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 This statute amended or repealed over 300 pieces of legislation, ranging from the Accumulations Act to the Off-Road Vehicles Act.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

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

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

Bianca La Neve

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

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Each year the Ontario Bar Association (OBA), Trusts and Estates Section, considers candidates for its Award of Excellence. Last year, the Section paid tribute to Barry Corbin as the recipient.

The Award for Excellence was created to recognize exceptional contributions and achievements by members of the OBA to the area of trusts and estates.

Any Trusts and Estates Section member of the OBA in good standing, as well as former members of the section who have retired or been appointed to the bench, but not including current officers of the Executive of the Trusts and Estates Section or the Executive of the OBA, are eligible to be nominated.

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The 12th Annual Estates & Trusts Summit, took place late last week on November 12th and 13th, 2009 in Toronto.  This program, organized by the Law Society of Upper Canada, presented a variety of issues which are of interest to anyone practicing in the Estates and Trusts field.

The summit spanned two days, and dealt with topics running the gamut.  Some of the Topics and Speakers included:

• Estate Planning in Recessionary Times (Heather Evans)
• U.S./Canada Cross-Border Planning (Beth Webel & Jim Yager)
• Family Law and Your Estates Practice - An Update (Daniel S. Melamed, C.S.)
• Drafting Multiple Wills (Clare A. Sullivan)
• Estate Administration Issues (Rosanne T. Rocchi)
• Creating Insurance Trusts to Minimize Probate Tax on Life Insurance (Robin Goodman)
• The Exercise of Trustee Discretion (Bernadette Dietrich)
• Practice Management Issues for Estates Practitioners (Louise F. Christofolakos)
• Constructive Trusts and Quantum Meruit (Elizabeth A. Bozek)
• The Standard of Care and Will Drafting (Ian M. Hull, C.S)
• Duelling Powers of Attorney (Jordan M. Atin, C.S.)
• The Latest Costs Issues (Shael Eisen)
• Remedies for Non-Compliance with Court Orders (Kimberly Ann Whaley, C.S.)
• The Top 10 Decisions Released by The Honourable Mr. Justice David Brown (Timothy G. Youdan)
• Representing the Incapable Person (Marshall Swadron)

For a full list of speakers and topics visit the Law Society of Upper Canada Website.  If you were not able to attend, contact the Law Society of Upper Canada to obtain materials.

Nadia M. Harasymowycz

Nadia M. Harasymowycz - Click here for more information on Nadia Harasymowycz.
 

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Today’s blog is the last in my series this week addressing certain aspects of preparation for trial in a contested passing of accounts.    The items discussed this week were certainly not meant to be, nor were they, exhaustive. Preparation necessary for a hearing/trial with narrow issues, few documents, few evidentiary concerns and an uncomplicated Estate will obviously be different than a case with numerous issues, voluminous documents, evidentiary issues and a complicated administration. The critical aspect of trial preparation is that it begins at the beginning of a case; not literally, but certainly in the sense of being mindful at pre-trial stages of the evidentiary considerations and how the evidence is to be marshalled and presented.

Aside from ensuring that you have appropriate resource materials at the trial (such as texts dealing with the rules of evidence, the Rules of Civil Procedure, Probate Practice etc.), it is important to have prepared your opening and closing statements (to the extent possible), have prepared the necessary law regarding the substantive issues in dispute (casebook, factum), have addressed costs submissions (organizing offers to settle, preparing a Bill of Costs etc.), and have a trial binder with you at trial for your own use. 

A trial binder typically contains the pertinent materials that you would like to have at your fingertips during the trial (ie. pleadings, orders, witness lists, witness summaries, answers to undertakings, listing of the types of evidence, objections, offers to settle etc.).  The trial binder will allow you to have quick access to information that you might only have a few minutes or less to locate and quickly review. 

While most contested passings settle at a pre-trial stage, if a trial is necessary, success may hinge on the preparedness of the parties.

Thanks for reading this week. 

Have a great weekend.

Craig

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The Ontario Lawyers Gazette recently published a helpful article titled “Succession Planning Protects You and Your Clients”, which reminds licensees of the importance of planning for the future.

According to a 2006 survey, 80% of sole practitioners do not have a plan detailing who would service their clients in the event of their death or incapacity. This is an alarming number of sole practitioners who are putting themselves at unnecessary risk.

Under the provisions of the Law Society Act, the Trustee Services department of the Law Society may intervene in a practitioner’s practice and obtain a variety of orders which would have the effect of winding up the practitioner’s practice in the event that the practitioner became incapacitated or deceased. Margaret Cowtan, manager of Trustee Services states that “it can be a very intrusive and often expensive undertaking if Trustee Services is required to resort to an order to enable a practice to be wound up.” 

One alternative that we can consider in planning for our future is to “name a licensed lawyer as a limited trustee in their wills for the sole purpose of winding up the practice. By appointing another lawyer as a trustee for the purposes of the practice, on death, that lawyer can not only take professional responsibility for the trust account and make appropriate distributions to clients he or she can review client files, continue matters should clients elect to engage them, or return files to clients as appropriate.” We can also give signing authority on the trust account to another lawyer in the event of an emergency. Only licensed lawyers or paralegals are permitted to deal with trust accounts.

If you are interested in learning more about planning for your future, please click the following link which will take you to the Law Society’s Succession Planning Toolkit.

Thank you for reading,


Rick Bickhram

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 As an aging society, we are likely to see an increase in issues surrounding abuse of our elderly. Just simply take a look at our recent estate and trust literature and you will notice that there has been an increase in articles about elder law. 

Recently, I read an article labeled “Putting the Brakes on POA Fraud.” This article can be found in Briefly Speaking which is the official magazine of the Ontario Bar Association. The article is authored by David Freedman, who is an associate professor at Queen’s University faculty of Law.  In his article, Professor Freedman looks at the common situation in which elder abuse is likely to occur wherein he states: “The prototypical example is the situation in which the elderly parent resides with one child who is to take principal responsibility for the parent’s care and who has been given a POA by the parent over his or her assets. Perhaps it is the siblings or a third-party care-giver who complains about the exercise or non-exercise of the POA, but there are many cases in which the assets are misappropriated.” Of course there is a strong public interest in protecting our elderly against financial exploitation, but what can we do?

For those of us who practice in this area of the law, how often have we heard of a family member approaching the police  to make a complaint about an elderly person who has been taken advantage of and being told “it’s a civil matter”? False. Section 331 of the Criminal Code of Canada addresses the issue of “Theft by a Person Holding a Power of Attorney.” In addition to the Criminal Code, there are civil remedies that are founded on the principles of restitution. Professor Freedman states that regardless of the type of case (criminal or civil) “the interest is the same, stripping the wrong-doer of any illicit gain and restoring the victim as much as it is possible to do in the circumstances.”

Thank you for reading,

Rick Bickhram

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Today’s blog will continue my series this week on protecting trustees from potential liability.

A trustee may incur personal liability arising from his or her administration of the trust. The provision or existence of a release and/or indemnification in favor of the trustee may protect, limit or exonerate the trustee from liability.

With respect to a trustee’s accounts (accounting) for the administration, releases may be sought by the trustee and provided by the beneficiaries in conjunction with a Court order passing the accounts.   Alternatively, the beneficiaries may provide the trustee with a release in lieu of compelling the trustee to pass his or her accounts in Court. Amongst other considerations, when seeking a release from the beneficiary, a copy of the accounts should be provided, either in an informal format or formal format, for the beneficiary’s benefit.  

A trustee may also incur personal liability in tort, in contract, or under statute within the context of administering a trust. If the terms of the trust do not provide for an indemnification of such liabilities, the trustee should consider the nature and extent of the indemnification necessary, whether out of the trust, or possibly the estate property, or from the beneficiaries. It may also be that the trustee may need to obtain a release or indemnification from third parties (perhaps third parties who the trustee properly contracted with in respect of trust assets).

Beneficiaries and/or third parties may agree by way of a release, deed or agreement to the indemnification of the outgoing and incoming trustees in respect of certain liabilities of the trust.

Releases may be sought and provided by beneficiaries in respect of a certain transaction or actions on the part of the trustee.

If the parties cannot agree upon an appropriate indemnification of the trustee, an Order of the Court may be necessary to afford the trustee with protection.

Thanks for reading, Craig.

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Today’s blog is a continuation of my series this week on protecting a trustee from potential liability.

Perhaps the best way for an outgoing trustee (and/or new trustee) to limit any liability that may be visited upon him/her/them as a result of the administration of the trust (or to the date of his or her retirement, removal and replacement) is for the trustee and his or her co-trustees, if any, to pass their accounts.   Assuming the accounts are passed, not only will the trustee know the “starting numbers” and the assets/liabilities for the future administration of the trust (that is start with a clean slate), but the trustee will have been afforded the proper protection of the Court order. 

Requiring an accounting may also be the only way that the beneficiaries can review the administration of the trust and determine whether the administration has been proper or whether misconduct has occurred, negligent or otherwise.

In the event that a trustee is resigning, being removed or replaced, the new trustee may require that the accounts be passed before the new proposed trustee accepts, and consents to, the appointment. 

In addition to a passing of accounts, applying to and obtaining a tax clearance certificate from all applicable tax authorities in respect of the trust will release the trustee from tax liability in respect of the trust to the date of the clearance certificate (absent fraud, willful concealment or misrepresentation).

Thanks for reading, Craig.

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

Topics included:

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

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

Have a great day!

Bianca La Neve

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Listen to Estate Planning in Uncertain Economic Times

This week on Hull on Estates David Smith and Sarah Hyndman Fitzpatrick talk about estate planning in uncertain economic times. They discuss how the current economic situation has impacted estate planning and litigation and new tools (such as the "Tax Free Savings Account") to consider in creating you estate plan.

Feel free to send us an email at hull.lawyers@gmail.com or leave us a comment on the Hull on Estates blog.

Estate Planning in Uncertain Economic Times - Episode #148

Posted on February 5^th, 2009 by Hull & Hull LLP

David Smith: Hi and welcome to Hull on Estates. You’re listening to episode #148 on Tuesday, February 3^rd, 2009.

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.

David Smith:  Hi, I’m David Smith and welcome to another episode of Hull on Estates.

Sarah Fitzpatrick:   And I’m Sarah Fitzpatrick. If you want to be heard on Hull on Estates, you can participate by leaving us a comment, you can e-mail us at hull.lawyers@gmail.com or you can visit our blog at estatelaw.hullandhull.com.

David Smith:  Good afternoon Sarah.

Sarah Fitzpatrick:   How are you today?

David Smith:  I’m good Sarah. And you know, it’s great to have this opportunity to podcast. And we were talking about what we could podcast about and regrettably top of mind for everybody is the economy.

Sarah Fitzpatrick:  Absolutely.

David Smith:  And so we thought maybe it would be a good time to revisit estate planning in general, especially in this kind of climate.

Sarah Fitzpatrick:   Absolutely. Certainly these fragile economic times lead everyone to think about their estate plans, perhaps what they’ve done right, what they could reconsider and it’s a good time just to make sure that your house is in order and your estate planning is up-to-date and current.

David Smith:  Right and I guess, you know, top of mind is keeping fees to a minimum and trying to save tax expense. And so, you know, that always makes us think about general probate avoidance techniques such as beneficiary designations and joint account holdings. But of course, we’ve got this new tax-free savings account as well.

Sarah Fitzpatrick: Right, these new tax-free savings accounts, also dubbed the TFSAs are really a new tool in our estate planning tool kit.

David Smith:  Yeah, could you tell me a little bit about them, Sarah, because I’d read a bit about them in the media but I don’t really have a handle on them.

Sarah Fitzpatrick:  Right, well it was introduced by the federal government in early January and basically it’s a mechanism whereby individuals can contribute a certain amount into savings accounts and they can…the income that is generated on that is not subject to tax. And unlike an RRSP, you can actually withdraw those amounts as well and the income when you withdraw it is not subject to tax as well.

David Smith:  So a little more flexible then.

Sarah Fitzpatrick:   It’s absolutely more flexible. It certainly doesn’t replace the estate planning tool of an RRSP but I would say it’s a helpful adjunct to the RRSP.

David Smith:  Okay, I think the number I see bandied about is $5,000, is that right?

Sarah Fitzpatrick:  Its $5,000 right now which many are considering one of the detriments to the scheme because it’s sort of a low contribution limit. I’ve heard that that’s supposed to be raised by $500 a year as well. So its $5,000 for the year.

David Smith:  Right, and I mean, I guess my initial impression when I heard about these were, you know, gosh the income you’re going to earn on that much money invested is not a heck of a lot of money so you know, I’m not sure that I’m sold on this being a huge tax savings. But I guess it adds up.

Sarah Fitzpatrick:   It does and again, when I said before that it can be used in conjunction with an RRSP, one advantage to it, unlike the RRSP, is actually there is no time limit where you need to wind it up or convert it into another investment vehicle. There’s actually no time limit at all…

David Smith:  You’re referring to the age of 69 or 70?

Sarah Fitzpatrick:  That’s correct, and rolling it over into your RIF as opposed to your RRSP. That time limit doesn’t apply in this case. So that can be very helpful. And obviously if you’re looking at long-term savings, $5,000 a year, with the increase of $500 every year, that can amount to some very considerable savings on your income.

David Smith: And that would be particularly useful for seniors, I guess, who are approaching the age when they would otherwise have to convert the RRSP.

Sarah Fitzpatrick:  Absolutely. Yeah. So once again, just yet another estate planning tool to consider. We still don’t seem to have an answer on whether or not the proceeds would fall inside or outside of your estate and be subject to probate tax. I note that you were discussing you know obviously one of the objectives when we are estate planning, is to make sure you have as much out of the pot, so to speak, as you can, to avoid those probate fees. So I think it’s yet to be seen whether or not the proceeds from the TFSAs are actually exempt from probate taxes but you can in fact designate a beneficiary on the plan.

David Smith:  Right, I know that one of our associates, Diane Vieira…

Sarah Fitzpatrick:   She recently blogged on this.

David Smith:  Recently blogged on this, right. So I guess for our listeners, if you go onto the website and type in “TFSA” in the search box, you’ll be able to find Diane’s blog. It was about 3 weeks ago and it touches on this very issue.

Sarah Fitzpatrick:   That’s right.

David Smith:  So I guess that kind of covers TFSAs. I mean, something to think about and as always, estate plans are impacted by any new investment tool that the government comes up with. Is there anything else we should think about, Sarah, in view of the economy in terms of advising our listeners what to give some consideration to?

Sarah Fitzpatrick:  Well I think you know we have really scenarios where you’ve got your individual who’s got a very basic estate plan and you would think that in this type of economy, individuals might be less inclined to come and make sure your estate plan is in order and get your Wills up to date, basically due to the cost. I’m finding that there’s actually been a surge in sort of the very basic individual who’s got the basic estate plan, coming in to make sure that they have sort of all their ducks in line and it’s been very busy with people, I think wanting just not to leave anything to chance. They’ve perhaps been exposed to risks over the last few months and looking just to shore everything up and make sure everything is in order. And then you have the situation where you might have somebody with a more complex estate plan and in those situations as well, again it’s a good time just to make sure that all your documents are in order. You may have assets that may be depleted, they may no longer even exist. You may have sold property that you’ve referred to in a Will. There may be income splitting trust arrangements that may be beneficial to consider. You may have drafted a trust based on perhaps capital gains issues and that issue may have changed now with the economy, given lower property values and so forth. So there’s all kinds of issues.

David Smith:  Lots of things to consider, for sure, and certainly you know our listeners may not know this but you’re more of a planning-bent; I’m more of a litigation-bent and in my practice, one thing that comes to mind for sure is the prudent investment of estate assets because of course with the downturn, you know, everybody - no matter how conservatively invested - is going to be losing something. And so consideration has to be given to reviewing your portfolios and that presumably is going to be a consideration top of mind for estate trustees who have that fiduciary duty to trustees. But also to people planning their estates and giving consideration to how to save taxes appropriately and all of these factors, you know, losses, what have you, can be factored into the estate plan.

Sarah Fitzpatrick:   That’s right.

David Smith:  Alright, so you know, useful to consider all of this. Something else that we…the general approach that we often consider when we’re talking about estate planning is this whole idea of probate avoidance techniques, I guess, I use it as a sort of general term because I run into it quite often in my practice. What are you seeing as trends in that in terms of the planning side?

Sarah Fitzpatrick:   I’d say obviously you’ve got your obvious ones, you’ve got your life insurance, making sure that you’ve got your life insurance in place because that obviously falls outside the scope of your estate and is not subject to probate tax. We’ve got your RRSPs as well. Those are really the critical ones. And I think people with a very basic estate plan are most likely to employ.

David Smith:  Right and I guess the joint account issue is always top of mind for me in litigation because I so often see what goes wrong if it’s not properly papered. And so of course if the intention is to gift that asset by right of survivorship and if it’s a scenario where but for some evidence that that’s the intention, the presumption of resulting trust would apply, its probably a good idea to document some kind of arrangement or agreement between the recipients as to how that asset is going to be treated.

Sarah Fitzpatrick:  That’s right. And as many of you are probably aware, we have had, you know, in the last year I guess it’s almost two years ago now, we’ve had the Supreme Court of Canada decisions in this regard. So absolutely making sure…I think the bottom line is making sure that your intentions are very clear whether or not it’s a resulting trust or not. But just making sure that everything is documented.

David Smith:  Right. Do you think, I see we’re getting near the end of our podcast here but in terms of wrapping it up, Sarah, is there anything we haven’t touched on that listeners can give some thought to, just having consideration to the market conditions and the general economic downturn, in terms of prudent estate planning, that comes to mind that we haven’t touched on?

Sarah Fitzpatrick:  Yeah, I think the bottom line David is just that this is, you know, a very uncertain economic time and people just want to make sure that everything is in order. That your documents that you have are the proper documents, they’re complete and that you’ve really covered off all your bases, and that your estate planning prudently.

David Smith: Right and on that whole idea of being prudent, I guess some thought has to be given to fundamentally the most important aspect of a good estate plan is that it reduces the likelihood of litigation which obviously, its in the minority, but those estates that are subject to litigation have to suffer you know the considerable added expense of legal fees that everyone ought to avoid. And so when clients meet with you to talk about an estate plan, the whole idea is to create a situation where the likelihood of litigation is reduced because of prudent estate planning.

Sarah Fitzpatrick:   That’s correct and I don’t know whether we’ve seen this trickle down effect yet but perhaps it remains to be seen whether, in light of the economy over the past year, we’ve got more litigation.

David Smith:  Yeah, its going to be an interesting question, isn’t it? Because the lawyers who act in litigation files are going to be less inclined presumably to ask for significant retainers, knowing that their clients may not be in a position to fund them. On the other hand, I think you may well see a drive towards people looking to estates as possible sources of relief from a situation where they are suffering from not having significant assets. Not to say that that will sort of feed into a huge cottage industry of frivolous litigation but people who might not otherwise give consideration to litigation may now be forced to consider whether they want to join in on a claim or what have you.

Sarah Fitzpatrick:  That’s right.
 

David Smith:  Simply because the market forces are such that they may feel that this is a necessity. So it could well drive the demands. I think it may also drive a lot of the cases to settle earlier too, because people just won’t have the belly or the wherewithal to stick it out to go to a trial.

Sarah Fitzpatrick:  Right.

David Smith:  So from the litigation side, it will be interesting as well to see how this happens. I mean obviously our best wish for everybody is that the economy you know experiences an upturn because nobody wants to be seen to be benefiting from a downturn. I think the bigger concern for everybody out there is just that we’re through this period sooner rather than later.

Sarah Fitzpatrick:  Absolutely.

David Smith:  So it was really helpful, I think Sarah, sort of revisiting the estate planning side of this and touching briefly on the litigation.

Sarah Fitzpatrick:   Great, it was great podcasting with you David.

David Smith:  Well, I’m just, you know, have this big decision now whether to contribute to a TFSA or an RRSP.

Sarah Fitzpatrick:   I think the answer is both.

David Smith:  Yeah, I just need the money.

Sarah Fitzpatrick:   Great.

David Smith:  Okay thank you.

Sarah Fitzpatrick:   Thanks David.

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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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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Amending or altering a formal, attested will can be a difficult task. Such amendments may not be accepted by the Court, despite what may be the clear intentions of the testator.

The recent Ontario decision of CIBC Trust Corp. v. Horn is illustrative of the principles involved. There, the testator executed a formal, typed will. After execution, the testator made substantial handwritten changes to a number of bequests. The changes were not dated or signed. In addition, she added three unnumbered paragraphs to the will.

The court noted that any alteration to a will must be made in accordance with the formal requirements of the Succession Law Reform Act, unless the alteration renders part of the will completely obliterated. Alterations to a formal will must be signed and attested and signed by two witnesses. 

Alternatively, it is possible to make a holograph codicil to a formal will. However, this too requires compliance with the requirements of the Succession Law Reform Act. For a holograph will or codicil, it must be signed “at, after, following, under or beside or opposite the end of the will”. In this case, the handwritten changes were not signed at all.

In conclusion, the court found that none of the additions or deletions could be given effect, and the Estate Trustee was directed to administer the estate in accordance with the typewritten will, and without considering any of the handwritten changes or additions.

Practitioners may want to advise clients of the requirements for amending or altering provisions in a will. Otherwise, a testator’s intentions may not be truly reflected in the will document that he or she leaves.

Thank you for reading.

Paul Trudelle

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

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

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

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

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

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

Enjoy the Holidays! Craig

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Today’s blog is the last in my series this week on the variation of a trust under the Variation of Trusts Act and touches upon the Application material to be brought in respect of the variation.

The Application seeking approval of the variation is usually brought by one or more of the capacitated beneficiaries. The respondents are typically all of the beneficiaries who are not named as the applicant(s) and the trustee (unless the trustee is the, or one of the, Applicant(s)). As a trustee is to act impartially toward the beneficiaries, it may not be appropriate for the trustee to bring the Application depending on the circumstances.
 

The Notice of Application sets out the relief being sought including (the following is not meant to be exhaustive): (i) any representation order required; (ii) Judgment approving the Deed of Arrangement on behalf of the respective interest;(iii) Orders for any ancillary relief that may be necessary; and (iv) costs.

The grounds being relied upon for the relief being sought are also included as are the materials being relied on. 

The supporting affidavit typically includes the relevant facts and verifies the recitals in the Deed of Arrangement. Any pertinent document such as the trust document, the listing of the trust property, and documents from another proceeding from which the variation arose, can, as necessary, be made exhibits to the affidavit.

The draft Judgment typically refers to all of the materials filed with the Court and includes, as necessary, provisions that, among other things, address the appointment of the litigation guardian, the approval of the Deed of Arrangement of behalf of incapacitated beneficiary, any ancillary relief and costs. 

Have a nice weekend. Craig
 

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On a contested passing of accounts, counsel may be requested to represent two or more clients, such as multiple beneficiaries of an estate or co-estate trustees. In such cases, it is critical to ensure that a conflict of interest does not exist. When counsel first meets with potential multiple clients their respective interests may well be perfectly aligned and identical and it may not appear that there is a potential conflict of interest. Further, all consent to the representation of multiple parties. 

In the case of multiple executors, in order to avoid a conflict of interest the controversial issues need to be addressed and discussed in detail. For instance, how will executor’s compensation be apportioned as between them? Is there a different relationship between each executor and the beneficiaries? Does one executor disagree with any actions taken by any of the other executors? Will their evidence be the same? Do the executors share the identical expectations of how the litigation should proceed as well as in respect of potential settlement? The potential disagreements can be discovered by exploring the issues up front.
 

If a conflict arises and the clients are not able to resolve a conflict, counsel may not be able to continue to act for any of them. Pursuant to the Rules of Professional Conduct, if a conflict exists or is likely to exist, clients need to be advised of the consequences of sharing counsel and consent after being informed of those consequences. In certain circumstances where clients wish and consent to having one lawyer represent them despite a conflict of interest, independent legal advice may be needed.

Joint retainer agreements or letters explaining the joint retainer relationship can set out the above issues so that clients and their lawyer are clear on their relationship and the passing of accounts.

Canadian Olympic medal count: 13. Keep watching.

Craig
 

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Looking out of our office window on such a beautiful summer day, my mind drifted from blogging to golfing. I then struggled to make a connection between the world of trusts and estates, and thoughts of golfing.

The one thing that immediately came to mind was the comment of Rodney Dangerfield’s character Al Czervic from the movie “Caddyshack” that “Golf courses and cemeteries are the biggest waste of prime real estate in America.”

Looking a little deeper on the internet, I found a wealth of golf-related murder mysteries!  Yahoo hosts a group for golf mystery collectors. The Waterboro Public Library has compiled a list of well over 100 golf murder mysteries (I stopped counting at 100). 

Titles include “Death is a Two-Stroke Penalty”, “Deadly Divots”, “Death Under Par”, “Rotten Lies”, “Fairway to Heaven”, “Putt to Death”, “Par for the Corpse” and “Six Strokes Under”. There appears to be no limit to the punning.

Whether you’re reading, or golfing, or both, have a great summer!

Thank you for reading.

Paul Trudelle

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The common law in Ontario now appears to clearly provide for claims by “disappointed beneficiaries” against drafting solicitors where a bequest to a beneficiary fails as a result of the negligence of the solicitor. (See Harrison v. Fallis, 2006 CanLII 19457 (ON S.C.))

A decision out of the Saskatchewan Court of Queens Bench appears to open the window to this type of claim even wider. Disappointed beneficiaries may also have a cause of action as against financial institutions and others that provide estate planning advice.

In Mayer v. Nordstrom, 2003 SKQB 397 (CanLII), the deceased consulted with a financial adviser with respect to his estate plan. The deceased owned a mutual fund plan, and designated his son as the beneficiary. However, the plan was not registered, and the designation was therefore void.  The fund fell into the deceased’s estate, and the son received only half of the value of the fund as a beneficiary of the estate. The disappointed son sued the financial planner for negligence. 

The financial planner resisted the claim, taking the position that he did not owe a duty of care to the son.

The Court disagreed. The Court held that the “disappointed beneficiary” principles articulated in solicitors’ negligence cases such as Earl v. Wilhelm (2000), 183 D.L.R. (4^th) 45 (Sask. C.A.) and White v. Jones, [1995] 1 All E.R. 691 (H.L.) applied equally to other professions. The “disappointed beneficiary” principle “is not a function merely of the defendant’s occupation”. The planner was a professional who held himself out as possessing special skill, judgment and knowledge in financial planning, which included estate planning tools. The planner ought to have known that carelessness on his part would cause harm to a third party.

The duty of care to potential beneficiaries, opened in the White v. Jones decision, continues to expand.

Thank you for reading.

Paul Trudelle

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Today’s blog is the third in my series this week on cases in the post Cummings v. Cummings era.

Today’s case is Simpson v. Leardi, [2005] O.J. No. 4282 (Ont. S.C.J.).  

In Simpson, the deceased had left a substantial estate. The plaintiff had brought an Application pursuant to the Succession Law Reform Act seeking support in the amount of $3,750 per month. The plaintiff was already receiving $1,000 per month pursuant to the deceased’s Will, leaving an alleged deficiency of $2,750 per month. The Court ordered that the Application be converted to an action and made an order awarding the plaintiff $2,750 a month in interim support.

The parties were subsequently in agreement that the plaintiff’s personal financial circumstances had improved since the interim order. The estate of the deceased was worth $10 million and the plaintiff’s assets were worth approximately $3 million.

The defendants, the estate trustees of the estate of the deceased, then brought a motion seeking the termination of the interim order for the support of the plaintiff. 

The plaintiff cited Cummings as support for her position that when the moral duty of the deceased to her is taken into account, the plaintiff should receive her fair share of the deceased’s wealth. The plaintiff conceded that based on a “needs based” analysis, she would not likely obtain a support order. The plaintiff contended, however, that the interim order should be maintained.

The Judge terminated the interim support, declining to accept the plaintiff’s argument that Cummings allows a court to take into account the respective wealth of the parties and reapportion that wealth in a “fair” manner. 

The judge noted that it was important that after the parties’ positions are put forward at trial, a judge may well determine that the plaintiff is entitled to more support than the $1,000 stipulated in the deceased’s Will. The plaintiff had not established, however, at the time of the motion, a continued need for interim support. 

Have a good weekend. Craig

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On April 23, 2008, I attended at the Ontario Bar Association’s Dinner with the Estates Lists Justices.

The evening began with a review of the Case of the Month by Barry Corbin. Barry discussed the Court of Appeal decision of Madore-Ogilvie v. Ogilvie Estate (This case was also discussed by Sean Graham and Rick Bickhram in Hull on Estates, Episode #103.) This case dealt with the inclusion of jointly owned insurance polices as “section 72” assets under the Succession Law Reform Act.

Following Barry’s excellent presentation, Madam Justice Allen, Madam Justice Conway and Mr. Justice Brown took to the dais. They discussed various ways that the bar can work with the bench in order to facilitate the decision-making process, while advocating the client’s position.

Practical tips include organizing the court file, filing meaningful confirmation forms, attending with a working draft of the Order Giving Directions, and filing chronologies and lists of beneficiaries were appropriate.

The importance of filing a Factum was emphasized. These are said to be extremely helpful, and not filing a Factum should be an exception rather than the norm. 

More tomorrow.

Paul Trudelle

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