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

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Who can forget the sad case of Terry Schiavo, the poor lady who suffered catastrophic brain damage in 1990 and was kept alive in a vegetative state on a feeding tube for 15 years?  Readers will remember the anguish involved when her husband was forced to litigate against her parents in order to get the tube removed so Terry could die in peace.  This became a powerful argument in favour of a "Living Will", which is basically a document in which individuals outline their "personal choices" regarding end-of-life treatments.  Living Wills became a feel-good legal product, a perceived solution to the heart-rending situations like Terry's.

Too bad the research shows that Living Wills may not live up to the hype.  According to a recent study by two University of California Irvine researchers, Professors Peter Ditto and Elizabeth Loftus, Living Wills appear to have serious defects.  One problem is that patient preferences change over time.  For instance, one tends to be more inclined against end-of-life treatments immediately after a hospital stay, but this changes with time.  Also, positive treatment results of family members make a patient more inclined to end-of-life treatment.  Many people who make Living Wills change their preferences but forget about their Living Will, or misidentify those preferences in the Living Will. 

Perhaps the most glaring weakness is that Living Wills do not appear to provide guidance  to surrogates who have read them.  According to the study, the accuracy of a surrogate who has read a Living Will in prediciting a loved one's treatment preferences is no higher than that of a surrogate who has not read the Living Will.  So a Living Will can be totally inconsistent with the patient's most recent intentions.   

Having a Living Will apparently makes both the patients and the surrogates feel better, so it's not all bad news. 

Have a safe day,

Chris Graham

 

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Listen to Dependency and Undue Influence

This week on Hull on Estates, Diane Vieira and Paul Trudelle discuss dependency and undue influence in the case of Bale vs. Bale. This topic is also discussed by Paul Trudelle in his blog post:

If the link does not work, cut and paste the following URL into your browser:

http://estatelaw.hullandhull.com/2008/04/articles/topics/estate-trust/dependency-and-undue-influence/

Continue Reading...

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Following up on Allan Socken’s blog of March 31, 2008 entitled “What is Legacy Coaching”, I came across an article in the American College of Trust and Estate Counsel Journal entitled “Is Your (Ethical) Will in Order?” (2008) 33 ACTEC Journal 154 by Zoe Hicks. In her article, the author reviews what an Ethical Will is, what types of topics are normally covered, the format of the Ethical Will, and how estate planning practitioners have embraced the concept of advising clients with respect to leaving an Ethical Will.

Essentially, an Ethical Will is a testament of what you want your survivors to know, rather than what material assets you want them to have. Ethical Wills can include expressions of wisdom, values and beliefs of the “testator”, reminders of heritage, apologies, explanations of actions taken or not taken, regrets, expressions of love and gratitude, and words of encouragement.

Ms. Hicks sets out numerous extracts from Ethical Wills so that the reader can get a flavour of the types of matters that an Ethical Will can to address. She concludes by observing that an Ethical Will can be a valuable exercise for both the writer and the recipient.

For more information, read her article, or visit www.ethicalwill.com. This site explains the concept, and provides several examples of Ethical Wills in different forms. 

Have a great weekend.

Paul Trudelle

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In Re Cogan, the Ontario Superior Court of Justice addressed the issue of contingency legal fees. The lawsuit involved the claim of a minor suffering from cerebral palsy, with the plaintiffs alleging that the obstetrician and nurses attending at the child’s birth were negligent.

The case settled for the sum of $12,543,750. The lawyers for the plaintiffs wanted to be paid $4,174,928.45, or roughly 33.33%, on the basis of a contingency fee agreement between them and the minor’s litigation guardian. A contingency fee agreement is an arrangement whereby a lawyer agrees to be paid a percentage of recovery in the lawsuit. Where there is no recovery, the lawyer works for free. Where there is a substantial recovery, the lawyer benefits accordingly.

The Court was asked to rule on whether the contingency fee agreement should be allowed. In its lengthy weighing of both sides, the Court found, among other things, that: The agreement was obtained in a fair way; 2. The agreement was reasonable; 3. The risk to the lawyer of not getting paid and not getting reimbursed for disbursements was high; 4. The case was complex and required significant time commitment and delayed payment; and 5. The result achieved by the lawyer was exceptional.

The Court also commented on the importance of access to justice for vulnerable plaintiffs like the minor and the role contingency agreements can play in fostering that goal.
Therefore, the Court upheld the agreement.

Thanks for reading.
Sean Graham

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A massive $110 million lawsuit has been brought by the Attorney General’s office in California against a “living trust mill that tricked senior citizens into using their retirement savings to buy annuities that often made less financial sense for the elderly victims but earned the con artists substantial commissions and other income.”

Estate Planning Law Firms.com quotes the Attorney General as saying the following:

“The perpetrators of this fraud deceived seniors into using their hard-earned retirement nest eggs to buy unneeded annuities that actually undermined their financial security. Living trust mills such as this one violate not only the law, but the trust of their elderly victims.”

What surprised me was the apparent scope of the alleged organization being sued by the Attorney General: between 250 and 300 sales agents and another 80 telemarketers were involved, allegedly soliciting elderly consumers through mailings, seminars, telemarketing, presentations at senior centers and other means, marketing their services as a way to avoid probate and estate taxes, then eventually convincing seniors to buy annuities that were, according to the Attorney General, not in their best interest.

Without commenting on this particular case, there does seem to have been a disturbing and growing trend in recent years of attempts to deprive the elderly of the considerable wealth concentrated in their hands.  

One more reason, if any were needed, to take great care in choosing investment and estate planning advisors.

Thanks for reading.

Sean Graham

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Yesterday, we read about Franz Kafka's unfulfilled wishes with respect to his manuscripts, both published and unpublished, at the time of his death in 1924.  Flash forward eight decades or so.  Dmitri Nabokov, the 73 yr old sole surviving heir of Vladimir Nabokov, continues his 30-yr struggle with his father's deathbed request that his last unpublished work, The Original of Laura, be destroyed.  The stakes are high for Laura; at one point, Dmitri referred to it as "the most concentrated distillation of [my father's] creativity."  The task of burning the manuscript was originally entrusted to Vladimir's wife Vera, but when she died in 1991 she had not yet carried out her husband's last wish.

As discussed in the Business Standard, those in favour of heeding Nabokov's wishes are not willfully destructive.  It is understood that great writers might work through countless drafts before arriving at a final product that meets their approval.  On the other hand, there's the argument that writers (including Kafka) seldom can judge their own work.

The long twisted saga may find its fate as a cliffhanger of sorts.  In a dramatic verdict, Dmitri indicated late last month that he had indeed "decided to make a decision" about what to do, but that he would "neither disclose publicly either the decision or the deed."  Apparently (or should I say apparition-ly?), Dmitri reached his decision after an imagined ghostly conversation with his dead father.  Stay tuned for the future unveiling of either a box of Laura's ashes or what might be Nabokov's greatest literary work.

David M. Smith

 

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Several recent stories in the news highlight the importance of making sure your estate plan includes a directive for health care in the event you are incapable of making health-related decisions.  Diane Sawyer, speaking on a segment for ABC news recently, covered the amazing story of a 65 year old woman who awakens from a coma after suffering a cerebral hemorrhage (watch the video here).

Regrettably, the outlook for many terminally ill patients is not as rosy and not every person faced with such odds gets a second chance.  Reminiscent of the case of Terri Schiavo in 2005, a father of a brain-damaged 23 year old has appealed a ruling by the Delaware Court of Chancery that could allow the removal of a feeding tube and end her life (read about it here).  Lauren Richardson was pregnant at the time she fell into a persistent vegetative state, and she was kept alive to enable her to give birth (which she did successfully last year).  The Court has now granted guardianship to her mother, who insists her daughter did not wish to live this way and wants the artificial life support measures withdrawn.      

In Ontario, having a Power of Attorney for Personal Care and a Living Will in place will ensure that your intentions regarding treatment will be considered.  Without the guidance afforded by these critical documents, your family may be unable to carry out your wishes (such as discontinuing medical treatment where there is no hope of recovery).  Including health care directives as part of your estate plan also enables you to specify instructions, such as requesting medication to alleviate suffering or distress, even though this may hasten the moment of death.

Sarah Hyndman Fitzpatrick  

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Much has already been written about the trial of Conrad Black currently unfolding in Chicago. There are, of course, constant press dispatches and on-going, daily TV coverage. I will leave Conrad Black’s innocence or guilt to the jury sitting in Chicago. However, on a more subtle level, there are lessons to be learned for any party in protracted litigation.

When Conrad Black was first charged with fraud and racketeering, he was widely condemned. His critics took a certain amount of glee in seeing “Conrad brought low”. He was after all getting his proper comeuppance after years of malfeasance. However, Conrad Black did not flinch or bow to the pressure. He maintained his innocence rather convincingly throughout and clearly believed in the strength of his case.

To my mind, what has been impressive is Conrad Black’s perseverance in the face of adversity. Persevering is key to successfully litigating. It has been said that litigation is not a tea party; in fact, it’s more akin to war. A party has to have, or quickly develop, a thick skin. The opposing party and their counsel will hurl all sorts of allegations against you, belittle your case, and try to marshal evidence that at first blush may seem crushing and unanswerable. However, a party has to believe in the righteousness of their case and not lose faith.

Obviously, a party should have only commenced litigation or mounted a defence after carefully considering the facts and the law. If it was concluded that litigation was unavoidable, then a party should not waiver but persevere. A party should always consider reasonable settlement options, but nevertheless carry on undaunted.

Litigation can be difficult, expensive, and in the estate context emotional. Many litigants begin to waiver midstream wondering whether they made the right decision, if the proper evidence has been gathered, and if their case is as strong as it first appeared. However, with the help of good counsel, a party will weather the storm.

When in doubt, stop for a moment and think of Conrad Black who persevered despite the tremendous pressure and the clamour of his critics. Who knows, he may ultimately win.

Enjoy!

Justin de Vries

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In McMullen v. McMullen [2006] B.C.J. No 2900, an 86 year old widower commenced an application against two of his three daughters, who held his power of attorney. The application was to set aside the transfer of a 99% interest in the father’s condominium property to the husbands of his two daughters. The daughters, in turn, brought an application for an order requiring their father to submit to a psychiatric assessment.

According to the medical evidence before the court, the father had some medical problems, but no documented cognitive problems. At worst, he suffered from depression. However, the two daughters alleged that their father’s spending habits had changed and his investments had been depleted. The daughters claimed that their father was sending money to a new female acquaintance in the United States. The family contacted medical professionals and legal authorities with concerns that their father was being financially abused, but to no avail.

When the daughters confronted their father with respect to his worsening financial situation, he became angry and denied he was being financially exploited. He asked his one daughter to stop monitoring his bank account though she did not accede to his request, as she considered it her duty under the power of attorney. The two daughters then transferred the father’s condominium property to preserve his only remaining asset and provide for his future care.

However, the daughters did not immediately register the transfer of the condominium property, as they thought it would cause emotional distress. It was not until a year later that the daughters finally registered the transfer of the condominium without telling their father or providing consideration. The father commenced the application when he ultimately discovered the transfer.

The court allowed the application by the father and the condominium transfer was declared null and void. While the daughters acted in what they considered to be in their father’s best interests, there was nevertheless no evidence to show that the father was incapable of managing his financial affairs. The daughters had therefore breached their duties as attorneys by acting contrary to their father’s intentions. The court dismissed the daughters’ application, as the father was not required to submit to a psychiatric assessment where his mental capacity was not an issue.

The case holds that even when a family fears that an elderly parent is being financially exploited, but mental incompetency is not an issue, a power of attorney does not give the family carte blanche to do what they think is in the best interests of that parent. A power of attorney for property has its limits even in the most egregious situations.

Enjoy!

Justin de Vries

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Yesterday I suggested that criminal charges in Estates, capacity and trust cases might become more common.

In R. v. Bunn (2000), C.C.C. (3d) 505,  the Supreme Court of Canada considered the sentencing of a Manitoba lawyer convicted of converting some $86,000 worth of trust monies to his own use. The accused acted as attorney for property for Soviet/Russian beneficiaries of Manitoba and Saskatchewan estates. He received monies in trust, but instead of paying it all to the beneficiaries, he redirected some of it to himself.

This conduct was discovered by the Law Society of Manitoba when conducting a spot audit of the accused. The accused was disbarred. Some compassion may be warranted: the accused cared for a disabled wife, was the sole income earner in the family, suffered financial woes for years, and lost his reputation and 20-year law career.

At trial the accused was sentenced to two years in a federal penitentiary, but the Manitoba Court of Appeal substituted a conditional sentence of two years less a day.

The Supreme Court of Canada, in a 5-3 decision, upheld the Appeal decision. The majority decided that the need for restorative justice and the benefits of reducing prison terms outweighed the minority’s desire to denounce the accused and promote general deterrence.

Lawyers tend to be easier targets in these cases because of the need to establish mens rea (the intent to commit a crime). It would be difficult for any competent lawyer to claim ignorance of proper usage of trust monies, but laypersons may be a different matter.

Thanks for reading.
Sean Graham

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MacLeans magazine’s Mark Steyn is providing an acerbic day-by-day report on the trial of newspaper magnate Conrad Black in Chicago. The trial continues a pattern by the US government to lay criminal charges in cases of alleged corporate malfeasance more vigorously following the Enron scandal.

As the historic intergenerational wealth transfer currently underway gathers steam, a well-publicised case could easily drive greater government interest in prosecuting breach of trust accusations just as Enron did in the corporate realm. Virtually all lawyers practising in the area have seen serious misappropriation of property or abuse of the vulnerable by those in a position of trust. Is this criminal? If so, will the police and crown attorneys be willing to treat it as such?

The Canadian Criminal Code certainly indicates so: it includes provisions dealing with Theft by person required to account (section 330); Theft by person holding a power of attorney (section 331); Misappropriation of money held under a direction (section 332); Criminal breach of trust (section 336); Fraud (section 380); and Assaults (sections 264 to 266). These provisions could be invoked given the right circumstances in an Estate, elder abuse or capacity case.

The Police often perceive misappropriation by fiduciaries as a civil matter. On the other hand, they are increasingly aware of elder abuse or abuse of the incapable, and far more willing to intervene.

As high-profile cases involving misappropriation of funds or abuse of incapable persons receive greater media attention, look for the legal consequences to branch out from the civil context to involve criminal charges as well.

Thanks for reading.

Sean Graham

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In a recent decision out of Québec, Broodney v. Herzog [2006] Q.J. No. 14933, testamentary intent trumped the literal wording of a Will.

The testator had been involved in a loving relationship with Harry Broodney. They had lived together for twelve years. In a 1995 Will, the testator left Harry $25,000.00. In a 1998 Codicil, the gift was increased to $35,000.00, payable in monthly instalments of $600.00. In 1999, the testator executed a further Codicil, increasing the monthly payments to $1,000.00 but not changing the capital amount of the gift. Both the 1995 Will and the 1998 Codicil stated that the gift to Harry would lapse and be null and void, if he and the testator were “not living together” at the time of the latter’s death.

The issue for the Court of Québec was the meaning of the phrase “not living together”. At the time of the testator’s death, she had been living in a nursing home due to her deteriorating health. Her family consequently claimed that Harry was not entitled to the $35,000.00 gift.

The Court focused on the testator’s intentions. Her intent to benefit Harry was clear and uncontested. The Court held that the testator intended the phrase “not living together” to mean a “break up” with Harry. The evidence was clear that their loving relationship did not end when the testator involuntarily left Harry to reside in the nursing home. The evidence was also clear that the testator’s family was aware of the loving relationship. For the Court, the inability to physically live together could not be a reason for disinheriting Harry.

Not surprisingly, Harry asked for and received punitive damages as a result of the family’s refusal to honour the testator’s last wishes. The Court deemed the family’s refusal to be malicious and reckless.

The litigation could have been avoided by better wording in the Will. Drafting issues aside, the case is a good illustration of a Court employing common sense and testamentary intent to avoid an unjust result.

Have a great day!
Bianca

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In today’s contemporary society, it is not uncommon to see extended families with both a “legal” spouse and a common-law spouse. This presents interesting legal issues for estates practitioners.

In a recent Nova Scotia decision, Canada (Minister of Human Resources Development) v. Tait, 2006 FCA 380, the deceased male CPP contributor’s legal wife and his common-law wife battled over who was entitled to his CPP survivor’s pension.

The legal wife had lived with the deceased for over 20 years, until their separation. After the separation, she raised the couple’s physically-challenged son by herself until the deceased’s death. The two never divorced. The deceased also had a long relationship (over twenty years) with his common-law spouse, which lasted until his death.

Which spouse gets the CPP pension?

The Canada Pension Plan Act seems clear. Further to section 60(1) of the Act, the common-law spouse is entitled to the pension, as she had lived continuously with the deceased for a year prior to his death. The interesting twist was that in his Will, the deceased had actually assigned the pension to his legal spouse. In addition, the common-law spouse had originally supported the assignment and had withdrawn her claim to the pension – she later retracted her withdrawal and re-asserted her claim, leading to the litigation.

The Federal Court of Appeal ultimately held that the Act must be followed and the assignment to the legal wife failed. The legal wife, who had not been cohabitating with the deceased continuously for one year prior to his death, could not contract into the Act’s benefits without the statutory authority to do so. The Court could not give effect to the legal spouse’s compelling moral claim to the pension.

Have a great day!
Bianca

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Anyone can discount a commercial interest they own, trading money for convenience. There is always someone looking for a bargain.

In the United States, dozens of companies are offering to buy structured settlements and trusts. In fact, it is a huge business. Most U.S. states have passed laws requiring court approval of the sale of a structured settlement. However, in many instances, courts will approve sales of structured settlements and trusts for anyone claiming financial hardship.

I am not aware of any prohibition in Canadian law stopping such a discount trade in Canada. The owner of a trust can sell it, unless the trust contains a prohibition against its sale. As another example, one can sell his/her remainder interest in a trust, at a huge discount. It will be interesting to see if this type of discount trade catches on in Canada. If it does, regulation may become necessary to protect vulnerable beneficiaries of structured settlements or trusts. For example, court approval and/or full disclosure of potential consequences may be required. However, it seems unlikely that the government will seek to stop beneficiaries who are sui juris from selling their interest in structured settlements or trusts.

Have a great day!

Bianca

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Yesterday, I wrote about an amazing book by Mitch Albom that I came across recently called “For One More Day”. In the introduction to the book, the author peaks your interest by asking the following question:

"Have you ever lost someone you love and wanted one more conversation, one more chance to make up for the time when you thought they would be here forever?"

Short answer? Well, of course!

The book is a fascinating story of a son and his mother who were in fact fortunate enough to be able to get "one more day" together. Imagine how priceless that must be – an opportunity to say the words that were never said, to share the thoughts that were never spoken, and to rid the relationship of any lingering regret …

Charley’s mother left him with words of wisdom regarding his impending marriage, words which (with slight modification) really can apply to any relationship it seems. She said:

“You have to work at it together. And you have to love three things. You have to love:

(i) each other

(ii) children

(iii) your marriage.

... There may be times that you fight, and sometimes you … won’t even like each other. But those are the times you have to love your marriage. It's like a third party. Look at your wedding photos. Look at any memories you've made. And believe in those memories, they will pull you back together."

Although it may seem trite, it was a beautifully written book that reminded me to make sure that I spend the time with my parents and family now, instead of trying to wait for another day, which may never come.

I highly recommend this story to anyone looking for a “reality check”.

Have a great weekend! All the best – Suzana.

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Recently, I had an opportunity to relax a bit and actually do some fun, as opposed to work-related, reading. I read an amazing book by Mitch Albom, who is the author of international best sellers, "The Five People You Meet in Heaven" and "Tuesdays with Morrie". Mr. Albom wrote another book called "For One More Day". 

"For One More Day" is the story of a relationship that is important to many of us as parents - that being the relationship between a mother and a son. It explores the intriguing question, "What would you do if you could spend one more day with a lost loved one?"

In the book, Charley Bonato does just that, at a very important stage in his life. Charley was essentially raised alone by his mother and, many years later, as a broken man, he decides to take his own life. After a failed attempt to do just that, he ends up spending "just one more day" with his mother.

As the author notes, the story is about a family and, as there is a ghost involved, it could be called a "ghost story"; every family, however, is a ghost story and the dead sit at your table long after they have gone. It’s the sharing of tales of those we've lost that helps us keep from really losing them.

Tomorrow, I’ll tell you a bit more about this remarkable piece of work.

Till then, all the best – Suzana.

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When does a bank become liable for the actions of clients who use its accounts as a vehicle for fraud?

This was the question considered in Abou-Rahmah v. Abacha [2006] EWCA Civ 1492 as reported in 9 ITELR.

A victim of fraud made payment into a Nigerian bank account through an English branch which funds were promptly removed from the bank by the fraudsters who disappeared. The victim sought damages against the Nigerian bank by way of a proceeding commenced in England.

Having lost at trial, the Plaintiff appealed, arguing that the bank had knowingly assisted in the fraudster’s breach of trust. The Court of Appeal (Civil Division) dismissed the appeal and, in so doing, comprehensively reviewed the authorities.

In short, a finding that the bank had knowingly assisted in the breach of trust would require a dishonest state of mind such that the bank had knowledge that rendered its participation “contrary to normally acceptable standards of honest conduct.”

Such a state of mind could involve suspicions combined with a conscious decision not to make enquiries. Applied to the case at hand, the Court considered that, although the bank had general suspicions that the account holder who subsequently committed the fraud was possibly involved in money laundering, the bank had no knowledge of any specific act of dishonesty regarding the transactions in question.

Until tomorrow,

David

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A rather unique estate battle is unfolding in Maine and Connecticut as reported on February 26, 2007 by the Associated Press.

Olive Watson took the unusual step of legally adopting her same sex partner, Patricia Spado, some fifteen years ago as a means of ensuring for Spado’s financial security and presumably to guarantee the provisions of Watson’s last will (which entirely benefited Spado) against any challenge by her siblings.

Remarkably, the adoption was apparently legal in Maine notwithstanding that Spado was a year older than Watson and the two shared a conjugal relationship. Watson and Spado subsequently amicably ended their relationship in 1992 after fourteen years.

It gets even more interesting: Watson’s father was none other than the founder of the predecessor of IBM who, on his death in 1993, left a multimillion dollar trust fund for the benefit of his eighteen “grandchildren” unaware that his daughter had legally adopted Spado. A Judge in Connecticut has found that Spado cannot share in the trust (Grandfather Watson not having been aware of the adoption when he settled the trust) and Spado has appealed. The Trustees of the trust fund have apparently also commenced proceedings in Maine to seek to annul the adoption although that prospect appears unlikely as it requires proof of deception or fraud.

To my mind, the surprising element of this story is that Spado would even assert an entitlement as a “grandchild” when the purpose of the adoption was clearly to provide certainty of her entitlement to Olive Watson’s estate. It would be interesting to examine the legal requirements of adoption in Maine in more detail. Presumably the state legislature will pause to consider amendments in the glare of the spotlight of the American media….

Have a great weekend,

David

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On the way into the office on the GO Train a couple of weeks back, an advertisement caught my eye. The “Book of the Month” was the unlikely titled “A Short History of Tractors in Ukrainian” by Marina Lewycka. Usually, I am not one for finding a good read from an advertisement in the newspaper, even though this one was apparently short-listed for the Mann Booker Prize 2005 (I am a sucker for anything that wins awards). However, this book (which I hasten to add I have not read) nonetheless caught the eye of this estate litigator with the following synopsis (culled from the Penguin website):

“For years two sisters have had as little to do with each other as possible…But now they had better learn how to get along, because since their mother’s death, their aging father has been sliding into his second childhood, and an alarming new woman has just entered his life. Valentina, a bosomy young synthetic blonde seems to think their father is much richer than he is and she is keen to see that he leaves this world with as little money to his name as possible. If the sisters don’t stop her no one will.”

I don’t know if Valentina marries the father, or whether he demands a marriage contract or whether the sisters file a Notice of Objection after their father’s death to challenge his new will. If the author’s audience is anyone other than estate lawyers, I expect these concerns don’t figure prominently in the plot. If nothing else, Ms. Lewycka joins the ranks of Dickens, Grisham, and others as authors who recognize the universal appeal of an estate fight…

Until tomorrow,

David M. Smith

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Adults can reject medical treatment even if doing so leads to their death. Should the same right be afforded to our youth? This is the question arising out of a recent Court of Appeal decision in Manitoba.*

The Court held that the rights of a 14 year-old girl were not violated when she was temporarily made a ward of the province and received life-saving blood transfusions against her wishes and contrary to her religious beliefs.

The legislative source for this decision** grants a judge ultimate decision-making authority for those under 16, with or without capacity, based on the “best interests” of the child. Although the Court acknowledged that the legislation infringed the minor’s Charter rights, in the circumstances of this case it found such violation to be justifiable.

It remains to be seen whether this decision is appealed to the Supreme Court of Canada. In any event, this is surely not the last word on the issue. I expect that other cases will arise where courts have the unenviable task of balancing considerations of health and safety of the young against their demands and desires, in particular those of mature teenagers.

And let’s not forget about the incapable. I wonder…how does a court-appointed guardian of an incapable minor ethically handle a situation where an urgent life or death decision to accept medical treatment has to be made in the face of conflicting religious or other convictions?

Until next time,

Natalia Angelini

*   Director of Child and Family Services v. A.C. [2007] M.J. No. 26.
** Section 25 of the Child and Family Services Act, S.M. 1985-86, c. 8 – Cap. C-80

The February 23, 2007 issue of The Lawyer's Weekly Magazine contains a more extensive case commentary on this decision

 

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LISTEN HERE

READ THE TRANSCRIBED PODCAST

During Hull on Estates Podcast #46, Ian and Suzana discuss the concept of causation and how it relates to estate matters.

Referring to the texts of Jackson and Powell on Professional Negligence  and Black's Law Dictionary, negligence claims, the standard and duty of care and the question of onus are considered.

The cases of Haag v. Marshall in the British Columbia Court of Appeal, Sykes v. Midland Bank [1971] 1 Q.B. 113 and Major v. Buchanan (1975), 9 O.R. (2nd) 491 at 514, 61 D.L.R. (3rd) 46 (H.C.) are also examined.

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A recent case out of England has led to an interesting twist on testamentary capacity. In Sharp v. Adam [2006] EWCA 449, the English Court of Appeal upheld the trial judge’s ruling that the unexplained exclusion of the testator’s daughters from his Will, together with evidence of brain deterioration (due to Multiple Sclerosis), was enough to set aside the Will on the basis of incapacity. This was despite evidence that the testator was able to communicate effectively by blinking and using a spelling board, and his experienced solicitor and family doctor were present when the Will was signed and had concluded that the testator had the requisite capacity.

In essence, the case turned on the lack of an explanation for why the testator had excluded his daughters. There was no evidence of undue influence by the named beneficiaries or of any problems with the daughters. While the Court of Appeal accepted that the testator’s ‘cognitive ability’ was satisfactory to make the Will, his ‘mood’ was not. In excluding his daughters inexplicably from his Will, the Court concluded that the testator’s ‘mood’ was so affected by his MS that this deprived him of the requisite testamentary capacity. This arguably raises the threshold for establishing testamentary capacity. A challenger to a Will may now be able to convince a court to set a Will aside on the basis that the testator’s mood was impaired, even if his/her cognitive abilities remained intact.

Have a great day!

Bianca La Neve

 

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Last year, I blogged on a Nova Scotia case involving DNA testing in an estate litigation dispute:Miller v. Staples Estate (2006), 25 E.T.R. (3d) 303. The case centered on a fight between sisters over the estate of their father, who had died intestate. One sister commenced an application for a court order requiring the other sister to provide a DNA sample to test for paternity. She claimed her sister was not entitled to a share of their father’s estate as she was not the father’s biological daughter. The plaintiff sister had argued that Nova Scotia’s Civil Procedure Rules, specifically Rule 22, provided the court with the authority to order DNA testing.

The evidence showed that the intestate had always treated the challenged sister as his daughter. The challenged sister had been born during the marriage, which brought into play the presumption of legitimacy. Given the evidence, Nova Scotia’s Supreme Court had held that this was not a case for DNA testing. The Court held that the Rule 22 should not be used by heirs-at-law to automatically require that their siblings undergo DNA testing to prove paternity.

Nova Scotia’s Rule 22 is similar to Ontario’s Rule 33, which provides for the physical or mental examination of a party whose physical or mental condition is in question in a proceeding. In my last blog on this subject, I had warned disgruntled or greedy siblings in Ontario away from using Rule 33 to automatically knock off other ‘alleged’ siblings, whose paternity may be in question, from sharing in an intestate estate. As it turns out, I blogged and warned too soon!

The plaintiff daughter in the Staples Estate case appealed the decision denying a DNA test to Nova Scotia’s Court of Appeal (see [2006] N.S.J. No. 522) and won! In what may turn out to be a precedent-setting estate law ruling, the Court of Appeal held that, where there is a clear factual foundation or some plausible evidence that a claimant may not be a biological descendant of an intestate, it is appropriate to order a DNA test. The Court chose science over long-standing case law about the presumption of legitimacy.

While the Court of Appeal rejected the notion that the ruling would unleash a flood of DNA applications in intestate matters, this ruling could become a ‘sword’ for disgruntled/greedy siblings all over the country. Only time will tell…no predictions or warnings from me!

Have a great day!

Bianca La Neve

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In Debora v. Debora, 2006 CanLII 40663 (ON C.A.), the Ontario Court of Appeal confirmed that a property will be considered a matrimonial home even if it is owned by a company instead of directly by a spouse.

The facts of the case make for interesting reading. The parties went through a religious wedding ceremony in 1987, but did not obtain a license to marry. They had one child born in 1989. In July, 1994, the parties went through a civil marriage ceremony. On October 19, 1993 a company, in which the husband was the sole shareholder, purchased a cottage property as an investment. He provided all of the funding. On September 11, 1995, the parties separated and became involved in contentious litigation which dragged on over a number of years.

The trial judge found that the cottage came within the definition of matrimonial home as set out in the Family Law Act. The court of appeal agreed.

According to the appellate court, the husband was the sole shareholder and controlled the company through which the cottage was originally purchased. The husband’s company did not pay for the renovation of the cottage. Moreover, money from the couple’s joint bank account was used to pay ongoing expenses. The court found that the company was essentially the alter ego of the husband and was being used by him to try to defeat the legitimate claim of his wife. The husband was not allowed to hide behind the corporate veil.

The court of appeal agreed with the conclusion that the cottage was a matrimonial home based on the finding by the trial judge that the property “was ordinarily occupied by the person and his or her spouse as their family residence”.

The bottom line is that if you want to characterize a property as an investment, it should be treat as such in both substance and form.

Justin de Vries

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Rose v. Rose is a recent Ontario case that deals with marriage breakdown, disillusioned children, and the finality of an irrevocable trust.

Brian and Janice were married and had two daughters. In 1992, Brian and Janice transferred a ski chalet and cottage into trust for the benefit of their daughters. Brian was the trustee for the trust. The trust was irrevocable. The family enjoyed the use of the chalet and cottage before and after the establishment of the trust.

Brian and Janice separated after the trust was established. Brian’s relationship with his daughters also deteriorated. The daughters ultimately became frustrated with their father as trustee and commenced an application to have him removed. They also sought an order winding up the trust and distributing the capital income to them.

For his part, Brian wanted to continue to use and enjoy the chalet and cottage despite the separation from his wife. However, the court held that the trust deed, the foundation document for the trust, could not be interpreted as authorizing Brian (or Janice for that matter) to use and enjoy the two properties without the consent of his two daughters. Furthermore, the court was not prepared rectify the trust deed to provide Brian with the use and enjoyment of the properties.

Brian also hoped to transfer the two properties back to him and his former wife. The court held that once the trust had been created, no such transfer could take place as Brian had failed to retain the power to revoke the trust.

However, the court did remove Brian as trustee. The court noted there was a great deal of hostility between Brian and his daughters. According to the court, it did not matter where the fault lay. The question to be asked when removing a trustee is whether it would be difficult for the trustee to act with impartiality, not whether in fact he would or would not do so. The court held that it would be impossible for Brian to act impartially in this situation.

Finally, the court held there was no basis for the claim by the daughters that they were entitled to call for the winding-up of the trust and for the distribution to them of the property of the trust.

Justin de Vries

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A.A. v. B.B. and C.C., a recent Ontario Court of Appeal decision, caused quite a ripple in the media. 

See articles in The National Post  and The Toronto Star, .

The case dealt with the parentage of a five-year-old boy whose biological father and mother, plus the mother’s spouse (the “spouse”) with whom she had been in a long-term same-sex relationship, all agreed that the spouse ought to be legally recognized as the boy’s mother.

At the trial level, the Judge found that the Court had no jurisdiction to make a Declaration mandating that recognition.

The Court of Appeal overruled the trial decision, finding that the Court’s parens patriae jurisdiction allowed it to grant the Declaration. Parens patriae is an inherent jurisdiction the Court can apply to rescue a child in danger or bridge a legislative gap. The Court used parens patriae on the basis that the applicable legislation, Ontario’s Children’s Law Reform Act, did not contemplate this situation and therefore had a gap.

Interest groups argued unsuccessfully against the Declaration, while both biological parents and the spouse all wanted it granted.

In any case, the boy now has two mothers and a father.

It will be interesting to see what happens when a biological parent objects to such a request. Presumably, all three parents must provide child support, not only during their lifetimes but also on death if they fail to provide for the boy in their Wills.

Thanks for reading.

Sean Graham

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John Hunt wrote an article titled “Get a financial strategy now” in the January 8, 2007 issue of Law Times, discussing the uncomfortable situation faced by many lawyers of spending a high proportion of their income in the face of the possibility of a pension-free retirement. He suggests that lawyers need extra focus on financial planning.

The article reminded me of how many lawyers I have met who have no Will, some of whom even practice in the Wills and Estates area. In some cases, they have estate plans that do not require a Will, such as holding all assets in joint ownership, but even so, there is a risk of problems with changing assets and financial profile, sentimentally valuable personal property and overlooked assets.

Coming up with an estate plan inevitably involves the contemplation of an uncomfortable certainty: one’s demise. This prospect is as unpleasant to lawyers as it is to anyone else. In the result, many lawyers are just as vulnerable to procrastination as laypersons when it comes to estate planning. They also risk all the same problems and risks of mayhem involved in dying without a Will.

Hopefully the “do as I say and not as I do” approach by lawyers to will planning is less prevalent than my experience suggests – Maybe I only run into the exceptions that prove the rule.

Thanks for reading. 
Sean Graham

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During Hull on Estates Episode #42, Justin and Megan discussed the case of Godwin c. Bolcso [1993] O.P.J. No. 297 and Section 32 of the Family Law Act.

This case concerns the application by a 58-year-old mother for support from four adult children. The issues covered included the definitions of "reasonable care" and "support", and insight into when support will be ordered for parents.

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January 15, 2007 articles from the National Post and the Globe and Mail describe breakthroughs in Alzheimer’s research.

This encouraging news raises the possibility that we may be closer to a cure for this terrible disease, or at least treatments to slow the onset. Families struggling daily against the ravages of dementia can now see some light at the end of a very long tunnel.

Capacity law could be greatly affected as well. Current assessments to determine capacity, such as the capacity to manage property or the capacity to execute a Will, mix elements of science (such as cat scans) with the experience and judgment of the capacity assessor. Different assessors come to different conclusions in close cases.

As science can better identify and isolate genetic causes of dementia, we can expect more accurate tests. We might even see partial or comprehensive cures for dementia diseases. If so, patients who have lost capacity might recover it. Someone unable to sign a binding Will in 2006 could theoretically regain that ability in 2008.

This opens a Pandora’s box of fascinating questions. For example, if John Doe loses capacity in 2005 and regains it in 2010, who’s to say if he would name the same beneficiaries in 2011 as in 2004? Conceivably his personality may be significantly different after recovering capacity than it was before he lost it.

A beneficiary’s joy at recovering a loved one could be tempered by losing an inheritance.

Thanks for reading.

Sean Graham

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Wolfe Goodman, Q.C., one of the foremost minds in Canadian Estates and Trusts law, recently passed away. Mr. Goodman’s accomplishments and impact were briefly described in the most recent issue of the OBA’s Briefly Speaking.

I did not know Mr. Goodman personally, but the loss of someone like him is nevertheless cause for reflection on the vital role senior lawyers play in the profession. I was blessed early on in my career to work for Melville O’Donohue, Q.C., a lawyer of some fifty years worth of experience. The practice habits I picked up from Mr. O’Donohue were invaluable and, I can only hope, long-lasting.

I suspect that literally thousands of lawyers would say similar things about Mr. Goodman.

An example closer to home is Rodney Hull, Q.C., Hull & Hull’s co-founder and likely the most accomplished estate litigator in the Province of Ontario during the last half-century. I can often get a better answer to a question after two minutes with Rodney than 5 hours of research in the library would get me.

Knowledge, judgment and experience are the probably the most valuable assets a lawyer can possess, and the most difficult to obtain, which makes lawyers like Mr. Goodman priceless and irreplaceable to the profession, and, by extension, the public as well.

Thanks for reading.

Sean Graham

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Yesterday, I introduced the basic principals of the Ontario Disability Support Program (“ODSP”). In order to maintain benefits, the disabled individual must acquire assets that exceed the income and asset thresholds. In an estate planning context, this can be achieved, to a certain extent, by effective planning.

The ODSP exempts a number of assets from the calculation of the disabled person’s assets as defined under the relevant legislation and regulations. These exempted assets can be gifted to the disabled beneficiary, or bequested under a will, without disqualifying the individual. A partial list of assets that can be gifted or bequested includes:

• A principal residence, or the proceeds from the sale of a principal residence, provided that the proceeds are used for the purchase of another principal residence within 12 months from sale;

• An interest in a second property, if the Director is satisfied that the property is necessary for the health or well-being of a member of the benefit unit. For example, a second property that is a cottage could be considered necessary for health and well-being. Further, a second property in a country with currency restrictions that cannot be liquidated or where proceeds cannot be remitted outside of the country may also be exempted

• One motor vehicle, regardless of value, and a second vehicle if the net value is no more than $15,000 and it is required to permit a dependent of the applicant to maintain employment;

• The total cash surrender value held in an insurance policy, to a limit of $100,000;

• Prepaid funerals for an applicant or spouse;

• Registered Education Savings Plans;

• The amount remaining to be paid to a member of the benefit unit under a mortgage or agreement for sale (however, actual payments received qualify as income);

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This week, I am discussing particular considerations to be kept in mind when planning an estate involving a disabled beneficiary.

As indicated yesterday, testators must keep in mind the effect that a bequest to a disabled beneficiary may have on the social benefits that the disabled beneficiary may be receiving.

In Ontario, disabled individuals may be entitled to receive Ontario Disability Support Program benefits. To qualify, the disabled individual must meet certain medical and financial qualifications.
Medically, under the Ontario Disability Support Program Act, a person is considered to have a disability if:

• He or she suffers from a continuous or recurrent physical or mental impairment;

• The impairment is substantial in nature;

• The impairment is expected to last a year or more;

• The impairment’s direct and cumulative effect on the person’s ability to attend to his or her personal care, function in the community and function in the workplace, results in a substantial restriction in on or more of these activities of daily living; and

• The impairment, duration and restriction on activities of daily living must be verified by a person with prescribed qualifications and is typically a member of a health profession that has been approved by the Director of the ODSP.

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UNABASHED PLUG: On January 17, 2007 I will be speaking as part of the Hull and Hull Breakfast Series Seminars. (For information, please see our website.). I am presenting a paper entitled “The Ontario Disability Support Program: What Every Estate Solicitor Needs to Know”.

As a lead up to that presentation (and to take advantage of the research done to prepare the paper), I thought I would spend some of my blog time this week discussing some of the issues to be considered were a disabled beneficiary is involved.

When one is planning an estate that involves a disabled beneficiary, special considerations must be taken into account. Obviously, the disabled beneficiary has special needs. The testator must discuss his or her hopes and goals in providing for the disabled beneficiary with the planner in order to ensure that these needs are, to the extent possible, facilitated. In addition, the estate planner must ensure that the benefits sought to be bestowed upon the disabled beneficiary are maximized.
The estate planner must ensure that these issues are fully canvassed. The estate planner must make efforts to ensure that a proper level of comfort is established with the client, as many clients are reluctant to discuss particulars of a disabled child. Further, the client may not be aware of the significance of the disability on his or her own estate plan.

Specifically, when considering an estate plan involving a disabled beneficiary, any bequests should be considered in light of the relevant social assistance legislation.

In Ontario, a program called the Ontario Disability Support Program exists. This program provides benefits to disabled Ontarians who meet certain financial and medical eligibility requirements. Once qualified, the ODSP recipient is entitled to income supplements of up to $979 per month. In addition, and often more importantly, the recipient is entitled to drug and dental benefits. Over the course of the disabled person’s lifetime, these benefits can be substantial.

 

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Picking up on our discussion of issues encountered in capacity litigation, a common scenario sees the Court asked to make inquiry into the relationship between the grantor and the attorney by a more “distant” sibling or relative (either geographically or otherwise).

Procedurally, in Ontario, leave of the Court must be sought under s. 42(4) of the Substitute Decisions Act to permit the Applicant to make application for an order compelling an attorney under a Power of Attorney for Property to pass his or her accounts.

The test for leave has been charac