyndman Fitzpatrick

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We have become information junkies - with a vast world of knowledge accessible in seconds by a tap of your finger on your computer, BlackBerry or iPhone.  Most would agree that this is a good thing - a great thing - most of the time.  But how about in the courtroom - during a trial?  What is fascinating about this scenario is the convergence of two very distinct ideals - judicial procedure and tradition on the one hand, with the emerging benefits of readily available (and accessible) technology on the other.

Last month, a juror in a federal drug trial in Florida admitted to the judge that he was conducting his own research on the internet.  This was in direct contravention of the judge's orders and (as lawyers are aware) centuries of legal rules relating to evidence.  A lack of bias and impartiality towards the defendant, and the issues raised during a trial, is a cornerstone of our judicial process.  However, when the judge questioned the other jurors he got an even bigger shock - eight other jurors had been doing the same thing.  "We were stunned" said defense lawyer Peter Raben.  "It's the first time modern technology struck us in that fashion, and it hit us right over the head".  The judge declared a mistrial, abruptly ending eight weeks of work by prosecutors and defense lawyers.

The New York Times has reported this story, and quoted at least two other cases where the unauthorized use of technology such as iPhones and BlackBerry's have resulted in mistrials.  One judgment was overturned because a juror had used Twitter to send updates during the trial, and in another a juror had posted updates on Twitter and his Facebook account, telling his readers that a "big announcement" was forthcoming.

Jurors are not supposed to obtain information from outside of the courtroom.  There are complex rules of evidence and laws of admissibility restricting the use of such information to ensure a fair and impartial judicial process.  However, jurors can now surf the web from their iPhone during a bathroom break and discover details about a case, a defendants history or criminal record, or information relating to a medical condition or a map of a crime scene (think Google maps).  And, unless the juror is sequestered (which is not always the case), jurors could still surf the web at home to find out information pertaining to the case.   

The answers on how to deal with this conundrum are far from easy - but, as the Connecticut Law Tribune quoted from a source, "How can you learn more about this issue?" - well, "Google it on your iPhone of course".

Sarah Hyndman Fitzpatrick

 

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New Canadian tax rules, as they pertain to the sale of property by non-residents, came into effect at the beginning of 2009.  The new procedures aim to further simplify the current clearance certificate process (which was already  "simplified" back in 2007 to avoid unnecessary delays - see David Smith's Bar-Ex commentary in 2007 on this issue here and on our blog). 

Withholding tax requirements under section 116 of Canada's Income Tax Act (the "Act") may arise whenever a non-resident is involved in a transaction.  Non-resident vendors and purchasers can be liable for payment of Canadian income tax on the disposition of certain types of Canadian based property, such as shares of Canadian companies, Canadian real estate, and beneficiaries of Canadian estates and trusts.  In the estates and trusts context, non-resident beneficiaries were previously required to obtain an Individual Tax Number, a Canadian Social Insurance number, or a Temporary Taxation Number before a clearance certificate would be issued.   In estate administrations involving non-resident beneficiaries, therefore, ITN numbers would need to be obtained (by the non-resident beneficiaries) in order for the estate trustee to obtain a section 116 clearance certificate.  This often resulted in the requirement of the estate trustee to withhold funds from the distribution (and remit to the CRA if necessary).  

My review of the new rules indicates that the purchaser now has an alternative to the current Certificate of Compliance procedures when the property in question is "treaty protected".  An associated form T2062C ("Notification of an Acquisition of Treaty-Protected Property from a Non-Resident Vendor") may now in certain cases eliminate the requirement to obtain ITN's.  To rely on the new rules, the purchaser must (1) determine that the non-resident vendor is a resident of a country with which Canada has a tax treaty; and (2) must also be satisfied that the property is treaty-protected.  If the purchaser is in fact satisfied with these requirements, withholding can be eliminated if the purchaser sends the form T2062C Notification to the CRA within 30 days of the acquisition.

In any event, whenever a non-resident disposes of Canadian based property, the application of the withholding rules of s.116 of the Act should be considered and advice from a tax professional should be obtained.   

Sarah Hyndman Fitzpatrick

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It's time to "mesh" again!  Canada's leading web conference is being held in Toronto on April 7th and 8th of 2009. 

As many of our readers may already be aware, mesh has proven to be Canada's most exciting, informative and interactive web conference, attracting a host of keynote speakers.  This year Mayor David Miller, Jessica Jackley (co-founder of Kiva.org), Jason Calacanis (founder and CEO of Mahalo.com), Michael Masnick (founder and CEO of Floor64), and Bonin Bough (Global Director of Digital and Social Media at PepsiCo) will be speaking, along with many others.  I understand that the focus this year will be on the Twitter phenomenon and open government.  Mesh provides the opportunity to connect with people who want to know more about how the web and social media are changing "the way we live, work and interact with the world". 

This is a great opportunity to "connect, share and inspire" with others about the web and everything social media can do for you and/or your business.  Learn more about the conference here on YouTube.

Sarah Hyndman Fitzpatrick

 

 

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While confessing your sins on your deathbed may seem like a noble gesture, you would be wise to make sure you're actually going to die first.

In a recent story reported in the UK's Independent website, a stroke victim's 'deathbed' confession to a murder proved premature.  James Brewer, a retired factory working living in Oklahoma, confessed to a decades old crime hoping that the confession would clear his conscience and "cleanse his soul" before he died.  During (what he believed to be) the final few moments of his life, he confessed to shooting a man dead in 1977 in Tennessee, while in a jealous rage fuelled by the suspicion that the victim had tried to seduce his wife.  He and his wife then fled to Oklahoma, where they began a new life under assumed names.  By all accounts they led a pretty normal, low profile life and were regular churchgoers and grandparents.

In a ironic twist of fate,  Mr. Brewer made a full recovery from the effects of his stroke after his confession.  He has now surrendered to police in Tennessee and may face the death penalty in that State.  Read further links to this story here and  here.

Sarah Hyndman Fitzpatrick

 

 

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I think that in a year I may retire. I cannot take my money with me when I die and I wish to enjoy it, with my family, while I live. - Harry Houdini, Magician and Escapologist

When I was around 6 or 7 years old, I was unequivocally obsessed with Harry Houdini.  My brother and I used to have contests at the local pool to see which of us could hold our breath the longest. He always won, and I'd end the day a few nickels lighter.

Born Ehrich Weisz on this day in 1874, Harry Houdini emigrated with his family from Budapest to the United States in 1878. As a young man, Houdini’s initial attempts to establish a career in magic were relatively unsuccessful; he even had to double as ‘a Wild Man’ carnival act. Harry met his kindred soul in Beatrice (Bess) Raymond, a teenager trying to succeed in show business as a singer and dancer. They married in 1894. After meeting manager Martin Beck, Houdini found his niche in escape acts: handcuffs, ropes, straitjackets, and chains. His most memorable act was to escape “The Chinese Water Torture Cell” (pictured below). To develop his breath-holding capabilities, Houdini even had an oversized bathtub installed in his house so he could practice regularly.

 

In the fall of 1926, after having broken his ankle while performing the Chinese Water Torture stunt, and after several sleepless nights caring for Bess after she suffered a bout of food poisoning, Houdini was in his Montreal dressing room chatting with a college student who also happened to be an amateur boxer. The student asked Houdini if it was true that Houdini could withstand any blow to his body above the waist. A weakened Houdini replied yes, and began to rise to his feet, but before he had time to tighten his abdominal muscles, the boxer punched him three times. Houdini suffered a burst appendix, and later, peritonitis. He died on the afternoon of October 31, 1926 at age 52, and was later buried in his bronze ‘buried alive casket’, his head resting on a black sack of letters his mother had written him while alive. No autopsy was performed. In his 23-clause-long will, which had been prepared in 1924 with a codicil added in 1925, Houdini left his collection of over 5,000 books (valued at $30,000) to the Library of Congress. His brother Theo received most of his magic equipment and memorabilia; however, Houdini stipulated that the magic apparatus be ‘burnt and destroyed’ upon Theo’s death. Two assistants received $500 each, while The Society of American Magicians received $1,000. His ‘hat rabbits’ reportedly were given to the children of friends. The balance of Houdini’s estate went to Bess, and it was enough to cover his extensive debts and to allow Bess to live comfortably. Bess also received $50,000 in life insurance money, since Houdini had remarkably purchased a double indemnity life insurance policy in the event of his accidental death.

The Chinese Water Torture Cell secret remains a mystery to this day, and my breath-holding record stands at 1:03.

Jennifer Hartman, guest blogger
 

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One form of Advance Directive is the Do Not Resuscitate Order, commonly referred to as a DNR Order, or simply a DNR. It is a written order, signed by a medical professional, indicating one’s desire that lifesaving measures not be initiated if one were to stop breathing or if one’s heart has stopped. A DNR Order is generally only put in place when a person is suffering from a serious, often terminal condition, and when ‘CPR will almost certainly not benefit the patient and is not part of the plan of treatment’.

Up until February 2008, an odd, but not insignificant loophole existed that prevented paramedics and firefighters from honouring any existing DNR while a person was being provided with emergency assistance on the scene, or while in transport to a medical facility. The Ambulance Act’s Basic Life Support Patient Care Standards, Version 2 meant that paramedics were legally obliged to initiate life support measures, including, but not limited to, chest compressions, artificial ventilation, and intubation. Perhaps 911 had been called in order for the person to be transported to a hospital to be rehydrated, or to be treated for an infection. Prior to February 2008, if something catastrophic were to thereafter unfold en route, emergency resuscitation measures would have been initiated, possibly with unimaginable consequences, even if a DNR order was provided to the paramedics or firefighters on-site.

In order to address this disconnect between personal wishes, best intentions and legal constraints, a DNR Task Force was struck in 2003. As a result, there is a new Do Not Resuscitate Confirmation Form that became the new standard in Ontario as of February 1, 2008. Once completed by a physician or nurse, the form authorizes paramedics and firefighters to withhold life support measures, as well as to provide palliative comfort care measures such as suctioning, oxygen, pain control (including morphine) and tranquilizers. This form can be viewed online here.

Jennifer Hartman, guest blogger

 

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When someone dies, they generally don’t get to take their debts to the grave.  Outstanding debts, such as bills and loans, remain just that…outstanding.  And just because the debtor is now gone, does not mean the creditors are going to be forgiving. 

Sometimes, the repayment of debts happens quickly and easily:  the debts are easy to identify; the deceased’s assets are sufficient to pay them; and there is someone with the authority to access the funds necessary to make the payments (i.e. an executor). 

However, when repayment doesn’t happen, creditors often come to collect.  A recent article in the New York Times, You’re Dead?  That Won’t Stop the Debt Collector, looks at what the paper refers to as “the newest frontier of debt collecting” – finding some way of collecting debts from the dead.  While this might mean going after a deceased’s assets, it also includes contacting next of kin and asking whether they’d mind paying up on the deceased’s behalf.  

Something I found interesting about the article was the degree to which next of kin believed that they were obligated to pay the deceased’s debts and the fact the collection agents weren’t too quick to dissuade them from that belief.

Generally speaking, next of kin do not become personally liable for debts on the death of a relative; the deceased (through his/her assets) is solely liable for those debts and in situations where the assets remaining are insufficient to pay the debts, the estate will be insolvent – family members will not be called on to “kick in” to pay outstanding liabilities.    

However, something to remember is that a deceased person’s debts are, along with funeral and testamentary expenses, a first charge on his/her assets; the debts must be paid before the beneficiaries get paid, so to speak.  So, if beneficiaries have received their share and the creditors have not, the creditors might be able to go after the assets that have been inherited.

Have a great day!

Megan F. Connolly   

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My blog today is the last in my series this week on protecting a trustee from potential liability.

A trustee may be protected from potential liability based on the conduct of the beneficiaries themselves or by having sought the assistance of the Court. 

If a beneficiary consents to, or concurs in, a breach of trust prior to it being carried out, or he releases the trustee from liability, or in some other way acquiesces in the breach after it has been carried out, he or she may not subsequently claim from the trustee any compensation to the trust for the loss arising. It is the beneficiary’s personal conduct which bars him or her from making such a claim. A beneficiary, who has instigated, requested or consented to a breach, may possibly be required to indemnify the trustee to the extent of the beneficial interest.

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Today’s blog will continue my series this week on protecting trustees from potential liability.

A trustee may incur personal liability arising from his or her administration of the trust. The provision or existence of a release and/or indemnification in favor of the trustee may protect, limit or exonerate the trustee from liability.

With respect to a trustee’s accounts (accounting) for the administration, releases may be sought by the trustee and provided by the beneficiaries in conjunction with a Court order passing the accounts.   Alternatively, the beneficiaries may provide the trustee with a release in lieu of compelling the trustee to pass his or her accounts in Court. Amongst other considerations, when seeking a release from the beneficiary, a copy of the accounts should be provided, either in an informal format or formal format, for the beneficiary’s benefit.  

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Today’s blog is a continuation of my series this week on protecting a trustee from potential liability.

Perhaps the best way for an outgoing trustee (and/or new trustee) to limit any liability that may be visited upon him/her/them as a result of the administration of the trust (or to the date of his or her retirement, removal and replacement) is for the trustee and his or her co-trustees, if any, to pass their accounts.   Assuming the accounts are passed, not only will the trustee know the “starting numbers” and the assets/liabilities for the future administration of the trust (that is start with a clean slate), but the trustee will have been afforded the proper protection of the Court order. 

 

Requiring an accounting may also be the only way that the beneficiaries can review the administration of the trust and determine whether the administration has been proper or whether misconduct has occurred, negligent or otherwise.

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A trustee, whether incoming or outgoing, needs to be aware of and consider his or her potential liability as trustee and over the administration of the trust. The trustee’s conduct may be protected, limited or exonerated by the terms of the trust, statute, an Order relieving the trustee of liability, the existence or provision of releases or indemnities, a passing of accounts, the conduct of the beneficiaries, whether indirect or direct, and/or the assistance of the Court. 

My blogs this week will, to some extent, touch upon some of the ways that the potential liability of a trustee can be protected, limited or exonerated.

 

To begin with, a trustee, whether incoming or outgoing, ought to carefully review the terms of the trust document as the trust document may contain provisions that impact on the potential liability of the trustee.

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I recently stumbled on an article by Eileen AJ Connelly, where she discusses the issues that might arise with aging relatives or friends. I found Ms. Connelly’s article to be interesting because Canada is an aging society, but more particularly because it provides her readers with a strategy on how to approach the subject of managing finances with an elderly relative and what signs to watch for if it is suspected that an elderly relative might be having trouble handling finances.

In her article, Ms. Connelly lists the following “warning signs” to watch for if you suspect an elderly relative, client or friend may be having trouble handling finances:

 

1.                  Unopened mail;

2.                  Late or unpaid bills; collections actions;

3.                  Confusion or lack of interest about what bills have been paid;

4.                  Bounced checks;

5.                  Disorganized personal paperwork;

6.                  Uncashed cheques or unclaimed property reverting to the government;

7.                  A large number of magazine subscriptions; and

8.                  Unusual or increasing direct mail or shopping-channel purchases.

 

The theme behind Ms. Connelly’s article is not to wait to get involved, but be proactive. If you have noticed a possible problem with an elderly relative or friend you should not wait to have the dreaded conversation of managing finances. The longer you wait, the greater the risk that any existing problems will only accumulate. Ms. Connelly states that most elderly relatives, like parents, are afraid that they are bothering their children and it’s up to the children not to assume that your offer for help will be refused.

 

Thank you for reading and have a great weekend.

 

Rick Bickhram

 

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On September 2, 2008, my colleague Megan F. Connolly blogged on Leona Helmsley, the deceased billionaire who settled a $12 million trust for the benefit of her Maltese, named Trouble. 

As it turns out, in 2003 Ms. Helmsley drafted a mission statement to establish goals for a multibillion dollar trust. Under the 2003 mission statement, Ms. Helmsley directed her trustees to make grants from the trust, in their sole discretion, for the benefit of:

 

1.                  indigent people;

 

2.                  for the care of dogs; and

 

3.                  such other charitable activities as the trustees shall determine.

 

A year later, Ms. Helmsley executed a subsequent mission statement (link 2004 mission statement), which revokes all prior mission statements and essentially removes the first goal from the mission statement. 

 

Up until February 19, 2009, experts in trusts and estates had debated over the validity of the mission statement. The judge overseeing the probate of her Will, Judge Troy K. Webber of the Surrogate Court in Manhattan, held “the trustees may apply trust funds for such charitable purposes and in such amounts as they may in their sole discretion determine”. Accordingly, Judge Webber’s ruling will permit billions of dollars to flow into a charitable trust to be distributed not only for the care and welfare of dogs but in other areas such as health care, medical research, human services, education etc. Given the state of the U.S. economy, there will clearly be no shortage of willing grant recipients.

Thank you for reading.

 

Rick Bickhram

 

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In keeping with modern advances in our society, The Honourable Coulter Osborne (former Associate Chief Justice of Ontario), was asked to propose some options that would assist in making our civil justice system more accessible and affordable.  The Honourable Coulter Osborne submitted his findings and recommendations and in December 2008 The Civil Rules Committee filed amendments, which are scheduled to come into effect on January 1, 2010 (amendments can be found here).  It is important to note that there is no transitional stage with respect to the amendments coming into force. 

The following are a few amendments that caught my eye:

1.    Rule 1.04 (1.1) provides that the court shall make orders and give directions that are proportionate to the importance and complexity of issues, and the amount involved, in the proceeding.  

2.    Rule 1.08 will permit the court, on its own initiative, to hear matters by telephone or video conference.  

3.    Pursuant to Rule 20 (summary judgment), the general test to obtain judgment is the moving parties ability to show that there is "no genuine issue for trial".  Rule 20 has now been amended which imposes the burden on the moving party to show that there is "no genuine issue requiring a trial".   

4.    In actions commenced in Toronto, Ottawa and Essex County, mandatory mediations are to take place within 180 days, rather than from 90 days of filing the first defence unless the court orders otherwise.  

5.    Where the discovery tools are likely to be implemented in a litigious matter, Rule 29.1 now requires the parties to agree to a discovery plan before the earlier of 60 days after the close of pleadings or such longer period as agreed.  The discovery plan must be in writing and it must include the intended scope of documentary discovery, taking into account relevance, costs and the importance and complexity of the issues.

6.    With respect to examinations for discovery, regardless of the number of parties or other persons to be examined, no party is allowed to examine for more than seven hours unless the party has obtained the consent of the parties or has obtained a court order.

7.    The monetary jurisdiction of the Small Claims Court will be increased to $25,000.00.

Again, these amendments were made with a view that it would make our civil justice system more accessible and affordable.  For instance, permitting courts to hear matters via telephone or video conference will free up judicial resources, and reduce Lawyers fees.   Increasing the monetary jurisdiction of Small Claims Court to $25,000.00 will provide access to justice for many in need and at the same time eliminate the demanding obligations that are imposed upon parties under the Rules of Civil Procedure.   I will be looking on with interest as these amendments take effect in the new year.

Thank you for reading and have a great day.  

Rick



 

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An Estate Trustee During Litigation (“ETDL”) is typically seen as an officer of the court who represents the Deceased.  An ETDL has a wide variety of duties, which fundamentally includes administering assets, and paying the outstanding debts of the Deceased.  The purpose of today’s blog is to consider two Ontario decisions where an application seeking the appointment of an ETDL was rejected and granted, respectively.

Re Lloyd, 24 O.R. (2d) 340, is a 1979 decision by the Ontario Surrogate Court, as it was called.  In this case, the widow of the deceased filed a Notice of Objection challenging the Last Will and Testament of the deceased and sought the appointment of an ETDL.  On the motion, the evidence indicated that the Applicant was unhappy because she was not being kept aware of the status of the assets, but there were no allegations expressing a concern about the preservation of estate assets or that an ETDL was necessary to prevent waste or mismanagement.  In fact, the evidence indicated that the assets of the estate were well managed, and increasing in value.  Accordingly, the Honourable Justice Clements refused the appointment of the ETDL.  

Re Groner Estate, 1994 CarswellOnt 2478, is a decision by the Ontario Superior Court of Justice.  In this case, the Applicant filed a Notice of Objection challenging the Last Will and Testament of the Deceased and also sought the appointment of an ETDL.  The Applicant was concerned that the named estate trustee had been administering the estate, despite no legal authority to do so.  The named estate trustee opposed the appointment of an ETDL.  The Honourable Justice Greer held that the size of the estate was large, however the administration of the estate was uncomplicated.  Nevertheless, Justice Greer, expressed concern over the conflict in having the named estate trustee’s lawyers acting as de facto administrator.  Justice Greer held that assets cannot be administered in a vacuum and that the perception of neutrality must be seen.

From an evidentiary point of view, both cases provide insight into what Lawyers should consider when drafting materials seeking the appointment of an ETDL.

Thank you for reading, and have a great day.

 

Rick Bickhram

 

 

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I recently learned that an old neighbour of mine was residing in a long-term care facility and I decided to visit him.  As a child, I remember my neighbour would often come out to join us in a pick up game of baseball or street-hockey.  Having known my neighbour to be a strong and vibrant individual, and despite having prepared myself, it was nonetheless disarming for me to see him in need of assistance and so dependent on others. Although, in my practice, I have cause to consider the issue of capacity almost daily, this experience caused me to reflect on the issue in a much more personal fashion.

Lawyers, particularly in our area of practice, are often required to consider capacity issues and it is easy to allow our personal views to affect our analysis.   For instance, if my neighbour left his entire estate equally among his three children, in most circumstances we would presume he had capacity.  However, if he left his estate to his caregiver, to the exclusion of his children, most of us would be inclined to conclude that he had either acted for want of capacity or was perhaps coerced to make a Will while vulnerable to undue influence.  

People do not typically become incapacitated overnight, except in circumstances where a catastrophic event has occurred.   Capacity to make a Will has been described as knowing and understanding the nature and effect of your dispositions and understanding who would be the natural persons to enjoy the bounty of their estate.

In making this determination, if there is any doubt regarding a client's capacity it is surely advisable to obtain the appropriate capacity assessment in the circumstances.

Have a great week! 

 

Rick Bickhram

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There were several estate related web postings that came to my attention this week. 

The Elder Abuse Awareness component of the Federal Government's New Horizons for Senior's Program announced 16 new projects directed at the prevention of elder abuse.  Somewhat to my surprise (largely because I assumed it was an area under provincial jurisdiction), the Federal Government has significantly increased funding to this program. 

In Britain, a committee is being charged with the task of considering future changes aimed at preventing the reigning monarch from sealing wills.  Her Royal Highness Queen Elizabeth II directed that the Last Wills of both Princess Margaret and the Queen Mother be sealed, a decision that has been criticized in many quarters.

And lastly, let's not forget the Last Will of George Washington which was drafted by the late President himself with "no professional character being consulted", his Will being an endeavour that "occupied many of my leisure hours."  Clocking in at 23 pages, Washington's Will also had an addendum detailing the location, description and value of his numerous properties (knowledge gleaned from his days as a land surveyor and speculator).

Have a great weekend!

David M. Smith

 

 

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The recent England and Wales Court of Appeal decision in Olins v. Walters [2008] EWCA Civ 782 gained some degree of notoriety among British legal observers.  This Mutual Wills case was notable for its clear pronouncement that a constructive trust is impressed on the estate of the first testator to die during the lifetime of the second testator.

Of arguably greater interest was the somewhat remarkable finding of the Judge of first instance ( see [2007] EWHC 3060 (Ch).] on the usually mundane issue of due execution.  One of the witnesses to the Will stated under oath that she was "more than 100 percent sure that she had not witnessed the signature of the deceased on the Will."  Notwithstanding this evidence, the trial judge held that she was honest but mistaken and upheld the Will.

It is not often easy to mess with legal presumptions.  Consider, for instance, the commentary subsequent to the Supreme Court of Canada decision in Pecore v. Pecore which focused on the suggestion that resort to presumptions is made as a "last resort."   While it is tempting to think that the evidence will always rule the day, the trial judge finding in Olins v. Walters (which, curiously, was appealed on the mutual wills issue but not on the finding of due execution) suggests that the presumption of due execution of a Will is particularly entrenched.

David M. Smith

 

 

 

 

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With the remarkably cold January (and now February) we have experienced, it is sadly inevitable that there may be seniors who fall victim to the elements.  However, a recent web posting regarding a 93 year-old WWII vet who died of hypothermia in his own home after the power was cut off is simply tragic.  The tragedy was compounded by the fact that there was no reason for him to be in arrears on his utility payments: he left an estate of over $500,000. 

Clearly this story raises at least two issues: (i) whether the cutting off of power in the deep of winter can ever be an appropriate remedy for non-payment of bills and (ii) whether this gentleman was in need of assistance from a substitute decision- maker.

Stories such as these should be rare and, thankfully (hopefully?), are.  However, there are many vulnerable seniors who are at risk in the winter months.  For those who are in need, incapable to manage their property or care for their person, and who do not have a Continuing Power of Attorney for Personal Care (and Property), there is doubtless a positive moral obligation for concerned family members to seek guardianship.  Such a step is likely to be perceived as threatening by such a person in need of assistance.  However, in circumstances where lives may be at risk, there may simply be no other option.

David M. Smith

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The March 2009 issue of Vanity Fair includes an interesting (albeit cheeky) article entitled "Final-Exit Strategies." Citing such works as Tuesdays with Morrie and The Last Lecture, the article notes the recent prevalence of works of fiction and non-fiction that are written from the perspective of someone contemplating their own imminent demise.  "The Grim Reaper as Life Coach" (one of the numerous tongue-in-cheek observations in the article) may not be the most sensitive assessment of such works but it does contain a kernel of truth: "given that we're all on death row, existentially speaking, finding a good writer to keep us company may be as good as it gets."

It got me thinking about how, for most people, their Will is likely the only document written for an audience to consider after their death.  And its aim is, of course, strictly businesslike: who gets my stuff when I die?  Rarely does one see a Will which pronounces in any way on an individual's personal philosophy or the conveying of life lessons.  But that may be changing.  In a past blog, Paul Trudelle commented on "Ethical Wills" (and see www.ethicalwills.com) which are created for just such a purpose, and Ian Hull and Suzana Popovic-Montag explored this issue in further detail in a podcast. 

Whether the legal profession will be prepared to embrace this broader concept of the purpose of the Will is an open question.  Of course, the odd Holograph Will will contain some candid personal insights that would not otherwise be seen in a lawyer-drawn Will and, it could be argued, stand a better chance of getting published!

David M. Smith

    

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The Mini-Mental Status Examination (MMSE) is a quantitative measure of cognitive status in adults. Since its creation in 1975, the MMSE has become the most widely used standardized cognitive screening test in both clinical practice and research.

As a screening tool, the MMSE can have limitations, some of which are outlined here:

· Interestingly, the MMSE was never actually designed for diagnosis of dementia; rather it was to be used as ‘a practical method for grading the cognitive state’ (Folstein et al.). As indicated by the team that designed the MMSE (Folstein et al.), in the Journal of Psychiatric Research, the MMSE "does have a number of valuable features for clinical practice even though it cannot carry alone the diagnostic responsibility.”
· Questions have been raised about the use of the MMSE to track cognitive changes over time, specifically, about the clinical relevance of these changes due to the potential for measurement error.
· One’s score on the MMSE is likely to be negatively skewed by a language barrier. Ironically, some patients in the advanced stages of Alzheimer’s Disease often revert to their native tongue, which, if not the English language, would serve to further skew their score.
· Psychological Medicine published a study back in 1982 that showed an increase in false positives amongst hospital patients with fewer than 9 years of education. Conversely, a highly educated person with mild dementia may score within the normal range on the MMSE.
· Studies have also shown that the test is not accurate in older adults who are illiterate.
· The MMSE is not reliable as a screening tool in someone with a learning disability (see reference) or a physical disability that would impair one’s ability to complete the test (e.g. blindness or deafness).
· A paper published in the Journal of Clinical Epidemiology reviewed MMSE results in older Mexican-Americans and found that the MMSE is ‘strongly influenced’ by noncognitive factors including marital status, language of interview and immigrant status.

When the MMSE is misused or applied inappropriately, cognitive deficits may be missed in some patients, while other patients may be misclassified.  However, when applied prudently, and when considered in partnership with additional data (e.g. anecdotal information from family members, or the results of other cognitive tests), the MMSE is both a valuable and valid screening tool for measuring cognitive status.

Jennifer Hartman, Guest Blogger
 

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In a paper recently given by Mark Handelman, he comprehensively reviewed POA for PC, which document, he notes, is more often prepared as an afterthought to the Will and POA for Property package - too frequently granted without serious discussion between lawyer and client and between client and proposed attorneys.

A variety of noteworthy issues are covered in Mr. Handelman’s paper, including the following:

· the requirements of execution (i.e. required age of grantors and attorneys, as well as witness requirements and restrictions);

· when POA for PC become effective;

· revocation of POA for PC (i.e. capacity requirement and method and scope of revocation)

· the two tests (minimum) for a grantor's capacity that lawyers ought to turn their minds to (see the Substitute Decisions Act, s. 45; and Health Care Consent Act, s. 4(1));

· precautions to take when the grantor's capacity to execute a POA for PC is in question;

· special considerations, conditions, restrictions and instructions in POA for PC (i.e. authorizing use of force or restraint to place a grantor for treatment) and special processes for them to be effective; and

· advance directives in POA for PC (i.e. to give or refuse consent to a particular care plan) and the enforcement of same.

If you are interested in reading more on this topic, you can find Mr. Handelman’s paper by contacting the Ontario Bar Association.

Have a great weekend!

Natalia Angelini

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When advancing a dependant support claim, it is important to determine where the deceased person was domiciled[1] at death.

Under the former dependants’ relief legislation (Dependants’ Relief Act, R.S.O. 1970, c. 126) the court could only make orders for dependant support in cases where the deceased died domiciled in Ontario. In contrast, under the Succession Law Reform Act (SLRA), courts in Ontario have the jurisdiction to also make such orders for support where the deceased died domiciled outside of Ontario.

The issue becomes one of jurisdiction – what assets will the Ontario courts have authority over? In brief, the answer appears to be as follows:

-          if the deceased person was not domiciled in Ontario, then the jurisdiction of the Ontario court will be limited to real property/immovables in Ontario;

-          if the deceased was domiciled in Ontario, and a support application was brought in Ontario, the court has jurisdiction to charge the movables of the deceased worldwide; and

-          even if the deceased person was domiciled in Ontario at death, an Ontario court order directing support for a dependant may not be enforced over real property/immovables located outside Ontario, such that the dependant may be forced to bring an application in the jurisdiction where this property is located in order to obtain the relief granted in the Ontario court order.

In Corina Weigl’s paper entitled “Conflicts of Laws in the Context of Dependant’s Relief – A Matter of Domicile”, presented at the Ontario Bar Association 2009 Institute of Continuing Legal Education, she discusses this and other related issues in greater depth. A worthwhile read!

Have a great day,

Natalia Angelini

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Delirium and dementia – are they different? Indeed, delirium and dementia are very different and have different diagnostic criteria, although just to muddle the discussion, these syndromes can occur concurrently.

Delirium
The word ‘delirium’ is derived from the Latin term delirare meaning ‘off the track’. Delirium is not a disease, but rather a syndrome that manifests as a change in mental state. It is often referred to as an acute confusional state; ‘acute’, meaning of rapid onset and short duration. According to the Diagnostic and Statistical Manual of Mental Disorders (DSM-IV) and the Canadian Mental Health Association, symptoms include:

· Problems with attention, memory and thinking
· Disturbances in consciousness and perception
· Disorientation to time
· Disruption of the sleep-wake cycle

Delirium is considered a medical emergency and it is important that the cause is investigated thoroughly. Metabolic disorders (e.g. organ failure, diabetes, hyperthyroidism, dehydration and vitamin deficiencies) are the single most prevalent cause of delirium.

Statistics suggest that 15% of older persons admitted to hospital have delirium and over 50% of older persons may develop delirium while in hospital.

Dementia
Dementia is not a specific disease, but rather a clinical syndrome accompanying disorders that affect the brain. Unlike delirium, which occurs over the span of minutes or hours, dementia is a chronic, usually progressive, degenerative and often irreversible decline in mental status. Symptoms of dementia include:

· Loss of memory
· Confusion and disorientation
· Language impairment and problems with judgment and reasoning
· Disruptive and inappropriate behaviour

Dementia is an umbrella term. There are over 100 types of dementia, the most common of which is Alzheimer’s disease, which, according to the Alzheimer Society of Canada, accounts for over 64% of all dementias in Canada. Other related dementias are attributed to Parkinson’s disease, acquired brain injury, Huntington’s disease, multiple strokes, chronic drug use and long-term alcohol abuse.

Initial findings of the study, “Rising Tide: The Impact of Dementia on Canadian Society”  (Alzheimer Society, 2009) indicate that approximately 500,000 Canadians are living with dementia, 71,000 of whom are under the age of 65. The study estimates that within the next five years, an additional 250,000 Canadians could develop Alzheimer’s disease or a related dementia. The number of Canadians with dementia is expected to triple between 1991 and 2031. 
 

Jennifer Hartman, Guest Blogger

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Tomorrow is Valentine’s Day, which means I am about to become the lucky recipient (insert sarcasm here), once again, of ‘subway flowers’. Call me a cynic, but I don’t consider subway flowers to be the hallmark (oooh – good pun) of advanced planning. See, my husband procrastinates. He’s the one frantically scanning the menu when everyone else has already given their order and he’s the guy online on the 24th of December trying to figure out who can guarantee next day delivery. I have to be honest, as someone hardwired for strategic planning, his approach truly unravels my DNA. To me, the 11th hour is the time to bask in the glow of a job completed well ahead of schedule. To him, the 11th hour is the time to put fuel in the tank for the inevitable burst of activity towards the impending finish line. The end results are the same; I just happen to really resent his methods.

He got quite smug with me last week when I came across some information that suggested he had procrastination competition in Leonardo da Vinci, of all people. According to the book “How to Procrastinate” (part of the Self-Hurt series), da Vinci’s prolific output was ‘matched only by his volume of random doodles and meandering sketches’. Apparently, The Last Supper was only finished after his patron threatened to cut off all funds. And Mona Lisa took twenty years to complete. Distractibility appeared to have been the cause of da Vinci’s procrastination. He dillied and dallied about in various fields of study, including math, anatomy, architecture and engineering. Some (the procrastinators in the audience, perhaps) may view this as multitasking; reportedly da Vinci could even paint with one hand and write with the other simultaneously. Others may perceive his widely varied interests as simply a lack of focus.

I chuckled in December when I read an item on CNNhealth.com about StickK.com, a website that offers the ‘Commitment Contract’, a binding promise by a user to stick to a personal goal or face a self-determined financial penalty. According to Yale University economics professor Dean Karlan, “It’s a contract to make slothfulness more expensive.”

Maybe I should just sign my husband up for art lessons instead…

Happy Valentine's!

Jennifer Hartman, Guest Blogger
 

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A Mareva injunction is a court order that freezes the assets of individuals or companies. It can be obtained without notice to the target individuals and/or companies and can then be extended on notice.

Mareva injunctions are usually employed in civil actions, typically situations involving fraud, where a plaintiff seeks to prevent a defendant from dissipating assets or removing them from the jurisdiction, pending final determination of the plaintiff’s action. 

In Will challenge proceedings, particularly involving large complex estates, a Mareva injunction may be of use in cases where there is a high risk of dissipation or removal of contested assets by one or more parties to the proceedings, thus defeating the purpose of the Will challenge.

A party seeking a Mareva injunction without notice to other affected parties must make out a strong case of dissipation or removal of assets, through sworn evidence. There is also a duty of full and frank disclosure of all material facts and law, given that the affected parties are not able to defend against the injunction at first instance. Finally, the party seeking the injunction must give an undertaking as to damages. That is, the party must undertake to pay damages to the affected parties in the event that it is subsequently determined by a Court that the Mareva injunction should not have been granted. In Ontario, further to Rule 40.02, a Mareva Order obtained without notice is valid for ten days. It can then be extended by a Court, on notice to the affected parties. An affected party, once it receives notice, may immediately move to quash the injunction. 

A Mareva Order may prove a valuable tool in preserving contested estate assets in Will challenge proceedings. 

Have a great day!

Bianca La Neve

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This year’s trusts and estates section of the Institute was held on Tuesday, February 3, 2009. The programme featured a broad and interesting selection of topics by experienced practitioners.

Topics included:

• Estate planning for ‘complex’ families
• Environmental liability issues for trustees, executors, attorneys and guardians
• Family law surprises
• Conflict of laws in cases of multi-jurisdictional families and their assets
• Developments in costs in estates and capacity litigation
• Trustee mistakes
• Rights of adult beneficiaries to receive support
• Capacity assessments
• Power of attorney pitfalls

The programme was informative and insightful and a great opportunity to meet and speak with leading estate practitioners. If you were unable to attend, the seminar materials are available from the Ontario Bar Association.

Have a great day!

Bianca La Neve

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There is a common misconception that strokes are almost formulaic in nature; sort of a one-size-fits-all approach to causes and outcomes. This is actually far from the truth. Here’s a quick anatomy refresher:

Strokes are either ‘ischemic’ in origin (i.e. caused by a blood clot), or ‘hemorrhagic’ (caused by uncontrollable bleeding in the brain). Outcomes of a stroke are dependent on the severity of the stroke and the location of the damage to the brain, both of which can be assessed in an emergency setting using either CT or MRI imaging techniques.

· The cerebrum is divided into the left hemisphere and the right hemisphere. Each hemisphere is divided into portions called ‘lobes’. The effects of a stroke in the cerebrum will be dependent on the lobe(s) affected:

· The frontal lobe is responsible for motor functions and ‘executive functions’, which include reasoning, planning and problem solving, as well as one’s social graces.
· The temporal lobe is involved in speech, memory and auditory perception.
· The parietal lobe is responsible for sensory activities, including receiving and interpreting information from other parts of the body.
· The occipital lobe is located at the back of the head and is responsible for visual processing.

· A stroke that occurs in the cerebellum affects coordination and balance, and often causes dizziness, nausea and vomiting.
· A brain stem stroke, while uncommon, is particularly devastating, since the brain stem controls our involuntary functions such as breathing and heart function, as well as swallowing.

It is important to further differentiate between a stroke and a transient ischemic attack (‘TIA’). A full-blown stroke can certainly be severe enough to render one incapable of making or changing a Will, although some recovery is possible, particularly if formal stroke rehabilitation is actively pursued. In contrast, a transient ischemic attack, as the name suggests, often fully resolves within minutes or hours, although incapacity may still be an issue during the attack. Both a stroke and a TIA are medical emergencies that require assessment and treatment in a medical facility.

Statistics indicate that of every 100 people who suffer a stroke, 10 will recover completely, 15 will die, 25 will recover with a minor impairment and 50 will have a moderate to severe disability, some requiring long term care.

For more information, visit the Heart and Stroke Foundation online.

Jennifer Hartman, Guest Blogger