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.
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!
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.
Having recently posted a blog on bad neighbours, you can well imagine my shock when I rounded the corner this week and saw what appeared to be an OPP paddywagon parked in front of a house on a fairly white bread, middle class street in Nothing-Ever-Happens-Here-ville, Ontario. A white box van with blue and red stripes – you know the one. As I slowly passed the van, admittedly hoping to glean some fodder for juicy neighbourhood gossip, nothing prepared me for the words ‘CRIME SCENE CLEANERS’ on the side of the vehicle.
Crime & Trauma Scene Cleaners Inc., a division of Biohazard Canada, and a licensed member of the Canadian Association of Decontamination Specialists, operates in Ontario, Quebec, Manitoba, Saskatchewan, Alberta and B.C. Their website states that they are ‘committed to helping people when tragedy strikes’ and that their objective is ‘to restore safety to an environment in the most professional and discrete manner possible. This relieves family members or employees of the emotional and traumatic task of cleaning up after a suicide, homicide, decomposition, accidental death, etc.’ For those of you reading this blog on your lunch hour, feel free to defer your perusal of the graphic photo gallery of various before and after crime scenes. Very Dexter, indeed.
The company, and their 34-year old president, Christian Cadieux, who has occasionally been referred to as ‘Death’s Janitor’, are getting wide and witty press coverage:
Cost? In an interview with George Stromboulopoulos on The Hour, Mr. Cadieux mused that the cleanup of the accidental backseat head shot in Pulp Fiction would set one back about $4,000 to $5,000. Although I’m still trying to figure out how you would explain this kind of expense to your insurer….
An article from mental_floss magazine has showcased ten things a body can do after death. My particular favourites are:
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.
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.
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.
The moment of death is obviously the seminal triggering event in the context of estate and trust law. As but one example, a Will speaks from the moment of death.
A recent article in the National Post raises an interesting question regarding when death actually occurs and how it is defined. There is a medical difference between "cardiac death" and "brain death." As the article notes, the issue is of most concern in the context or organ donation. Simply put, the cardiac death protocol provides that declaration of death may be made 5 minutes after cardiac death. However, in extremely rare instances, case have been reported of a "Lazarus syndrome" and "auto-resuscitation" as long as ten minutes after cardiac death. In any event, a person may still have brain activity for a period of time after cardiac death.
As Jocelyn Downie, an ethicist at Dalhousie University notes: "It is only after the declaration of death that certain things can happen: we can take your organs, we can bury you, we can do an autopsy...we can trigger all sorts of things around your property." Downie advocates a more rigid definition.
Legislation in most provinces suggests that death is to be determined by physicians according to "current medical practice." PEI's law is more specific (death can "include brain death"). In Quebec, there is no legal definition at all: the matter is left completely to the physician.
Ontario's Trillium Gift of Life Network endorsed the new donation-after-cardiac-death (DCD) protocol only after extensive research and consultation that ensured it is a moral and medically appropriate practice.
Death planning now includes options like buying your coffin at your favourite retailer, purchasing jewellery keepsakes that hold a loved one's ashes, and even treating mourners at your funeral to ice cream.
For my final blog of the week, I thought that it would be appropriate to discuss Death Planning. In my limited experience, I recognize an ingredient of success is the ability to adapt to change. Changing ideas about traditional funeral and burial practices are bringing change to this industry. A recent article in the New York Times by Gabrielle Glasser discusses personalizing your funeral service.
Despite being in financially weary times, Glasser notes that your funeral is your last chance to be a big spender. Peter Moloney and his six brothers own six funeral homes on Long Island and have catered to customers who wish to have a customized send-off. For instance: “Bike lovers pay an extra $200 or so to take their last ride in a special hearse towed by a Harley-Davidson motorcycle. Gardeners select wildflower seed packets to include with their funeral programs. One gentleman wanted to be remembered for comforting his grandchildren with ice cream, so, after the funeral, mourners were greeted by a man in a Good Humor truck, handing out frozen treats.”
I have yet to hear of a funeral home that caters to customized send-offs north of the border, but I presume that we may be a little bit more reluctant to abandon our traditional religious funerals in favour of secular ceremonies.
Before I sign-off, I would like to point out that tonight is the final game of the Stanley Cup Playoffs. Two of the greats will be playing tonight for Pittsburgh, Sid the Kid and Evgeni Malkin. If you tune in tonight, I am sure that you will get the opportunity to see them outskate the older, and slower Detroit Red Wings. Looking on with anticipation…
This week on Hull on Estates, Megan Connolly and Sean Graham review the Golubchuk case out of Manitoba and discuss the Health Care Consent Act of Ontario.
Megan Connolly: Hello and welcome to Hull on Estates. You’re listening to Episode #123 on Tuesday, August 12th, 2008.
Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada. Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and Wills. Now, here are today’s hosts.
Megan Connolly: Hi and welcome to another episode of Hull on Estates. I’m Megan Connolly.
Sean Graham: And I’m Sean Graham.
Megan Connolly: If you want to be heard on Hull on Estates, you can participate in our discussion by leaving a comment. Give us a call at 206-350-6636. The number is in the show notes along with our e-mail address which is hull.lawyers@gmail.com or you can visit our blog at estatelaw.hullandhull.com.
Sean Graham: Hi Megan, how are you?
Megan Connolly: I’m fine, how are you?
Sean Graham: Pretty good thanks. Well we thought we’d start off today by speaking about the Golubchuk case out of Manitoba and then segway into discussion of the Health Care Consent Act of Ontario which would have applied in the Golubchuk case had it been an Ontario case, but of course, it was Manitoba. So maybe Megan, if you can just sketch out the Golubchuk case it might be helpful.
Megan Connolly: Sure. The case arose at the end of 2007 in November, where an elderly man was admitted to the hospital and was severely ill. At the time he was admitted he couldn’t breathe on his own, he was on a ventilator, there was a tube down his throat, his brain was functioning but not very well; he couldn’t walk, he couldn’t speak and as a result of a cardiac condition, his heart wouldn’t beat properly.
Sean Graham: And it seems that the doctors, or some of the doctors at least, seem to have been pretty sure that Mr. Golubchuk was not going to recover and that continued life support measures, or extraordinary measures, whatever term you want to use, were not benefitting him and it seems as though the doctors, most of them at least, were of the view that life support should be discontinued. On the other side, it looks as though some of Mr. Golubchuk’s children felt differently and wanted to prolong his life.
Megan Connolly: Right. So what the doctors wanted to do, as you said, was remove the patient from the ventilator which isn’t an unusual thing to do when doctors have decided the person is not going to get better and, of course, when the family agrees. Now in this case, the elderly man’s children said first of all, that the removal of the ventilator or the withdrawal of the life support would require the consent of the children, that the removal of the ventilator or life support by the doctors would constitute assault and would constitute battery, in that it would, at a minimum, hasten the elderly man’s death. Another issue that was raised was the fact that the withdrawal of the life support would seem to contravene the man’s religious beliefs. He was an Orthodox Jew, and the analogy they used was imposing blood transfusion on a Jehovah’s Witness. I guess the religious belief for Jehovah’s Witnesses would preclude the use of a blood transfusion.
Sean Graham: So I understand that it looks as though the hospital was of the view that the family did not understand adequately at least, the seriousness of Mr. Golubchuk’s condition, that the conclusions reached by the doctors were acceptable and conformed to the standards the doctors felt themselves needed to apply, that the withdrawal of the medical treatment could well be in Mr. Golubchuk’s best interest, even if it meant that he would succumb to his illnesses, and that the decision to withdraw medical treatment is that of the physician and not that of the patient or the Courts. And so it was quite an argument that was set up in this case between the family and the medical professionals.
Megan Connolly: Now, in November 2007, the family won a Court injunction preventing the doctors from withdrawing life support and a few weeks later the Court ordered that the matter be set down for trial. Now, while this took a toll on the family, it also took its toll on some of the doctors at the hospital. A number of them resigned, saying that their personal conscience and their professional ethics prevented them from continuing to provide medical interventions that, in their mind, would harm a patient without any prospect for future benefit.
Sean Graham: Even though the matter was set down for trial, it never made it to trial because Mr Golubchuk died. And so the delays we often encounter in the trial system in this case really meant that there was a tremendous amount of controversy and difficulty and stress, and in fact that the system did not end up giving the parties the chance to argue the matter and find out what the Court would have believed at the end of legal arguments.
Megan Connolly: Now the family had originally brought a law suit against the hospital, although last week I saw an article saying that they’d since abandoned the law suit. So I guess with respect to this matter, nothing further is going to happen in the Court system.
Sean Graham: Yeah, it looks that way. And I think it’s helpful to turn to the Act in force in Ontario that would cover some of these issues, and that’s called the Health Care Consent Act. And Section 10 of the Health Care Consent Act talks about needing consent before treating a patient.
Megan Connolly: And what that Act says, is that when a doctor, or I guess a health care practitioner, proposes treatment for someone, they can’t administer their treatment unless the person consents to it.
Sean Graham: Now the question, of course, is what’s consent?
Megan Connolly: Um hm.
Sean Graham: And so the Act helps us out there also by stating out the elements of the consent, and there’s four elements. I’ll just go through them. The first is that the consent must relate to the treatment, so that’s fairly self-explanatory. The second is that the consent must be informed so the patient must have some understanding of exactly what they’re getting into. Third, and this is kind of obvious I think, but it’s there anyway, the consent must be given voluntarily. And then finally, which is also obvious, the consent must not be obtained through misrepresentation or fraud.
Megan Connolly: And this goes into, I guess, the next aspect of consent, which means it has to be informed consent. Now the issue of informed consent has given rise to enough litigation although it’s probably the purview for today, but I guess, basically put, the patient needs to be provided with sufficient information about the treatment so that they can, in a knowledgeable and informed way, consent to it.
Sean Graham: And the statute goes into a little bit more of a definition stating that the consent is only informed if, before giving it, the person consenting received the following information, and there’s a list in subsection 11(3) of the Health Care Consent Act. There’s six items. The first is that the person needs to know sufficient information about the nature of the treatment; (2) is the expected benefits of the treatment; (3) the material risks of the treatment; (4) the material side effects of the treatment; (5) alternative courses of action; and then (6) the likely consequences of not having the treatment.
Now in Mr. Golubchuk’s case, I’m not sure that would have ever been possible for Mr. Golubchuk. It’s not clear to me whether he had any chance really, before he was in the position that led to this case, whether he had any chance to obtain treatment. But certainly by the time this case came to the forefront, he did not have capacity and so a different section of the Act, which is entitled “Consent on Incapable Person’s Behalf” would have applied, and maybe you can just take us through that, Megan.
Megan Connolly: Right, so as you said, I mean it’s great for someone to consent, but it’s not unusual for someone to just not be able to consent, and in this case I think the man was in a coma and couldn’t speak and didn’t really understand what was going on around him. So you can’t have informed consent, but obviously it doesn’t make sense to say, well we’re just not going to treat someone if they can’t consent. So when somebody is incapable of consenting to treatment, and that doesn’t mean they won’t consent to it because they don’t want to but they’re mentally or physically incapable of providing that consent, the Act provides for a list of people who can give or refuse consent on the person’s behalf. There are eight different people, starting with the person’s guardian of the person or their attorney for personal care, if they have one. They don’t always have one. The next person to be able to give consent is somebody who has been appointed as the incapable person’s representative by the Consent and Capacity Board. After that it would be the incapable person’s spouse or partner. Next it would be the children or parents of the incapable person.
Sean Graham: And if there is the Children’s Aid Society or it’s a situation where the Children’s Aid Society has lawful authority to give that consent, they can stand in the place of the parent. And it’s noteworthy that this paragraph does not include a parent who has only a right of access. So this could have family law ramifications as well if spouses are in the course of or have completed matrimonial litigation.
Megan Connolly: So the parent who only does have a right of access may have the right to give the consent to treatment on the person’s behalf but not if there’s a parent who, I guess, has custodial rights. And after that it’s a brother or sister, then any other relative. Now like I said, this is a rank order, so number one is the person’s guardian of the person and then you go down the list if no one else can provide consent.
Sean Graham: Now one aspect I found that was interesting in this is that the meaning of spouse is defined, and it makes a certain amount of sense because it needs to be clear that a spouse making this choice has to be a spouse under an ongoing relationship. Subsection 8 of Section 20 states that “two people are not spouses for the purposes of this section if they are living separate and apart as a result of the breakdown of their relationship”. I think it’s pretty clear why that section is in there.
Megan Connolly: Now when it comes to giving or refusing consent, the person just can’t do it arbitrarily. There are certain principles that they have to take into consideration when making a decision.
Sean Graham: Now that’s someone appointed under this section.
Megan Connolly: Yeah.
Sean Graham: An individual deciding on their own, my understanding is as long as they are capable, they in fact, could be arbitrary.
Megan Connolly: Right.
Sean Graham: But, a substitute decision-maker is a different kettle of fish.
Megan Connolly: So the first thing they have to take into account is whether they are aware of any wish the person has made previously that would deal with situations where consent had to be given. So when capable, had they always been clear that if they were incredibly ill and weren’t going to recover, maybe they’ve stated while capable that they’d want support withdrawn. Alternatively, maybe they’ve said the opposite.
Sean Graham: There’s a list in Section 21 of the Act that sets out the factors to go into this. I think that, for the purpose of wrapping up, I think that maybe one of the best principles to come out of this is to be very careful in choosing an attorney for personal care because that is really the only way that someone can exercise any kind of control in planning for a situation where someone else is going to have to make the decision for them. I guess you can tell your family members but you’re not really sure who’s going to be around and who’s going to be making that decision. So it seems to me the best way to try to have some control over these types of decisions is to appoint an attorney for personal care to make them on your behalf and then have a long heart-to-heart with that person, maybe more than one, as the years go on, in order that they will have some background in order to help them make that decision.
Megan Connolly: Right. So thank you very much. It’s been nice talking to you, as always, Sean.
Sean Graham: Yeah, thanks a lot, Megan. It was certainly a pleasure and I look forward to podcasting with you again soon.
Megan Connolly: Well I think that brings us to the end of this week’s discussion. Thank you for listening and thanks for joining me today. And we look forward to hearing from our listeners, so you can send us an e-mail at hull.lawyers@gmail.com or just pick up the phone and leave us a message on our comment line at 206-350-6636. Be sure to visit our blog at estatelaw.hullandhull and the and is a-n-d not ampersand .com where you’ll find even more information and discussion on today’s practice of estates law. We hope you enjoyed the show. I’m Megan Connolly.
Sean Graham: And I’m Sean Graham, until next week, so long.
This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.
To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.
Our theme music is Upper Structure by DJ AKid and is courtesy of the Podsafe Music Network.
This week on Hull on Estates, Natalia Angelini and Craig Vander Zee discuss dependant relief and reference a variety of cases that utilized the Succession Law Reform Act.
Natalia Angelini: Hello and welcome to Hull on Estates. You’re listening to Episode 117 on Tuesday, July 1st, 2008.
Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada. Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills. Now, here are today’s hosts.
Natalia Angelini: Hi and welcome to another episode of Hull on Estates. I’m Natalia Angelini.
Craig Vander Zee: And I’m Craig Vander Zee.
Natalia Angelini: If you want to be heard on Hull on Estates you can participate in our discussion by leaving a comment, give us a call at 206-350-6636. The number is in the show notes along with our e-mail address, hull.lawyers@gmail.com or you can visit our blog page at estatelaw.hullandhull.com. So welcome everyone, it’s Canada Day.
Craig Vander Zee: Happy Canada Day to you, Natalia.
Natalia Angelini: Thank you. I’m thrilled to be at work on Canada Day and podcasting with you, Craig.
Craig Vander Zee: It’s certainly my pleasure as well.
Natalia Angelini: Great. So why don’t we get started. Today we’re talking about dependants relief and in particular, we’re going to be discussing the case of Cummings and Cummings and some of the subsequent cases that have applied it.
Craig Vander Zee: Well starting off, Natalia, as we know, the Succession Law Reform Act governs the rights of beneficiaries to receive support and other benefits upon the death of an individual. And more specifically, without getting into the wording of Section 58, it’s Section 58 which enables one to make this application to the Court for dependant support.
Natalia Angelini: That’s right and that’s what happened in Cummings and Cummings and perhaps, Craig, you can tell our listeners what the decision was in that case.
Craig Vander Zee: Well I think before heading into the decisions on Cummings and Cummings, it’s really important to really understand what we’re talking about today, that whether moral and ethical considerations find their way into the consideration of a judge in the Court when a dependant support claim is being considered. And what is certainly, Cummings is well recent in jurisprudence, it’s certainly not recent in the sense of it just coming out. But what was interesting in Cummings is that the Court of Appeal said that prior to 1978, while moral and ethical considerations were important in dependant support claims, or at least that they were thought of as considerations, the Ontario Court of Appeal had not considered to what extent they’re taking into consideration given the new legislation. Because prior to 1978, and prior to the Succession Law Reform Act, Ontario had a prior Act which was called the Dependant’s Relief Act. And in 1978, when the Succession Law Reform Act came into being, Section 58 was then the enabling Section in the legislation and what the Court of Appeal was saying is, that this particular aspect, moral and ethical consideration, had not been specifically considered by that Court and how it would affect the actual Section. And that’s why Cummings is important, because it’s really the first time in excess of 20 years that the Court took a look and actually focused on how and in what manner moral and ethical considerations are to be regarded when a dependant’s support claim is brought.
Natalia Angelini: Exactly, great point, Craig. And what the Court of Appeal did find in Cummings was that when examining all of the circumstances of a dependant support application, the Court has to consider two things. Firstly, what legal obligations would have been imposed on the deceased had the question of provision arisen during his or her lifetime. And secondly, what moral obligations arise between the deceased and his or her dependants as a result of society’s expectations of what a judicious person would do in the circumstances.
Craig Vander Zee: And the Court found its way to that reasoning, in part, based on the Supreme Court of Canada’s decision in Tatteron and Tatteron which was a 1994 decision by the Supreme Court of Canada. And what distinguishes Tatteron is it was a decision that arose out of B.C. and was a decision that was considered in the context of British Columbia’s Wills Variations Act. And the Court, at that point in time the Court being the Supreme Court of Canada, found that a deceased’s moral duty towards his or her dependants is a relevant consideration in a dependant’s relief application and that judges are not limited by simply conducting a needs based economic analysis in determining what disposition to make.
So, while the thought might have been prior to Cummings, at least in Ontario, that it’s a needs based decision, the Court said in Cummings, no, we’re going to rely on what the Supreme Court of Canada said in Tatteron that takes it one step beyond a needs based analysis. And while there were differences perhaps, obviously between the British Columbia Wills Variation Act and the Succession Law Reform Act, the Ontario Court of Appeal just essentially came to the conclusion that those disparities weren’t important and certainly not important enough to have this not being a consideration. And so clearly then, the Court of Appeal enunciated that a needs based analysis is not the end test. The end test is to consider moral and ethical considerations. And with that, I think we then turn to the Cummings decision and the facts to see why the Court might have come to that decision.
Natalia Angelini: Okay, great. Why don’t I turn to the facts of the case? So, I’ll just succinctly set them out. Essentially Mr. Cummings died leaving a widow, a former spouse and two children, Paul and Elizabeth. And they were children from his marriage to his former spouse. So, his children were dependants under the SLRA, there was no dispute about that. And one of the children, Paul, even though he was an adult, he suffered from Muscular Dystrophy, so it was also not in dispute that his future care would far exceed the value of the deceased’s estate.
Craig Vander Zee: I think what’s important in Cummings to point out is that the two children, the daughter was 18, she was attending university, and the son, who you’ve just mentioned who was unfortunately suffering from Muscular Dystrophy, was 24 years old. And it wasn’t argued as between the parties that the son’s future care wouldn’t exceed the assets in the estate. And what happened was that the widow and the first wife both did not make dependant support claims. It was essentially clear, my understanding that they didn’t need support and had agreed, or at least weren’t making dependant support claims. So that it was really the claims being advanced on behalf of the children. And the actual claims themselves were for payment of arrears of child support ordered in the judgment for divorce. I guess the deceased had arrears outstanding. And then also to provide for a trust as set out in the Will for both of the children, and then also seeking additional payments for support. Now the twist on this is that there was only $135,000 in the estate, unless you clawed back assets under Section 72 of the Succession Law Reform Act that would allow for the estate to be of an increased value. And when the assets, being a cottage property and the matrimonial home and the deceased’s RRSPs, all of which the widow had interest in or was a designated beneficiary of, were clawed back in, at least his portion, the estate had a value of $637,000. And so that’s what the Court was left with in deciding how to deal with that amount.
Natalia Angelini: Right, and the Court concluded that in all of the circumstances, that the support should be set at $250,000 and that was to be payable by way of a lump sum with a maximum of $10,000 for the daughter to complete her Master’s degree and the balance of it to go to care for the adult son. In addition, the Court also ordered that support arrears, in just over $50,000 should be paid to the former spouse.
Craig Vander Zee: And really, one of the important things, what the Court tried to do, was to balance the varied interests of the parties before the Court. And the Court of Appeal held that moral considerations are not something to be contemplated in addition to or in isolation from the factors that are listed in the Succession Law Reform Act when considering an application. And so it is something that, in the context of a dependant support claim, that needs to be at the forefront of the parties. And while there have been a number of decisions about Cummings since Cummings came out and again, it’s a 2004 decision, really the aftermath of Cummings is yet to completely unfold. There have been a number of cases, but in many of these cases as might be anticipated, you have situations where you would think that dependant support would be given in the context. And so it’s difficult to actually, perhaps, isolate the exact amount that’s factored or that’s being included because of a moral based decision versus an economic needs based analysis. But a couple of those decisions we can talk about briefly right now, Natalia.
Natalia Angelini: Great, so why don’t we start with an interesting case by the name of Simpson and Leardi. It’s a 2005 decision of the Ontario Superior Court of Justice. And in that case, the deceased had left a substantial estate of about $10 million and the plaintiff, herself, had about $3 million. But she was seeking support under the SLRA and she had already been awarded interim support of about $2700 a month.
Craig Vander Zee: Yeah, I think the important thing there is that the Will left her $1,000 per month and that she had already brought an interim support proceeding where the Court granted her $2750 per month. And at this point, that is, the point in time where it was before the Court, the estate trustees were bringing on a motion to cease, terminate that increased support on the basis that she no longer had a need for it.
Natalia Angelini: Right and the plaintiff was defending that motion and cited Cummings to support her argument that when the moral duty of the deceased is to take her into account, that she should get her fair share of the wealth. And she did concede, however, that on a needs based analysis, she would not likely obtain a support order. However, she still maintained that the interim order should continue.
Craig Vander Zee: And the judge here took a look at the situation and said, well no, what you’re really trying to do is to expand upon Cummings here. The plaintiff was making the argument that really what should be done is you’re taking into account the respective wealth of the parties and reapportion that wealth in a fair manner because the estates were $10 and $3 million respectively. And the Court said, no, no, no, we’re not going that far on this. We’re going to terminate the interim support. The application for support is still ongoing so it’s important to remember here that the judge wasn’t making a decision in a final way as to the support. But the judge just said on an interim basis, no, you’re not going to make an argument here based on equalization of wealth. That’s not what Cummings stood for. And as a result, the interim support was cancelled but the application for support continued and that might be pursued by the plaintiff.
Natalia Angelini: Right and one of the things that the Court might have taken into account when making that decision was that the plaintiff’s personal financial circumstances had improved since the interim order. So that might have just been one nuance that assisted in that determination being made.
Craig Vander Zee: One other case to consider, Natalia, is the case of Broderick I’m going to have problems here pronouncing this one, so thank you for letting me be the one to pronounce the name, Papathousiou. Anyways…
Natalia Angelini: No, no, no, Papathanasiou.
Craig Vander Zee: Okay, well…
Natalia Angelini: for all the Greek people out there, I hope haven’t offended.
Craig Vander Zee: What I can say is it’s a 2006 case, the Ontario Superior Court of Justice. And in this case, Miss Broderick contended that she had lived with the deceased in a common-law relationship for eight years prior to his death, and the deceased had not provided for her in his Will, or even during her lifetime. Miss Broderick had earned even in some years more money than the deceased, but they lived in residences owned by the deceased. I guess they had moved a couple of times but on each occasion, the funds for the residence and the ownership of the residence was in and had been provided by the deceased. And she brought a dependant support claim asking the Court for an order that support be provided to her under the Succession Law Reform Act.
Natalia Angelini: So the Court essentially found in favour of Miss Broderick in this matter and it found that contributions by her to the deceased, both to his personal and financial well-being to the detriment of her own finances, should be recognized by an award from the estate. And the Court, in making this decision, cited Cummings. However, making that determination, the Court also found that there weren’t enough assets in the estate to provide for Miss Broderick so it ordered that the deceased’s condominium be sold and that she get one-half of the net proceeds in recognition of her contributions.
Craig Vander Zee: And it’s, you know, in these kinds of cases, sometimes it’s difficult to know if Cummings had not been a case that had come around in recent years what she would have received. But, you know, clearly the Court found that she had contributed to both the personal and financial well-being of the individual. And also, what is intriguing about these types of cases is that they appear to be situations where there would have been a possibility of dependant support. In this particular one, they had found that she had contributed to the finances and to his personal well-being and had not been compensated, although that was clearly to her detriment. So the Court, in making that finding, as you said, Natalia, relied on Cummings and the deceased’s moral duty towards her as a dependant and that being a relevant decision.
Given our time today, I don’t think we’re going to get into the other cases. But there are some others to consider which are: Reid v Reid, it’s a 2005 Ontario Superior Court of Justice case. And then also the case of Pirelli and Foley Estate, which is a 2006 decision of the Ontario Superior Court of Justice. And what’s interesting, just quickly about Pirelli is that it appears to expand on the reasoning in Cummings where the judge, in this particular case, said after you look and identify all the dependants who make a claim on an estate, then the Court must tentatively value those claims of those dependants by considering the factors set out in the legislation and the legal and moral obligations of the estate to the dependants. But, and here is what seems to be the addition to it, is that the Court must identify those non-dependant persons who may have a legal or moral claim to a share of the estate. And then the Court must attempt to balance the competing claims to the estate by taking into account the size of the estate, the strength of the claims and the intentions of the deceased amongst other things. And so while it is unclear, for sure, where Pirelli leaves us, and whether that would be followed in another case, it does give us some view into a crystal ball as to where these types of claims may be going in the future. And so, again, the aftermath of Cummings is not yet known, but certainly and without a doubt, it’s being applied by Courts in Ontario.
Natalia Angelini: Absolutely. Thanks, Craig.
Craig Vander Zee: And with that, I bid you a good Canada Day and I hope you enjoy the fireworks tonight.
Natalia Angelini: It was a pleasure podcasting with you and we look forward to hearing from our listeners. So you can send us an e-mail at hull.lawyers@gmail.com or just pick up the phone and leave us a message on our comment line at 206-350-6636. Be sure to visit our blog at estatelaw.hullandhull.com where you’ll find even more information and discussion on today’s practice of estate law. We hope you enjoyed the show. I’m Natalia Angelini.
Craig Vander Zee: And I’m Craig Vander Zee. Until next week, so long.
Natalia Angelini: So long.
This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.
To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.
Our theme music is Upper Structure by DJ AKid and is courtesy of the Podsafe Music Network.
This week on Hull on Estates, Diane and Paul discuss accounting under the powers or attorney, the duty to account after the guarantor has passed away and the De Zorzi Estate v. Read case (2008, O.J. No. 944).
Paul Trudelle: Hi and welcome to Hull on Estates. You’re listening to Episode #113 on Tuesday, June 3, 2008.
Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada. Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills. Now, here are today’s hosts.
Diane Vieira: Hi Paul, how are you?
Paul Trudelle: Oh hi, Diane, very good, how are you today?
Diane Vieira: I’m good.
Paul Trudelle: We are podcasting together again and today we thought we’d talk about the issue of accounting under Powers of Attorney and the duty to account after the grantor of the Power of Attorney passed away.
Diane Vieira: So we’re going to discuss a 2008 Ontario decision, De Zorzi Estate v. Read.
Paul Trudelle: And we’ll have a link to that on our website. This is an interesting case that just came to our attention. It was released just recently, in March of 2008. Megan Connolly blogged on it earlier last week and we thought we’d go into a little more detail in our podcast today.
Diane Vieira: So this is a case which discusses the duty of an attorney to disclose financial records for the grantor of a Power of Attorney.
Paul Trudelle: Right, and it’s an interesting case because there, there was a Power of Attorney that was granted. The grantor passed away and the beneficiaries sought to get an accounting from the attorney after the death of the grantor.
Diane Vieira: Why don’t I just give a bit of the background to the case and the different parties?
Paul Trudelle: Sure, that’d be great.
Diane Vieira: The respondents in this case were the residual beneficiaries of the estate. And the other side was a person who was both attorney and estate trustee.
Paul Trudelle: I think that’s pretty important and we’ll talk a bit about how important that is down the road.
Diane Vieira: And the beneficiaries had the question with respect to what happened to some bank accounts, prior to the death of the grantor.
Paul Trudelle: Right, and that would be relevant because the question was, what assets fell within the estate at the time of death? So the actions of the Power of Attorney prior to that would be very relevant to the size and nature of the estate.
Diane Vieira: And in this case, the grantor, there was no question that she was competent and that she never became incapable and actually there was evidence before the Court that she was the one making the financial decisions prior to her death.
Paul Trudelle: Right, and I think that’s an important factor as well. This was not the case where there was an incapable grantor who wasn’t able to look after her affairs. I think that would be a much easier case for getting disclosure in accounting down the road. But here she was capable throughout and was able to consent and in fact, directed the transactions and that was something that the attorney appears to have relied upon in trying to avoid an accounting.
Diane Vieira: Yeah, the attorney had argued that she doesn’t have to disclose this financial information. The only person she had to account to would have been the grantor who was capable.
Paul Trudelle: Right.
Diane Vieira: So the beneficiaries had a few questions with respect to the administration of the estate but the sticking point was these bank accounts as we discussed, which would require the attorney to provide disclosure of financial information predating the death of the grantor.
Paul Trudelle: That’s right. So the application was before the Court. The question was whether the attorney had to account to these beneficiaries. The attorney took the position that they didn’t have to account and the Court then considered whether the beneficiaries would have a right to compel an accounting.
I think the important sections of the legislation which is the Substitute Decisions Act in Ontario, is Section 42. Section 42 provides for an attorney to pass their accounts and sets out or enumerates who can apply to have accounts passed. Clearly, the grantor, if alive and capable, can request that the accounts be passed. There’s a number of other parties that are listed as being able to compel an accounting: the grantor, the attorney themselves, the Public Guardian and Trustee and the Children’s Lawyer have an automatic right to apply for an accounting, a judgment creditor of the grantor or the incapable person. And at the end of Section 42(4) there is a catch-all: any other person with leave of the Court, and that’s the key there. If you’re falling into that ‘any other person’ category, you have to apply to the Court to get leave to get permission from the Court to compel the passing. And the question here was whether beneficiaries of an estate fell within the ‘any other person’ category who could then apply to the Court to compel a passing.
Diane Vieira: That’s right. Justice Herman looked at case law but with reference to this Section. She did find the beneficiaries within the Court were allowed to ask for an accounting.
Paul Trudelle: Right, and I think the cases, the Court identified the unusual or probably it’s usual, it happens a lot, the factor is that here, the attorney under the Power of Attorney was the same person as the estate trustee. So whereas normally an estate trustee would step into the shoes of the grantor and be entitled to compel an accounting from an attorney, here that estate trustee was one and the same as the attorney. And the Court felt that it wasn’t likely that that person would compel an accounting from themselves and, therefore, opened the door to allow the beneficiaries of the estate to ask for this accounting.
So, having qualified as a person or other person entitled to apply for leave to pass the accounts, the Court then turned their mind to whether the beneficiaries should be granted leave in this case. And the Court considered a number of factors and looked at the issue of whether the fact that the grantor was capable throughout had an impact on whether leave should be granted.
Diane Vieira: Well in the Stickles Estate v. Fuller, the Justice based her decision on Section 42(1) of the Act which provides that the Court can order the accounts of the attorney to be passed and it doesn’t depend on whether the grantor became incapable or not.
Paul Trudelle: Right, and I think there’s a very broad and clear requirement that attorneys keep their accounts and pass them or produce them when asked for. And the fact that the person was capable is not going to be seen as something that negates the requirement to pass accounts. The Stickles case was one where the grantor was capable and yet the Court still required the passing.
Another factor is, another issue that the Court looked at in this decision is, how far back you have to go when passing your accounts. In this case, there was a Power of Attorney granted in September of ‘04 before death, and the person died in December ‘04. The beneficiaries sought an accounting that went back well before that, back to January ’04. And the Court found that the duty or requirement to pass accounts will only go back as far as the Power of Attorney itself. And in fact, the Court looked at other cases and those cases dealt with attorneyships that predated the Substitute Decisions Act and in those other cases, the obligation to account only went back as far as the passing or the effective date of the Substitute Decisions Act. So in most cases then, the duty to account will start from when the Power of Attorney is actually granted.
So just to wrap up then on this topic, first of all I’d like to refer you to a very helpful article by Kim Whaley in the 2008 issue of Deadbeat that discusses this case and a number of the cases that are referred to in the De Zorzi Estate decision. And it summarizes the applicable law and concludes by saying that the case is very helpful in clarifying the law with respect to the duty to account. Generally speaking, there is a heavy onus on an attorney to keep records and to pass those accounts when required and it clarifies who can request the passing of accounts after the death of the grantor. And you may be required to account to beneficiaries of the estate, even though the grantor was capable while you were acting as attorney and even though you are the estate trustee for that person’s estate as well.
Diane Vieira: Thanks, Paul.
Paul Trudelle: Well thanks, Diane. And before we leave, we’d just like to refer you to our contact information.
Diane Vieira: You can reach us by e-mail at hull.lawyers@gmail.com or you can call us on our telephone line which is 206-350-6636.
Paul Trudelle: We also invite you to visit our webpage where we have daily blogs and links to our podcasts on Hull and Estates and also our podcasts on Hull and Estate and Succession Planning. That can be found at estatelaw.hullandhull.com.
This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.
To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.
Our theme music is Upper Structure by DJ AKid and is courtesy of the Podsafe Music Network.
The issue of when a missing person will be deemed to be deceased was most recently (and prominently) in the news during the search for Steve Fossett. Notwithstanding the relatively short duration of time since his disappearance on September 3, 2007, circumstantial evidence suggested that, on a balance of probabilities, his death was a safe assumption and Fossett was declared legally dead on February 15 , 2008.
In Ontario, the Absentee Act deals with the situation in which a person is missing but about whom there is "no knowledge as to whether he or she is alive or dead." In such a situation, the Court has the power to appoint a trust company or others to deal with that person's affairs in the interim. Interestingly, the term "Committee" (which also used to be the title given to the person now appointed as a "Guardian" under the provisions of the Substitute Decisions Act) still is used for this purpose.
The Act provides that certain persons including the Absentee's spouse or (adult) child can make application to the court for a declaration of Absentee and the appointment of a Committee to manage such person's property.
The question that inevitably arises in any such situation is: what if the Absentee in fact shows up one day, alive and well, and wanting to know what has happened to his or her property? Of course, such situations are rare but not unheard of. In such a case, the Committee will have the obligations of a fiduciary to account for the Absentee's property. The Committee will likely make a compelling argument that the Absentee's assets ought to be available to fund the costs of making the application and compensating the Committee for safeguarding the Absentee's assets.
This week on Hull on Estate and Succession Planning, Ian and Suzana discuss the considerations and responsibilities of estate trustees at the time of a funeral.
Suzana Popovic-Montag:Hi, and welcome to Hull on Estate and Succession Planning.You’re listening to Episode #95 of our podcast on Tuesday, January 15th, 2008.
Welcome to Hull on Estate and Succession Planning, a series of podcasts hosted by
Ian Hull and Suzana Popovic-Montag, that will provide information and insights into estate planning in Canada, from the offices of Hull Estate Mediation in Toronto, Ontario, Canada.Here are Ian and Suzana.
Ian Hull:Hi Suzana.
Suzana Popovic-Montag:Hi there Ian, how are you?
Ian Hull:I’m okay.I don’t know if I have a bit of a cold.I’m a little out of kilter today but I’ll hopefully get through the podcast.
Suzana Popovic-Montag:Now I have to ask you, at the end of our last podcast, you were talking about your New Year’s resolution.I’m just wondering how that’s coming along one week later now?
Ian Hull:My resolution not to drink before noon.
Suzana Popovic-Montag:Yes, that would be the one.
Ian Hull:Yeah.I’ve managed to go 4 days straight without doing it so…
Suzana Popovic-Montag:That’s great.
Ian Hull:No, it’s been good.It was a long time ago since the holidays but it was a great holiday and I know you and your family got up skiing and so did we, so that was a nice break.
Suzana Popovic-Montag:It was, now with the weather being the way it is though, we just hope it holds out for the rest of the winter.
Ian Hull:Yeah, no kidding.It’s been a strange winter for that here in Toronto.
What we thought we’d go through today is…maybe none of these topics are particularly necessarily happy topics but we’re in the business of death and we can’t avoid that.So we’re trying to work through and bring to life, so to speak, some of the mechanical expectations and the practical expectations that one faces when they get the job as a trustee and executor.And so we talked briefly, and actually in our last few podcasts, we keep touching on this topic.So I want to sort of close the loop on this one aspect of it.And that is the whole question of the funeral.And to most people, this can be a pretty daunting task if you are the executor or you expect to be the executor.So why don’t we spend some time talking a little bit about that.
Suzana Popovic-Montag:That’s a good idea, Ian.And we know typically that estate trustees or executors, whatever the term that you want to use, are responsible for making the funeral arrangements.And they are the ones who have the authority to make the decisions concerning how an individual is ultimately laid to rest.And the reality is, though, that so many times upon a death, there is such a hustle and bustle that occurs, the family gets involved and these arrangements can be made even before a Will is actually found, if there is in fact a Will.
Ian Hull:And as we’ve said in the past, don’t forget that the Will speaks from death, so the authority question really shouldn’t be in doubt, except in special circumstances where there might be other Wills.One of the things from a practical standpoint, we don’t profess to sell life insurance but we keep talking about encouraging people to buy life insurance for some estate planning needs.The other thing I do not profess to do is sell pre-purchased funeral arrangements but having said that, having been involved in these kinds of cases for so many years, those who do take advantage of that product that’s out there, and that is, sort of buying up the service before you die (a) there’s a financial benefit to it and (b) it really does take some pressure off the family.So you may want to look into making those arrangements as necessary before you pass away unless you want to pass that on to the executor.
One of the questions that many people face for those who haven’t prepaid for the funeral, is how am I going to pay for this?They walk into the funeral home, they realize, I mean lots of funerals are anywhere between $15,000 - $30,000 in terms of once you’ve had a reception after and so on.And, you know, a lot of people don’t have that money just sitting around in the bank.What do we do about that situation?
Suzana Popovic-Montag:And I guess, Ian, this is still in the pre-probate stage when we’re talking about these arrangements being made because someone has just passed away and probate hasn’t been sought yet.And we say typically that the Will is the authority for things to be done by an executor.But in these situations, we typically find that banks will make an exception, so to say, in order to provide the funds for the payment of a funeral account.And so if you’ve got a Will with an appointment that names an executor, you’ve got an account for a funeral bill, then typically you’ll see that the banks will make arrangements to pay this even without the benefit of probate.
Ian Hull:Okay.Another important question is the stone itself.
Suzana Popovic-Montag:That’s right.The memorial stone and what I think that people want to consider is making arrangements for the purchase of that, if that’s something that would be applicable in the circumstances.And again, you know, you want to arrange for the payment of that afterwards and again, the banks are willing to facilitate the payment of those kinds of expenses even without probate.
Ian Hull:And I don’t…I tell my clients not to underestimate the emotional aspects of these two things.One is making the funeral arrangements and two is actually arranging for the stone.Unfortunately, on both of those fronts, we are involved with contentious estate administrations where there’s a fight over what’s going to be put on the stone, what size the lettering will be for who, what names are on there and so on.So again, I mean these are things that if you want, you can sort of deal with before you die.But if you don’t want to deal with it before you die, make sure you’ve maybe given some direction to your executor or you’ve picked an executor who is strong and is prepared to take on that courageous task, in some cases.
Suzana Popovic-Montag:Because we can’t forget that these are really emotional times for family members.And so there are flashpoints that you wouldn’t even be able to predict or expect, but the reality is these things happen.So to the extent you can try to facilitate that in advance, I think that can only help.
Ian Hull:A couple of little procedural questions that come up.One is the importance of getting the funeral director’s Proof of Death Certificate.It is such a vital document at the early pre-probate stage.And you should make those arrangements quickly and get that organized.Typically you’ll want to get several copies from the funeral director itself.
Suzana Popovic-Montag:The other thing you’ll want to consider possibly also is obtaining the provincial Death Certificate which you will need probably in circumstances when you’re looking to cash out proceeds of life insurance and those kinds of assets that were previously owned by the individual.
Ian Hull:So you can see a lawyer too, to just get extra copies of these in what we call notarial form, if necessary.I apologize as we go along here because my cold is not getting better but getting worse as we talk.Alright, there are some aspects to…sort of some technical aspects to getting these certificates and getting the Death Certificate and so on.And again, if you’re running into trouble in the right situation, you really should spend the time and effort to get to see a lawyer quickly on this, because there are ways to expedite the certificates if needed, there are ways to deal with the funeral directors and so on.And these issues can be fairly pressing in situations where sometimes you want to release funds such as insurance proceeds.
Suzana Popovic-Montag:I think, Ian, that basically sort of ties together with the thoughts that we had on funeral arrangements that are made in these situations.And I thought it might be a good point to talk a little bit about this great theory that you’ve been telling me about recently and you’ve been speaking to a lot of people about, the Tipping Point theory.Can you tell us a bit about that?
Ian Hull:Sure, and I think what we’ve, when we were, Suzana and I were sitting down assessing our 2008 plan of action for our podcasts, we thought we’d try to interject from time to time some additional aspects.A big part of social media is trying to discuss and deal with and obviously download information to the extent that we can that’s helpful to people who are interested in our topic area, that being estates.But a big part of the social media revolution and what makes podcasting so exciting, and blogging as well, is trying to sort of incorporate what’s going on out there as well.And so we wanted to add a quick segment to today’s podcast, on a book that I’d been reading over the Christmas holiday and really enjoyed, and I thought was something that was worth discussing because it does tie in to many of our life moments.And we see in the estates world the tipping point, and that tipping point sometimes is, of course, the triggering of death.Now, The Tipping Point is a book that we’re going to get into in more detail on our next podcast.But it’s a New York Times Best Seller book out there right now, and I’ve been reading it and enjoying it.But it’s that magic moment…they describe it as that magic moment when an idea or a trend or a social behaviour crosses the threshold, tips and sort of spreads like wildfire.Now what was interesting to me was that the tipping point in many estates, whether they get contentious or non-contentious, but obviously most often contentious, is death can be a tipping point.And the issues of emotions and sort of illogical behaviour maybe on the part of some of the family members and so on, spread like wildfire in many situations.So I’ve been enjoying this book, The Tipping Point, and I thought we could spend a couple of minutes and talk about what their analysis is, understand what the tipping point is, which I’ve just defined it, then talk a little bit about what the tipping point means and how we can identify a tipping point, because then we can start to maybe help manage the wildfire that sometimes gets created when the obvious tipping point of death hits in our world.
Suzana Popovic-Montag:I think that’s the great thing about the title of this book, Ian, and the whole concept of it.It just seems to transcend so many different areas.It’s not just a business philosophy.It’s not…you can bring it into the estates context.And it seems that it can apply in almost any situation.
Ian Hull:I agree.And I mean that’s why, when I looked at the definition in the back of the book, it described it.You know, it talks about social behaviour crossing the threshold and then spreading like wildfire.And most people see their family in a relatively dysfunctional framework, but while everyone is alive.But everybody sort of lives with it.But when the glue starts to come undone and the tipping point hits when one or more of the, sort of, heads of the family pass away, this spreading like wildfire I think is something that we have to…and we focus so many of our podcasts on…try to manage.And so let’s spend a few minutes just talking about what that wildfire is all about.
And in the book, what they talk about was the classic…an example that they started off with was with the Hushpuppy Shoes.And this is an American brand, it’s sort of a brushed suede shoe that when I was a kid, I used to wear them.But in the mid 90’s, it became…it hit the tipping point.And the illustration here was…this is a business illustration…was the brand was just all but dead, there was about 30,000 pairs a year that were being sold and then something happened.
Suzana Popovic-Montag:And that something was some kid suddenly in Soho, who thought that they were a little bit different or little bit unique, they started to wear them in New York.
Ian Hull:And so these kids got picked up…this trend started to get picked up by local designers in the Soho, New York City area.And eventually from 30,000 sales in 1994, it went to 430,000 in 1995.
Suzana Popovic-Montag:And so then what happened is that the idea was that the shoes had suddenly passed this certain point of popularity and then they tipped.They sort of hit that point where they just, you know, they hit the jackpot, so to speak.
Ian Hull:So this was an example and we wanted to sort of set that up in this podcast, because we’re going to work through this example and this concept.But we’ll keep the Hushpuppy concept in mind as we go through it because it is an example of where a social phenomenon tipped and the book spends a lot of time using it, and many other examples, in showing why it tipped, what happened, what went on and so forth.And another example we’re going to talk a little bit is about some historic moments in time where things changed and affected the American society strongly throughout the book, is analyzed.So anyway, it’s a good…it’s a fun book.I think it’s a telling book in our area even, and I think it also gives people an idea of a little bit about what’s out there beyond just our sphere of estate world.I think it talks about social behaviour in a way and an understanding that can be very helpful.
Suzana Popovic-Montag:So if anyone is interested in following up and looking at the book itself, we’ll put a reference to it in our show notes and we’ll look forward to our next podcast, Ian.
Ian Hull:Thanks so much, Suzana.
Suzana Popovic-Montag:Thanks to you.
You’ve been listening to Hull on Estate and Succession Planning with Ian Hull and Suzana Popovic-Montag.The podcast you have been listening to has been provided as an information service.It is a summary of current legal issues in estates and estate planning.It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.
To listen to other Hull On podcasts, or to leave a question or comment, please visit our website at www.hullestatemediation.com.
Our theme music is UpTempo14 by Gary and is courtesy of the Podsafe Music Network.
Interest is normally paid on the proceeds of a policy of life insurance thirty days after the insurer receives sufficient evidence of the claim. The requirements are mandated by statute. What happens, however, where the insured “disappears”, and the beneficiary brings an application for a declaration of death? Is interest payable from the date of death (as declared by the court), or from the date of the declaration itself?
This issue was considered by the Court of Appeal of Manitoba in Antonation v. Sylvester, 2007 MBCA 110 (CanLII). There, the “deceased” disappeared on May 29, 1998. In May 2005, the beneficiary under a policy of insurance on the deceased’s life brought an application for a declaration that the deceased was presumed dead because of the passage of seven years from his disappearance. The court granted an Order on July 4, 2005 declaring that the deceased “shall be presumed to have died on May 29, 1998.”
The proceeds of the insurance policy were paid to the beneficiary within 30 days of the date that the court made the declaration: July 4, 2005. However, the beneficiary claimed interest from the date of disappearance (ie. the date of death as declared by the court: May 29, 1998).
The Court below and the Court of Appeal both held that no interest was payable until 30 days after the date upon which the declaration of death was made. This declaration was part of the “sufficient evidence” that the insurer required in order to trigger the obligation to pay under the applicable legislation. Until this declaration was made by the court, there was no obligation on the part of the insurer to make the payment.
The legislation in Ontario is essentially similar to the applicable Manitoba legislation considered by the court. In fact, the Court of Appeal of Manitoba relied on an Ontario Divisional Court case directly on point.
In Cummings v. Cummings, the Court of Appeal affirmed the decision made by the application judge at first instance.
In coming to this conclusion, the Court of Appeal was strongly influenced by the concepts set out in the decision of the Supreme Court of Canada in Tataryn v. Tataryn Estate ([1994] 2 S.C.R. 807 (S.C.C.)).
The decision in the Tataryn case held that moral considerations were applicable to a determination as to the amount of a dependant's support award in the context of the British Columbia statute (The Wills Variation Act, R.S.B.C. 1979, c. 435).
Until the Cummings v. Cummings decision, the approach to quantifying dependant's relief claims in Ontario was to essentially ignore the Tataryn moral considerations approach. This was as a result of the fact that the Tataryn decision was an appeal from the British Columbia Court of Appeal and was in respect to section 2(1) of the Wills Variation Act, which included substantially different wording than that of the SLRA. The Wills Variation Act assists dependants where there is a will which does not "in the Court's opinion, make adequate provision for the proper maintenance and support of the testator's wife, husband or children".
It is this language that has allowed the British Columbia Courts to approach the whole question of quantifying dependant's relief on a very different basis and on a moral conviction approach. The language in the Wills Variation Act is broadly drafted and essentially allows the Court to do what it thinks is adequate, just and equitable in the circumstances.
With the Cummings v. Cummings decision essentially embracing the decision of Tataryn, a very different approach must be considered in respect of quantifying dependant's relief claims in Ontario.
We hope this case gives you an idea of the application of the basics legal definitions and terms.
As to the adequacy of support, section 62(1) of the Succession Law Reform Act provides as follows:
62. (1) Determination of amount - In determining the amount and duration, if any, of support, the Court shall consider all the circumstances of the application, including,
(a) the dependant's current assets and means;
(b) the assets and means that the dependant is likely to have in the future;
(c) the dependant's capacity to contribute to his or her own support;
(d) the dependant's age and physical and mental health;
(e) the dependant's needs, in determining which the Court shall regard to the dependant's accustomed standard of living;
(f) the measures available for the dependant to become able to provide for his or her own support and the length of time and cost involved to enable the dependant to take those measures;
(g) the proximity and duration of the dependant's relationship with the deceased;
(h) the contributions made by the dependant to the deceased's welfare, including indirect and non-financial contributions;
(i) the contributions made by the dependant to the acquisition, maintenance and improvement of the deceased's property or business;
(j) a contribution by the dependant to the realization of the deceased's career potential;
(k) whether the dependant has a legal obligation to provide support for another person;
(l) the circumstances of the deceased at the time of death;
(m) any agreement between the deceased and the dependant;
(n) any previous distribution or division of property made by the deceased in favour of the dependant by gift or agreement or under Court order;
(o) the claims that any other person may have as a dependant;
(p) if the dependant is a child,
(i) the child's aptitude for and reasonable prospects of obtaining an education, and(ii) the child's need for a stable environment;
(q) if the dependant is a child of the age of sixteen years or more, whether the child has withdrawn from parental control;
(r) if the dependant is a spouse,
(i) a course of conduct by the spouse during the deceased's lifetime that is so unconscionable as to constitute an obvious and gross repudiation of the relationship,(ii) the length of time the spouse cohabited,(iii) the effect on the spouse's earning capacity or the responsibilities assumed during cohabitation,(iv) whether the spouse has undertaken the care of a child who is of the age of eighteen years or over and unable by reason of illness, disability or other cause to withdraw from the charge of his or her parents,
(v) whether the spouse has undertaken to assist in the continuation of a program of education for a child eighteen years of age or over who is unable for that reason to withdraw from the charge of his or her parents,
(vi) any housekeeping, child care or other domestic service performed by the spouse for the family, as if the spouse had devoted the time spent in performing that service in remunerative employment and had contributed the earnings to the family's support,
(vii) the effect on the spouse's earnings and career development of the responsibility of caring for a child,
(viii) the desirability of the spouse remaining at home to care for a child; and
(s) any other legal right of the dependant to support, other than out of public money.
(2) Evidence - In addition to the evidence presented by the parties, the Court may direct other evidence to be given as the Court considers necessary or proper.
(3) Idem - The Court may accept such evidence as it considers proper of the deceased's reasons, so far as ascertainable, for making the dispositions in his or her will, or for not making adequate provision for a dependant, as the case may be, including any statement in writing signed by the deceased.
(4) Idem - In estimating the weight to be given to a statement referred to in subsection (3), the Court shall have regard to all the circumstances from which an inference can reasonably be drawn as to the accuracy of the statement.
Tomorrow we will begin to look at how these legislative terms are being applied by the Courts.
