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

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I don’t know about you, but I would be enjoying this heat wave a lot more if I wasn’t smack dab in the centre of the smog advisory zone. Although, I can’t really complain as I wasn’t one of the unlucky people stuck in elevator shafts during the power outage earlier this week without air conditioning. Ugh.

On the opposite end of the spectrum, going through a hot summer confined in a cold air-conditioned office is another form of torture in my view. Interestingly, an article in the July 2, 2010 edition of The Lawyers Weekly on room temperature gathered the following data from a survey of 95 US office buildings:

·                    When the air gets too chilly, productivity declines.

·                    Symptoms were found of, among other things, problems with upper and lower respiratory tracts, eyes, and skin as well as headache, fatigue, and difficulty concentrating.  These symptoms were increased by 50% in buildings kept below 23 degrees (often temperatures are set on the assumption that the building is full - research indicates usually 40 to 50% of employees are there).

·                    When people experience temperatures they feel comfortable with (usually warmer than cooler) they do more work and spend more time at their desks.

Some recommendations offered are setting room temperature in common areas to industry standards, placing thermostats in individual offices, and possibly adding a humidifier. 

I hope you all find your own way of beating the heat, and the cold. Have a great weekend!

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

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Estate litigators in Ontario know full well that the historical rule that costs are usually paid from the estate assets is no longer the case. They are seeing a trend in the case law that if the Court is of the impression that one of the parties to the dispute has behaved improperly at any stage of the litigation, including advancing a position not supported by the evidence, significant cost awards against that person could be made. 

Moreover, Judges seem to be increasingly exercising their discretion to ensure cost awards are subject to the overriding principle of fairness and reasonableness in light of all the circumstances of each particular case, as well as proportionate to the amount at issue. So even if one is successful and has conducted herself appropriately in the litigation, she may still have to absorb a portion of (and possibly all of) her legal costs.

We are also seeing evidence of this trend beyond our borders, notably in a recent Alberta decision, where the Court dismissed a son’s Will challenge in respect of his deceased father’s estate, and similarly dismissed his dependant’s relief claim. 

Notwithstanding his loss, the son sought recovery of his legal costs from the estate. The Court found, however, that he was to personally pay his costs as, (a) the testator did not cause the litigation, (b) the challenge to the testator’s capacity and allegation of undue influence were unreasonable, and (c) the son rejected reasonable offers to settle. Moreover, the son was Ordered to pay “double party-party costs” of his sister, a beneficiary and estate trustee of the estate (as a result of the Rules of Alberta that seem to bear some resemblance to our Rule 49).

I suppose this serves as another reminder to us all to keep this issue top of mind throughout the life of a dispute.

Thanks for reading and have a good day,

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

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The Ontario Bar Association (OBA), Trusts and Estates Section, year end dinner was held on June 1, 2010 at Archeo (Distillery District) in Toronto. 

Suzana Popovic-Montag, the Chair of the Section for the past year, brought the past year to a close and the election of the OBA, Trusts and Estates Section Executive for the 2010/2011 year, was confirmed. 

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

The Award for Excellence was created to recognize exceptional contributions and achievements by members of the OBA to the area of trusts and estates. The criteria for the award is demonstrated leadership in the trusts and estates bar through knowledge, experience, skill, commitment, passion and strength of character, plus all or some of the following:

·         academic excellence through teaching at the Bar Admission Course, lecturing at a law school, participating in Continuing Legal Education and/or academic writing;

·         participation in the OBA Trusts and Estates Section Executive or the Law Society of Upper Canada on wills, trusts and estate matters; and

·         contribution to the development of wills, trusts and estate law.

In addition to the Award for Excellence, Lionel Smith was awarded with the Widdifield Award and Sender Tator was presented with the Hoffstein Book Prize.

Congrats to Hilary, Lionel and Sender.

In addition, there was a tribute to The Honourable Mr. Justice Maurice Cullity, who is retiring this year.

It was a wonderful change of venue for the dinner and a very enjoyable evening.

Thanks for reading.

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

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It's Friday, June 25, 2010 and as a result of the G20 summit, I am blogging remotely - from the comfort of my own home. As you know, the leaders from the G20 countries are meeting in Toronto this year to discuss key issues in the global economy.

The road leading to the summit has been a rocky one. I believe the words "fake lake" pretty much sums it up.

And you should be aware that there are traffic restrictions in effect today. For a list of the major highways with partial and full closures today through to Sunday, click here.

Even the judiciary has been impacted! If you are practicing in the area of estates, you are well aware that there were no judges sitting yesterday and there are none sitting today. My colleagues, Natalia Angelini and Paul Trudelle, noted that this was a topic of discussion at the recent Dinner with the Honourable Estates List Judges. 

Well, it's not just the courts that are closed today. In the Globe and Mail's 'local view' blog, which is dedicated to keeping us up to date on the "disruptions" and "drama" that Toronto has experienced in the lead up to the G20 summit, Siri Agrell informs us things have become personal. What could be so personal for Torontonians? Apparently the LCBO announced that it would close 7 of their stores.

If you’ve noticed that your local LCBO store is closed today and you need to stalk up for that party you're holding tomorrow evening (perhaps to celebrate recovery and new beginnings – this year’s G20 theme), click here.

Enjoy your weekend!

Kathryn Pilkington - Click here for more information on Kathryn Pilkington.

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This is the first time I have ever contributed to a blog, legal or otherwise, so you can imagine my delight when I noticed an article in the June 11, 2010 issue of Lawyers Weekly entitled "Legal blogs that work”.

The article, written by Geoff Kirbyson, discusses the benefits of legal blogging and includes helpful hints on running effective law-blogs.

Mr. Kirbyson points out that legal-blogging has become more common amongst law firms. This assertion comes as no surprise to me. My colleague, Sharon Davis, recently discussed the growing popularity of blogging amongst members of our profession. She noted that blogging is not an alien concept for lawyers as writing has always been a large part of our professional lives. You can find her blog here.

The increased attention given to on-line media makes sense when you consider the number of individuals who rely on social media for their information. A 2009 study by CNW Group and Ledger Marketing found that 50% of those surveyed accessed social media tools once per day.

So, what makes a legal blog effective? A managing partner of a Winnipeg-based firm opined that an effective blog showcases activity at a law firm, highlights developments in particular legal areas, demonstrates a firm’s knowledge and expertise, and enables a firm to engage in client service through social media. This is certainly true.

In my opinion, however, there is one more necessary component to effective legal blogging. In addition to being accurate, relevant, and current, a legal blog should be FUN.

Happy blogging everyone! I know that we’ll talk again soon.

Kathryn Pilkington - Click here for more information on Kathryn Pilkington.
 

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If you are working in Ontario by now you should be aware of Bill 168, the new workplace violence and harassment legislation, which came into force last week. 

An interesting article in the June 14, 2010 edition of the Law Times notes that Premier McGuinty’s government introduced the legislation in part in response to the murder of nurse Lori Dupont in 2005 in her workplace by her former boyfriend, an anesthesiologist at the hospital. The hospital had reportedly known of the doctor’s escalating harassment of Lori, but did not discipline him – they were supposed to work together the day he fatally stabbed her.

We should all be pleased with the introduction of the Bill, and I hope it has a positive impact on the health and safety in workplaces. Notably, breaches can attract fines of up to $500,000 for companies and up to $25,000 or 12 months imprisonment for individuals. Not something to take lightly.

Despite its importance, employers have apparently been having real difficulty complying with the new legislation by the June 15, 2010 deadline (just six months after the Bill received Royal assent). It seems many employers have not addressed their obligations in time, perhaps because they underestimated the amount of requirements they need to comply with, or possibly because they didn’t realize that a “wait and see” approach would not do as Bill 168 requires positive steps on the part of employers. Such requirements include:

-          conduct a risk assessment for violence and harassment in the workplace;

-          develop policies addressing the risks identified; and

-          complete staff training.

Are you ready?

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

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In our litigation practice, it is not uncommon to obtain orders permitting clients to register a Certificate of Pending Litigation (CPL) against title to property that is, for instance, an estate asset that one party is seeking to preserve until the litigation is concluded. 

If the litigation stagnates, which can happen from time to time, without reminders in place it is possible for the registered CPL to be left unaddressed. A recent decision in Novia v. Saccoia Estate (Trustee of) illustrates the impact of such a delay. 

The facts of the case are interesting and somewhat complicated, so I am drastically simplifying them here. In short, a dispute arose between a couple over the purchase of a property. A claim was commenced in 1988. A CPL was obtained in 1989. The plaintiff took no further steps in the litigation. The CPL remained on title for a while….oh lets say, until 2010! In 2006 the defendant passed away. In 2010 the estate trustee of the defendant’s estate brought a motion seeking to dismiss the action for delay (how the litigation had not previously been dismissed for delay by the Registrar is a surprise to me). 

The Court reviewed the applicable case law and, based on the evidence before the Court, it found that the delay was inordinate, contumelious and intentional. It also found that the prejudice caused was presumed and actual, as the defendant was no longer able to testify. Accordingly, the action was dismissed and the CPL discharged.

While the facts of this case are uniquely interesting, in my view this case generally serves as a good reminder to all of us to keep an eye on any CPL obtained and properly address its treatment over the life of the litigation.

Have a good day,

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

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I could not help but do a double-take when I came across an article with the above-captioned title in the Law Times (June 7, 2010 issue).

It was reported that in 2004, a Toronto lawyer was charged by the Law Society of Upper Canada (LSUC) with professional misconduct for conflict of interest while acting as an estate trustee and solicitor without adequate disclosure to the beneficiaries. It was also alleged that he breached his fiduciary duty as trustee by making several imprudent unsecured loans from the estate. It seems that the line between acting as estate trustee versus acting as lawyer for the estate may have been blurred in this case.

In 2008, the lawyer was found guilty, and he received a two-month suspension and a lifetime prohibition from acting for both borrowers and lenders in private mortgage transactions. The lawyer appealed the decision.

The appeal panel, with Larry Banack writing for the majority, granted the appeal. It found that the original proceeding had “compromised the appearance of fairness” and created a “reasonable apprehension of bias”.  This conclusion appears to have been based on the determination that interventions by the original panel during the lawyer’s oral testimony gave the appearance of “descending into the arena and assuming the role of the prosecution”. This is a departure from the proper role of neutral fact-finder.

This seems to be one of the first times, if not the very first time, that the LSUC appeal panel has made a finding of reasonable apprehension of bias. This decision is also noteworthy given that it involves benchers on the appeal panel being called upon to find against fellow benchers comprising the original panel. As noted in this article, this demonstrates that the LSUC can be very fair in its self-regulating function.

Have a good day,

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

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The Sunday Times recently reported that two women were arrested for trying to push a dead relative strapped to a wheelchair onto a flight leaving out of Liverpool John Lennon Airport.  The charge - suspicion of failing to give notification of a death.

Police were apparently called when staff at the check-in desk became suspicious about the elderly man in the wheelchair. He was partially hidden behind sunglasses and did not appear to be moving.  While staff were told he was sleeping, it turns out he had been dead for some time.

It was reported that the ladies were likely attempting to evade the complex and costly process of repatriating human remains abroad - bodies being repatriated by air are required to be contained inside hermetically-sealed zinc-lined coffins and kept in the cargo hold for the duration of the journey. It is also necessary for the proper paperwork to be in place.

It is amazing the lengths these ladies went to to avoid abiding by the rules and regulations one has to adhere to before transporting human remains to a foreign country. Truly a bizarre tale!

Have a great weekend,

Natalia R. Angelini - Click here to learn more about Natalia Angelini.

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The Honourable Justice Brown has in recent months released several Endorsements that appear to be achieving the objective of assisting counsel and the Toronto Region Estates Office by clarifying and streamlining procedural requirements in certain estate matters.

One recent example of this arises out of the Armstrong decision, where after eight months of exchanges with the Toronto Region Estates Office, a non-resident applicant (residing in New Brunswick) had not been granted a Certificate of Appointment of Estate Trustee with a Will. The matter was then sent to a judge for consideration, thereby landing in the lap of Justice Brown. 

After consideration of the facts, including (a) the language of the applicable legislation; (b) that consent of the majority of the persons resident in Ontario had been obtained; and (c) that a bond had been posted in an amount equal to the full value of the estate; His Honour granted the request for a Certificate of Appointment.

While some could view this as a “better late than never” type of situation, as Justice Brown remarks, timely processing of such requests constitutes a critical service provided by the government to the public so they can deal with the assets of a loved one. The goal, therefore, is to achieve a turn-around time of no more than three or four weeks for the issuance of Certificates of Appointment.  

While admittedly this case was not the usual application thereby requiring judicial consideration, it seems we are on our way!

Have a good day,

Natalia Angelini - Click here to learn more about Natalia Angelini.

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Growing up, I used to watch Perry Mason television movies and dreamed of becoming a top litigator, regularly eliciting confessions from the ‘real criminal’ during courtroom trials full of intrigue and suspense.  As a law student and then practicing litigator, I quickly learned that there is a world of difference between trials and the legal system as depicted on (usually) American television, and the daily workings of the Canadian legal system. Sadly, I still cannot boast of any “You can’t handle the truth!” moments during my cross-examinations. 

A recent article in the National Post examined the influence of U.S. legal shows on Canadians, and noted that most Canadians do not understand the basics of our own legal system. In a recent high-profile Toronto murder case, a key witness’ testimony during the trial did not match what she had earlier told police. When asked if she understood what it meant to commit perjury, the witness indignantly answered that she knew what perjury was as she watched “Judge Judy” and “Judge Mathis”. As noted in the article, the “CSI effect” has led to an expectation among jurors that forensic evidence will solve a case. There may also be a “Law & Order syndrome” that leads to false impressions regarding courtroom procedure and legal concepts. For example, many Canadians may be shocked to learn that lawyers appearing in a Canadian court must usually wear gowns (but not wigs á la BBC legal dramas). 

The article notes that more legal education in our high schools may help counter the misleading influence of U.S. legal shows. Perhaps another Canadian legal drama like “Street Legal” could also help more Canadians learn about their own legal system.

Thanks for reading,

Bianca V. La Neve - Click here to learn more about Bianca La Neve.

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In Re Estate of Michael O’Flynn, 2009 CanLII 57149 (ON S.C.), the Honourable Justice Brown encouraged the development of a culture of common sense in processing applications for certificates of appointment of estate trustee. This approach is further illustrated in the recent decision in Re Estate of Daniel O’Donnell, 2010.

In Re Estate of Daniel O’Donnell, the date of Mr. O’Donnell’s death was mistakenly listed as May 1, 2009 (not May 2) on the application for a certificate of appointment and resulting certificate. This mistake did not stop the administration of the estate. Mr. O’Donnell’s Will named Mr. Wilson as the sole estate trustee and sole beneficiary, and Mr. Wilson distributed virtually all of the estate assets to himself. He died a short time later, in July 2009. The administration of Mr. O’Donnell’s estate was yet to be completed, but the alternate estate trustee in Mr. O’Donnell’s Will had renounced her right to act. 

Accordingly, the named estate trustee for Mr. Wilson’s estate, Ms. Thomas, applied for a certificate of appointment as succeeding estate trustee with a will for Mr. O’Donnell’s estate. The application materials filed by Mr. Wilson’s estate trustee listed May 2, 2009 as Mr. O’Donnell’s date of death. The original error in the date of death went unnoticed for some time.

When the mistake in the date of Mr. O’Donnell’s death was finally identified, the Toronto Estates Office took the position that the applicant should bring an ex parte motion to correct the error made in the original certificate before the second certificate could be issued. Ms. Thomas argued, among other things, that she should not have to bear the cost of correcting a mistake she had not made and that the cost of preparing such a motion was out of proportion to what was at stake in the succeeding application (the succeeding application was only needed to complete tax filings and distribute the remaining assets valued at only $1,000.00.) 

Justice Brown’s solution was as follows. If the Estates Office identifies a discrepancy in the date of death between the original certificate and the application for a succeeding certificate, it should request an affidavit from the applicant that confirms that a mistake was made on the original certificate and attests to the correct date of death. Upon receiving such an affidavit, the Estates Registrar can then process the application for a succeeding certificate using the corrected date of death, and make any required changes to the original certificate and Ontario’s central registry which records information regarding estates. 

Thanks for reading,

Bianca V. La Neve - Click here to learn more about Bianca La Neve.

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Shortly after Farrah Fawcett’s death in June 2009, there was some controversy over the terms of her last Will. The bulk of her estate was apparently left in a lifetime trust for the benefit of her 24-year-old son, Redmond. The purpose of the lifetime trust, which Redmond will never personally control, is to provide support to him during his struggle with drug and alcohol addiction. Part of Fawcett's estate was also left to her father, and The Farrah Fawcett Foundation, a private foundation founded by Fawcett in 2007 and dedicated to funding cancer research. Nothing was left to Fawcett's long-time partner and the father of Redmond, Ryan O'Neal. 

There is now renewed controversy involving the late actress’ estate. Fawcett’s estate recently sued the producer who collaborated on a documentary with her, claiming, among other things, that he misused her company's funds. The producer has retaliated, claiming in his responding materials that the estate has withheld money from some of its beneficiaries and that the lawsuit against him is an example of the estate trustee’s misuse of estate funds. 

Surely, Farrah Fawcett did not wish for her estate to be embroiled in controversy but as we who practice estate litigation know all too well, testators can never fully control events surrounding their assets and estate after death.  

Thanks for reading,

Bianca V. La Neve - Click here for more information on Bianca La Neve

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As noted in past blogs and podcasts, the modern rule that “costs follow the event” also now generally applies to estate litigation. However, as demonstrated by a recent case out of Alberta, there are still instances where an unsuccessful party will not be held responsible for the costs of the successful party and will also recover their own costs from an estate. 

In Re Foote Estate, the Deceased’s widow and children had commenced an application for the advice and direction of the Court as to the Deceased’s domicile (i.e. where, legally, the Deceased lived) as well as the validity of a “poison pill” clause in the Deceased’s Will (i.e. a provision disinheriting a beneficiary who challenged the Will). The widow and children wanted to commence support claims against the estate, and were concerned about the poison pill provision. They also realized that the Deceased’s domicile at his death would determine the applicable law with respect to their support claims. The Deceased had been born, raised and ultimately died in Alberta, but he had obtained permanent residency status on Norfolk Island during his life. He also had a significant connection to British Columbia. The widow and children argued that the Deceased had been domiciled in Alberta or British Columbia at the time of his death. The executor and the two residuary beneficiaries (both charities) argued in favour of Norfolk Island. A three-week trial was held and Justice Graesser ruled that the Deceased was domiciled on Norfolk Island, an Australian territory, at the time of his death. 

The respondents, as the successful parties, subsequently sought their costs against the applicants, Deceased’s widow and children. The latter, although unsuccessful in their application, sought their costs from the estate, valued at over $100 million. 

After a thorough review of the law concerning costs in estate litigation and its application to the case at hand, Justice Graesser ultimately held in his costs decision that the matter clearly fell within the exceptions to the modern rule. Accordingly, the executor and the residuary beneficiaries were not entitled to recover any of their costs from the applicants, the widow and children. As for the applicants, Justice Graesser ruled that this was an appropriate case for them to recover their costs from the estate, as, among other factors, the Deceased’s conduct caused the litigation, the applicants prosecuted the litigation in a diligent and efficient manner and there was no basis to criticize their conduct.

Thanks for reading,

Bianca V. La Neve - Click here for more information on Bianca La Neve

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Last year, I blogged on the controversy surrounding the estate of the late boxing champion, Arturo Gatti. The Montreal-born boxer and two-time world champion had died July 11, 2009 at a posh Brazilian seaside resort. Controversy surrounded his death, with his young widow initially suspected of killing him. Brazilian officials later ruled Gatti committed suicide by hanging himself with a bag strap.

At issue in this estate fight is the validity of two Wills that distribute the late boxer’s estate in very different ways. Gatti’s young widow, Amanda Rodrigues, has submitted a 2009 Québec Will that leaves Gatti’s entire estate, estimated to be $6 million, to her. An earlier 2007 Will signed in New Jersey leaves the bulk of the estate to Mr. Gatti’s mother. 

In November 2009, Gatti’s young widow was awarded $40,000.00 to cover legal fees and child care costs for their baby son. In that decision, the judge urged the warring parties to settle to avoid a lengthy and costly court battle that could eat away at the estate. It appears that this advice has gone unheeded, as both sides have continued the fight. 

In a recent decision out of Québec, Ms. Rodrigues was awarded a further $100,000.00 from the estate. She received the money as financial compensation for the legal fees she was forced to pay following the former boxing champion's death. She also received $2,000 a month in child support payments for the couple's 18-month-old son. This is in addition to the $2,500 per month already awarded to her by a New Jersey court. The final bell won’t be ringing anytime soon in this estate fight!

Thanks for reading,

Bianca V. La Neve - Click here for more information on Bianca La Neve

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Collaborative Practice is a concept and practice that for some time has been familiar to and used by family law lawyers in Ontario (since about 2000), but to date has not formed part of any estate lawyer’s practice.  This may be changing soon. 

On April 7, 2010 an information session is being offered to estates lawyers, where the nuts and bolts of Collaborative Law will be shown, together with how it might apply in an estates practice - whether as a litigator or an estate planner.

Collaborative Practice Toronto’s website and The Collaborative Family Lawyers of Canada website are helpful places to look if you want to learn more about this unique model being applied in the family law context.  These sites note certain objectives, components and benefits to such an approach, which include:

·         resolve family law disputes without going to court or threatening to go to court (spouses and both collaborative lawyers sign a contract agreeing not to go to court);

·         find and focus on your common interests;

·         remain focused on the best interests of children;

·         understand each other's concerns;

·         ensure full and complete disclosure of all important information;

·         negotiate in a principled, dignified and respectful manner;

·         use informal discussions and conferences to settle all issues;

·         explore as many options for settlement as possible;

·         reach creative resolutions that best meet the goals and priorities of the individual family; and

·         spend less time and money to settle matters (this practice is generally less expensive than litigation).

There are certainly differences between the dynamics and factors at play in estates disputes versus family law matters. It will be interesting to see if this practice will be formally introduced in the estates bar and, if so, whether it will be a workable and beneficial mechanism for all concerned. 

Have a good day,

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

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In Re Estate of John Mitchell, the Endorsement of The Honourable Justice Brown clarifies expectations of the court in respect of requests for increased costs on unopposed applications to pass accounts, as the Rules of Civil Procedure contain some ambiguity in this regard.

His Honour notes that Rule 74.18 specifies the materials that must be filed initially on an application to pass accounts and where the application will be unopposed and proceed without a hearing. 

However, the Rule does not expressly stipulate the materials that should be filed where the application will proceed unopposed, but with a request for increased costs so that a hearing must be held. His Honour states that the applicant should ensure that the following materials are filed with the court in such situations:      

·                    proper initial application materials: Rule 74.18(1);

·                    a supplementary application record containing materials specified by Rule 74.18(9);

·                    additional evidence (a simple affidavit) that contains:

·                    the request for increased costs in proper form;

·                    proof of service of the request on all affected parties;

·                    a statement explaining the responses of affected parties to the request; and

·                    the details of and the reasons for the request, either through a detailed bill of costs or an easily understandable copy of the relevant dockets.

His Honour also stresses the importance of this last requirement, as a court cannot conduct a review of the request to ensure it is fair and reasonable without evidence describing the work performed, the time spent, the value of the work or the cost of such work.  Adequate evidence is essential.

Have a good day,

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

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I came across an interesting article by John Archer in the Gazette about real-estate investing in the U.S. Mr. Archer warns that while it has become a buyers' market, real-estate investing in the U.S. can leave Canadian speculators and leisure-property owners exposed to a variety of problems. Notably, this is what the article details as things to consider:

·                    Prices - in spite of the drop in property values, there remains a lot on the market at a wide range of price levels; the slump may last into 2011, so you may not want to buy too early;

·                    Insurance – inquire into home insurance costs when calculating overall affordability (e.g. the frequency of hurricanes attacking the Florida coast has lead to higher insurance premiums for seaside properties);

·                    The dollar – while the Canadian dollar is nearing par with the U.S. dollar, keep in mind the possibility of our currency declining, and the impact of expenses such as condo fees and property taxes etc. no longer being as affordable;

·                    Liquidity – consider whether your prospective new property can be easily sold; if not, your estate may be left with an asset that is difficult to sell, which could delay the administration;

·                    Taxes – as a departure from the norm, there are no U.S. estate taxes in 2010 (legislators are pondering this issue); pay attention to developments in this area;

·                    Probate fees – probate fees in some states also might be applied to the property upon your death; consult with your cross-border tax adviser, and ensure that you have a valid will and power of attorney that address your U.S. property (preferably drafted in the state where it is located); and

·                    Rental cost - if you rent out the property, you will be subject to U.S. income tax on the U.S. rental income; this might mean an additional accounting expense to file dual tax returns.

In spite of all this, Mr. Archer notes one neat tax angle when buying a property in the U.S.  It could still qualify as your principle residence for the purpose of using the principle residence exemption, as long as the usual criteria are met, which could result in a reduction or elimination of capital gain tax.

Have a good day,

Natalia Angelini

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

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The notion of being buried alive has no doubt been the subject of suspense thrillers and horror films past, probably because it generates the reaction movie makers want – fear. 

Well, this fictional terror almost became a reality for a 45 year-old Colombian woman recently declared dead of a heart attack. Luckily for her, she moved one of her arms just as an undertaker was about to embalm her.

The patient has multiple sclerosis, and was admitted to hospital a couple of days earlier after a heart attack.  Reportedly, she survived for several hours on life support, but then seemingly didn't respond to resuscitation efforts following a second attack.  She was declared dead not long after that.

A few hours after the pronouncement, a funeral home employee was about to inject embalming fluid into her body when he saw her move. He stopped the procedure and brought her back to the hospital to be treated.  

The reported medical opinion is that on rare occasions a person's heart rate and breathing can drop to undetectable levels, leading doctors to erroneously declare a patient dead. Pretty scary stuff!

Being buried alive would definitely be ranked up there with one of my worst nightmare scenarios.  Thankfully this woman was spared a similar fate! 

Don’t think I’ll be watching any horror flicks this weekend,   

Natalia Angelini

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

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Although it seems that I hear of a new tale of familial strife weekly in this practice, I still find myself surprised and saddened to learn of each new account. One such case takes us to England, where it was recently reported that the daughters of a millionaire farmer are accused by their brothers to have plied their father with whisky and sleeping tablets before making him sign a Will leaving the sisters £600,000. At the time, their father, 89, was apparently grieving for his wife, who had died days earlier after a 65-year marriage. He was also possibly suffering from Alzheimer's.

The brothers’ version of events paints a picture of a man in a weakened condition being taken advantage of in a grief-stricken state. In contrast, the sisters explain that their father was a stubborn man who knew what he was doing and who wanted to treat all his children equally (he had already apparently left land worth an equivalent amount to his sons).

Both sides called expert medical witnesses, with doctors offering different opinions over the testator’s capacity. In addition, others close to the deceased gave evidence of their observations of him. Notably, the Will was drawn up by a solicitor who had acted for the father for many years, who testified that he had the necessary capacity and knew and approved of the Will’s contents. 

If the brothers’ case is successful, the court will uphold a prior Will in which they will inherit most of the £1.2million estate. Their sisters, in contrast, will each receive only £15,000.

While the outcome of this case is not yet known, to me it highlights the importance of gathering evidence to support one’s position in this type of litigation. As a deceased loved one is unable to offer up assistance from the grave, medical evidence, lawyer’s evidence and the evidence of people close to a testator are often all necessary to help put the pieces of the puzzle together.

Have a good day,

Natalia Angelini

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In Ontario, the law is that a Will is revoked by marriage (for exceptions, see section 16 of the Succession Law Reform Act (SLRA)). 

If after a testator makes a Will he or she divorces or the marriage is declared a nullity, (a) a gift in a Will of property to one’s former spouse; (b) an appointment of one’s former spouse as executor or trustee; and (c) the conferring of a general or special power of appointment on one’s former spouse, are revoked. The Will is construed as if the former spouse had died before the testator (see section 17(2) of the SLRA). Notably, this law does not apply if a contrary intention appears in the Will.

Divorced couples (or the other beneficiaries under their Will) can take comfort in knowing that they won't be surprised by having a gift no longer intended for a former spouse honoured, which could otherwise reduce the entitlement of others named in the Will.   

As reported in the February 2010 edition of Will Power, until not so long ago the common law in Nova Scotia lead to a very different result.  A gift by Will to one’s spouse was construed prima facie to refer to the person to whom the individual was married at the time the Will was made, unless circumstances showed that a future spouse was intended. If the individual was later divorced or the marriage was later annulled, this event had no effect on the gift made in the Will. To the likely chagrin of the divorced testator, unless the Will was changed after the divorce, his or her former spouse would still get the gift on the testator's death.

That has all changed with the coming into force of section 19A of the Nova Scotia Wills Act. This legislation brings the law in Nova Scotia in line with that of Ontario and some other provinces. It is good to see growing uniformity being applied in Canada on this issue.

Enjoy the rest of your day,

Natalia Angelini

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When loved ones pass away, family members and estate trustees are often faced with sorting through and disposing of personal possessions stockpiled over a lifetime. Sometimes, it will be obvious that certain possessions hold monetary value, such as a painting from one of the Group of Seven. The local auction house will gladly sell such valuable pieces for you. Other times, though, less obvious things such as handwoven baskets can also fetch a handsome price. How does one know which personal items are valuable and which are not? Unfortunately, for 2010, the Antiques Roadshow will not be travelling to any Canadian cities.

Fortunately, there are many antiques experts who will assess and dispose of personal possessions. A recent article in the National Post newspaper highlighted the use of such antiques experts who will assess all of the contents of a decedent’s home, and then dispose of the goods through various channels such as estate sales and eBay. A Toronto-based company, EstateNet.ca, promises personalized services customized for each client. As noted on their website, they will examine every closet, drawer and storage space to clean, sort, identify and organize all personal items. They will research the market status of special items. Once the contents have been itemized, a pricing schedule is set. EstateNet uses a two-stage sales process: advance selling, followed by an on-site public sale. You can read more about the company, their services, and testimonials from happy customers on their website. 

Bianca La Neve

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The United State’s federal estate tax, more commonly known as the “Death Tax” is a tax applied to the transfer of a person’s assets at death. It is defined by the U.S. Internal Revenue Service as “a tax on your right to transfer property at your death.”

The Death Tax is paid by the recipients of an inheritance and is due within 9 months of the decedent’s death.   If there is not sufficient cash in the estate, personal property and business assets must be sold to pay the tax. 

As noted in one of our prior blogs, due to changes made by Congress during the George Bush administration back in 2001, the Death Tax was due to fall from 45% to 0% on January 1, 2010.  Many thought this loophole would be addressed before the start of the year. However, due to a Congressional tax standoff, no action was taken in time and the Death Tax has been repealed. However, the repeal is not permanent and the Death Tax is scheduled to be resurrected on January 1, 2010, at a rate of 55% on all assets above $1 million (the current exemption amount). 

It remains to be seen which way the political winds will blow, as Congress will likely address the issue this year. In the interim, estate planners in the U.S. are in uncharted territory, as no one can predict whether/when the Death Tax will be resurrected and if so, whether Congress will make it retroactive to the beginning of the year. This may ultimately be a matter for the courts to decide. Stay tuned!

Bianca La Neve

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In her new book, They're Your Parents, Too!: How Siblings Can Survive Their Parents' Aging Without Driving Each Other Crazy, journalist Francine Russo writes about a difficult stage of life: the “twilight transition” when boomer-aged siblings reunite to care for aging parents. This period is laden with new challenges – dividing assets, dementia, caregiving issues - and has the potential to inflame old sibling rivalries as adult siblings deal with the end of their first family and take over their parents’ place as the decision-making generation. As noted by Ms. Russo in a recent interview with The Globe and Mail: “There’s a huge re-emergence of sibling rivalry over parents because when we see that our parents’ time is limited, all the unmet needs we’ve had resurface: to be loved, approved of, forgiven….”

In her book, Ms. Russo interviewed siblings, gerontologists, family therapists, elder-care attorneys, financial planners, and health workers to offer practical advice on such topics as:

-          the negotiation of caregiving issues and dealing with unequal contributions or power struggles;

-          the making of major medical and financial decisions, when parents cannot;

-          how to cope with unresolved childhood rivalries and hurts; and

-          tips for avoiding conflict.

Click here to read Ms. Russo’s interview in Monday’s edition of The Globe and Mail.

Bianca La Neve

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As I noted yesterday, Ontario’s Good Government Act 2009 has received royal assent. Over 300 pieces of legislation have been amended or repealed, including various statutes dealing with the regulation of charities in Ontario.  

Of particular note are the following two changes:

1.    The Charitable Gifts Act (the “CGA”) has been repealed. This Act has long been criticized for unnecessarily restricting the ability of charities from directly or indirectly owning more than a 10% interest in a business, particularly as the Income Tax Act already imposes various restrictions on registered charities conducting business activities. The repeal of the CGA may be a welcome change to Ontario charities wishing to acquire an interest in a business for investment purposes. 

2.    An amendment to the Charities Accounting Act (“CAA”) relates to the section dealing with interests in real or personal property held for a charitable purpose. Historically, the CAA restricted the ownership of real estate by an Ontario charity by requiring that land could only be held to the extent that it was used for the charitable purpose. A charity could not own excess land and lease it out. Any excess property was subject to vesting in the Public Guardian and Trustee. The amended section now simply provides that a charity that holds an interest in real or personal property for a charitable purpose shall use the property for the charitable purpose. This amendment will presumably allow charities to hold excess property, both real or personal, and invest such property in order to earn income. 

For a more fulsome discussion of the effect of the Good Government Act, 2009 on charities, see Miller Thomson’s informative newsletter.

Bianca La Neve

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

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

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

Bianca La Neve

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

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

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

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

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

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

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

Thank you for reading,

Rick Bickhram

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This is by far my favourite time of year. The holiday parties are in full swing, I am eating sweets and miniature puff pastries on what seems like a daily basis, and my birthday is around the corner.  Well, truth be told there is not that much to celebrate about my getting older at this point, but any excuse to continue the festivities is fine by me!

Birthdays and hallmarks like Christmas and New Years are great annual reminders to review your estate plan and to see if any changes need to be made to, for instance, account for a new or pending marriage, divorce, birth or death etc. 

Today is the last day I will be blogging until the New Year. So I just wanted to thank everyone for reading and for staying in tune with our blog and podcasts this year. We certainly enjoy doing them. 

Have a wonderful holiday season!

Natalia Angelini

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The Rules of Civil Procedure are a wonderful resource, and provide guidance as to, among other things, the types of applications that can be brought when someone wants to have an estate trustee appointed in Ontario in unusual circumstances. For instance:

(a)               where there is an estate trustee appointed with or without a Will in the United Kingdom or in a province in Canada (outside of Ontario), an application is to be made for Confirmation by Resealing of Appointment of Estate Trustee;

(b)               where there is a foreign estate trustee and no Will, an application is to be made for a Certificate of Appointment of Foreign Estate Trustee’s Nominee as Estate Trustee Without a Will; and

(c)               where there is a foreign estate trustee with a Will, and the applicant was appointed by a court having jurisdiction outside Ontario, other than a jurisdiction referred to in (a) above, an application is to be made for a Certificate of Ancillary Appointment of Estate Trustee.

What the Rules don’t speak to, however, is when you have a Will and a foreign grant of probate with a Will, but no estate trustee is named in the Will or appointed in the foreign grant.   I would imagine this is a rare occurrence, yet I am currently facing that very situation.  

I have chosen to address this situation by applying for an ancillary grant, as that seems to be the closest applicable Rule to this fact scenario. However, the application is being accompanied by a motion record wherein we explain the circumstances of our case and seek a court order that a person in Ontario (an individual or trust company, as the case may be) be granted a Certificate of Ancillary Appointment of Estate Trustee. 

I hope this will satisfy the court, and will let you know the results!

Have a great day,

Natalia Angelini

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At the recent Estates and Trusts Summit, the Children's Lawyer (Debra L. Stephens) gave us some insight into her office's view about the “do’s and don’ts” for counsel when preparing guardianship applications, including the following:

·                    Do – provide a rationale as to why the appointment of a guardian to manage the minor’s assets is better than transferring the assets to the Accountant of the Superior Court of Justice;

·                    Don’t – forget that the guardian’s investment options are restricted by the Trustee Act (s. 27) if nothing is stated in the plan about investments;

·                    Do – bring the application to the right court e.g. if a plan provides for payments out of the assets other than reasonable management fees and expenses, only the Superior Court of Justice (not The Ontario Court of Justice) has the authority to approve the plan;

·                    Don’t – forget that all appointed guardians are jointly and severally liable for their management of the minor’s property;

·                    Do – teach your client about the duty and complexity of accounting for his/her actions as guardian;

·                    Don’t – bring the application prematurely e.g. in a custody dispute the appointment of a guardian should only be made after custody issues are resolved;

·                    Do – address the need for a bond and the evidentiary basis for any request to dispense with it;

·                    Don’t – forget to take into account risk tolerance and the investment horizon when preparing the plan of care and management; and

·                    Do – address professional fees of an investment advisor and compensation.

You can get a more comprehensive read of these “do’s and don’ts” by reading Ms. Stephens’ paper entitled “Stuff” the OCL thinks is more interesting than the recession, which addresses guardianships, selling property, annuities, trust property, separation agreements and more.

Have a good day,

Natalia Angelini

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It is always a learning experience when going to court, and reading Paul J. Pape’s perspective on how he prepares for advocacy in the Court of Appeal will surely be of help to me when appearing in appellate court, or any court for that matter. I found some of his noteworthy insights to be:

·                    Imagine your mother as the adjudicator – if you can’t convince her of the righteousness of your position, you will not persuade the court:

·                    judges are swayed by the same considerations as ordinary people - a sense of humanity and justice will likely appeal to the panel;

·                    take a common sense approach, as judges try to solve matters by taking a practical approach;

·                    capture the court’s attention - tell a story, not an argument or submission;

·                    focus on the facts, this is more interesting - appeals, like trials, are determined on them;

·                    the court knows the law better than we do - the law should in many cases play a minimal role;

·                    be brief, and tell the story in simple terms – be specific and detailed, but keep the facts to those that advance the tale;

·                    there is always only one issue, was the result just – keep this as your focus; and

·                    anticipate the court’s questions and welcome them.

I did not have space here to address more of Mr. Pape’s commentary and tips on how to prepare your factum and compendium, so I would recommend reading his article, which can be found in the Winter 2009 issue of The Advocates’ Journal.

Have a great day,

Natalia Angelini

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Bobby Fischer died in 2008 in Iceland at the age of 64. The tawdry details of his life often overshadowed the genius of his game - he was a child prodigy, a teenage grandmaster and -- before age 30 -- a world champion who triumphed in a Cold War showdown with Soviet champion, Boris Spassky. Since his death, there has been a battle over his estate. Two nephews, a long-time companion (and spouse?) and a recent companion have all made claims against the estate. 

This month, it appeared that the long-time companion (and spouse?), Miyoko Watai, had won the battle against Fischer’s nephews, when her claim was certified by Iceland’s highest court, according to the website Chessbase.com. This would make her the sole heir to Fischer’s estate. However, a few days later, Marilyn Young of the Philippines apparently filed a claim in Iceland that her 8-year-old daughter, Jinky, was Fischer’s child. Ms. Young apparently provided photographs of her, Fischer and Jinky together and at least two postcards to Jinky signed “Daddy” that were said to be from Fischer. If Ms. Young’s claim is upheld, her daughter may be entitled to two-thirds of Fischer’s estate under Icelandic law.

Claims to Fischer’s estate will be settled in Iceland because he was a citizen of that country when he died, and he reportedly left no Will. His estate may be substantial. In 1992, he apparently was paid over $3 million for winning a rematch with his old rival, Boris Spassky.

There may be more surprise moves to come in this continuing saga. 

Have a great weekend!

Bianca La Neve

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 In a recent Québec decision, the young widow of the late boxing champion, Arturo Gatti, and mother to his son, has been awarded $40,000 to cover her legal fees and child care costs. Ms. Rodrigues had asked for a $150,000 advance and their dog. She had also sought to have an earlier Will in which she did not benefit declared invalid. 

At issue is the validity of two Wills that distribute the late boxer’s estate in very different ways. Ms. Rodrigues has submitted a recent Will signed this past June in Québec, which left the entire estate to her. Mr. Gatti’s family contend instead that a 2007 Will signed in New Jersey is the valid last Will. This Will leaves the bulk of the estate to Mr. Gatti’s mother. The Gatti family claim that the Québec Will was signed under duress. However, a signed original of the 2007 Will has apparently not yet been located by the Gatti family. Accordingly, Ms. Rodrigues sought to have this earlier Will declared invalid, an attempt that was rejected at this preliminary stage by Justice Chaput of the Québec Superior Court. He also ruled that custody of the couple’s dog was not an urgent matter for the time being.

Justice Chaput has urged both sides to come to a settlement to avoid a lengthy and costly court battle that could eat away at the estate, estimated to be $6 million. However, both sides seem prepared to go the distance in their legal fight. Stay turned for a real barnburner.

Thanks for reading,

Bianca La Neve

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British Columbia’s new Wills, Estates and Succession Act received Royal Assent on October 29, 2009. This new Act is a comprehensive statute designed to modernize and streamline the making of Wills and the administering of estates in British Columbia. 

Changes will include:

• Introducing a simplified procedure for administering small estates;
• Using the term “will-maker” instead of “testator”;
• Incorporating succession law concepts currently found only in case law (such as those that apply to adopted children);
• Granting the court the power to rectify a Will in certain situations, to ensure that a will-maker’s last wishes are respected; and
• Abolishing the presumption that a gift given by the will-maker during his/her lifetime to a child is an advancement of a gift in the will – instead, such a gift would take effect according to its terms.

The new Act is expected to come into force sometime in 2011, which will allow time for the public and legal community to review and prepare for the new legislation. 

Wills made before the new Act comes into effect will not be invalidated, but the new Act will apply to the interpretation of existing Wills. This may lead to a flurry of demands to update existing Wills, so that a will-maker’s longstanding wishes are not inadvertently thwarted by the new statute.  More information can be found at www.ag.gov.bc.ca/justice-reform-initiatives.

Thanks for reading,

Bianca La Neve

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

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

Your Team of Hull & Hull LLP Bloggers and Podcasters

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The 85 year old son of New York socialite, Brooke Astor was convicted yesterday of grand larceny and scheming to fraud. For a background to the proceedings, click here and here.

After a 5 month trial and 12 days of jury deliberations, Anthony D. Marshall was found guilty of 14 charges, including giving himself a pay-rise of $1 million for managing his mother’s finances. He faces a mandatory sentence from 1 to 25 years behind bars. His sentencing is set for December 8, 2009.

The attorney who did the estate planning for Mrs. Astor was also convicted of forgery charges. Click here to read David Smith’s blog on the attorney’s actions.

The prosecution argued that Mrs. Astor’s Alzheimer’s was advanced so far that she could not understand the complex changes to her 2004 Will or other financial decisions that benefitted her son, such as the $1 million salary.

The defence has argued that Mrs. Astor had lucid moments despite her Alzheimer’s and that she gave her only son control of her estate out of love.

The story does not end there. Mr. Marshall may appeal and the question of what will happen to Mrs. Astor’s $180 million estate has not been resolved. A civil case was postponed pending the resolution of the criminal charges against Mr. Marshall. Some of the charitable beneficiaries of the estate sent observers to the criminal trial and it are not clear how evidence it the criminal  trial will impact the civil case.

Whichever Will is eventually probated, Mr. Marshall will receive a large portion of his late mother’s estate.

Happy Thanksgiving,

Diane Vieira

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Baseball Hall of Famer, Ted Williams is the news again as a former employee of the cryonics facility in which Williams’ body is preserved is releasing a book detailing alleged mistreatment of Williams’ remains.

By way of background, Williams died in 2002.  Within hours of his death, Williams’ body was flown to Alcor Life Extension Foundation in Arizona to be cryonically preserved in hopes of being reanimated in the future. Williams’ head was separated from his body and both preserved separately in liquid nitrogen.

In his 1996 Will, Williams requested to be cremated. However, two of Williams’ children produced a handwritten note signed in 2000 by Williams and themselves stating that they all wanted to be cryonically preserved in hopes of being resuscitated and reunited in the future.

Williams’ eldest child brought proceedings demanding that her father’s body be cremated. Their legal dispute was resolved and Williams remains frozen. Since those legal proceedings, Williams’ son has also died and been cryonically preserved in the same facility.

Alcor Life Extension Foundation, the world’s largest cryonics facility, currently has 88 people preserved and a further 905 signed on for preservation.  While cryonics is not specifically prohibited in any province in Canada, British Columbia does have a regulation prohibiting the sale of an arrangement of the preservation or storage of human remains based on cryonics and other processes with the expectation of resuscitation of human remains but does allow a funeral director to prepare a body for cryonics preservation as long as the preparation of the body is in compliance with provincial health regulations and human remains transfer regulations.

Thanks for reading,

Diane Vieira

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October 1, 2009 was a historical day in U.K.'s judicial history, as the Supreme Court of the United Kingdom was established.

Prior to last week, the House of Lords held the judicial function as the court of last resort.
A Committee of legally qualified lords who sat in the House of Lords, known as the Law Lords, heard final appeals of court decisions.  Even though they rarely took part in political debates or voted on legislation, the Law Lords were peers of the House of Lords.

Prompted by concern and possible criticism by the European Union, due to the appearance of a conflict of interest as the officials who execute laws were those testing those laws, there was a movement to create visibly distinct legislative, judicial, and executive powers.

In 2003, then Prime Minister Tony Blair announced the creation of a judicial body to act as a Supreme Court. The Constitutional Reform Act, 2005 provides that the Supreme Court take over the judicial functions from the House of Lords. Now the Supreme Court has their own building, identity separate from the House of Lords, and blog.

The Supreme Court is the court of the last resort in all civil matters in the U.K. and criminal matters in England, Wales and Northern Ireland.

There are 12 Law Lords (with one current vacancy) who will hear appeals, with up to nine judges hearing an appeal. It will be interesting to see if the appointment of the Law Lords becomes politicized as in the United States or if this move merely re-brands the system that was already in place.

Thanks for reading,

Diane Vieira

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In a captivating article authored by Kent Sepkowitz, an infectious-disease specialist at a Cancer Center in New York City, he recounts the practical difficulties when someone dies at home - doing it yourself can be thorny and chaotic without the administrative help of Hospitals.

Specifically, when someone dies at home, a licensed professional must determine that the person is indeed dead.  While this should be arranged in advance with the doctor, the timing may not ultimately work out.  If no doctor is available, the other option is to call an ambulance…for a dead person.  There are reportedly other annoyances as well, including:

·                    the death certificate must be completed in black ink (using only certain approved diagnoses);

·                    an undertaker needs to be selected; and

·                    law enforcement must be called to establish that no foul play occurred – not an investigation anyone wants to deal with after just losing a loved one.

Mr. Sepkowitz notes that, with the active support of hospice care, savings could come from facilitating the wishes of those who choose to die at home.  He also considers what is likely the more important benefit of assuring tranquility and dignity for the person dying and their family.

Thanks for reading and have a great weekend!

Natalia Angelini

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

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

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

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

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

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

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

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

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

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

Have a great day,

Natalia

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

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The Chicago Tribune provides an interesting commentary on a recent decision of the Illinois Supreme Court, which ruled that a Jewish couple could legally disinherit any grandchildren who married outside their faith, as long as the method of doing so did not encourage divorce. 

The facts giving rise to the case are that the husband discovered that his grandson was taking a gentile to the junior prom.  The husband wrote his strong feelings about religious loyalty into his Will.  Specifically, his Will indicated that upon his wife’s death their grandchildren would become lifetime beneficiaries of certain trusts. However, if any of them married outside the faith and their non-Jewish spouse did not convert to Judaism within a year, they would not receive their share of the trusts.

The husband predeceased the wife. The wife came up with a slightly different approach in her Will.  She bequeathed $250,000 to the one grandchild who had married within the faith. Those who did not do so received nothing.  

One of the disinherited grandchildren argued that the clause violated public policy by offering money to practice a particular religion.  The court disagreed, pointing out that the wife did not set up a system that encouraged heirs to divorce and remarry to claim an inheritance.  Rather, she made a bequest to reward those grandchildren whose lives embraced the values she and her husband cherished.

Thanks for reading,                                                                                                       

Natalia

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Hull & Hull LLP hosted its quarterly breakfast series on September 24, 2009.   Megan Connolly started off the day with a very informative talk on charitable gifts, with a focus on when a charitable beneficiary can not be identified or cannot be found. 

Megan reviewed ways in which the charitable gift may survive in these circumstances, which are touched upon below.

·                    When the charity is inaccurately described, but the description is sufficient to make it clear to which charity the gift was intended and the beneficiary is discoverable, the gift will not fail;  

·                    When the institution can still be identified, although its form might have changed (i.e. unification of churches), then the court will often be willing to give effect to the gift – a key consideration is whether the charity has maintained a “continuing identity”;

·                    When it is impossible or impracticable to carry out the gift (i.e. the named institution ceased to exist during the testator’s lifetime) an application for the advice direction of the court can be brought on the basis of the cy-près doctrine; and

·                    Section 13 of the Charities Accounting Act provides a mechanism for obtaining a cy-près order without having to commence a formal court proceeding when the consent is obtained of the Public Guardian and Trustee and everyone else required to be served with such an application.

An interesting panel discussion followed between Ian Hull and Suzana Popovic-Montag on undue influence, which is seen to be the most difficult ground upon which to successfully challenge a Will.

If you would like to receive a copy of the papers on these topics please contact us.

Have a great day,              

Natalia Angelini

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Earlier this month, Elsie Poncher posted on eBay her late husband's crypt for sale. The unique feature about the crypt is its location directly above the crypt of Hollywood icon, Marilyn Monroe in Westwood Village Memorial Park cemetery. Mrs. Poncher decided to sell the valuable crypt and move her husband's remains to another part of the cemetery in order pay the $1.6 million mortgage on her Beverly Hills home.
 
Last week, someone purchased the crypt with a winning bid of $4.6 million. That bid has since fallen through with the bidder unable to pay but there were a number of other multi-million dollar bids which may now become the winning bid.
 
In Ontario, the Cemeteries Act prohibits the private resale of burial plots or crypts. When someone purchases a burial plot, they receive interment rights in perpetuity, not property rights. The property rights belong to the cemetery and if required, transfer to a third party requires the consent of the cemetery and the cemetery maintains the right to buy back the interment rights.
 
However,  in the United States many states do not have similar legislation and some suggest that the reselling of burial plots have increased in recent economic times .
 
Thanks for Reading,

Diane Vieira

Diane Vieira - Click here for more information on Diane Vieira.

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An article from mental_floss magazine has showcased ten things a body can do after death. My particular favourites are:

1. Get Married! In China, ghost marriages —the practice of setting up deceased relatives with suitable spouses, dead or alive— is on the rise. The marriages serve a religious function by making the deceased happier in the afterlife.
2. Go Green! Cremation uses up a lot of energy and nonrenewable resources. In Europe, some crematoriums have ‘gone green’. These crematoriums have found a way to replace conventional boilers by harnessing the heat produced in their fires. Beginning in 1997, the Swedish city of Helsingborg has used local crematoriums to supply 10 percent of the heat for its homes.
3. Stand Trial! In 897 CE, Pope Stephen VI accused former Pope Formosus (who had died nine months earlier!) of perjury and violation of church canon.  Pope Stephen VI proceeded to exhume the dead pope’s body, and put the corpse on trial and subject it to a full cross-examination - the so-called "Cadaver Synod".  The following year, Formosus’ conviction was overturned and his body was reburied with full honours. 

For the complete list, check out the article at http://www.mentalfloss.com/blogs/archives/24833.

Have a great weekend!
Bianca La Neve

Bianca La Neve - Click here for more information on Bianca La Neve.

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A good friend of mine recently reminded me that death is not just about dividing up the spoils (a common theme in estate litigation), but also about remembering the lasting contributions made by a person during their lifetime. I was reminded of this in reading about the recent deaths of two well-known figures, Donald Marshall and Eunice Kennedy Shriver.

Donald Marshall passed away last week in Sydney, Nova Scotia. In 1971, when he was just seventeen years old, Mr. Marshall was wrongfully convicted of a crime he did not commit and jailed for eleven years. He subsequently challenged the legal system and blazed a trail for other wrongfully convicted Canadians to fight to have their convictions overturned. His case led to a Royal Commission in 1990, which produced a slew of recommendations that fundamentally changed the criminal justice system in Nova Scotia. In 1993, Mr. Marshall again reluctantly stepped into the spotlight, when he was arrested and eventually convicted of various fishing violations. Mr. Marshall fought his convictions all the way to the Supreme Court of Canada, winning acquittals and a significant victory for the native treaty rights of his people, the Mi’kmaq Nation. 

This week, Eunice Kennedy Shriver (President John F. Kennedy's sister) passed away. Eunice Kennedy Shriver was a champion for the rights of the mentally disabled and founded the Special Olympics, which has grown into a truly global event. President Obama noted in a statement that Mrs. Shriver will be remembered as "as a champion for people with intellectual disabilities, and as an extraordinary woman who, as much as anyone, taught our nation — and our world — that no physical or mental barrier can restrain the power of the human spirit".

Thanks for reading,

Bianca La Neve

Bianca La Neve - Click here for more information on Bianca La Neve.

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Cy pres is the equitable doctrine under which a court interprets a document containing a gift to charity by substituting another charity to reflect as closely as possible the donor’s intention. Courts use cy pres when a donor’s original charitable purpose cannot be exactly fulfilled. When literal compliance is impossible, the general intention of the donor should still be carried out as nearly as possible (cy pres) so that the charitable bequest does not fail.  

In our area of expertise, estate and trust litigation, cy pres applications are quite common to determine the proper beneficiary(s) of a subject testamentary bequest.  Megan Connolly has blogged on the application of the cy pres doctrine to charitable bequests in Wills. Cy pres has been applied in other areas of the law.

In the context of class action proceedings, settlements increasingly include cy pres orders (as they are often called) where part of the settlement funds are paid to charitable and non-profit organizations, to be applied to activities that may reasonably be expected to benefit class members. In a recent decision approving the settlement of a class action against a financial institution involving alleged unauthorized charges for foreign currency transactions, Justice Cullity reviewed cy pres orders in class action settlements and ultimately made an order for the Law Foundation of Ontario to receive $14.2 million to create a trust fund “for the purpose of advancing public access to justice in Canada”. Justice Cullity noted that access to justice had been used as a ground for certifying the proceeding. Class members and other members of the public would benefit from enhanced access to justice in the future. 

Thanks for reading,

Bianca La Neve

Bianca La Neve - Click here for more information on Bianca La Neve.

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In a recent news item out of Queensland, Australia, a 77-year-old man has failed in his attempt to regain control of his financial affairs. The elderly gentleman had apparently squandered part of his money on hundreds of calls to sex-chat lines. The Guardianship and Administration Tribunal of Queensland had made an order last year giving control of the elderly gentleman’s financial affairs to the Public Trustee. In November 2008, the Tribunal upheld its original order, leading the elderly gentleman to appeal the matter to the Supreme Court. Last week, the Supreme Court denied the appeal and agreed that the Tribunal retain control over the man’s financial affairs. 

Details of the hearing cannot be released due to a publication ban. One wonders whether the sex-chat calls were isolated incidents or part of a pattern of unusual behaviour that convinced the Tribunal (and the Supreme Court) that the elderly gentleman’s capacity to manage his own finances was impaired. It is also unclear whether the man had family and/or whether any of his family supported his fight to regain control of his money. 

I note that the Guardianship and Administration Tribunal of Queensland has similar duties and responsibilities to Ontario’s Office of the Public Guardian and Trustee of Ontario (OPGT) and the Consent and Capacity Board. The Tribunal of Queensland can determine whether or not a person has impaired decision-making capacity and, if necessary, make an order appointing a guardian and/or an administrator. In Ontario, it is the courts that primarily make determinations of incapacity. 

Thanks for reading,

Bianca La Neve

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CNN recently reported disturbing events, whereby employees at a historic cemetery near Chicago allegedly dug up more than 300 graves as part of a conspiracy to resell burial plots to unsuspecting buyers.  

Reportedly, at least four people are in custody facing a slew of felony charges. Additionally, investigators are in the process of attempting to determine the scope of the scheme. It may not be an easy task since, among other things, it is possible that the employees doctored records to conceal the scheme.   They are expected to use thermal imaging to assist their efforts, and have brought in forensic scientists to help.

While most of the excavations reportedly occurred in back lots, where the plots were older and not frequently visited, they are not certain of this. Other plots may have been disturbed as well.

Investigators are faced with the unenviable task of trying to find the families of those whose graves were disinterred, as well as those people who unknowingly purchased occupied plots. 

A sad day indeed….

Natalia Angelini

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Given the nature of estate litigation, a party to the dispute, and/or a witness that is to testify at trial, are at times elderly, in poor health, incapable of testifying or out of the jurisdiction, such that it is appropriate for their evidence to be given out of court in advance of the trial date. Rule 36 of the Rules of Civil Procedure regulates taking of evidence before trial. 

A person may be examined under this Rule either by consent of the parties or with leave of the court. The court is to take into account several factors when determining whether to grant leave to order an examination before trial, which are particularized in Rule 36. These include the convenience of the witness and saving of costs. This permits the court to take a more broad approach, since previously these orders were limited to situations where it was established that the witness will likely be out of the jurisdiction or incapable of testifying.  

Moreover, previously, leave of the court was necessary before the examination of a witness could be used at trial. Now, the transcript or videotape of the examination of a witness who is not a party may be used “unless the court orders otherwise”, and the witness shall not be called to give evidence at trial except with leave of the court. In contrast, the transcript or videotape of the examination of a witness who is a party may not be used except with leave of the court or the agreement of the parties.

While it seems to me that live testimony will likely have more impact then a transcript or videotape, if the circumstances warrant it, this is a handy tool to avoid difficulties and complications in attempting to get witnesses and/or parties on the stand when the trial date arrives, and ensures the evidence is preserved and gets before the court.  

Have a great day,

Natalia Angelini

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As noted in one of my earlier blogs, gone are the days where estate litigants almost automatically were awarded their costs out of the estate. The trend in recent years has adopted elements of the loser- pays philosophy, which has long been applied to other types of litigation. 

Moreover, parties in estate matters who conduct themselves in such a manner that serves to protract and unnecessarily increase the costs of litigation can more and more often find themselves penalized with a cost award.

This trend is no more clearly seen than in Teffer v. Schaefers, a recent decision of the Ontario Superior Court of Justice, where an estate trustee was Ordered to personally pay more than half of the legal costs awarded to the various other parties due to his conduct in the litigation.

That said, less than 25% of the aggregate legal costs sought were actually awarded (although I understand further submissions are being made).  This result is indicative of another noteworthy trend that we are seeing in estate matters. That is, judges are increasingly exercising their discretion to ensure cost awards are subject to the overriding principle of fairness and reasonableness in light of all the circumstances of each particular case, as well as proportionate to the amount at issue (in addition to being reflective of the factors set out in Rule 57.01(1) of the Rules of Civil Procedure).

This decision should serve as a caution to anyone involved in estate litigation – costs (even to the victor) are not guaranteed! 

Have a great day,

Natalia Angelini

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In estate litigation it is not uncommon for one or more disputing parties to be under disability. Unless the court or a statute provide otherwise, a party under disability must be represented by a litigation guardian (see Rule 7 of the Rules of Civil Procedure, which regulates proceedings by or against parties under disability). 

Someone can act as the litigation guardian for a plaintiff (or applicant) by filing an affidavit with the court, the required contents of which are set out in Rule 7.

In the case of a defendant (or respondent) who is a minor, the Children’s Lawyer shall act as the litigation guardian, unless the court orders otherwise.

In contrast, in the case of a defendant who is an adult, aside for a few exceptions set out in the Rule, no one can act as a litigation guardian until appointed by the court. The evidence that must be filed in support of the motion for such appointment is also particularized in the Rule.

Some other noteworthy provisions in Rule 7 are:

·                    a litigation guardian other than the Children’s Lawyer or the Public Guardian and Trustee must be represented by a lawyer;

·                    a litigation guardian shall diligently attend to the interests of the person under disability and take all steps necessary for the protection of those interests, including the commencement and conduct of a counterclaim, crossclaim or third party claim;

·                    where it appears to the court that a litigation guardian is not acting in the best interests of the party under disability, the court may substitute the Children’s Lawyer, the Public Guardian and Trustee or any other person as litigation guardian; and

·                    no settlement of a claim made by or against a person under disability, whether or not a proceeding has been commenced in respect of the claim, is binding on the person without the approval of a judge.

Have a great day,

Natalia Angelini

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The sudden death of Michael Jackson has sent a shock-wave of sadness across the globe. I expect it will be some time before you can tune in to various media without seeing coverage on it. 

I find myself drawn in to the discussion, which one of my colleagues also blogged on last week.  His commentary focused on the expected complex administration of Jackson’s estate, given both his sizeable assets and debts. This blog focuses on one aspect of the human element of the tragedy, sparked by Jackson’s Will. 

As noted in a recent New York Times Article, in his Will Diana Ross is appointed as the guardian for Jackson’s children if his mother is no longer willing or able to fulfill that role. 

In Ontario, a custody or guardianship appointment by Will is not determinative of the issue. It only has a temporary effect, in that any appointment for custody or guardianship expires ninety-days after such appointment becomes effective (i.e. ninety-days from the date of death in this case) (see section 61(7) of the Children’s Law Reform Act). 

However, if the appointee applies to the court for custody or guardianship within the ninety-day period, the appointment expires when the application is disposed of.   While each case is usually fact-specific, I would expect that a testator’s wishes set out in his/her Will is a factor a court would give significant weight to when considering such an application.

In Jackson’s case this issue is already a live one, with potentially several people vying for custody and/or guardianship. It will be interesting to see who ends up being the primary caregiver(s) of his young children.

Have a great day,

Natalia Angelini

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Today’s blog is a continuation of my blogs this week addressing some aspects of preparation for a trial in a contested passing. I briefly touch upon transcripts, the Request to Admit and Witnesses today.

It is important in preparing for trial to review the transcripts of the examinations conducted to assist counsel with locating evidence in the transcripts during trial, including admissions and/or inconsistent statements made by a witness at trial, to address the completeness of questions on the examinations, and whether additional discovery is needed before trial.

If a damages brief is to be provided by the opposing party as a result of an undertaking at examinations or otherwise, ensure that it has been provided.

A party may also, further to Rule 51.02 of the Rules of Civil Procedure, at any time, by serving a Request to Admit, request any other party to admit, for the purposes of the proceeding only, the truth of a fact or the authenticity of a document. A copy of any document mentioned in the Request to Admit shall, where practicable be served with the request (unless a copy is already in the possession of the other party).

The opposing party must respond to the Request to Admit within 20 days, failing which the opposing party will be deemed to admit the truth of the facts asserted in the Request to Admit or the authenticity of the documents referred to in the Request to Admit. As such, the Request to Admit should be served at least 20 days before the commencement of the trial, and quite some time before that, if possible, so that counsel will know what facts need not be proved or the authenticity of documents that will not need to be proved.

There may be cost consequences if a party refuses to admit the truth of a fact or authenticate documents which are proven or authenticated during the trial.

Requests to Admit may be effective to: (i) reduce the facts in dispute, (ii) reduce the number of witnesses to be called and/or the examination of a witness, (iii) minimize the costs and length of the trial, and (iv) avoid having to authenticate documents.

With respect to witnesses, amongst other things, it is helpful to make a witness list of anticipated witnesses for each of the parties, prepare a chart of the issues/documents to be proved by each witness and identify and consider the concerns, evidentiary or not, with the evidence and documents to be dealt with by each witness. If the witnesses are experts, Rule 53 of the Rules of Civil Procedure is applicable. Summons to Witness need to be considered (Rule 53.04) as well as whether an Order excluding witnesses is necessary (Rule 52.06).

Thanks for reading.

Craig

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Yesterday, my blog touched on the use of Rule 39.03 to examine non-party witnesses before the hearing of a pending motion or application.  As noted, Rule 39.03 can be used to summons solicitors to give relevant evidence about a deceased former client in estate litigation proceedings. However, given the special relationship between a solicitor and his/her client, it is always good practice to obtain a court order in advance which directs a solicitor to attend an examination and waives confidentiality and solicitor-client privilege over any evidence provided.  As demonstrated by a recent case, Rule 39.03 is not a carte blanche to examine solicitors about former clients.

In Nieweglowski Estate (Re) 2009 Canlii 13033 (On. S.C.), Justice Strathy held that a solicitor is entitled to the protection of a court order before being examined as a witness pursuant to Rule 39.03.  The case involved estate litigation over Mr. Nieweglowski’s Will and a property transfer made by him before his death.  Further to a prior court order, the solicitor who had assisted Mr. Nieweglowski produced his files regarding the matters.  However, the court order did not provide for the solicitor’s examination. The solicitor was then subpoenaed to give evidence pursuant to Rule 39.03.  Although the solicitor attended at his examination, he refused to give evidence. The ground for his objection was the absence of any express provision in the first court order. The party that had subpoenaed the solicitor moved before Justice Strathy for an order that the solicitor provide his evidence and that he be personally responsible for the costs of the first aborted examination.

Justice Strathy refused to order costs against the solicitor. His Honour held that it was not unreasonable for the solicitor to insist upon a court order directing him to attend an examination and provide evidence about privileged communications with a former client.  Accordingly, Justice Strathy ordered that the solicitor was entitled to provide his evidence regarding matters that would otherwise be privileged or confidential.

Have a great day!

Bianca La Neve
 

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Estate litigation differs in many ways from general civil litigation, as noted in previous blogs on our website. Differences notwithstanding, estate litigators should still make it a habit to consider all of the Rules of Civil Procedure when planning out their litigation strategy.

In gathering the necessary evidence in estate litigation matters, counsel must resort to Rule 39 of the Rules of Civil Procedure. Rule 39 deals with how evidence may be provided on motions and applications. In the usual course, evidence is given by affidavit and cross-examination on affidavits. However, Rule 39 provides for other ways to obtain evidence:

• by the examination of a witness before the hearing of a pending motion or application [rule 39.03(1)];
• by the examination of a witness orally at the hearing, with leave of the court [rule 39.03(4)]; or
• by the use of an examination for discovery on the hearing of a motion [rule 39.04].

The examination of a witness before the hearing of a pending motion or application [rule 39.03(1)] can prove a useful tool for obtaining evidence from non-parties to the litigation. If a non-party witness has relevant evidence, there is arguably a prima facie right to resort to this rule so long as the right is not exercised in a way that constitutes an abuse of process. A witness examined under Rule 39.03 may be cross-examined by the examining party and any other party. 

In my own estates and trust litigation practice, I have used Rule 39.03 to summons solicitors and health practitioners to give relevant evidence about a deceased individual in Will challenge proceedings. Rule 39.03 can prove a useful tool to other estate litigators in marshalling their evidence for motions and applications. 

Have a great day!

Bianca La Neve

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The growth in Canada’s aging population has led to increased awareness of the special needs of seniors and the impact of the law on them. Our blogs have often dealt with issues that particularly affect the elderly, such as power of attorney abuse. In a previous blog, I noted the rise of a new practice specialty, elder law, to deal with the multi-faceted legal needs of the elderly. 

The Advocacy Centre for the Elderly (ACE) is a longstanding community legal clinic that has been at the forefront of elder law since 1984. ACE specializes in providing legal services to low income seniors in Ontario and promoting access to justice for the elderly. Through its work, ACE has developed expertise in issues affecting older persons, such as elder abuse and exploitation, mental capacity and consent, patients’ rights in hospitals and other institutions, and substitute decision making. 

ACE is currently working with the Law Commission of Ontario (LCO) to research the best ways to enforce the rights of older adults residing in institutional settings, such as hospitals, long-term care homes and retirement homes. Older adults, including residents in institutional settings, are too often denied access to justice due to lack of awareness of legal rights, discrimination based on age, and financial and physical obstacles in trying to access the legal system. ACE’s goal is to develop an ‘access to justice model’ that will promote the autonomy and dignity of older adults residing in institutions, and ensure that their complaints are heard and successfully resolved. ACE’s work is part of a broader multi-year project by the LCO to develop a new framework to analyze and understand the impact of law on older persons. 

For more information about ACE, see their website at www.advocacycentreelderly.org. More information about the LCO’s project on older adults can be found on their website at www.lco-cdo.org.

Have a great day!

Bianca La Neve

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By now, almost everyone has heard about Twitter. Twitter is the micro-blogging social network that allows you to publish and read short messages of less than 140 characters (“tweets”). Twitter has over 10 million users and with all the recent media attention it seems like everyone is on twitter; celebrities, news agencies, municipalities, and corporations.

Some people think it’s a fad and others think that it is the new source for sharing information. It is difficult to predict what role Twitter has for lawyers in a professional capacity. Some lawyers are using Twitter to republish their blogs, build social networks, and access information. Other lawyers are not sold on the idea of Twitter. Click here  to hear a podcast by two lawyers debating both sides of the issue.

For lawyers deciding whether or not to Twitter or those who have already taken the plunge, Steve Matthews for slaw.ca has written a fantastic blog offering lawyers some dos and don’ts for using Twitter.

While Twitter has been around for awhile, it will be interesting to see if its new surge in popularity will affect the way the legal community views Twitter as a marketing tool.

Thanks for reading,

 Diane Vieira

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A recent case from Britain focuses the spotlight on the traditional Hindu cremation practice. 
 
A 70 year old Hindu spiritual leader, Davender Ghai, sought the legal right to an open air funeral pyre. In 2006, Newcastle City Council has refused Mr. Ghai’s request for a permit for an open air cremation site in a remote part of Northumberland. Citing the Cremation Act, 1902, Council noted that the burning of human remains other than a crematorium is a criminal offence. The Ministry of Justice agreed with the Council’s decision.
 
Mr. Ghai appealed the Council’s decision to the High Court. Mr. Ghai, who immigrated to Britain from Kenya in 1958, stated this he required an open air funeral pyre to release his spirit after death. Invoking Articles 8 and 9 of the  European Convention on Human Rights Act, Mr. Ghai argued that his religious freedom and freedom to family life were being infringed. Mr. Ghai requested to be able to follow the 4,000 year old tradition at the time of his death and noted that such permits would have to be regulated and pyres sites held away from urban and residential areas. 
 
Mr. Justice Cranston upheld the Council's decision. He agreed with the Ministry of Justice that open cremation is prohibited by law and that the prohibition was justified on the grounds of public health and public safety. The issue is not over yet, Justice Cranston did give Mr. Ghai permission to appeal his ruling to the Court of Appeal. Mr. Ghai has stated his intention to do so.  
 
As the population ages in multicultural societies, we can expect to revisit similar issues frequently

Enjoy your day,
 

Diane Vieira

 

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

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

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

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

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

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

Have a great weekend!

Natalia

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You would expect that a minor or a party to a proceeding who is declared mentally incapable to manage his/her property and/or personal care (under sections 6 and 45 of the Substitute Decisions Act) would not be able to or required to participate in the litigation.   However, this is not so. 

Pursuant to Rule 31.03 (5)(b) of the Rules of Civil Procedure, a party under “disability” (defined to include minors and mentally incapable adults) can be examined for discovery if he/she is "competent to give evidence".  

The onus of establishing incompetence rests on the party alleging it: Barnes v. Kirk, [1968] 2 O.R. 213 (C.A.).

Application of the Rule has led to varying decisions and approaches, a few of which I note below.

Mental Incapacity

·                    a party under disability may be examined if competent to give evidence subject to the discretion of the court to impose limits where the examination would be oppressive, vexatious or unnecessary: Nyilas v. Janos (1985), 50 C.P.C. 91 (Ont. Master);

·                    an appointment for discovery should be struck out on the grounds of unsoundness of mind only in the clearest cases – the preferable course is to allow the trial judge to rule on the admissibility of the examination and the credibility of the witness: McGowan v. Haslehurst (1977), 17 O.R. (2d) 440 (H.C.);

Minors

·                    the right to examine a minor for discovery is not absolute – the court should interview the child before exercising its discretion in that regard: Bennett v. Hartemink (1983), 42 C.P.C. 33 (Ont. H.C.);

·                    a defendant was denied the right to examine a ten-year-old plaintiff where it was found that the examination would result in psychological herm to the child: Kidd v. Lake (1998), 42 O.R. (3d) 312 (Gen. Div.); and

·                    the court permitted the examination of two plaintiffs (ages 16 and 11) notwithstanding evidence that it might cause serious psychological damage: Nyilas v. Janos, supra.

Have a great day,

Natalia

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

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

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

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

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

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

Have a great day,

Natalia Angelini

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Removing an attorney for property is notoriously difficult. A person should only seek to remove an attorney for property when clear and compelling evidence presents itself. 

Where you feel the circumstances necessitate the commencement of a removal application, I recommend that you consider the following practical and strategic evidence-gathering steps, which may add teeth to your claim:

·                    Compile a detailed list of the attorney’s misdeeds and inactions;

·                    Consider asking The Office of the Public Guardian and Trustee to investigate;

·                    Talk to neighbours and caregivers to gather critical information;

·                    Maintain regular contact with the incapable person and try to ascertain his/her wishes; and

·                    Ask the attorney for regular progress reports.

Finally, it is worth considering applying to the court for directions regarding the conduct of the attorney before embarking on a removal application. The court may implement conditions and/or restrictions on an attorney’s activities and may also provide guidance as to whether a removal application is warranted as a next step.

For more on this topic and power of attorney litigation generally, I suggest you read Ian Hull’s book, Power of Attorney Litigation, 2000, CCH Canadian Limited.

Have a great day,

Natalia Angelini

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Today’s blog is part II in my series this week regarding the protection that may be available to a trustee against potential liability.

Apart from the provisions of the trust document itself, a trustee’s potential liability may be protected, limited or exonerated in a number of ways by statute.   Some examples are sections 18(1), 20(3), 28 and 29 of the Trustee Act (“Act”). 

Section 28 of the Act provides that a trustee is not liable for a loss to the trust arising from the investment of trust property if the conduct of the trustee that led to the loss conformed to a plan or strategy for the investment of the trust property, comprising reasonable assessments of risk and return, that a prudent investor could adopt under comparable circumstances. Section 29 of the Act provides that if a trustee is liable for a loss to the trust arising from the investment of trust property, a court assessing the damages payable by the trustee may take into account the overall performance of the investments.

The application of the Limitations Act should also be considered.

Also, in considering a trustee’s potential liability in respect of his or her administration of the trust, a trustee ought to consider his or her conduct and whether that conduct may be exonerated, if necessary, by the Court under section 35 of the Act. As a way of balancing the rights of beneficiaries with the interest to not overburden trustees, s.35 of the Act holds that when a breach occurs, the Court has the discretion to relieve the trustee of liability in cases where it believes that the trustee acted honestly and reasonably and ought fairly to be excused.

With some exception, the Court therefore has a statutory discretion to grant trustees relief from liability if they have acted honestly and reasonably, and ought fairly to be excused.  

Thanks for reading,

Craig

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

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

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

· when POA for PC become effective;

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

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

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

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

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

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

Have a great weekend!

Natalia Angelini

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

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

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

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

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

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

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

Have a great day,

Natalia Angelini

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The Succession Law Reform Act permits dependant support claims to be brought by a spouse, sibling, child and parent of a deceased. In order to qualify as a “dependant”, however, a spouse, parent, child or sibling must be someone to whom the deceased: (a) was providing support immediately before death; or (b) was under a legal obligation to provide support immediately before death.

It is noteworthy that the definition of a “child” is not limited to minor children, or even financially dependant children. 

While claims of adult children financially supported at death are clearly recognized by the Courts, it appears that there may be a new type of claimant on the horizon – that of an independent adult child to whom no financial support was being paid immediately prior to death. 

The reason for this change can be linked to the development and application of the concept of the “moral” obligation of a deceased (see Tataryn v. Tataryn Estate and, more recently, Cummings v. Cummings), and the Courts’ interest in protecting spouses and children through applying such principle.

While it is still early days, the reasoning in certain cases subsequent to Cummings (including Juffs v. Investors Group Financial, Broderick v. Papathanasiou and Perilli v. Foley Estate) may foretell that independent adult children will have a better chance of succeeding on a dependant support claim than before. Some factors that may impact on such a claim could include the size of the estate, whether there are other competing support claims, and the intentions of the deceased.   

While claims of independent adults will no doubt remain more tenuous than claims of adult children to whom financial support was being provided at death, it will be interesting to see how the law develops in this regard. For a more comprehensive analysis of this issue, I recommend reading Susan J. Woodley’s paper entitled “The (Almost, Possible, Probable) Right of an Adult Child to Receive Support”, presented at the Ontario Bar Association 2009 Institute of Continuing Legal Education.

Have a great day!

Natalia Angelini

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

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

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

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

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

Have a great day!

Bianca La Neve

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

Topics included:

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

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

Have a great day!

Bianca La Neve

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In a recent decision Giacomelli v. Canada (Attorney General), the Ontario Court of Appeal confirmed that an estate cannot continue a claim based on the Charter.

The Deceased was a Canadian citizen of Italian origin who brought a statement of claim against the Government in 2005 for damages relating to his detention at a concentration camp. The Deceased alleged that Canada’s refusal to offer compensation to Italian Canadians while offering compensation to other ethnic minorities was discriminatory and contrary to sections 7 and 15 of the Charter.

The Deceased died in 2006 and his estate trustees obtained an Order to Continue. In 2007, citing Canada (Attorney General) v. Hislop the Government was successful in obtaining a motion varying the Order to Continue so that the Estate could not pursue any claims for relief for Charter based violations. The estate trustees appealed this decision.

The Court of Appeal dismissed the estate trustees’ appeal. Gillese J.A. stated that she was also of the view that Hislop was determinative that an estate cannot continue a claim based on s. 15(1) of the Charter as rights guaranteed by s. 15(1) are personal and end with the death of the affected individual.

Further, Gillese noted that the Supreme Court identified only two exceptions to that principle being, when the individual dies after judgment while an appeal is pending or when the individual dies after the conclusion of argument but before judgment is entered.As these did not apply, the Appeal was dismissed.

Enjoy your weekend,

Diane Vieira

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Those who follow American politics have probably heard of Roland Burris. He is controversial Governor Rod Blagojevich’s choice to replace the Senate seat vacated by President –Elect Barack Obama. While the constitutional debate continues on whether or not Burris can be seated in the Senate, another issue that has grabbed the headlines is Burris’ final resting place.

Burris has commissioned for himself a grand mausoleum consisting of two columns and three tablets referring to himself as a trail blazer and listing all his political and business accomplishments, both minor and major, with room for more to be engraved. The monument, referred to “as his resume in stone” had attracted unfavourable attention from the media and earned Burris the nickname “Tombstone”. Needless to say, it was probably not the effect Burris intended.

While many people include burial instructions in their Will, such instructions are not binding on the estate. The estate trustee has the ultimate responsibility to make burial arrangements. For those who wish to make elaborate arrangements, they should make those instructions clear to the estate trustee and other family members, so that the estate trustee is not criticized for the expense to the estate. Additionally, we can take Burris’ lead and make our own arrangement during our lifetime. Click here to read Paul Trudelle’s paper on estate issues and dealing with the body after death.

Thanks for reading,

Diane Vieira

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 Starting last week, any resident of Canada over the age of 18 with a valid social insurance number can open up a tax-free savings account (TFSA) and make a contribution of up to $5,000 a year. Income earned inside a TFSA is not taxable and money can be withdrawn tax-free at any time. Click here to read a National Post article on TFSAs and what type of assets can be held within a TFSA.

When TFSAs were first introduced in the Federal Government’s 2008 budget, there were concerns with how TFSAs would be treated upon the death of the account holder.  TFSAs allow account holders to name a spouse or a common law partner as a “successor account holder” to allow the successor account holder to maintain the TFSA of the deceased without a reduction in their own contributions. Upon death, the value of the TFSA is not included in income but any income that accrues after death is subject to tax.

However, the federal government likely lacks the jurisdiction to give effect to successor account holder designations without also be named in testamentary documents and requiring probate. Beneficiary designations to allow assets to pass outside of probate are within the domain of provincial jurisdiction and the provincial legislation needs to be amended to allow for TFSA designations similar to RRSP beneficiary designations.

Currently, many Ontario financial institutions are providing for both a beneficiary designation and successor account holder be named when a TFSA is opened. The big unanswered question is if probate will be required or if a TFSA is an asset that passes outside of the estate.

Once the issue of beneficiary designations is settled, TFSAs may become another estate planning tool. 

Have a great day,

Diane Vieira

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Happy New Year!

It promises to be an interesting year in estates law with exciting changes headed our way. Under the guidance of the Honourable Mr. Justice Brown, the Estates List Practice Direction is being updated and should be implemented before the end of the year.

The Ontario Bar Association is starting a listserv for Trusts & Estates section members. This email based mailing list will allow members to post questions or share their thoughts with other members. Members can expect an email later this month from the Ontario Bar Association with details on how to subscribe.

The Law Society's new client identification and verification requirements came into force on December 31, 2008. The Law Society is offering a teleseminar on January 13, 2009 to discuss the new requirements and to assist with any questions practitioners may have.

Thanks for reading,

Diane Vieira

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I hope everyone is having great holiday season.

With the close of 2008, we turn and look to the promise of 2009. In looking ahead to 2009 many may wonder if they have properly protected and provided for those they intend to protect should something unexpected happen to them. Questions may also arise regarding whether a spouse or parent has taken steps to provide for themselves and/or those they intend to provide for.

While there are no doubt many things to consider for the new year from a family perspective, perhaps this is the year to resolve to consider, or reconsider, whether your family’s legal affairs have been properly planned.

I wish everyone a healthy, happy and prosperous 2009.

Happy New Year! Craig

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Offers to settle and more specifically, Rule 49.10 of the Rules of Civil Procedure, are intended to force the parties in a legal proceeding to consider the settlement of a matter prior to trial failing which, costs consequences will result if an offer is more favourable than the result obtained at the trial.

In the general litigation context, the Ontario Court of Appeal has held that the Court should depart from the prima facie costs consequences in Rule 49.10 only where, after giving proper weight to the policy of the rule and the importance of a reasonable predictability and the even applicability of the rule, the interests of justice require departure.  

The applicability of offers to settle and Rule 49 in a Will challenge context has been considered by Judges with different results. In the often quoted case of Olenchuk Estate, Re.  the Court found, amongst other things, that it would seem somewhat incompatible with the nature of these proceedings to apply rules designed to encourage settlement of adversarial, contentious, proceedings and when there appears to be a reasonable question whether the deceased was mentally capable of making the Will that is propounded; it imposes an obligation on the Court to be satisfied that the Will was the product of a capable testator before putting on it the imprimatur of the Court. In Olenchuk, the Court further held that Rules designed to encourage settlement of contentious litigation can be applied in estate matters, but the difference between certain kinds of estate litigation and other forms of litigation can make it difficult to apply Rules of Civil Procedure to estate proceedings.

The Ontario Court of Appeal discussed the traditional approach and modern approach to awards of costs in estate litigation in its 2005 decision of McDougald Estate v. Gooderham. The Court found that the modern approach to fixing costs in estate litigation is to carefully scrutinize the litigation and, unless the Court finds that one or more of the public policy considerations, set out in its decision applies, to follow the costs rules that apply in civil litigation.

The Court of Appeal noted that “Gone are the days when the costs of all parties are so routinely ordered payable out of the estate that people perceive there is nothing to be lost in pursuing estate litigation.”

In a Will challenge, offers to settle, whether informal or formal can be an important tool in regard to the disposition of costs; perhaps more so in light of the approach for costs set out in McDougald v. Gooderham.

Enjoy the Holidays! Craig

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The business pages, especially in this uncertain economy, can be interesting.  Recently I gravitate toward Paul Waldie's column in the Globe & Mail.  Frequently, he identifies the gifts, causes and reasons provided by individuals whose donations range from under $100,000 to a million dollars or more. It's a spot of good news in this economic downturn.

We have covered legacies from several angles at Hull & Hull; there are 25 hits when "legacy" is searched on the Blogs and Podcasts section of our website.  The law dictionary defines legacy as "A gift by will, esp. of personal property and often of money;  a bequest."

Individuals can leave a legacy in their respective Wills, but as the Globe & Mail column highlights, people who have the means enjoy the satisfaction of leaving a legacy during their lifetime. Stories abound, as www.leavealegacy.ca illustrates.  There are as many reasons to leave a legacy as there are donors.

The principle of leaving a successful legacy applies to many realms, including the family business.  In some instances, it is advisable to not leave the kids the family business.  Rick Spence, of Moneysense, suggests passing on values, rather than gifting the family business.  Certainly we are not all in the position of "firing the kids", but there may be many good reasons to do now what you would otherwise do in your Will. 

Jonathan

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The cooler weather is cause for many people, retirees especially, to plan an annual sojourn south.

In preparing for the winter, protecting real property -- often a significant asset -- may be top of mind.

My colleague, Paul Trudelle, wrote about "Real Estate Transactions Involving Powers of Attorney" in July 2008.  While travelling south for the winter does not require a sale, steps can be taken to minimize risks to real property.  The Government of Ontario suggests that to avoid real estate fraud one should protect his or her identity and be alert to identity theft.

Regarding a Power of Attorney, the government also suggests caution:  "Whenever you give another person a power of attorney that permits them to deal with your personal assets, you should consult with your lawyers or advisers regarding appropriate limitations."

In a 2004 Canadian Bar Association paper -- Cross-Border Issues for Snowbirds and Roaming Retirees - Marilyn Piccini Roy wrote: "If the Snowbird owns real estate elsewhere, this power of attorney may not be recognized there if the law of the situs applies its own law to the formal or substantive validity of the power of attorney or to its effectiveness vis-à-vis third parties."   If a Power of Attorney deals with assets in different jurisdictions, one should seek legal advice in the jurisdiction of the asset(s).

Recent Ontario case law highlights issues that can arise regarding real estate when a fraudulent Power of Attorney is used.  Reviczky v. Meleknia; Caplan (Intervenor) 2007 Canlii 56494 (On. S.C.) raises quesitons about a solicitor's duty to"go behind" a Power of Attorney by enquiring about the donor's mental capacity at the time of signing and later, as well as evidentiary requirements.  The recent case law reminds all of us, including snowbirds, of the risks that exist with a Power of Attorney.  

Jonathan Morse 

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As a WWII pay officer in the Canadian military, my paternal grandfather met a British woman on the beach when he was stationed in the south of England. They married soon after the War and retired in England in the mid-1960s.  My grandfather died in the early 1990s; when my step-grandmother, Tessa, died in 2008, in her Will she left her house to my father and aunt.

If there were no Will, Tessa's estate could have contributed to the British government's coffers.  In that circumstance, a probate research firm could have played a role. 

Title Research is one of the firms highlighted in yesterdays blog about "heir hunters".  Its services include: searches for missing beneficiaries, heirs, and legal documents (such as marriage, birth and death certificates back to the 1800s); asset research to value, verify and find missing or unknown assets; missing beneficiary indemnity insurance; probate valuations; and will searches to determine that the Will is the deceased's last will. 

If Tessa had died intestate, Title Research, and other firms, could have located her heirs around the world.  Alternatively, if the estate trustee had questions about the value of the estate assets, or had the trustee not known the whereabouts of the beneficiaries, it could have enlisted a search firm's services as some anecdotes suggest.

Potentially trustees can protect their personal liability by engaging a firm that has a best practices endorsement of Britain's Law Society.  It seems that an estate need not just have ties to the UK, but the extent of a firm's expertise in a specific jurisdiction would have to be assessed.

Interestingly, some of the detective work can be done by amateur sleuths: www.findmypast.com and www.ancestry.co.uk allow access to census data from the 1800s and a host of other historical information.  If genealogy is in your blood, it's a place to start.  And, as one UK law firm suggests, it might be advisable to do some of your own investigating.

Jonathan Morse

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In Scotland for my honeymoon, I encountered a few different “estates”. Hiking the West Highland Way – averaging about 12 miles a day – we passed Blackmount Lodge, in the Bridge of Orchy. The lodge, owned by the Fleming family (of James Bond fame) sits on the edge of an idyllic loch. It took a day to walk across the estate.

Fellow walkers from Britain were interested to learn that I work in estate litigation. After sorting out differences in our terminology, they asked if “heir hunters” exist in Canada. I was intrigued.

While I still do not know the extent of “heir hunting” here, I learned that Heir Hunters is a BBC series that follows probate detectives who look for distant relatives of people who have died without making a will. I have not heard of a similar program in North America.

Several UK firms track down missing relatives: Fraser and Fraser  and Title Research are two examples. About 545,000 people die in Britain every year and half of them do not have a will. As in Ontario, there are rules in Britain which dictate that when people die intestate, their estate passes to the deceased’s legal next of kin. In Britain, if there is no family, the estate falls to the Crown.  The Guardian claims that £10 million to £20 million falls to the government every year because there is no one to claim the estate. Heir hunters locate the next of kin and alert them to their inheritance; there is a finder’s fee of up to 25% of the amount.

Many people in Canada can trace their roots to the United Kingdom. Estate practitioners, if advising estate trustees, would be well served to keep “heir hunting” firms in mind. 

Thank you for reading.  Enjoy your day.

Jonathan Morse

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I recently read an article regarding the most common claims against lawyers, which is authored by Dan Pinnington who is the director of practicePro, LawPro’s risk and practice management program (click here for the article). I found it particularly interesting that only a small portion of LawPro claims account for a lawyer’s inability to know or apply the substantive law.    

The most common claim involves communication between lawyer and client. Dan breaks down the type of communication errors into three categories. According to the article, the most common communication related error, is the failure to follow the client’s instructions.  The second type of communication error is the lawyer doing work or taking steps on a matter, but failing to obtain the client’s consent or to inform the client. The third type of communication error involves the failure to explain to the client simple administrative things (i.e. timing of steps on the matter, fees and disbursement). Dan states that you can reduce your exposure to this type of claim by managing your client’s expectations from the very start of the matter and actively communicating with the client at all stages of the matter. 

The second most common claim is missed deadlines and time management related errors. The most common time-related error is a failure to know or to ascertain a deadline (i.e. limitation period). There is a concern that procrastination-related errors are on an upwards trend. Dan states that these types of errors are easily preventable with better time management skills and the proper use of tickler systems.

The third most common error is the inadequate investigation or discovery of facts.   To avoid these types of claims lawyers have to “dig deeper”, take the time to read between the lines so that all of the appropriate issues and concerns associated with the subject matter can be identified. 

I hope my final blog will assist all of us in our practise. 

Rick Bickhram   

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Those wishing to vary a trust in Ontario, can look to the Variation of Trusts Act (R.S.O. 1990, c. V.1) (Act) for the authority to do so. Although the Act is surprisingly only one section in length, don’t let the length fool you.

Essentially, the Act permits the Court to approve a variation of a trust under a will, settlement or other disposition on behalf of minor, unascertained, unborn or contingent beneficiaries if the variation, in the words of the Act, “appears to be for the benefit” of those persons.

While relying on the Act for jurisdiction to make a variation, there are many things to consider in pursuing a variation such as the procedure to follow and the criteria to meet in order to have the variation approved. 

In the well-known case of R v. Irving, (1975), 11 O.R. (2d) 442 (H.C.), the Court set out three criteria to consider in determining whether to approve a variation, namely: (i) does the variation keep alive the basic intention of the testator or settler?, (ii) does the variation benefit those for whom the Court is asked to consent?, and (iii) whether a prudent adult motivated by intelligent self-interest and sustained consideration of the expectancies and risks of the variation, would likely accept it?

There are a number of cases that have considered these criteria; too many to go into in this blog. Suffice it to say that the Act does provide an answer to the question as to whether one can vary a trust, but the answer is only a partial one as the Court will also consider criteria needed to be met in determining whether to approve a variation.

Enjoy the long weekend (and last of the summer), school starts next Tuesday.

Craig

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 The Beijing Olympic Games come to a close this weekend and the international sports community turns their attention to the 2010 Vancouver Games and the 2012 London Games.
 
The Olympics inspire a multitude of feelings and generate a healthy amount of debate. One thing for certain is that a tremendous amount of preparation is required by the hosting city and the effort of a variety of people are required to pull it all together.
 
An interesting article posted on timesonline looks at the impact of the Olympic Games on the legal profession. The article boldly declares that lawyers are as much a part of the sporting community as athletes. It goes on to describe how the Olympics generate a boom in legal work as a result of preventing ambush marketing and unauthorized broadcasts as well as both defending and prosecuting anti-doping cases.
 
For those interested in learning more about international sports law, a great international law blog Opinio Juris featured some excellent expert commentators during the Beijing Games. A compelling post discussed the growing prominence of athletes representing countries that they are not citizens of. The author contrasts a competitor’s identity vs. a national identity and explains the requirements under the Olympics Charter for an athlete to compete for a nation.
 
Congratulations to all the athletes and let's get ready for 2010!
 
Enjoy your weekend,

Diane Vieira

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Today, if I have my count right, is day eleven of the Olympics. For certain, the Olympics stimulate debate on a spectrum of important social, political, economic and, of course, athletic issues of our time. I do not intend to touch upon those debates. Over the past ten days of the Olympics, however, incredible stories of the athletes have arisen, and will no doubt continue to arise. Some, like Michael Phelps’ eight gold medals, involve incredible success, almost beyond one’s imagination, while others involve success on a more personal level or, as the saying goes, the agony of defeat. These stories, from whatever viewpoint, are quite remarkable and have no doubt involved the setting of objectives, planning and dedication and commitment to the goal.

While perhaps obvious, it continues to strike me as to the extent that these athletes live in the moment or for the day. So much rises and falls for them with one or in some cases several performances. What onlookers of the Olympics take away from the Olympics is no doubt personal but perhaps the notion of setting objectives, striving to obtain them while living for the day is the most universal.

What do these stories actually have to do with Estates? From a legal standpoint, nothing. However, perhaps the above notion may focus us to consider our own legacy and the steps that have been taken, or should be taken now, to ensure that those that benefit from that legacy are the intended ones.

Keep watching.

Craig
 

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The superrich likely have the market cornered when it comes to epic estate battles - Howard Hughes, J. Howard Marshall (i.e. Anna Nicole Smith), and E. Howard Hunt (of silver fame) - quickly come to mind.

However, even the mildly famous or sainted can have their moment in the estate spotlight.  Recently, Luciano Pavarotti's family was in the news when a dispute arose among his offspring in respect of his considerable fortune.  They have apparently reached a settlement.

I also read with interest a recent US newspaper article indicating that two of Martin Luther King's children had filed a lawsuit against a third regarding a dispute over the civil rights leader's estate (J. Edger Hoover would have loved it).  Bernice King and Martin Luther King III filed a lawsuit in Atlanta in order to force their brother, Dexter King, to open the books of their famous father's estate.

From what I understand, the lawsuit claims that Dexter King, who is the executor of his father's estate, has refused to provide his brother and sister with documents concerning the estate's administration.  The lawsuit claims that Dexter King and the estate "converted substantial funds from the estate's financial accounts…for their own use".  The siblings were never told beforehand and are now seeking financial records and other documents in order to investigate the administration of the estate. 

Martin Luther King's "dream" seems to have stalled when it comes to sibling rivalry and the fortunes of his estate.  However, on a more serious note, the dispute once again reminds us of the importance of transparency in the administration of an estate and open communication between executor and beneficiary.

Thanks for reading.  Auf Wiedersehen

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Welcome to my week of blogs.

An issue that can crop up in estate litigation is whether a party is entitled to interim payment of costs payable out of the estate.  The reason for such an order is to fund litigation, such as a will challenge, out of the largesse of the estate.

The court has the discretion to order the interim payment of costs pursuant to Section 131 of the Courts of Justice Act.  A number of cases have addressed the interim payment of costs, including Waese v. Bojman as well as Zhao v. Ismail Estate (Trustee of) (link not available).  Both decisions recognize the court’s inherent jurisdiction to award interim costs in a proceeding, including estate actions.

As with any exercise of judicial discretion, the facts are crucial and how those facts are marshalled and presented to the court may carry the day.  Proper evidence and complete and financial disclosure is required.  However, even where an interim payment of costs is allowed, the court is likely to impose terms and require costs to be paid out in stages based on the progress of the litigation.

Thanks for reading.  A demain.

Justin

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If you have recently gone on to your favourite charity’s website or received correspondence from a charity you donate to, you will likely notice an advertisement asking if you own BCE shares. 

The privatization of BCE shares means that some shareholders are now looking for a way to minimize their tax liabilities from the sale of shares. Some financial advisors have advocated  the direct transfer of the publically traded securities to registered charities as one way to minimize any capital gains.

Since 2006, charities seem to have benefitted from the elimination of capital gains for donated shares. In turn, charities have become more sophisticated and take a business-like approach to attracting potential donors of shares. By providing the contact information of a gift planner, easy to fill out share transfer forms with step-by-step instructions, and information about the advantages of share donation, charities are hoping shareholders donate their shares directly to them by presenting them with a win-win situation.

Additionally, charities are providing more information to potential donors about estate planning and the potential tax benefits of donations-in-kind, such as the transfer of shares. Charities and private foundations are sending the message to potential donors that donors can benefit on multiple levels through different types of donations and charities are there to assist them with their choices.

Enjoy your weekend,

Diane Vieira

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In a recent Ontario decision, Tiedemann v Tiedemann, the court considered whether the deceased had intended to gift to his sister the balance of funds in a joint account held by the both of them.

The sister argued that her brother intended to gift to her the balance of the funds as he did not have a good relationship with his son. The son of the deceased, the sole beneficiary of his estate, contented the funds belonged to the deceased’s estate on the basis of a resulting trust. The court found as the deceased was the only contributor to the account, the sister had to rebut the presumption of a resulting trust and as she was neither his spouse nor his child, she derived no benefit from the presumption of advancement.

Referencing the Supreme Court of Canada decisions of Pecore v. Pecore and Madsen Estate v. Saylor, the court looked at the evidence to determine the deceased’s actual intention. The court found the testimony by the deceased’s lawyer and a bank employee indicated that the deceased was interested in providing his sister with the authority to manage his finances and had not intended to gift her funds.

Weighing the evidence, the court found on a balance of probabilities that the resulting trust had not been rebutted and the intention of the deceased was to have his sister assist with bill payments if he became incapable.

To learn more about joint accounts, listen to Episode HOESP #60  where Ian Hull and Suzana Popovic-Montag discuss Percore v Pecore or read the transcribed version.

Thanks for reading,

Diane Vieira

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As you probably know, Hull and Hull LLP produces two weekly podcasts that discuss issues related to the estates area and estate and succession planning. Podcasting has certainly grown in the last year and there is a lot of content out there. To learn more about our firm’s use of this social medium, read Suzana Popovic-Montag’s and Ian Hull’s blog on podcasting.

Other Canadian legal podcasts include Osler Audio Reports offered by Osler, Hoskin, & Harcourt LLP that discuss a variety of business legal issues. The Canadian Bar Association provides PracticeLink Podcasts offering practice management information to its members. Law is Cool is both a blog and podcast produced by and for Canadian law students. (Podcast Episode No. 8 features an interview with Ian Hull).

Law schools are also providing a tremendous amount of information through the podcasting medium. The University of Ottawa’s Law and Technology Program was one of the first educational institutions to utilize podcasting and make classes available via podcasts. Through podcasts, many American law schools are making special lectures available to the public. Harvard Law School’s Program on Negotiation produces PONcasts offering advice on negotiation skills.

On a slightly different note, BBC Radio 4’s Law in Action is a half hour weekly podcast from the UK that discusses legal issues in the news.  

These are just a few of the legal podcast choices out there. Whether it is for education or entertainment purposes, there is a lot of information out there.  

Have a nice day,

Diane Vieira

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A widow in the United Kingdom is suing her two children, her one-year-old son and three-year old-daughter, over her late husband’s estate.  Taryn Dielle launched an action in London’s High Court claiming that the country’s intestacy laws do not provide her with enough money to care for her children.

Her husband, a London millionaire, died in 2007 without leaving a Will.  As he died intestate, his estate, worth about £2,231,201 (approximately 4.5 million dollars), was distributed in accordance with the United Kingdom’s intestacy rules. According to those rules, Ms. Dielle is to receive the statutory legacy and £50,000.00 ($100,000) per year in interest from her late husband’s estate, while her two children inherit the rest of the estate.

The United Kingdom’s intestacy rules provide that when someone dies intestate, leaving a spouse and issue, the surviving spouse receives all personal chattels, a lump sum of £125,000 (just over $250,000 dollars) referred to as the statutory legacy, and a life interest in one half of the residue. The surviving spouse can only receive the interest from the residue and cannot encroach upon the capital. The issue of the Deceased receive one half of any excess over the statutory legacy and ultimately they receive the other half of the residue when the surviving spouse dies. To contrast the UK law with Canada’s intestacy succession law, please read David Smith’s blog on intestacy distribution.

This will be an interesting case to follow and is already being referred to as an example that highlights the importance of estate planning.

Thanks for reading,

Diane Vieira 

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In yesterday’s blog I noted that in today’s blog I would mention another dependant support case decided in the post Cummings v. Cummings era.

In Reid v. Reid, [2005] O.J. No. 2359 (Ont. S.C.J.), [2008] O.J. No. 826 (Ont. Div. Ct.), the deceased was survived by her son, her daughter and her daughter’s two children (the deceased’s grandchildren).

According to the trial judge, the deceased’s daughter was a 42 year old mentally challenged individual with one of the grandchildren also being mentally challenged.

The deceased’s estate was worth approximately $200,000, consisting primarily of a house.  The deceased’s daughter and her two children resided with the deceased. The deceased’s Will left her estate equally to her daughter and son.

The daughter and grandchildren brought an application for support.

Having acknowledged the considerations set out in the Cummings decision, the trial judge found that there was a relationship of dependency such that the deceased was contributing to the support of her daughter and her two grandchildren.

The trial judge held that the son should receive $25,000 from the estate with the balance of the estate (the house) to be held for the deceased’s daughter, and on her death, the net proceeds from the sale of the house divided equally between her two children. 

On appeal, counsel for the son conceded the issue of the dependency of the deceased’s daughter and grandchildren as found by the trial judge within the meaning of the Succession Law Reform Act (s.57). Interestingly though, the Divisional Court stated:

“We also agree with the appellant…[the deceased’s son] that the trial judge fell into error by ordering that the residue of the estate pass to… [the grandchildren] without having any evidence before her as to what their needs might be at some unidentified time in the future.  Nor was there any evidence before the trial judge that either of these two applicants would still be dependant within the meaning of the Succession Law Reform Act at this unidentified future date, the date of…[the deceased’s daughter’s] death.”

The Divisional Court ordered, amongst other things, that the son be paid $25,000 from the estate (from a mortgage to be obtained on the house), the house be transferred to the daughter, the daughter and her two children may live in the house until 2018, at which time the property will be sold and the proceeds distributed equally between the son and the daughter, provided that the son’s share be reduced by the above-noted $25,000. 

Thanks for reading. 

Craig

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The Succession Law Reform Act (“SLRA”) governs the rights of beneficiaries to receive support and other benefits on death.

In Cummings v. Cummings, [2003] 5 E.T.R (3d) 81 (Ont. S.C.J.); affirmed [2004] 69 O.R. (3d) 398 (Ont. C.A.), Ontario’s Court of Appeal held that when examining all of the circumstances of an Application for Dependant’s Relief under the SLRA, the Court is entitled to take into account not only the needs of the dependants but the moral obligation of the deceased to those dependants.

Today’s blog, as well as my blogs for the balance of this week, will look at several dependant support cases in the post Cummings era. 

In Broderick v. Papathanasiou, [2006] O.J. No. 4707 (Ont. S.C.J.), Ms. Broderick contended that she lived with Mr. Papathanasiou (the “deceased”) in a common law relationship for 8 years prior to his death.

The deceased did not provide for Ms. Broderick in his Will or during his lifetime.  Ms. Broderick earned more money than the deceased during some of the years they lived together.  They lived in residences owned by the deceased.

Ms. Broderick claimed she was a dependent spouse and asked that the Court make an order for her support under the SLRA.

The Court found that Ms. Broderick’s contributions to the deceased’s personal and financial well-being, to the detriment of her own finances, should be recognized by an award from the estate.

The Court held that the requirement for “adequate provision” to a dependant under the SLRA had been expansively interpreted by the courts; it was no longer a strictly needs based analysis; the deceased’s moral duty towards his dependents was now also a relevant decision, citing Cummings.

As the estate was not large enough to make provision for Ms. Broderick’s support indefinitely, the Court found that a lump sum would support her in transition and provide for her relocation and that it was also equitable that the deceased’s daughters should enjoy the benefit of their father’s estate as he intended under the will.

In the end, the Court ordered that the deceased’s condominium be sold and Ms. Broderick receive one half of the net proceeds in recognition of her contributions to the deceased’s well-being.

Thanks for reading.

Craig

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The Ontario Bar Association (OBA), Trusts and Estates Section, year end dinner was held on May 27, 2007 at the Gardiner Museum in Toronto. 

Jordan Atin, the Chair of the Section for the past year, brought the past year to a close and the election of the OBA, Trusts and Estates Section Executive for the 2007/2008 year, was confirmed. 

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

The Award for Excellence was created to recognize exceptional contributions and achievements by members of the OBA to the area of trusts and estates. The criteria for the award is demonstrated leadership in the trusts and estates bar through knowledge, experience, skill, commitment, passion and strength of character, plus all or some of the following:

·         academic excellence through teaching at the Bar Admission Course, lecturing at a law school, participating in Continuing Legal Education and/or academic writing;

·         participation in the OBA Trusts and Estates Section Executive or the Law Society of Upper Canada on wills, trusts and estate matters; and

·         contribution to the development of wills, trusts and estate law.

In addition to the Award for Excellence, Archie Rabinowitz was presented with the Widdifield Award and Corina Weigl with the Hoffstein Book Prize.

Congrats to Barry, Archie and Corina.  The venue, dinner (and particularly the Cornish Hen) and evening were all quite enjoyable.

Thanks for reading.

Craig

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The annual conference of Society of Trust and Estate Practitioners is upon us.  Yesterday’s full day of interesting talks was capped off with a tenth anniversary gala dinner at The Royal York. 

It was great to see a full house of estate, trust, accounting and tax practitioners decked out in their finest to enjoy an evening with their peers, and honouring the lifetime achievements of Professor Emeritus Donovan Waters.  Prof. Waters, a pioneer of trust law and author of the leading text of trust law in Canada, was introduced by four esteemed speakers. True to his reputation, Prof. Waters delivered a thoughtful and engaging acceptance speech.  It was a lovely evening.

The conference will wrap up after another full day of talks today. See you there!

Have a great weekend,

Natalia

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Yesterday, Hull & Hull LLP hosted one of its informative Breakfast Series.

David Smith started off the seminar with a talk on the challenge of exercising an estate’s controlling interest in private corporations.  His discussion included the following observations:

-                   the obligation of an estate trustee to exercise his or her controlling interest is that of a “reasonably prudent businessman”

-                   the trustee must determine the value of the company in as timely a manner as possible

-                   depending on the wording of the Will, the trustee must provide for the company’s continuation, sale or liquidation

-                   in order for the trustee to make such a decision he/she should review the Will, financial statements and corporate records, and should inquire with individuals who have knowledge of the company’s affairs including beneficiaries, family, directors, shareholders, employees, solicitors, accountants and bankers

-                   it is advisable for a trustee to have an active role in management by, among other things, sitting on the board of directors (despite there being no legal obligation to do so)

Sean Graham followed with a discussion on evidence in estate litigation, and Ian Hull spoke about interesting case law developments.  You can find a more thorough consideration of these topics in their presented papers.

Until tomorrow,

Natalia

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In Schwartz Estate v. Kwinter the divorce of the mother and father in 1996 divided the family, with one daughter, Elaine, siding with the father and the other daughter, Shelley, siding with the mother.  The father then made new Wills giving everything to Elaine, and the mother likewise made new Wills giving everything to Shelley.

The father died in 2003.  A dispute arose about the purported understanding between the parents in making these Wills leading Elaine to commence an action seeking, among other things, that her mother disclose the testamentary instructions given to her solicitor for the purposes of drafting her Wills, which the mother opposed on the ground that such instructions were privileged. 

The Court held that although a Will is privileged until the testator dies, and although instructions to a testator's solicitor and the related work product are also privileged, that the mother voluntarily waived privilege by producing her Wills and by swearing affidavits relying on their content.

Another approach one could perhaps take in such circumstances is to refuse to produce a Will at the outset and claim that it is a privileged document, which may then likely lead to a court determining the issue.  If one is ultimately compelled to produce their Will by court order it would likely be viewed as involuntary disclosure, and therefore any claim for further disclosure (i.e. solicitor's instructions and file documents) could again be met with a fresh assertion of privilege. 

Have a nice day,

Natalia

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In a recent edition of the OBA Estates and Trusts Section newsletter, Deadbeat, Justin de Vries wrote an article commenting on the summary trial and how it can be a way to curb the costs of estate litigation (in claims of $50,000 or less).  This article is worth a read, and I thought in today's blog I would add my voice to his chorus.

While counsel may often overlook the option of summary trial (in Rule 76 of the Rules of Civil Procedure), there is no reason that it shouldn't be invoked in certain estate disputes.  At a minimum, some thought should be given to it before the pre-trial stage, since the pre-trial judge or master can decide what mode of trial is appropriate if no agreement has been reached between the parties before that time.

Some of the cost-saving measures of a summary trial include the following:

1. Evidence in chief is to be adduced by affidavit.

2. A party wishing to cross-examine the deponent on an affidavit, which can be done orally, can take no more than 50 minutes.

3. Closing arguments can take no more than 45 minutes for each party.

Proceeding by way of summary trial may also lead to a comparatively quick result and correspondingly lower cost awards.  Something worth considering…

Thanks for reading,

Natalia

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Soulsbury v. Soulsbury is an interesting appeal from a decision of the Central London County Court about a contract dispute involving a divorced couple.

The couple had been married for 20 years, and after the breakdown of their marriage the ex-husband was ordered to make periodic payments to the ex-wife.  The couple remained on friendly terms.  The ex-husband later suggested that rather than continue to pay periodic support that he should leave £100,000 to the ex-wife in his Will.  The ex-wife agreed to this proposal and they put their agreement into effect.

The ex-husband subsequently fell ill and died, marrying another woman on the morning of his death, which revoked his Will.  After his widow refused to pay the legacy from the estate, the ex-wife brought a claim for payment.

The trial judge found in favour of the ex-wife, holding that a binding agreement had been entered into between the couple.  The widow unsuccessfully appealed.  In response to her arguments to the contrary, the appellate Court held that (i) by entering into the agreement the ex-wife had not bartered away her right to future maintenance or ousted the jurisdiction of the matrimonial court; and (ii) the agreement between the couple was governed by ordinary contract principles (not principles relating to an agreement for the compromise of ancillary relief) and therefore the principal that such an agreement does not give rise to a contract enforceable at law did not apply. 

This serves as a good reminder that when contemplating rearranging one’s support arrangements, in even the most amicable of scenarios, a contingency plan should be in place to deal with the event that either of the parties may enter into a subsequent marriage.

Have a good day,

Natalia

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The intense media coverage of the raid on the polygamist ranch in Texas has also generated scrutiny of Canada’s polygamous communities.

Polygamy is against the law in Canada but there has not been a prosecution of a case in over sixty years. For a background on the issues surrounding polygamy and Canadian law, read A Polygamy Primer on Osgoode Hall’s law blog, The Court.

The primer provides a link to a collection of research policy reports commissioned by the federal government exploring polygamy in the Canadian context. While the focus of the papers is on polygamy in a criminal law and family law context, the paper by Alberta’s Civil Liberties Research Centre discusses the civil case of Yew v. British Columbia (Attorney General) [1924] 1 D.O.D. 1166 (B.C.C.A.). In the case, the British Columbia Court of Appeal gave limited recognition to a polygamous marriage that had occurred in China to allow the two surviving wives to receive their annuities from their husband’s estate at a lower tax rate.

It will be interesting to see if the possible recognition of polygamous unions in the family law context will have an impact on estates law.

Enjoy your weekend,

Diane Vieira

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The Court of Appeal recently rendered its decision in Madore-Ogilvie and Ogilvie v. Ogilvie Estate, 2008 ONCA 39.  One of the issues was whether the proceeds from a jointly owned life insurance policy could be included in the deceased’s estate for the purposes of satisfying a dependant’s relief claim. 

One of our previous blogs reviews the facts of the case and the appellate decision of the Divisional Court, which I will not repeat except to say that the Divisional Court reversed the application judge’s finding that the policy could be included as part of the estate, and decided that the contractual rights of the spouse to the joint policy trumped the needs of the deceased’s dependants.

Two of the minor children appealed the Divisional Court’s decision and asked that the application judge's decision be restored.  The deceased’s spouse cross-appealed. 

The Court of Appeal dismissed both the appeal and the cross-appeal, finding as follows:

-          the policy was not caught within the ambit of section 72(1)(f) of the Succession Law Reform Act;

-          the policy was not an arrangement that was made to jeopardize the maintenance of the deceased’s dependants; and

-          section 199 of the Insurance Act did not apply to the policy.

Have a good day,

Natalia

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I thought I would close off this week’s blogs with a recent decision that reviews the law on surrogate parents.

In M.D. v. L.L. a married couple wished to have a child.  Unfortunately, the wife, M.D., was unable to bear children.  So, the couple turned to a family friend, L.L., who was willing to act as a surrogate mother.  M.D. and L.L. papered the terms of their understanding in a Gestational Carriage Agreement. 

After L.L. gave birth to the child, a Statement of Live Birth had to be completed and filed with the Registrar, which statement required L.L. to place her name on the form as the “mother” of the child, notwithstanding the Agreement and the fact that M.D. and her husband were the genetic parents of the child.

M.D. and her husband sought orders declaring themselves to be the parents of the child, and declaring L.L. and her husband not to be the parents.  The Court granted the orders sought, and in so doing held that despite a statutory definition defining “mother” by reference to birth, the genetic parents were the true parents.

This decision is likely going to be the authority relied upon in surrogate parenting litigation to come.

Have a great long weekend!

Natalia

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In a recent Superior Court of Quebec decision a family’s patriarch, Leon, died intestate in 1968.  The main asset of his estate was his home (registered in Leon’s name) where he resided with his wife and son, Walter.  At law Leon’s wife was entitled to 1/3 of the home, and Walter was entitled to 2/3 of the home.  Following Leon’s death, his wife and son continued to live in the home and dealt with it as their own property.

Leon’s wife died intestate in 1983.  Her sole heir was Walter.  The home remained registered in Leon’s name, but Walter continued to live there and dealt with it as his own property.

Walter disappeared after 1992, and in 2004 was declared dead.  Walter’s maternal and paternal cousins began fighting over Walter’s estate.  While all the cousins agreed they were equal beneficiaries of Walter’s estate, the argument of the maternal cousins was that they were beneficiaries of his mother’s estate (including her interest in the home), since she died intestate and Walter had never formally accepted her estate.

After applying various provisions of the Quebec Civil Code, the Court held that Walter, by being an absentee, was deemed to have accepted his mother’s estate because an absentee can only renounce through his representative. 

This case reveals an interesting distinction between Quebec and Ontario legislation, the latter of which does not impose any obligation to accept or reject one’s interest in an estate.

Until tomorrow,

Natalia

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In my blog yesterday, I introduced the prudent investor rule as the standard of care for trustees when investing assets that are held in a trust. Today, I will address how a trustee’s investment performance may be assessed.

Prior to July 1999, trustees were required to make investments pursuant to the “statutory legal list” provided for in the Trustee Act. This had the effect of holding trustees accountable for each particular investment, rather then the investment portfolio as a whole. The principle was further illuminated by the anti-netting rule, which stated that a trustee, who committed a breach of trust, was not entitled to set off a gain in one transaction against a loss in another. However, through recent amendments to the Trustee Act, the statutory legal list was repealed and replaced with the Prudent Investor Rule.

The Prudent Investor Rule reflects the modern portfolio approach to investments, the emphasis being on the prudence of the portfolio as a whole as opposed to each particular component. This theory is captured in Section 27(5) of the Trustee Act. Section 27(5) requires “a trustee to consider … the role that each investment plays within the overall trust portfolio”. Furthermore, under section 27(6) “a trustee is required to diversify the investments of the trust property. It appears that under the modern portfolio approach, a trustee would not be breaching the standard of care, should he or she invest a substantial amount of trust assets into a single security. As described above, section 27(6) requires that the trustee consider diversifying the portfolio, which is necessary if the Prudent Investor Rule is to be followed. To conclude my topic, tomorrow I will consider the liability of a trustee with respect to the investment of trust assets.

Thanks for reading,

Rick

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Yesterday's Breakfast Series was very informative (and the breakfast is always a nice treat!).

Suzana Popovic-Montag started off the seminar with an instructive talk on trust issues in an estates context.  Her discussion of leading and recent case-law examining a trustee's discretion to encroach on capital, including Gisborne v. Gisborne (1877), 2 A.C. 300 (H.L.) and Fox v. Fox Estate, included the following observations:

• the Court will not interfere with the exercise of a trustee's discretion to encroach on capital in the absence of mala fides
• the term mala fides should be interpreted with some flexibility
• mala fides is more than just a category of fraud; it includes any act by an executor which is based on matters/considerations "extraneous" to the purposes of the testator
• the question as to the extent of a beneficiary's personal resources should, at first instance, be irrelevant

Suzana gleaned from her review of the authorities that the Court's overwhelming view seems to allow for the broad exercise of discretion on an unfettered basis (presuming the Will provides for it) and the Court will only reluctantly limit that discretion.

Craig Vander Zee followed with an interesting discussion on the removal and/or replacement of a trustee, and Ian Hull spoke about various estate law remedies applicable to estate administrations.  Their papers contain a thorough consideration of these topics that I unfortunately do not have sufficient space in this blog to touch upon.

Have a great weekend!

Natalia

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In Reviczky v. Meleknia, a house was "sold" (unbeknownst to the true owner) by a person acting under a fictitious power of attorney and posing as the applicant’s relative.  The purchaser, an innocent third party, financed most of the purchase price through a mortgage registered on title.  Although the purchaser conceded that he did not have good title, the bank that financed the transaction nonetheless took the position before the Court that its mortgage was valid.  

The lawyer representing the "vendor" sent a copy of the power of attorney to the lawyer acting for the buyer and the bank.  The power of attorney was dated just one month before the sale closed, the donor was over 88 years old and it was only witnessed by one person.  Both lawyers were unaware the document was forged. 

The solicitor for the buyer and the bank did not take any steps to learn about the form, content or validity of the forged power of attorney.   It was held that because the solicitor took no steps to scrutinize the document the bank’s mortgage was void.

It will be interesting to see how this case is applied.  I wonder if it will impact on a solicitor’s duties to “go behind” a power of attorney i.e. where a power of attorney has been signed recently and/or the donor is elderly, must a solicitor ask about the donor’s whereabouts, mental capacity at the time of signing, mental capacity at the time the power of attorney is being acted on etc.?

Thanks for reading,

Natalia

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An offer to settle made pursuant to Rule 49 of the Rules of Civil Procedure can be an extremely effective mechanism to secure a better costs order (see Rule 49.10).  Most offers made outside the ambit of the Rules can also be very helpful to the offeror from a costs standpoint, particularly if such offers (like Rule 49.10 offers) demonstrate that it would have been better for the recipient of the offer to have accepted it. 

However, a low ball offer made at the last minute may have little or no beneficial impact whatsoever.  In Volchuk Estate (Re), a contested passing of accounts application, where such an offer was made by the respondent, the court held that the offer did not have any influence on the quantum of costs that should be ordered to be paid. 

Several factors in discretion under Rule 57.01 that are to be considered by a court when making costs decisions will also likely impact on the quantum of a cost award.   In this case, for instance, the respondent was found not only to have failed to properly account for his activities as attorney for the deceased, but also to have misappropriated funds of the deceased during his lifetime.   While the principal amount of the Judgment against him was in the amount of approximately $40,000, the costs Order rendered exceeded $100,000. 

Thanks for reading,

Natalia

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In guardianship disputes, unlike other estate litigation, you are dealing with a living person, whose needs and wishes must be kept in mind at all times.   For this reason, thorough contemplation of how to approach the case is important to undertake at the outset.

Felice Kirsh recommended some early considerations to keep in mind at the 10th Annual Estates and Trusts Summit, which include the following:

• Think before you start - A guardianship application is a drastic step. Even a consent application will be scrutinized by a judge and medical evidence will likely be required, as the court is trying to protect a vulnerable person who, in effect, is having his/her independence taken away.
• Representation of the incapable person - The incapable person is deemed to have capacity to retain and instruct counsel (section 3(1)(b) Substitute Decisions Act).  If this is not addressed at the outset by counsel, the court will often order representation for the incapable person prior to dealing with the substantive issues.
•  ADR Options - It may be possible to resolve a guardianship dispute (relating to a person over 18 years of age) by having him/her sign a new Power of Attorney.  Other means for resolving such disputes are for the parties to agree to attend a family meeting or mediation as early in the process as possible.

Given the cost and emotional nature of guardianship litigation, I hope these points provide helpful reminders of the caution that should be exercised in these matters. 

Have a good day,

Natalia

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It seems with increasing environmental disasters, marked climate change and the media buzz resulting from the release of An Inconvenient Truth, that environmental consciousness has risen to an all-time high in North America.   While lots of us do our part at home i.e. by recycling, composting and unplugging unused electrical items, more could be done at the workplace. 

I found a write-up on this issue in this week’s Globe and Mail, which noted an astounding claim by GreenPrint Technologies (a company that sells software to eliminate unnecessary pages before printing), that Americans use enough sheets of paper each year to build a ten-foot high wall that would stretch from New York to Tokyo and beyond.  

Despite the 20^th Century predictions of a paperless office, it seems we are far from achieving that goal, particularly in the legal arena where people may be more fearful of relying solely on computer systems to store important documents, and where hard copies of file materials are often required to conduct our practice. 

I wonder whether a truly paperless office is realistic given the nature of our work.  Perhaps the best we can hope for is to significantly reduce our paper usage.  A start may be to send e-mails ending with a message along the lines of “Print only when necessary”, which environmentalists reportedly say have real value.   Other options are to cut down on extending e-mail trails and to avoid sending written communications in multiple forms.

Have a great weekend,

Natalia

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This is the title of an interesting article I read in Perspective (Fall 2007 issue) that reviews some steps and considerations that may help strike the right balance for your family when estate planning, which I have touched upon below.   

1. Talk about the future – ask your children how they see your estate being distributed, correct imperceptions and incorporate others, let them know you do not want a dispute over your estate, and be realistic.

2. Deal with differences – if your children have achieved different levels of monetary success, consider the following questions:

1. Have the opportunities been equal? Take this into account to avoid future resentments.

2. Are current circumstances beyond a beneficiary’s control? If an heir has a medical or physical infirmity you may wish to balance the amount gifted with other benefits they receive.  Think about creating a trust for a vulnerable person suffering from substance abuse or other addiction to ensure ongoing financial structure.

3. Are lifestyle choices a factor?  If you oppose a lifestyle choice, rather than exclude that person consider stipulations on the gift that could allow it to be used for purposes consistent with your family values.

4. What about your family business? If your goal is to maintain the family business and family harmony, one solution is to issue different classes of shares so there is equal ownership and those working in the business retain control.

3. Your Way – it is important that your family understand your thinking in order to avoid misunderstandings and potential litigation, which you can convey to them via a family meeting or a family letter with follow up discussion.

Have a good day,

Natalia

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The fifth annual Intensive Wills and Estates Workshop is coming up!  It was recently announced in the Osgoode Professional Development circular, and is touted as an interactive workshop designed for practitioners wanting to update their knowledge and hone their skills in estate planning and administration. 

Some of the things you will learn are:

· how to take more comprehensive instructions and notes

· techniques for substantiating capacity

· effective strategies for using a roadmap and checklist when drafting

· how to avoid negligence claims when executing a Will

· strategies to avoid or lessen probate fees and estate tax liabilities

· how to handle situations where a challenge to a Will is anticipated

· methods to protect yourself when acting as an estate solicitor in both testate and  intestate situations

· how to manage unusual applications for Certificates of Appointment

The workshop is being led by Jordan Atin, barrister & solicitor (and associate counsel to Hull & Hull LLP), and will be taking place over three Wednesday evenings - January 30, February 6 and February 13, 2008 – from 6:30 p.m. to 9:30 p.m.  

As the nature of the workshop is interactive, it allows for lots of questions and discussion.   Participants will critically analyze and apply the law to the issues covered, and will receive insight from leading practitioners in the area.  They will also be given valuable precedents. 

You can register at www.osgoodepd.ca.  See you there!

Natalia  

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In the latest edition of CCH Will Power (November 2007, No. 155) a Court of Quebec decision in Molnar v. Kovacs was discussed, where a gift was compelled to be returned due to ingratitude.

The mother in this case owned a house and subsequently bought a mobile home with monies loaned to her, guaranteed by a mortgage on her house.  Pursuant to the mortgage agreement, the mother was liable for the loan even if the ownership of the house was subsequently transferred.  The mother moved into the mobile home, and her son and his girlfriend began living in the house, paying rent to the mother of $400/month (which amount covered the mortgage payments). 

The mother later agreed to give the house to her son, evidenced by a signed deed of donation.  The mother then moved back into the house, living there for a time with her son and his girlfriend. The son continued to make the $400 monthly payments to the mother.

Relations between the mother and her son deteriorated, and the mother moved back into her mobile home.  The son stopped making the monthly payments to the mother, and the mother ultimately commenced proceedings against her son to get her house back, based on her son’s ingratitude (pursuant to a provision of the Quebec Civil Code (art. 1836)).

The Court held that by stopping the monthly payments the son demonstrated “seriously reprehensible” behaviour towards his mother (particularly given her age, modest income and ongoing obligations to meet her mortgage payments), ordered that he return the house to his mother and declared that the mother was the owner of the house retroactively to the date of the donation of the house.

Have a good day,

Natalia Angelini  

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Last week Justin de Vries blogged on the all too common situation where family members of an incapable person feel frustrated and marginalized while a loved one is being legally cared for by someone they do not like or trust.  While reading a recent article in the Globe and Mail by Rebecca Dube, I couldn’t help but see how the feelings of frustration and marginalization can be exacerbated by the complicating circumstance of a loved one striking up new romance. 

Ms. Dube notes that it is common for people with various forms of dementia to forget that they are married and to fall in love with another person.  The forgotten spouse is usually left either struggling with the new state of affairs or coming to a place of acceptance.  The latter may be a difficult thing to accomplish.  However, Sandra Day O’Connor, a retired Judge of the U.S. Supreme Court, has done exactly that.  Her husband of over 50 years recently moved into a nursing home and, after initially dealing with depression, commenced a relationship with a woman there who, like him, suffers from Alzheimer’s.  While Ms. O’Connor reportedly felt relieved that her husband finally was content in his nursing home, others may have a harder time getting over the grief and anger of losing their spouse in this way.

Ms. Dube’s article reminds us of how important it is to recognize that people with dementia still feel emotion and continue to have a need for love and intimacy.  The difficulty, particularly for a spouse who is also the legal caregiver of their incapable partner, is not letting the devastation felt in such circumstances get in the way of their decision-making, which must be guided by what is in the best interests of the incapable person.

Have a good day,

Natalia Angelini  

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In Singh Estate v. Shandil, 2007 BCCA 303, the testator had executed a 2003 Will and an accompanying Statutory Declaration (SD). The SD contained a clause forgiving a $100,000 loan to the testator’s daughter.   

The testator’s relationship with his daughter subsequently soured. In 2004, he signed a document purporting to revoke the SD. He also swore a new Will which specifically instructed the executor to collect the loan. A demand was made for repayment. Shortly thereafter, the testator died and his estate commenced a claim for repayment.

At first instance, it was found that the daughter met the two required elements to establish a gift, namely, that the donor intended to make a gift, and that the donor delivered the gift.  It was also found that the SD was irrevocable as there was no express power to revoke (an implied power won’t suffice). The estate trustee argued that because the 2003 Will was referenced in the SD, the SD was merely designed to explain the provisions of the 2003 Will, and was thereby a testamentary document.   The judge did not accept this argument (I recommend reading the case to get a full flavour of the circumstances), and the trial decision was upheld by the British Columbia Court of Appeal.  

So when your client intends to document his/her forgiveness of a loan made to a loved one, it might be worthwhile to consider including a revocation clause in the SD, or like document.  That said, I wonder whether it is a viable option in practice. Perhaps waiting until your death (by forgiving a loan in your Will) is a simpler and better way to approach it.

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In the September, 2007 edition of Will Power, you will find an article with the above-captioned title, where the author comments on Bolduc v. Carrier, 2006 QCCS 5485, a decision of the Quebec Superior Court with an interesting and tragic fact-scenario.  

The parents of Anthony, a three-year old boy with brain cancer, set up a trust for monies donated by the public to help pay for Anthony’s medical care. More than $450,000 was donated and deposited into the trust account. Anthony’s parents were the joint settlors of the trust, and three trustees were named, Anthony’s father, Anthony’s aunt and a family friend. 

Anthony sadly died a few months later.  At that time approximately $200,000 was remaining in the trust (about $250,000 of undocumented expenses had been paid out).  In addition to an accounting issue raised in respect of the spent monies, which I will not address in this blog, the trustees couldn’t agree on what to do with the trust balance. Anthony’s father wanted the money to go to him and his wife, and relied on the Quebec Civil Code (article 1297) to support their position. The other trustees wanted it to go towards payment for “sick children and their care”, pursuant to an article in the trust deed that granted the trustees the discretion to use the funds in that manner.

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An article in Saturday's Globe and Mail with the above-captioned title caught my eye. The author, Tim Cestnick, sends the message that "doing nothing - that is, refraining from certain transactions" - can often make sense in tax planning. To illustrate his point, he shared a story of Ruth, an elderly woman with a dilemma involving her cottage and her children. 

Ruth owns a cottage that she rarely uses. The cottage was purchased for $50,000 in 1975, that same amount was invested in it over the years, and it is currently worth $500,000. Ruth decides to give the cottage to her two children. The problem? If she does so, she'll be deemed to have disposed of the property at fair market value, which could trigger a taxable capital gain and a potential tax bill of almost $100,000. That result isn't workable for Ruth, particularly as there will be no sale proceeds available to pay the tax bill.

While it was noted in the article that Ruth may be better off waiting until she dies to transfer the cottage to her kids (this will defer tax until that time), the fact is that she wants it transferred now for sentimental reasons. The solution? "Sell" the cottage to her children for fair market value in exchange for promissory notes. The notes will be worded such that Ruth will collect the proceeds over at least five years. This will allow Ruth to pay tax on her capital gain over a five-year period. As Ruth has no intention of collecting on the notes, she will make sure to forgive the promissory notes in her Will (which will have no adverse tax consequences).

This article illustrates how a creative approach tailored to a person's unique circumstances is often needed in tax and estate planning. Mr. Cestnick reminds readers to visit a tax pro if you hope to try this, and I would recommend consulting with an estate planning lawyer as well. You should also tune in to Ian Hull and Suzana Popovic-Montag’s recent pod-casts focusing on cottage properties.

Have a good day,

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This summer's edition of VOX announces the unveiling of the newly renovated Toronto Lawyers Association's (TLA) Lawyers Lounge (located at 361 University, 2nd Floor), and highlights some of its features, which I review below. 

Aside from the Lounge sporting a modern and functional new look, the upgrades and benefits include easy access to courthouses, wireless internet and a generous working space.  While downtown practitioners make frequent use of the Lounge, it is especially helpful for members who practice outside the city centre.  With the library just one floor above, it also makes for a handy place to work when preparing for court or during breaks between court attendances.  Another option TLA members should contemplate is using the space to hold meetings, functions and receptions.  

The new digs are an additional perk offered to TLA members that should be enjoyed.   A great time to drop by will be at the Open House scheduled for September 10 - 14, 2007.    

Have a good weekend!

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Can a dependant's need only arise once?  This was the question recently answered by the Manitoba Court of Appeal in Zenyk v. Kowalyk [2007] M.J. No. 135.

In this case the deceased, a mother of four, provided in her Will that two of her children, including her son with cerebral palsy, could live in her house for one year after her death, after which time the house was to be sold and the proceeds added to the residue of her estate.   The one year anniversary of the mother's death came and went, and the son never moved out of the house.  When two of the daughters brought an application for an order to remove him, he brought a dependant support application seeking possession/transfer of the house. 

There was no dispute that the son fell within the definition of a "dependant" at the time of his mother's death.  However, the son's application was commenced pursuant to a legislative exception to the six-month limitation period (see section 6(3)(b) of The Dependants Relief Act, C.C.S.M., c. D37).  The daughters argued that his application should be denied, because in order to fall under that exception the son's need could only arise once, after the expiry of the limitation period. 

While the trial judge agreed with the daughters' argument, the Court of Appeal did not.  In coming to its decision, the Court found that the trial judge's approach was not in keeping with the remedial purpose of the Act. Its interpretation of the Act contemplates the court being able to consider the changing circumstances of a dependant.

This decision reveals Manitoba's perspective is drawing closer to Ontario's, which has legislated that courts have the discretion to allow, if they consider it proper, an application to be made at any time as to any portion of the estate remaining undistributed at the date of the application (see section 61 of the Succession Law Reform Act, R.S.O. 1990, c. S.26).

Have a great day!

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As litigators, we use the Rules of Civil Procedure to ensure the required procedural steps are taken when preparing, serving and filing court materials.  However, when it comes to estate matters knowing the Rules isn’t always enough.  

For instance, the Toronto estates court office recently refused to allow a guardianship application to proceed together with an application seeking a passing of attorney accounts, notwithstanding that they were related matters and that there is no such requirement to commence two separate applications under the Rules or applicable legislation. 

To avoid this type of situation happening to you, I recommend familiarizing yourself with the practice of the estates court office you are dealing with, which may have its own protocol. Reading the Practice Directions will also assist. In so doing you will learn, for example, that while pursuant to the Rules a notice of application can be issued by a court office either on its own or as part of an application record, the Toronto estates court office will not issue a notice of application if it is not accompanied by the record.  

While the obligation to have an application record assembled at the get go can become a hindrance when an urgent court date is needed for interim relief, i.e. a motion for a certificate of pending litigation, one way to cope in that circumstance is to have a Caution registered on title to the property in question, which will give you a 60 day window to get your application materials completed and your motion date booked. 

Hope this helps!