Listen to The Business of Being an Estate Trustee.
This week on Hull on Estate and Succession Planning, Ian and Suzana discuss the business side of being an Estate Trustee and talk about what to do with assets.
Comments? Send us an email at hullandhull@gmail.com, call us on the comment line at 206-457-1985, or leave us a comment on the Hull on Estate and Succession Planning blog.
Robert Brown claims to be the unacknowledged “love child” of Queen’s
In 2002, shortly before the deaths of Princess Margaret and the Queen Mother, lawyers for the Royal Family, the British Treasury, and the Attorney General met with
Mr. Brown sought to have the Wills unsealed in family court but his case was struck down as vexatious and baseless. Mr. Brown sought leave to appeal and the court of appeal granted Mr. Brown leave and found that he was entitled to a hearing of his claim to have the Wills inspected. Despite calling his claim to be Princess Margaret's son “irrational and scandalous”, Lord Chief Justice Lord Phillips found that the public interest outweighed the Royal family’s right to privacy and called the pact unconstitutional.
News of the “secret pact” resulted in an outcry in the British media and calls for transparency within the Royal family. Mr. Brown’s lawyer submitted that members of the Royal family who receive national assets should have their Wills inspected by the public to ensure those assets are not mixed with personal property. If Mr. Brown wins, he will overturn the long standing convention that Royal Wills be kept sealed; a convention started in 1911 by Queen Mary to seal the will of her brother, Prince William of Teck and prevent a Royal sandal.
You never know who is going to change the law.
Have a great (long) weekend,
Diane Vieira
Listen to The Process of Administering an Estate
This week on Hull on Estate and Succession Planning, Ian and Suzana talk about the first, pre-probate stages of administering an estate.
Consider the following interpretation issue, which was recently considered by the Ontario Superior Court of Justice:
The deceased left a will kit-type will directing that all “just debts, funeral and testamentary expenses, all succession duties, inheritance and death taxes, and all expenses necessarily incidental thereto, to be paid and satisfied by” my executor as soon as convenient after her death.
The will went on to provide that the following distributions were to be made:
To son A, Property A "with all loans, leins [sic], mortgages attached”.
To son B, Property B, “free and clear of all debt".
The residue was to be divided between A and B. For the purposes of the trial, the only assets of significance were the real estate: Properties A and B.
At the time of her death, the deceased had no debt other than certain mortgages registered on title against Property A.
The issue in dispute was what assets were to be chargeable for paying the deceased's taxes, including estate administration tax and income taxes, and funeral and testamentary expenses.
A took the position that these expenses were paid out of the residue, and in the absence of any residue, were to be chargeable equally as against Property A and B. (Properties A and B were of equal value.)
B took the position that Property B was conveyed to him "free and clear of all debt", and thus, those expenses were payable out of Property A only.
What did the court do? Tune in tomorrow.
Until then, thank you for reading.
Paul Trudelle
Listen to Episode 89 - Payment of Taxes on Death
This week on Hull on Estates and Succession Planning, Ian and Suzana discuss the necessity of planning for the payment of taxes on death.
Continue Reading...We often see wills where the testator has taken it upon him or herself to make various changes to an executed will by making handwritten changes on its face. What is the effect of these alterations?
A starting point is s. 18 of the Succession Law Reform Act (“SLRA”). This section provides that an alteration is not effective unless it made in accordance with the provisions of the SLRA regarding due execution, or unless the alteration makes a word or words “no longer apparent”.
If the will is a formal will, holograph alterations are not permitted (although a holograph codicil is permitted).
These principles were applied in the case of Luty v. Magill. There, it was found that handwritten alterations to a will that were undated and that did not totally obscure the original bequest were invalid, but that other alterations that were initialled (initials can constitute a signature for the purposes of the SLRA) and dated were considered holograph codicils, and were therefore valid.
With respect to obliteration, if the original words cannot be read, by holding the will up to the light or by using a magnifying glass, (but without the assistance of any other mechanical aids) then the words will be considered to be revoked, regardless of when they were obliterated.
Altered wills will usually require an application for the opinion, advice and direction of the court. Testators should be cautioned as to the requirements for validly altering a will so that the costs of such a court application can be avoided.
Thanks for reading,
Paul Trudelle
In the October 22, 2007 edition of the "Law Times", Bev Cline writes about the importance of family dynamics when considering an estate plan, and when dealing with estate disputes.
The article quotes Hull and Hull's own Jordan Atin: "A will is usually the last thing that a parent says to his or her children...". As such, the document "creates a definitive, lasting record of the relationship between parent and child and among a child and his or her siblings. That reason alone explains why estate disputes are so hotly contested".
Jordan Atin states that in addition to addressing the mechanics of the estate plan, solicitors also need to address their client’s family dynamics. Lawyers should consider with their clients the emotional effects of the will may that arise after the testator passes away.
In the article, Sender Tator, a solicitor with Schnurr Kirsh Stephens, notes that in the context of litigation, “emotion often gets in the way of legal or practical realities; your client is often looking for a certain result, which legally may not be feasible".
The interplay of family dynamics and human emotion is one factor that makes estate litigation so interesting. (It is also a factor that often makes the practice so frustrating!)
One of the functions of a solicitor in estate litigation is to consider the role of family dynamics, and to see that it is identified and addressed. In addition, the solicitor should strive to ensure that the legal or practical realities are not overlooked, and that passion alone does not drive the litigation.
Thanks for reading, and happy Halloween.
Paul Trudelle
In the recent case of Gubo Estate v. Cotroneo, the Court considered a claim on behalf of an estate for the recovery of funds advanced by the deceased to her boyfriend.
The deceased had sold her home and had given the proceeds of sale, being $65,000, to her boyfriend, and then moved into his home.
The Court found that there was insufficient evidence to establish that the advance was a gift.
As to a remedy, the Court heard evidence that the advance was likely for the purpose of defeating creditors of the deceased. As such, the Court declined to apply the doctrine of resulting trusts, applying a Court of Appeal statement to the effect that "evidence of an illegal scheme will not be received to support a resulting trust."
However, the Court found that it was not necessary to rely on the doctrine of resulting trusts. The Court found that it was able to make a monetary award, and granted judgment in favour of the deceased’s estate.
In advancing a claim on behalf of an estate, the imposition of a trust is not always necessary, and a monetary award will often be the most appropriate remedy.
Have a great day,
Paul Trudelle
A forgotten cousin of litigation is the enforcement of judgments and orders (including cost orders). Here’s a general overview.
To enforce the payment or recovery of money, a party has the following options: a writ of seizure and sale, garnishment, a writ of sequestration, appointing a receiver (Rule 60.02/Forms 60A and 60B).
A party can enforce an order for the recovery or possession of land by a writ of possession (Rule 60.03/Form 60C).
An order for the recovery of possession of personal property, other than money, may be enforced by a writ of delivery (Form 60D).
An order requiring a person to do an act, other than the payment of money, or to abstain from doing an act, may be enforced against the person refusing or neglecting to obey the order by a contempt order (Rule 60.05). A motion before a judge is required (Rule 60.11).
Welcome to my week of blogs! As you may have gathered, lawyers at Hull & Hull alternate weeks when it comes to blogging. The hope is to provide you with a cornucopia of perspectives on various issues of interest to the estate bar and the profession generally. We try to mix light-hearted topics with serious ones.
Turning to today’s blog, I read with interest that Pavarotti’s Will was recently opened. The great tenor ultimately succumbed to pancreatic cancer. Pavarotti was colourful both on and off the stage. He was married twice and sired 4 children. It now turns out that Pavarotti’s estate is as rich as his voice.
Pavarotti left the bulk of his estate to his second wife and four children pursuant to a recent June 13th Will (his youngest and only child from his second marriage is four years old). In a second Will dated July 29th Pavarotti apparently created a trust in favour of his second wife of approximately €15 million. This was a surprise to his friends and family. The second Will dealt with Pavarotti’s three New York apartments as well as personal items, including paintings by Matisse. The family has denied rumours in the Italian press that Pavarotti’s first and second families were at odds. Like so many, Pavarotti waited until the end of his life to deal with his Estate. No doubt, the opera star was reluctant to confront his own death (though death looms large in many operas).
The reading of a Will by family members is often fertile ground for surprise and disappointment. Many testators use a Will to settle old scores, reward or punish behaviour, or favour those who nursed the testator through illness or old age.
I struggle with whether to advise a client to reveal the contents of his/her Will to family members before death. Overcoming the trepidation to execute a Will is one thing, but to then reveal its contents to family members, who may benefit unequally, is an entirely different matter. For example, a disappointed son or daughter may punish their parents by no longer seeing them or cutting off access to grandchildren. However, if the Will comes as a surprise after the testator’s death and is a disappointment, the potential for litigation is rife. A disappointed beneficiary will justify litigation by claiming that they are only doing “what mom really wanted”. Emotions come into play, judgment becomes clouded, and lawyers are retained.
In the end, there is no easy answer as to whether to advise your client to reveal the contents of his/her Will.
Ciao, Justin
The Prince Edward Island court recently entertained an Application for directions by the trustees of the estate of Owen Connolly, reported at Connolly Estate (Re) [2006] P.E.I.J. No. 61.
Mr. Connolly died in 1887. He left a will which established a trust “for the purpose of educating or assisting to educate poor children resident in Prince Edward Island who are members of the Roman Catholic Church and who are either Irish or the sons of Irish farmers...".
The trust was said to have paid out over $1 million in bursaries since inception, and had a reserved capital of approximately $1 million.
The trustees stated that with the passage of time, the question of eligibility had become more difficult. The trustees sought direction from the court as to whether eligibility was open only to males, and whether eligibility was open to those who had “significant” Irish ancestry, being at least 50%.
It was noted that the administration of the trust was not affected by the discrimination provisions of the relevant human rights legislation.
The court had little difficulty in concluding that the trust did not benefit males only.
A more difficult question is what was meant by the term "Irish". The court reviewed the history of Ireland and its society and noted that 19th century Ireland was not the product of a pure strain of "Irish", but was a melding of a variety of ethnic strains of immigrants who arrived at different times through history. The court traced the history of Ireland back to 3000 B.C. The court concluded that when he referred to a person being “Irish”, the testator intended to refer to either a person who had emigrated from Ireland, or to a person who was a descendent of a person who had emigrated from Ireland. By making reference to "sons of Irish fathers", the court concluded that the testator had visualized the Irish blending into the larger community in PEI, and thus, felt that having 50% Irish blood was reasonable and sufficient.
The case is an interesting read, as it not only reviews Irish history, but it sets out in some detail the life of the testator in the mid-1800s, including a detailed report of his death in December, 1887.
Thanks for reading,
Paul Trudelle
The Ontario Supreme Court of Justice recently ruled on the issue of whether a solicitor can assert a solicitor’s lien over an original will.
In Szabo Estate v. Adelson (2007), CanLII 4588, the solicitor acted as estate solicitor, having been retained by the estate trustee named in the will. He rendered an account for legal services in the amount of $3,230.79. This account was not paid, and the solicitor asserted a solicitor’s lien over the documents in his file, including the original will.
Interestingly, the solicitor offered to release the will if the estate trustee agreed to a charge against the estate. The estate trustee would not agree.
The estate trustee brought an Application under s. 9 of the Estates Act for the production of the original will. In considering the Application, the court noted the basic proposition that where a client discharges a solicitor without cause, the solicitor may exercise a lien for his or her fees over the documents in the solicitor’s possession, and may retain them until paid.
The estate trustee relied upon an article and an excerpt from a text that stated that a solicitor’s lien did not extend to a will. The court found that the article did not cite any authority for that proposition, and that the case referred to in the text, an 1823 decision, did not support the proposition, either.
This illustrates that one should not blindly rely on articles and texts as setting out black letter law (unless, of course, one is relying on Hull and Hull, Probate Practice).
The court concluded that a solicitor can exercise a lien over a will, just as he or she could over any other important document.
However, the court can and will intervene in order to prevent an injustice to a client resulting from the exercise of the lien. In the case under consideration, the court ordered the solicitor to deliver up the will IF AND WHEN the estate trustee agreed to a charge against the estate in the amount of the solicitor’s account.
Thanks for reading,
Paul Trudelle
Leona Helmsley’s estate continues to raise eyebrows, and serves as an illustration of what not to do when estate planning.
Following her death, it was revealed that she set up a $12m US trust to care for her dog, Trouble.
Last week, it was reported that the named trustee of the trust, her 80 year old brother (who received over $15m US himself from the estate) does not want to care for Trouble. It is yet to be seen whether the alternate trustee, Leona’s grandson, will take on the responsibility.
In addition, Leona’s will directed that Trouble, following his death, be buried with her at the family mausoleum. However, state laws forbid animal remains from being interred at human graveyards.
To make matters worse, it appears that Trouble bit a housekeeper, and the housekeeper now wants a piece of Trouble’s money.
The present circumstances illustrate the need for open discussion of estate plans. Trustees should be consulted in order to ensure that they actually will agree to take on the role of trustee; special requests should be explored to ensure that they are feasible.
Thank you for reading,
Paul Trudelle
Unfortunately, the following quote applies to many of the cases that we deal with on a daily basis:
“To say that brother and sister do not get along in this case is an understatement. There is plenty of mistrust, suspicion and bitterness to go around. The applicant blames her brother for high-handed and unilateral conduct. He claims he has acted improperly. On the other hand, [brother] blames his sister for being non-communicative and hard to get along with. He was compelled to take the steps that he did because his sister which not deal with him.”
The quote is from Hill v. McLoughlin, 2007 CanLII 1334 (Ont. S.C.). There, brother and sister were co-estate trustees and residual beneficiaries of their mother’s estate. As a result of the above-noted mistrust, sister brought an application to have brother removed as an estate trustee.
The court found that while there was friction and hostility between brother and sister which hindered the administration of the estate, it was not satisfied that brother committed a breach of trust as alleged, or was in a conflict of interest.
The court stated that where the deceased has expressly appointed trustees, a court should be loath to interfere with the testator’s expressed intention except on the clearest of evidence that there was no other course to follow. The expressed wishes of the testator should be respected and not interfered with lightly. It is only where a court determines that the welfare of the beneficiaries requires removal and replacement of trustees that the court should undertake such action. It is not any mistake or neglect of duty on the part of the trustees which would lead to their removal. It must be shown that the non-removal of the trustee will likely prevent the trust from being properly executed.
While the court did not order removal of the brother, it did not condone his actions. The court required that the brother undertake certain steps, such as provide specific information to the sister.
On the issue of costs, judge ordered that each party should bear their own costs.
It is often hard for siblings or others to get along and cooperate in the administration of an estate. Further, actions taken by trustees, out of spite or otherwise, can serve to exacerbate the mistrust that already exists. Knowing that the courts will not automatically step in and remove an estate trustee in the circumstances should encourage the parties to an estate to act reasonably and simply get the job done.
Thank you.
Paul Trudelle
The world wide web offers a wealth of information: some useful; some not so. Recently, I came across www.stealanestate.com. The website puffs “Get Rich! On Other People’s Money”, “Displace Rightful Heirs Legally!” and “Never Have to Work Again!”
The web page offers a three step program:
Step One: Assess Opportunities & Establish Yourself
Step Two: Discredit and Displace the Heirs
Step Three: Savour Your Triumph
Tips incude:
• Identify elderly affluent people who are alone;
• Use alcohol;
• Create reasons to see them often;
• Always take their side and fault anyone who disagrees with them;
• Get into a position of trust and authority;
• Act like the perfect son or daughter;
• Keep the rightful heirs ignorant of your relationship;
• Sever all communications between the victim and their heirs;
• Create conflict – lie to the victim about the heirs and their dishonesty and misdeeds.
The site contains many more “tips”.
At first blush, the site is shocking and disturbing. However, deeper into the site there is an explanation. The site claims be operated by individuals “currently in litigation fighting years of undue influence for our mother’s estate”. The tactics and tips set out in the site were apparently used against them. The page is “meant to shock you into action and attention.”
The site should be read as a cautionary tale: a shopping list of things to look out for: both for ourselves and for our loved ones, rather than as a “how-to” list on elder abuse.
Thank you.
Paul Trudelle
In Thursday’s Globe and Mail, Margaret Wente wrote about “Geezers in Paradise”, and observed that tomorrow’s seniors will be able to enjoy “the most delightful old age of any generation the world has ever known”. Seniors are the fastest growing group in Canada, and by 2017, seniors will outnumber those under 15.
Ms. Wente sees a future where “mature lifestyle residences” replace schools, nannies are imported to care for your mom rather than for your kids, and the most popular diapers will be size XXL. Industries will sprout up to service this aging population, medicines will improve, and the political clout of this older group will ensure their comfort and entitlements.
This optimistic future is contrasted by reports earlier last week that one in three Canadians worry about outliving their savings (Toronto Star, July 16, 2007). The report found that many older Canadians did not foresee such a rosy retirement. 33% of respondents over 60 worked either part-time or full-time, and 19% indicated that their financial situation was worse or much worse than 5 years ago.
The vision of the baby boomer generation, on the cusp of becoming senior citizens, being the most affluent group ever is not universal. “There’s going to be a group of baby boomers for whom all of this image of affluence and consumption isn’t reality,” said professor Doug Owram of the University of British Columbia.
Rich or poor, the articles both highlight the importance of planning for our later years.
Thank you.
Paul Trudelle
Mr. Bernard Bayer has won the right to receive a salary from his former employer until March 1, 2012. Unfortunately, Bernard died on April 23, 2005.
In this most unusual case, Bernard's estate will be entitled to receive payment equal to Bernard’s salary until 2012, notwithstanding Bernard's death.
The case turns on the peculiar wording of Bernard's employment agreement with his employer, the Blue Button Club. Pursuant to this agreement, which was entered into on March 1, 2002, Bernard was employed as the Executive Manager of the Club. The agreement had a 10 year term. The agreement described Bernard's duties at the Club. It provided that he was to be paid at least $60,000 per year.
An unusual provision of the employment agreement provided that the Club was to maintain insurance on the life of Bernard, naming the Club as beneficiary, so that the Club could comply with the termination provisions of the agreement. The termination provisions provided that the employment agreement could be terminated in the event that Bernard failed repeatedly and demonstrably to perform his duties, and failed to remedy this problem after receiving reasonable notice; for just cause; or upon his death, in which case, the Club was to collect the insurance proceeds and pay these to Bernard's estate. Apparently, the Club did not take out such a policy of insurance.
In resisting the claim by Bernard’s estate, the Club argued that, prior to his death, Bernard failed to fill his duties. The court rejected this submission, holding that the Club did not provide the required written warning to Bernard.
The Club also submitted that the agreement was not enforceable, and that neither of the parties expected the agreement to be enforceable. The court easily rejected this submission.
As the agreement clearly contemplated Bernard’s death, it was not frustrated by his death.
The court found that Bernard's estate was entitled to the payments due until the end of the agreement. These damages totalled $410,000.
In this case, the employment agreement was drafted by or on behalf of the Club. The court held the Club to its agreement, notwithstanding its unusual provisions, or the fact that it produced, at least at first blush, an unusual result.
Thank you,
Paul Trudelle
From 1993 to 1996, Daniel Assh, a Pensions Advocate with the Bureau of Pensions Advocates, Veterans Affairs Canada assisted Maria Orn, a veteran and the widow of a veteran in obtaining her pension benefits.
In 2001, Maria prepared her will. In it, she left specific legacies totalling more than $100,000, and divided the residue of her estate amongst various named persons and a charity. Three weeks later, she died.
One of the specific legacies was a $5,000 bequest to Daniel.
Daniel told his superiors about the bequest, and that he intended to accept it as it could not give rise to a conflict of interest. They told him to "hold off" on accepting the bequest until the matter was cleared through the “appropriate department channels”.
Daniel argued that because he did not know of the bequest in advance, and because there could not be the expectation of further services, and no possibility that Daniel could provide special assistance to Maria or her family, there was no conflict. Daniel submitted that he had stopped providing services to Maria long before her death. It was agreed that Daniel had in no way attempted to influence Maria into making the gift.
Did he get to keep the bequest?
No. Veterans Affairs determined that accepting the gift would be in contravention of the federal Conflict of Interest Code.
Daniel grieved the decision through two levels of the internal grievance process, and then applied for judicial review when the decision was upheld at both levels. Judicial review was allowed, and Daniel was allowed to keep the bequest. However, the decision was appealed to the Federal Court of Appeal (“FCA”).
The FCA held that the bequest could give rise to a perception of conflict. The question was whether a reasonable person would think that there was a realistic possibility that acceptance of the legacy could influence the employee’s future performance of official duties. The FCA noted that a pensions advocate is in a position of confidence and influence. The clientele are usually elderly and vulnerable, and often in difficult circumstances, such as the death of a spouse.
The FCA stated that while Daniel could not accept the gift, “the acknowledgment of her gratitude to him for assisting her is effectively communicated to him, and to others.”
Thank you for reading.
Paul Trudelle
Many litigants are disappointed to learn that costs are no longer automatically paid out of an estate. In fact, it is now widely accepted that estate litigation can attract the usual costs consequence. As such, costs are an issue that should be considered by a party before embarking upon estate litigation. Ukrainian Catholic Episcopal Corp. of Easter Canada v. Pidwerbecki, a recent decision of the Ontario Superior Court of Justice, is instructive in this regard.
The respondents were success at trial and sought their costs. The applicant, the Ukrainian Catholic Episcopal Corp. of Easter Canada (the “Church”), argued that no costs should be awarded and that the costs requested were, in any event, excessive.
The court recognized that in estate matters, issues frequently arose upon which “reasonable persons” could “reasonably disagree”. Ambiguity in a testamentary document was cited as one such example. The court held that where there were reasonable grounds for an application, costs should generally be paid by the estate.
However, in the case at hand, there was no dispute arising out of any mistake or lack of clarity or default of the testator. According to the court, the lack of evidence supporting the Church’s position ought to have been apparent from the beginning and certainly at the end of discoveries (a good reminder to counsel to write to clients at the end of discoveries to address the merits of the case). Given the allegations of misconduct, coupled with the lack of evidence, the court held that costs, on a partial indemnity scale, should follow the cause (loser pays the winner).
The fact that the Church was a not-for-profit organization carried no weight with the court. Moreover, even though there was no adversity of interest between the respondents, the court was satisfied, despite the arguments of the Church, that it was reasonable for the parties to be separately represented. The respondents were awarded their separate costs.
Thanks for reading and have a good weekend.
Justin
The census-takers tell us that our population is rapidly ageing (the need for sound estate planning seems obvious). The challenges that Canadian society faces are likely profound and there is much gnashing of teeth and wringing of hands about the future. There is a certain irony to the fact that as the information age accelerates, driven by our pervasive youth culture, our population ages.
In the above context, it is worth considering what I believe to be the motivating factor or thinking behind the Supreme Court of Canada’s (“S.C.C.”) decisions in Pecore v. Pecore and Madsen Estate v. Saylor. The two recently released companion cases were eagerly anticipated by the estate bar and addressed the transfer of property by an ageing parent into joint ownership with one of their children.
The S.C.C. made it clear that the “presumption of resulting trust” is the general rule that applies to gratuitous transfers of property into joint ownership. The onus is therefore placed on the person who received the gift to demonstrate that a gift was, in fact, intended. The court also held that the “presumption of advancement” applied to transfers of property by parents into joint ownership with their minor children. The burden of rebutting such a presumption falls to the party challenging the transfer rather than the gift-receiver.
The transfer of property by an ageing parent, particularly funds into joint bank accounts, is becoming widespread. In the context of an ageing population, Rothstein J., writing for the majority of the court, specifically addressed why the presumption of resulting trust arose rather than a presumption of a gift.
As Rothstein J. noted in his decision: “… it is common nowadays for ageing parents to transfer their assets into joint accounts with their adult children in order to have that child assist them in managing their financial affairs. There should therefore be a rebuttable presumption that the adult child is holding the property in trust for the ageing parent to facilitate the free and efficient management of their parent’s affairs”. In taking note of this stepped-up practice, the S.C.C. recognized the changing dynamics of Canada’s population and framed its decision accordingly.
Thanks for reading!
Justin
Most lawyers have come across the vexatious litigant, the complainant who has an endless array of grievances and regards the courts as a convenient forum to pursue frivolous claims. The Oxford Dictionary defines vexatious as "... not having sufficient grounds for action and seeking only to annoy the defendant". Endless proceedings and countless motions are brought over a number of years. Regrettably, the vexatious litigant knows enough about the rules of court, often through trial and error, to be a menace and not easily put off. As no one judge initially hears all proceedings and accompanying motions, a great deal of sympathy is often extended to the vexatious plaintiff together with ample leeway to pursue his or her claims.
However, there is hope. Section 140 of the Courts of Justice Act states that where a judge of the Ontario Superior Court of Justice is satisfied that a person has persistently and without reasonable grounds instituted vexatious proceedings or conducted proceedings in a vexatious manner, the judge may order that no further proceedings be instituted or current proceedings continued without leave of a judge.
In Dale Streiman & Kurz LLP v. De Teresi, Mr. De Teresi had commenced 73 proceedings over 10 years. According to the court, Mr. De Teresi had a history of serially litigating against the same party over essentially the same set of facts. He brought sequential lawsuits, often suing lawyers who had acted for or against him in past proceedings and continued to litigate even when a settlement had been reached. The court held that Mr. De Teresi had deliberately misled the court and instituted proceedings that could not succeed but were simply designed to harass other parties. Mr. De Teresi was declared a vexatious litigant and could no longer institute proceedings without leave.
Finally, if a section 40 order is not yet open to the defendant, the defendant can ask that a judge be appointed to case manage all proceedings commenced by the vexatious plaintiff. Once assigned, a judge will quickly take the measure of the plaintiff and begin to shut down frivolous proceedings and useless motions.
Thanks for reading!
Justin
Over the next week, I will blog on a variety of topics within the estate and and trust world. I will canvas notable case law as well as draw on my recent experience. My first topic deals with evidence.
It is crucial when litigating to amass the right evidence. A great deal of thought usually goes into deciding whether to litigate, but once that decision has been made, the right evidence has to be put forward in order to win or to facilitate a favourable settlement. Much of what litigators now do is by way of application so affidavit evidence is key. The beauty of affidavit evidence is that it allows the lawyer time to draft or finesse the evidence - not change it, but just present it in its most persuasive format.
When dealing with a will challenge and capacity, the notes of the solicitor who drew up the will are obviously critical, as is any medical evidence particularly from a family doctor. In a guardianship fight, medical evidence is again key, but so is evidence from family or friends. However, when deciding what evidence to submit, a careful litigator will take the time to decide what evidence is required over and above the usual. In other words, what avenues are worth exploring that may reveal the unexpected. Is there some person who may be able to add fresh evidence that will make the difference and carry the day?
In a recent guardianship case that I was involved with, the evidence of two neighbours turned out to be critical. The neighbours were able to comment on the slow deterioration of the incapable. As family members had applied to the court to be appointed guardians, the neighbour were also able to comment on whether the family members visited and how often. The neighbours, who still kept in touch with the incapable, were also able speak to the wishes of the incapable when it came to who should look after the incapable. A caregiver at a nursing home was also in a position to comment on the mental state of the incapable and, in fact, assisted a doctor who was retained to prepare a retrospective assessment. What the neighbours and the caregiver brought to the table was the fact that their evidence was credible and independent. In other words, they had no particular stake, one way or the other, in the outcome of the litigation. They were simply interested in doing what was best for the incapable. When it comes to evidence from outside or third parties, their evidence will likely be believed because it is seen as untainted. As a result, every effort should be made to get evidence from outside or third parties and from sources that may be out of the ordinary.
Thanks for reading.
Justin
In Ontario, a valid Holograph Will, by definition, is made and signed entirely in the handwriting of the testator. While this sounds simple enough, such documents often invite litigation.
For the person propounding such a Will, the first objective is to prove that the handwriting is that of the alleged testator. Of course, another distinctive feature of a Holograph Will is the absence of witnesses. Proving the identity of the author of a Holograph Will therefore usually requires expert analysis of the handwriting. The expert may encounter difficulties. Rather than writing a Holograph Will in her ordinary handwriting, the testator may have printed the document.
To successfully prove the handwriting of the testator, an expert typically requires several samples of the testator’s signature and writing style. In the absence of such samples (and in the absence of witnesses) it is far from a certainty that the Will can be proved. Further complicating matters is the absence of the original.
While a copy of a Will can be proved in the right circumstances, the absence of witnesses makes it more difficult to prove a copy of a holograph will. On a final note, Holograph Wills frequently give rise to questions of interpretation.
Until next time,
David
By virtue of the Gender Recognition Act 2004 the United Kingdom now recognizes a change of gender as being permanent for all legal purposes. Specifically, the Act provides a framework for a person who is at least 18 years old to acquire a legally-recognized gender by making an application for a Gender Recognition Certificate on the basis of living in the other gender or having changed gender under the law of a country or territory outside the United Kingdom.
In an article by Jo Summers with the above-captioned title, published in the June 2006 edition of the Society of Trust and Estate Practitioners Journal, Ms. Summers outlines the consequences of acquiring a gender under the Act.
In the estates context, the Act does not affect Wills made before it came into force. For example, if a Will states that certain property is to go to "my son alive at the date of my death", and the child had become recognized as a woman under the Act, the child would be treated as a son and allowed to receive the gift if the Will was dated before April 4, 2005 (the date the Act came into force). However, if the Will was dated on or after April 4, 2005, the child would be treated as a daughter and disentitled to the legacy (depending on the wording of the gift).
Although this seems to be an unfair result for the intended beneficiary, the Act attempts to address it by allowing anyone who has been adversely affected as a result of the gender change to commence a court application for relief.
While I know of no similar legislation being contemplated in Ontario, given that Parliament has recently broadened its definition of a spouse, I expect it will not be long before gender change will be similarly acknowledged. Once that time comes, more care will likely be needed in drafting testamentary documents. Sensible solutions proposed by Ms. Summers are to avoid referring to beneficiaries by class and instead referring to them by name, and/or to insert a clause setting out the meaning of references to gender.
Natalia Angelini
The Ontario Bar Association’s Trust and Estates Section Year End Dinner was held on Wednesday May 30, 2007. During the well-attended event, the Award for Excellence in Trusts and Estates was presented to Brian Schnurr.
Mr. Schnurr exemplifies the highest standards of an estate practitioner, and many spoke of his dedication to the law, and his remarkable career.
I wrote to the selection committee in support of Mr. Schnurr’s nomination. The following is an excerpt:
I write to support the nomination of Brian Schnurr as the recipient of the Award of Excellence in Trusts and Estates, as nominated by Rodney Hull.
…Prior to joining the Estates Bar, and though I did not practice in the area, I was aware of Mr. Schnurr’s reputation as a leader in the field of Estate litigation.
Upon joining the Estates Bar, I have come to know Mr. Schnurr professionally, and have had a number of files where Mr. Schnurr was involved as counsel. I have come to know that his reputation for excellence is well deserved. He practices according to the highest standards: his breadth of knowledge is vast: and his professionalism is remarkable.
In addition to knowing him in a professional context, I have learned that he is a selfless individual, dedicating significant hours to professional development.
Mr. Schnurr is clearly a leader in the area of Trusts and Estates, and represents the qualities of excellence that we should all strive to achieve.
The award to Brian Schnurr is well deserved. Congratulations.
Paul Trudelle
There has been a lot in the press recently regarding the estates of the famous and the near-famous. Arguably, too much time has been spent by the media covering the estate issues surrounding the passing of Anna Nicole Smith and the estate implications, Similarly, the estate of James Brown has attracted a lot of media attention.
Presumably, the media is just giving their readers what they want. The public has a prurient interest in the lives (and deaths) of celebrities.
The Internet definitely panders to this interest. From an estate point of view, those who are interested in this sort of thing are able to find a wealth of information regarding the estates of the rich and famous.
For example, on the Smoking Gun website , one can find the last will and testament of Katherine Hepburn, John F. Kennedy Jr., Bob Hope, and Marilyn Munroe, amongst others. At Celebrity Collectables, surfers can purchase the wills of hundreds of celebrities. Often, other probate-related documents are available, including asset inventories, death certificates and funeral particulars. Links to may wills can be found at Taxprof Blog. It appears that there is no rest for the famous, or respite from the prying eyes of a celebrity-crazed public.
Paul Trudelle
If a deceased's Will cannot be found, there are a number of ways to determine whether the deceased in fact had a Will and, if so, its current location. The following are among common techniques for locating a deceased's Will:
1. A thorough search of the deceased's personal papers, safety deposit box, office, etc. If the search does not reveal a Will, it may reveal the lawyers who the deceased may have used to draft a Will. Further inquiries with those lawyers may then be made.
2. Contacting the deceased's accountant or financial advisor. Often, these individuals will discuss estate planning with their clients and may therefore have some idea as to whether the deceased had a Will.
3. Contacting the person or persons believed to be named as executors in the deceased's Will. A testator will frequently give copies of her Will to the executor.
4. Advertising in the Ontario Reports, which is a regular publication sent to Ontario Lawyers. The ad may request for any lawyer having knowledge of the Will to make contact.
Hopefully, one of these inquiries will result in a Will being found. However, in the event a Will is not found, an Application to Court may be made to administer the deceased's estate on an intestacy. The Application would include a supporting Affidavit, establishing that a Will cannot be found.
Thanks for reading,
Jason Allan
One of the complaints I often hear from estate administration counsel is that applications they submit for a Certificate of Appointment of Estate Trustee are rarely approved on the first try and are at times returned more than once with different corrections.
This issue was the subject of a paper recently presented by Malcolm S. Archibald at the Six-Minute Estates Lawyer 2007. A few of the suggestions he makes to ensure your application is accepted included the following:
If you are unable to resolve an issue with respect to the application with the court office, Mr. Archibald recommends writing a letter setting out your position addressed to the Registrar to be given to a judge for consideration.
I understand that efforts are being made to standardize the estate court office’s approach to such applications. So, if you have ever completed an application correctly and had it returned to you, there is a chance that you will encounter this problem less frequently as greater consistency in the approach at the court office is established.
Enjoy the rest of the week.
Natalia Angelini
* For additional guidelines, you can obtain a copy of the Estates Procedures Manual from the Ministry of the Attorney General.
Last week, Jason Allan blogged on the principle of ademption. I thought I’d take the opportunity blog on the similar, but distinct, principle of abatement.
Whereas ademption refers property devised in a Will ceasing to exist at the date of death, abatement refers to the reduction of legacies that occurs when, after payment of debts, there are insufficient assets in the Deceased’s estate to satisfy all of the gifts provided for in the Will in full. As a result, absent a contrary intention in the Will, the beneficiaries will receive their bequests at a reduced amount, if at all.
The type of legacy provided for in the Will determines the order in which the gifts will abate. The order of abatement is as follows:
The assets at each level will abate rateably until they have been exhausted, at which point the assets at the next level will start to abate.
Keep this in mind when planning your clients’ estates. I recently had a case where the assets in the estate were a home and some bank accounts. Because of debts, the cash assets ended up being exhausted. At the end of the day, one beneficiary walked off with a $250,000.00 home. The others got nothing. One wonders if this is what the testator had intended.
Have a great day!
Megan Connolly
According to the principle of “ademption,” where there is a bequest of a specific item under a Will and that item no longer exists at the testator’s death or is no longer part of his estate at the time of his death, the gift is forfeited or “adeems.” Quite simply, you don’t get the gift. However, a beneficiary who is disappointed to learn that a promised gift no longer exists must consider how the gift was disposed. More specifically, who disposed of the gift and for what reason. Under Ontario law, if the gift was disposed of by a guardian of property or an attorney acting under a power of attorney, as the beneficiary of that gift, you are not necessarily out of luck. Section 36 of the Substitute Decisions Act (the “Act”) provides that a beneficiary of an adeemed gift is entitled to the equivalent value of the proceeds from the disposition of the gift out of the residue of the deceased’s estate. This is known as an anti-ademption clause. The Act sets out corresponding duties on guardians and attorneys for property to determine whether the incapable person under their care has a Will and if so, to determine the provisions of the Will. As with most rules, there are exceptions to the anti-ademption clause, including the following: Thanks for reading. Jason Allan
This blog completes my week-long rogue’s gallery of criminal convictions in estate matters. So far I’ve talked about the Criminal Code in general plus specific cases involving breach of trust and theft.
On to fraud.
In R. v. Moore (1998 Carswell Nfld 276), an accused along with a deceased’s four siblings signed and filed with the court false documents stating that the whereabouts of the deceased’s four children were unknown, that the deceased left no will, and that the accused knew of no one else with an interest in the estate. This is chronicled at length in a set of reasons dealing with the deceased’s remarkable and inspiring life. The accused, though equally remarkable, was hardly inspiring. The criminal charges marked the culmination of her complex scheme of lies and deceit.
The accused claimed she doubted whether her brother was born to the deceased, and said her doubts in this regard justified her behaviour. The Court found that the accused was “resourceful, and articulate”, but used her talents by “persist[ing] in [a] despicable charade” to defraud her brother, nieces and nephews.
For all her trouble, the accused received $10,000, plus a conviction for fraud. It is often bizarre the extent someone will go for what seems, objectively, to be a small amount of money.
An interesting aspect of the case is that the deceased in question, mother of the accused/convicted, was by all indications a font of kindness and compassion, taking several children under her wing during her lifetime. The reasons dwell at length on what a fine person the deceased was, implying quite clearly that the accused failed to measure up to her mother’s legacy.
We will not be posting a blog on Good Friday, April 6, 2007.
Thanks for reading.
Sean Graham