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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In an aging society, our elderly can easily fall prey to predators looking to exploit them. Elder abuse can take many different forms: physical, psychological or financial abuse, or simply neglect.

I read an article yesterday about Huguette Clark, the 104 year old heiress whose wealth is estimated at half a billion dollars. During her lifetime, Clark made generous gifts towards those who cared for her. For instance, it is reported that Clark gifted $10 million dollars to her social secretary. 

It is reported that Clark’s wealth is being managed by her lawyer and her accountant. 

A former paralegal who worked for Clark’s attorney, has now blown the whistle on what she alleges is improper behavior by Clark’s attorney and accountant. According to reports, it is alleged that they “drafted a will that would have left money to [one of them], trying repeatedly to persuade her to sign it — then joked about their client and cursed her behind her back when she would not sign the will.” It is also reported that her lawyer allegedly solicited from Clark $1.5 million dollars to build a security system for a community where his daughters and their families live. In addition he allegedly sold a Stradivarius violin for $6 million dollars and a Renoir painting for $23.5 million. 

A criminal investigation has now been launched by the Manhattan district attorney, who has the Elder Abuse Unit of the New York County District Attorney's Office looking into the handling of Clark's finances.

It bears repeating that the complaints at this stage are unproven allegations. Nonetheless, the mere thought that this could happen provides us with a dreadful reminder of what the elderly face in our society today.

Thank you for reading,

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

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

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

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

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

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

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

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

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

Thank you for reading.

Rick Bickhram

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

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

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

1.                  Unopened mail;

2.                  Late or unpaid bills; collections actions;

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

4.                  Bounced checks;

5.                  Disorganized personal paperwork;

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

7.                  A large number of magazine subscriptions; and

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

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

Thank you for reading and have a great weekend.

Rick Bickhram

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

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

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

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

Have a great weekend!

David M. Smith

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My mother used to volunteer with Goodwill, where one of the projects was a contents sale. A team from Goodwill would organize a home’s contents for sale – I have a frying pan purchased from one of those sales.

Several organizations exist to assist with different aspects of the moving process. One such example is Marsha’s Helping Hand, which helps when clients, particularly elderly people, want to downsize.   

There are a lot of memories to manage and items to be packed up, distributed or possibly sold. Often the house itself must be sold. Many scenarios are possible – elderly people are downsizing or a home is being sold as part of an estate. 

Estate sales can be slow however.  Recently, the New York Times focused on this issue: delays can occur in transactions because of the dynamics between distant beneficiaries and the estate trustee, or even because of the emotional energy required by heirs who are assisting with the removal of the Deceased’s belongings. 

There are understandable reasons for the delays in the estate sale process. Not least of which is that often the people who want to do the job are themselves busy with multiple responsibilities, be it child care or parent care or the demands of a paying job. Help is available though.  Organizations, which cater to these increasing needs can assist, according to a recent Globe and Mail article.

These practical issues often dovetail with legal duties of the Estate Trustee, a role that may be more manageable when a plan is in place. Costs should always be considered though because ultimately, the Trustee has a duty to account to beneficiaries.

Enjoy your day.

Jonathan

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The administration of drug therapy in the elderly is a complex undertaking.  As a person ages, they undergo physiological changes; changes in body composition, gastrointestinal, liver and/or renal function that can alter both the therapeutic and toxic effects of drugs.  Created in 1991, and most recently updated in 2003, the Beers List includes drugs that 'are either ineffective in the elderly or put seniors at an unnecessarily high risk when safer alternatives are available' (CBC News, September 2007).  The list, compiled by a group of American experts led by Dr. Mark Beers, was created to determine which drugs should be used in nursing homes, since seniors are known to be particularly at risk for adverse side effects, including falls (see blog of November 28, 2008), depression, and even death.

Last year, the Canadian Institute for Health Information reported that the Beers List has resulted in a reduction in use of the listed drugs, as well as a reduction in the number of adverse side effects linked to these prescription medications.  It is, however, not all good news across the board.  According to CIHI, 25% of seniors are still receiving at least one drug on the Beers List.  Further, a 2005 CBC investigation found that in spite of making up only 13% of the population, seniors accounted for over 44% of all deaths reported to Health Canada's adverse drug reaction database between 1999 and 2003.

With families gathering this month for various holiday celebrations, it may be an appropriate opportunity to suggest a 'brown bag review' for mum or dad.  Just like the name suggests, a pharmacist or geriatrician can review all of mum's medications (both prescription and non-prescription, including herbal products) and check for correct dosage, frequency, duplication of drug therapy, discontinued products, and potential interactions.  It goes without saying that changes to a drug regimen should only ever take place under the direction of one's physician.

Note:  In 2007, CBC News 'Canadianized' the Beers List to reflect only those drugs available here in Canada, and also took the liberty of adding a number of benzodiazepines (medications that are prescribed for the treatment of anxiety and sleep disorders and have been found to increase the likelihood of a fall four-fold) that are available here, but not in the States.  Click here to access the modified version.

Stay tuned Thursday for a much lighter-hearted healthcare blog.

Jennifer Hartman, guest blogger

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Dependency and Undue Influence - Hull on Estates Podcast #108

Posted on April 29^th, 2008 by Hull & Hull LLP

Diane Vieira: Hello and welcome to Hull on Estates. You’re listening to Episode #108 on Tuesday, April 29^th, 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 and welcome to another episode on Hull on Estates, I am Diane Vieira.

Paul Trudelle:  And I’m Paul Trudelle. Hi Diane, how are you today?

Diane Vieira: I’m good, how are you?

Paul Trudelle: Very good, thank you for filling in.  You are filling in for Megan Connelly, who was going to be podcasting with me this week, but she ran off to South America.

Diane Vieira: Yes.

Paul Trudelle: She got out of it.

Diane Vieira: Yes

Paul Trudelle: She didn’t take any trust funds, and she is coming back so there’s nothing  wrong with her going. We hope she has a very good time, and I thank you for joining me today. You have a busy week.  In addition to podcasting, you are also blogging this week.

Diane Vieira: Yes I am. So it is…I will be featured heavily on the website this week.

Paul Trudelle: Yes. Today we thought we would spend some time and talk about a situation that arises in a lot of matters that we see.  It is the type of situation where there is an elderly person with two or three adult children.  The elderly person wants to provide for all of them, however the elderly person is often closer to one of the children.  And prior to death, a property gets transferred to that one child to the exclusion of the other children and they are not able to share in that other property, once the estate falls into place.  And that causes them much concern and leads to a lot of litigation.  So we thought we would talk a little bit about that today.

Diane Vieira: And we are going to discuss a case that you actually wrote a blog on last week, its Bale vs Bale.  And the facts in that case is similar a situation as you just pointed out.  There is a mom who, in her Will, leaves her estate to her three sons equally.  But prior to her death, she conveys her farm to one of the sons.  The son being the child who is taking care of her and the other two sons in the situation were actually not very much part of her life and didn’t provide any care for her and where the applicant’s position was that they were estranged from her.

Paul Trudelle: Right.  There was a bit of an issue is to how close these other children were and that usually is the case and there was evidence heard from both sides as to how close they were.  But I think for the purposes of discussion today, we can just presume that the one child was significantly closer to the mother than the other two.

Diane Vieira: So, just a bit of a background on what happened here was a few years prior to her death, the main asset of the estate was a farm.  And the mother gave the farm to the applicant.  And there was testimony as to the capacity of the mother to make this gift with respect, because the other two sons challenged her…challenged this gift and said it was given to the other son under undue influence.

Paul Trudelle: That’s right and there was actually some fairly extensive evidence from the solicitor who acted on the transaction and also from her family doctor as to her capacity and both the solicitor and her two family doctors felt that while she was elderly and frail, she did have capacity and she understood what she was doing when she gifted this farm to her one son.  Then the mother passed away and the one son brought an application to get a declaration that the gift was valid.  The other two children brought a cross-application to say that the gift was not valid and was a result of undue influence.

Diane Vieira: In the situation the mother, at the time of the gift, was ninety-three years old and a dependant of the applicant.

Paul Trudelle: I think that is quite important that evidence with respect to dependency. The mother was living with the son, she was quite adamant that she didn’t want to be moved into a nursing home and by living with the one son, she was able to avoid having to move into a nursing home, although she was found to be quite, you know, vulnerable and dependant and relied on that one son for essentially all of her care

Diane Vieira: The judge in this case noted that even though the mother likely did have capacity, she was very vulnerable at the time the gift was made in terms of she was just coming out of the hospital and didn’t want to go to a nursing home.  So that point came out in determining whether or not this was under undue influence

Paul Trudelle: That’s right and I think that is very important.  In looking at undue influence, we see undue influence with respect to gifts.  We also see it with respect to Wills that are often said to be the result of undue influence.  And the case law often states that undue influence is beyond influence, it must be undue and it must amount to arm twisting or coercion in the normal course.  If you are making an allegation of undue influence, however, that is quite different where there’s a relationship of dependency or vulnerability.

Diane Vieira: In this case, the judge did see a relationship of dependency and suggested that it was up to the applicant to rebut the presumption of undue influence.

Paul Trudelle: That’s right, and it’s because of that presumption that the onus shifts onto the receiver of the gift.  Presumption of undue influence doesn’t apply in every relationship, although it does apply in certain relationships such as a solicitor and client relationship, parent-child,  guardian and ward, and we are seeing it more and more in other relationships of dependency such as an elderly parent and an adult child.  And in this case, the judge found that there was a presumption of undue influence and in his analysis went through the cases in which you would find a presumption of undue influence and what follows from that. 

I think after finding a relationship of dependency, the Court will then, as set out by the judge in the  Bale and Bale decision and referring to the Goodman Estate and Geffin decision from 1991, a Supreme Court of Canada case.  After there is a finding of a relationship of dependency that gives rise to a presumption of undue influence, the Court will then look at the nature of the transaction.  If it is a commercial transaction or a sale or other transfer, they will look at whether there was consideration or not.  With respect to other transactions like this one where there is a gift, its not that easy to do that, so what the Court will then look at is the onus moving on to the defendant to rebut that presumption.

Diane Vieira: And in this case, the applicant, as part of his evidence, was he offered medical testimony in terms of capacity and her disappointment with her other sons.  However the judge rejects this in a way.  What he expected was evidence that this was a transfer made out of gratitude and that was something that neither the lawyer or the applicant spoke of, the reason for this transfer.  And he found that suggested undue influence.

Paul Trudelle: Right and I think they said that, the Court there said that in order to rebut the presumption, it would have to be a result of the mother’s full, free and informed thought.  She was extremely vulnerable and dependent upon the son for her care and that vulnerability tainted the transaction, so to speak.  And the Court concluded that the decision to convey the farm was the result of undue influence by reason of her dependency.

Diane Vieira: In this situation, do you think it would have made a difference if the mother had independent legal advice?

Paul Trudelle: I think that would help and I think if there was independent legal advice we would have perhaps some evidence with respect to the transaction and the reason for it.  Here there was legal…a lawyer was involved and documented the transaction but there was some question as to how the mother got to see the solicitor and as he stated, there was an absence of any notes with respect to the reason for the transaction, it seems.  So on the issue of undue influence and vulnerability as discussed there was a finding that the gift was made as a result of this undue influence, presumption of undue influence because of the dependency the elderly mother. The Court found that while there was a great deal of affection between the mother and the son and it didn’t say that there was anything improper about the relationship, you know, the Court felt that there wasn’t…the affection that they shared for each other wasn’t sufficient to validate the transfer of the farm to the son.  I think it is important to note there that the farm was essentially all of the estate and would leave the other children with nothing.

Diane Vieira: Another issue that was decided was in terms of the accounting that the applicant provided.  He did take a number…some money from his mother’s bank account while he was caring for her.  He used some of this money to purchase a truck.  He testified the truck was being used to transport the mother back and forth from medical appointments and what not.  In this case, the judge found that this truck was a gift.

Paul Trudelle: Right and I think just because it was a much smaller amount relative to the value of the estate and because of the findings of capacity, the elderly mother was said to have known about this gift and approved of it and consented to it.  I think because it wasn’t all of the estate, the Court was prepared to let that gift stand, whereas a gift of the entire estate was seen as too much.

Diane Vieira: And the judge also found that the respondents, the other two brothers, failed to prove their claim for a loss of occupation rent.  That was going back to the request that the other brother pay them the rent for the farm they had been using.

Paul Trudelle: Right and I think again the Court wanted to be seen as, you know, being fair and balancing that.  They didn’t allow the farm to go to the son but they weren’t going to turn around and charge him occupancy rent for staying in the property during that period because of the assistance he was providing to his mother.

Diane Vieira: So in the end, the judge ordered that the sale of the farm be set aside under the grounds of undue influence, while dismissing the respondents’ other requests for damages and occupation rent.

Paul Trudelle: Right and I think that is a good and useful discussion of that case.  It’s the type of case, as we said, that we see often and I think all of the circumstances surrounding any gift of property by a deceased prior to death need to be looked at.  It’s not just enough to say, well, what’s in the estate and how is it divided now? You’ve got to step back a little bit and see what was in the estate and where did it go, if it was a gift during the lifetime of the testator, was it a gift made while she had capacity, was it a gift that may be tainted by undue influence as a result of his or her dependency.

Diane Vieira: Do you think it would have made a difference if the mother in this case, since she did have capacity, made a new Will?

Paul Trudelle: I think it might have. I think again the same analysis that the Court went into with respect to undue influence with respect to the gift might be used with respect to an allegation of undue influence regarding the Will, if, rather than gifting the farm, she simply made a Will leaving the entire farm to her son, the same arguments would have been made, I expect.

Diane Vieira: I think that brings us to an end of this week’s discussion. Thanks for listening and thanks for joining me today, Paul.  

Paul Trudelle: Well, thank you very much. Diane, and we’ll speak to you again soon.

Diane Vieira: And we look forward to hearing from our listeners.  You can send us an email at hull.lawyers@gmail.com or just pick up the phone and leave us a message or comment at 206-305-6636.  Be sure to visit our blog at estatelaw.hullandhull.com where you will find even more information and discussion on today’s practice of estate law. And you can find the case citation for Bale vs Bale on our website. We hope you enjoyed the show. I am Diane Vieira.

Paul Trudelle: I am Paul Trudelle.  And until next week, we’ll talk to you then.

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.

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By all indications, the abuse of Powers of Attorney to misappropriate assets is on the rise. 

When a grantor gives powers to an attorney to manage the grantor’s property, it allows the attorney to assist the grantor in managing property, and in fact to take over management of property altogether if the grantor does not monitor the situation.  Often the very goal of the grantor is to allow someone else to completely take over management of one’s property due to age, potential incapacity or other reasons, so the grantor has no intention to monitor.

This is often a reasonable choice, and the law holds attorneys to a high standard to protect grantors.  However, the potential for abuse is immense.  Abuse can be willful or simply negligent, but in either case the damage can be devastating and irreversible.  In many cases attorneys who stray from their duties are never made to account, although they have that obligation.  Often they live with the grantor and have little or no oversight.  The legal fees in securing justice are generally high, and the chances of recovering on a judgment can be low.  In the result, legal proceedings might be impractical, however blatant abuse may be in a given case.

The best defence against this problem is awareness, so these varied results from a quick internet search are somewhat encouraging: a Florida law firm website; an excellent Vancouver Sun article; a synopsis of a TV news story; the New York Attorney General’s website; a news report of a Philadelphia trial; and a news release from Prince Edward Island’s provincial government commenting on the problem for World Elder Abuse Day.

This is the tip of a very large iceberg: by all indications lawyers, financial institutions, governments and of course the public will be wrestling with a growing problem for years to come.  

Thanks for reading.

Sean Graham

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

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

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

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

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

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

Thanks for reading.

Sean Graham

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LISTEN HERE

READ THE TRANSCRIBED PODCAST HERE

During Hull of Estate and Succession Planning Episode 32, we continued to discuss the Elder Law Conference with an emphasis on what the Canadian Centre for Elder Law Studies is currently working on, highlighing their past work and discussing its mission of enriching and informing the elderly in the law.

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Continuing with our review of the Canadian Centre for Elder Law Studies' paper on viatical settlements, we note that the paper is broken down into 7 parts, starting with a brief introduction and an examination of typical viatical settlements. There is also a review of American academic articles and the study looked at the historical developments of viatical settlements in the U.S.

The study goes on to examine the current law in Canada and looks at leading policy arguments for and against removing the legal barriers to viatical settlements in Canada. The study also examines in detail the leading Canadian model for law reform drafted in 2001 by Ontario's Financial Services Commission. The last two parts of the study include a review of several issues for reform and a conclusion to the study paper.

The origins of the project arose out of the Program Committee of the British Columbia Law Institute, whereby they identified examining the possibility of legalizing and regulating viatical settlements as an innovative area for legal reform.

After having reviewed the study paper on viatical settlements, it is clear that, while this is an innovative area of legal reform, certainly in the United States, the concept of viatical settlements is a growing trend and one that will no doubt be considered over the next few years as the increase in population puts pressure on the market forces.

Given that viatical settlements are rare in Canada, the study paper looked at the elements of a typical viatical settlement from the United States as providing the reference point. Again, while there are different approaches in the United States, the study notes (at page 3) that one commentator who recently reviewed the American market concluded that the typical viatical settlement contains six steps.

We will look at the six steps in our next blog.

All the best, Suzana and Ian. --------

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The Canadian Centre for Elder Law Studies has produced an excellent study paper on viatical settlements.

In the executive summary, the study paper defines a viatical settlement as a transaction in which an insured person with diminished life expectancy transfers the entitlement to receive the death benefit under the policy of insurance to another person. This other person agrees immediately to pay the insured person an amount that is less than the face value of the death benefit and undertakes to pay the premiums for the insurance policy as they come due. A

s is noted in the executive summary, in most Canadian jurisdictions, legislation directed at trafficking in insurance policies (which has its origins in the Depression), renders viatical settlements illegal. There is a small viatical settlement industry based in some of the provinces that lack this legislation. However, in the U.S., the viatical settlement industry has been very active and has, for example, focused on AIDS patients and others suffering from terminal diseases. As such, the viatical settlement industry has expanded considerably.

The aim of the study paper produced by the Canadian Centre for Elder Law Studies was to provide the groundwork for law reform in this area. More on the details of the study in our next blog.

All the best, Suzana and Ian. --------