In 1997, the son and his sister discovered a German bank account in their father’s name containing 1.78 million dollars. The German government froze the bank account. The son says that if his father is declared dead and he inherits money from his father, he will donate it to the study of the Mauthausen concentration camp.

His son insists that he has not see his father since 1962 and has had no contact with him since that time with the exception of receiving two unsigned notes in 1962 and 1967. His father would turn 94 this year and he assumes that he is likely dead. However, throughout the last four decades Aribert Heim has been spotted numerous times and as late as last month; the Simon Wiesenthal Centre believed that they have found evidence of him living in Chile.  The son says that he is working with a lawyer to provide evidence of his father’s death.

In Canada, the court is authorized by the Declarations of Death Act to determine whether a person is dead on the basis of circumstantial evidence or the rule of common law which presumes a person dead after an unexplained absence of seven years or more. Click here to listen to a podcast on the Declaration of Death Act and the Absentee Act. Additionally, under the Rules of Civil Procedure, an interested party can also apply for the opinion, advice, and direction of the court.

Thanks for reading,
 

Diane Vieira

Pierce J. held that in order for a release to be enforced, the beneficiary who signs the release:

1.   must be “fully informed”;
2.   must have received competent legal advice in a review of the accounts;
3.   should understand how compensation has been charged; and
4.   should know what legal services have been provided and what the fees were.

Pierce J. also held that a distribution cannot be withheld pending the execution of a release. It is simply fiction for an executor to believe that he/she can refuse to distribute the estate until a signed release is in hand. A holdback must be reasonable and demonstrably justifiable in the circumstances (i.e. tax liability or the costs of a passing). 

However, in the end, some common sense must prevail. In a simple administration, it is unlikely that formal accounts will be prepared for passing either because no compensation is claimed or the costs of doing so are prohibitive. However, the executor will likely ask for a release on the distribution of the estate. In that case, transparency may be the answer. By communicating regularly with the beneficiaries, sending them pertinent information and updates, and/or preparing an informal accounting (including how compensation has been taken), a court may just be convinced that a signed release is good enough.

“TGIT”

Justin

Tax season is once again upon us with all of its attendant trepidation. No doubt, a general panic has set in as people gather together the necessary documentation to fill out and file their tax returns. 

Anybody who has been an estate trustee will know that he/she is responsible to prepare and file a terminal tax return and to ensure that any outstanding taxes are paid on time. To help cut through the confusion, I thought it worthwhile to set out some of the income/deduction tax receipts that an estate trustee may come across when preparing a tax return:

Income

Ø      T4                    Employment Income

Ø      T4A                  Pension/Annuity Benefits, Canada Pension Plan Benefits

Ø      T4A(OAS)       Old Age Security Benefits

Ø      T4RIF              Registered Retirement Income Fund Withdrawals

Ø      T4RSP            Registered Saving Plan Withdrawals

Ø      T4PS               Contributions by a Company to Profit Sharing Plan

Ø      T600                Cash Canada Savings Bonds

Ø      T4E                  Employment Insurance Benefits       

Ø      T5                     Investment Income

Ø      T3                     Trust Income (including mutual funds and income trusts)

Ø      T5008              Statement of Securities Transactions

Ø      T5013              Statement of Partnership Income

Deductions

Ø      T2200              Declaration of Conditions of Employment

Ø      T2201              Disability Tax Credit (completed by a doctor)

Ø      T2202              Tuition/Education Deduction Certificate

Ø      T101                 Statement of Renounced Resource Expense

Ø       T5006              Labour Sponsored Tax Fund Credit, RRSP Contribution, Union and Other  Professional Dues, Medical or Attendant Care Expenses, Charitable Donations, Political Donations, etc.

Thank you for reading, Justin.

Posted on March 25^th, 2008 by Hull & Hull LLP

Suzana Popovic-Montag: Hi and welcome to Hull on Estate and Succession Planning. You’re listening to Episode #105 of our podcast on Tuesday, March 25^th, 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 today?

Ian Hull: Just great, thanks. Glad to be podcasting again with you. Missed you last week.

Suzana Popovic-Montag: Sorry about that.

Ian Hull: No it’s – these things happen.

Suzana Popovic-Montag: They do.

Ian Hull: Don’t forget to all those who are listening, feel free to call us at 206-457-1985.

Suzana Popovic-Montag: Or if you’d like to drop us an e-mail at hullandhull@gmail.com or, of course, you can visit our blog at estatelaw.hullandhull.com.

Ian Hull: Okay, we’ve been trying to follow through the process of an estate administration per se, and what it takes to get the job. One of the things that we talked a little bit about, not at the last podcast but the one before, was the application for probate itself. And I thought what we could do today is, sort of, talk about some of the things that might come as a surprise to people just how much notice you have to give to the beneficiaries.  And just who needs to be given notice in the application process and some of the other, sort of, what I might consider more mundane steps you have to take in the process. We talked, not in the last podcast but the one before though, about the bonding requirements in Ontario anyway, the probate tax that gets calculated.

Suzana Popovic-Montag: And we didn’t mention the fact though, Ian, that when you don’t necessarily know the exact value of the estate and you can’t necessarily calculate the administration tax that will be payable, you can still file on the basis of an estimated value for the estate, as long as you provide an undertaking that our statute here in Ontario provides for.

Ian Hull: That’s right.  It gives us some flexibility and so it means that you don’t have to know the numbers right down to the dollar.

Alright one of the next things that I think of whenever I’m applying for probate is I think of the Affidavit of Execution.  And that’s because you need it, it is such a vital document. I mean, when you’re dealing with an estate, to administer an estate, you have to have a valid Will and you have to prove that it was properly executed with two witnesses in the room at the same time as the deceased. So the Affidavit of Execution is something you want to track down and sometimes that’s not as easy as it sounds.

Suzana Popovic-Montag: And that Affidavit, for people who aren’t familiar with it, is an Affidavit by those witnesses to the Will saying that they were actually present for the signing of the Will and that all the formalities required by the legislation were abided by.

Ian Hull: And some difficulties can arise because, for example, say the Will was done 20 years ago and you don’t have any real information about the Will and the Affidavit wasn’t signed at the time, you can get into some trouble with the Affidavit of Execution in the sense of trying to track it down. So I always remind my clients whenever they do sign their Will up, make sure that they have asked their lawyer where the Affidavit of Execution is and make sure it’s in a secure place, because it is a vital part of the application itself.

Suzana Popovic-Montag: That’s for sure, Ian. And then once you’ve got all this documentation in place and this information all put together, then what you’ll typically do is actually meet with the lawyer and have the documentation signed up.

Ian Hull: Now in Ontario, and I think it’s a useful exercise to go through because when you do this for the first time, I find people are often surprised at just what needs to be involved in an application for probate. Now let’s talk a little bit about some of the people that get notice of the application itself.

Suzana Popovic-Montag: And that basically is all of the beneficiaries who are named in the Will. And so if you’ve got a beneficiary who’s actually a charity, in that instance, you have to serve not only the charity itself but also possibly the Public Guardian and Trustee as well.

Ian Hull: And people forget that when you have made a gift of a charity, what you’ve done is you’ve created a new layer of bureaucracy in the probate process and in the accounting process, if the gift is part of the residue, and we’ll get into more of that later. But the point is, is that it’s wonderful to give to charities in the Will but I notice in the last 10 years certainly, the taxing authorities in Canada have started to encourage us to gift during your lifetime. You get better tax advantages than you used to for that gifting and, quite frankly, on death, the gift to a charity can be a bit cumbersome. It’s not overwhelming, but it’s just another layer in the process.

Suzana Popovic-Montag: And another government institution that you serve with this notice of application, if you have minors who are beneficiaries of an estate, is the Children’s Lawyer’s office here in Ontario. And that is, again, if you’ve got a minor who’s a beneficiary of an estate, you’ll serve the Children’s Lawyer on their behalf, as well as the parents of the minor.

Ian Hull: So we can’t forget, too, because a lot of these Wills will have what we call is a gift-over provision and they will have a situation where there may be a trust or something of that nature, and so there are minor beneficiaries’ interests that need to be protected. And the governing authority gets a copy of it, opens a file and then is in a position to audit your administration, so to speak. So you put them on notice of the Will and you put them on notice of the financial interests.

Suzana Popovic-Montag: And if you have beneficiaries who are actually not capable, whether if mentally or otherwise, you may have to also, in those circumstances, serve their guardian of property or their attorney for property, if they’ve got one that you are aware of.

Ian Hull: That’s a really good point because sometimes people overlook that aspect of the administration.

Now the final step, of course, is to go up to the Court and file the application itself, and that can be done by your lawyer or it can be done by yourself, it depends in your circumstances. So let’s just take a minute now and we’ve filed for the application, we’ve covered off and maybe been a bit surprised at who all knows about the information.  And I say that because, in Ontario anyway, we’re required to say and provide a copy of the Will to the individual who’s a beneficiary. But we’re not necessarily required to put the amount of the estate. You actually file an Affidavit of Execution with the Court and you also file an Affidavit verifying the amount of the assets when you file in Ontario, so that it’s a public document, but it is not necessarily produced in this first series of disclosure steps. So it’s one of those things that I often will say to my clients “Look, you know what, it’s a public record. Maybe you want to go up to the Court, get a copy of the Affidavit that they file in support because in it will tell you the value of the estate and you might get some answers very quickly as to what’s going on.”

Alright, so we’ve got our Certificate of Appointment and now what do we do? This is the document we’ve all been waiting for, so to speak, and we are in a position now to start to show it to third parties to start to meaningfully administer the estate and get access to certain aspects of the assets that we haven’t been – we’ve been prevented from getting until we got this famous probate document.

Suzana Popovic-Montag: And so one of the first things that my clients will normally want is to have a couple of copies, notarial copies, you know, our Court of approval or seal of approval on that document, indicating that it is a valid probate document that they can then take and use with the authorities who actually require it, in order to help them collect and administer the assets of the estate.

Ian Hull: And that lets you get into various… gets access to various assets. It’s like getting into a safety deposit box, for example.

Suzana Popovic-Montag: And also closing out bank accounts as well.

Ian Hull: And we talked about in other podcasts and the problem is, is that the banks and third parties will not necessarily deal with you as executor without this formal order.  And banks are classics for that and the brokerage companies are classics for that because they want to know that they’re dealing with the right person before they start to release the funds to the estate bank account. Often the bank will also insist on probate before they’ll even open an estate account. So that’s case by case, but that’s something that, you know, as I say, it’s great to have the document now, get lots of notarial copies of it, use them properly and you’re in a position to start to really meaningfully administer the assets.

Suzana Popovic-Montag: And that’s particularly important when you’re trying to collect life insurance policies which typically are in large denominations. And so you’ve now got that Certificate that you can give to the institutions in order to be able to get those funds.

Ian Hull: Another one asset that we sometimes run into glitches on is RRSPs, here in Canada, and again, with our probate documentation, we can usually complete that transfer fairly quickly.

Suzana Popovic-Montag: As part and parcel of that, too, just other kinds of securities where you have to provide the transfer agents with proof of the fact that you’ve got authority to deal with those assets. And again, you’ve now got it in hand and you can give that to them in order to collect those assets as well.

Ian Hull: And, of course, one of the fundamental assets that you have to concern yourself with is the transfer of real estate. And with many different jurisdictions, it is mixed in terms of whether or not you need probate or not. But I would say, sort of, as a good general rule, probate is almost always required. And so now we can start to transfer and sell real estate.

Okay, now one little twist that some people don’t often think of the beauty of probate and before we get into some of this, what I will call some of the other action items that you can take the steps on with the probate document, are things like dealing with personal affects. And for our next podcast, I want to start to…we’ll talk a little bit about not just personal affects but automobiles, talk about other assets that we can now start to administer with the document in hand, that being probate, and with authority that we’ve been waiting for.

So thanks so much Suzana. Good to have you back and we look forward to our next podcast.

Suzana Popovic-Montag: Thanks to you, too, Ian. And just a reminder to our listeners, that we’ve got our comment line set up at 206-457-1985.

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.

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Mr. Osborne reviewed potential areas of reform and made recommendations to make the civil justice system more accessible and affordable. A variety of organizations and individuals made submissions, including the OBA. Some of Mr. Osborne's recommendations are bold and certainly worth considering:

• Additional Superior Court judicial resources in Brampton, Hamilton, Newmarket and Toronto and more judges generally;
• Increase the monetary jurisdiction of the Small Claims Court to $25,000 with no right of appeal from a judgment of less than $1,500;
• Increase the monetary jurisdiction for Simplified Procedural actions to $100,000;
• Amend Rule 20 to allow the court to weigh evidence, evaluate credibility and draw any reasonable inference from the evidence. This power, however, ought not to be exercised where the interests of justice require that the issue be determined at trial;
• Encouraged lawyers to consider new and innovative billing methods that promote access to justice for litigants with civil litigation issues who wouldn't otherwise be able to afford counsel;
• Amend Rule 31 to provide that each party has up to a maximum of one day (7 hours) to examine parties adverse in interest subject to agreement otherwise or a court order;
• Law Commission of Ontario to review of the role of the Divisional Court as a court of intermediate appellant jurisdiction and make recommendations regarding the Court's future role in jurisdiction.

It will be interesting to see how the Report fares and what recommendations are implemented.

Thanks for reading, Justin

I recently came across a case that considered the doctrine of abuse of process. While it was a family law dispute, the case nevertheless caught my attention as abuse of process cuts across all areas of the law, including estate litigation.

The Supreme Court of Canada had this to say about abuse of process:

The doctrine of abuse of process engages the inherent power of the court to prevent the misuse of its procedure in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute. It is a flexible doctrine unencumbered by the specific requirements of concepts such as issue estoppel.

As can be seen from the above passage, the focus of the abuse of process doctrine is on the integrity of the judicial process and not on the motive, however dishonourable, or status of the parties. 

In the context of estate litigation, where emotions are often raw and grievances long held, a party to an action cannot be blinded by perceived motives when considering whether to strike a claim as an abuse of process. 

The best way to approach abuse of process is to consider claims that the court has held to be an abuse of process. A good example is where a party re-litigates a claim, however disguised, solely to achieve a more favourable judicial result or harass the other side.  Such a case is both manifestly unfair to the defendant as well as bringing the administration of justice into disrepute.  

The real attraction of the doctrine of abuse of process is its flexibility and the latitude it provides the court in its application. However, as with all procedural or early motions, it is often a difficult case to meet. The facts must be clear in order to successfully argue that a claim should be struck as an abuse of process. 

Justin

In 1995, the defendant inherited property from his aunt. The plaintiff helped pay property taxes on the inherited property. Furthermore, as the defendant became ill in 1999, he ultimately contributed less to the parties’ expenses. 

The plaintiff sought a declaration of a constructive trust over the inherited property based on unjust enrichment. The plaintiff claimed she supported the defendant over the course of many years and that her financial contribution to the defendant enabled him, among other things, to pay taxes on the inherited property. Alternatively, she sought monetary compensation for the defendant’s enrichment. 

The defining feature of the case is that the inherited property came to the defendant by way of an inheritance. As noted by the British Columbia Court of Appeal, the case was different from the majority of cases where the parties lived together and jointly built up assets over many years. If, in fact, the plaintiff was entitled to any trust claim to the inherited property, such a claim would derive from what she did after the defendant inherited it.

However, the court found that it would not be appropriate to award the plaintiff a constructive trust remedy over the inherited property, having regard to her relatively sparse direct contributions to maintaining or improving the property after the defendant inherited it. A constructive trust is the appropriate remedy for unjust enrichment only where a monetary award is insufficient and where there has been a direct contribution to the property by the party seeking such a remedy. 

According to the court, spouse-like care and assistance, some personal and some financial, entitled the plaintiff to a monetary award based on unjust enrichment. In the circumstances, the court felt that an award to the plaintiff of one-third of the value of the property accruing to the defendant was fair.

Justin

In any event, I try to approach obituaries with a positive spin. I often read an obituary with admiration for the remarkable life lived. Most of the obituaries I read canvass the lives of a generation that is often called the “greatest generation”. Many of the people I read about survived the depression as children or young adults and lived through World War II with all its agony, grief and sacrifice. They greeted the prosperity of the 1950s with relief after a long war, witnessed and ultimately embraced the social revolution of the 1960s, raised successful children (baby boomers) who themselves are changing the face of Canadian society. The greatest generation is, in fact, a testament to what can be accomplished when hard work, sacrifice and compassion are brought to bear. 

It was along these lines that I read with interest the recent passing of Anna Marie De Sousa. Mrs. De Sousa, along with her husband, was a shining star when it came to charitable fundraising in Toronto. She was the founder of the Brazilian Ball, a wild extravaganza held every year to raise money for charity (the recipient changes every year). I never met Mrs. De Sousa, but I certainly read about her in the newspaper and the success that her Brazilian Ball ultimately came to represent. The glittering elite of Toronto would come out to watch scantily clad Brazilian dancers and raise millions of dollars for a good cause. No doubt, there will be follow-up tributes to her life in more detail than the obituary that recently appeared in the Globe & Mail. However, she is an inspiration to many of us. Much can be accomplished in life if we set out mind to it. She made Toronto a better place and there are many others who strive to do the same.

Justin

An interesting case recently released by the Ontario Superior Court of Justice in Rand Estate v Lenton caught my attention.  In a relatively rare decision, the court awarded costs against the solicitors for the respondents.

According to the court, the conduct of the solicitors for the respondents caused costs to be incurred without reasonable cause or wasted by undue delay, negligence or default. The solicitors for the respondents systematically engaged in a pattern of inappropriate conduct, including: (1) inordinate and unnecessary delays; (2) bringing numerous and unnecessary motions; (3) being inadequately prepared; (3) failing to appear; (3) disregarding the professional obligation to be civil and courteous to others; (4) presenting arguments that had no merit; (5) acting for the respondents despite having a clear conflict of interest; (6) failing to do anything to resolve the litigation; (7) disregarding court orders; and (8) continuing to produce documents in contempt of a court order.  As a result, the court found it appropriate to award costs against the solicitors for the respondents on a substantial indemnity basis to address the costs thrown away by the applicants. 

The case, and the laundry list of improper behaviour, is a good reminder to all counsel to think long and hard about tactics and strategy (no case is really worth sullying your own reputation and credibility). Lawyers also need to keep in mind that they are not just mouth pieces for their clients. Counsel should advise their clients of the minimum standard of behaviour, decorum and professionalism expected by the courts. A good way to control your client is to remind him/her that costs can be awarded against a party who makes frivolous claims, or engages in egregious behaviour. Of course, lawyers are clearly not immune from costs and must govern themselves accordingly. If a client refuses to listen or expects you to take a position that will be frowned upon by the court, it is time to get off the record. 

Justin

The respondents were success at trial and sought their costs. The applicant, the Ukrainian Catholic Episcopal Corp. of Easter Canada (the “Church”), argued that no costs should be awarded and that the costs requested were, in any event, excessive.

The court recognized that in estate matters, issues frequently arose upon which “reasonable persons” could “reasonably disagree”. Ambiguity in a testamentary document was cited as one such example. The court held that where there were reasonable grounds for an application, costs should generally be paid by the estate.

However, in the case at hand, there was no dispute arising out of any mistake or lack of clarity or default of the testator. According to the court, the lack of evidence supporting the Church’s position ought to have been apparent from the beginning and certainly at the end of discoveries (a good reminder to counsel to write to clients at the end of discoveries to address the merits of the case). Given the allegations of misconduct, coupled with the lack of evidence, the court held that costs, on a partial indemnity scale, should follow the cause (loser pays the winner).

The fact that the Church was a not-for-profit organization carried no weight with the court. Moreover, even though there was no adversity of interest between the respondents, the court was satisfied, despite the arguments of the Church, that it was reasonable for the parties to be separately represented. The respondents were awarded their separate costs.

Thanks for reading and have a good weekend.

Justin