In a recent article published in STEP's Trust Quarterly Review, Audrey Giles profiles technological advances in the electronic recognition of handwriting. For example, The Center of Excellence for Document Analysis and Recognition (CEDAR) at the University at Buffalo, State University of New York has developed electronic processes for the assessment of handwriting. While such systems are funded by governments primarily concerned about white collar crime, forensic document examination is of great assistance to the estate litigator especially when trying to prove a fraud.
The difficulty is that, as Giles notes, while handwriting analysis can entail the comparison of hundreds of characteristics such as spacing between characters and the slope of letters, a signature is a very small sample which provides limited points of comparison for the document examiner. To further compound the challenge to the document examiner, all signatures demonstrate some degree of natural variation and different people will exhibit different degrees of variation in their signature. It is for this reason that the forensic document examiner will want as many samples of a true signature as possible before rendering an expert opinion.
The objective of the forensic document examiner is to provide opinion evidence for the consideration of the trier of fact as to whether a signature (on a Will for example) is that of the testator or a forgery. One tool in the arsenal of the examiner is the Video Spectral Comparator which can reveal pencil guide lines or impressions that may have been used by the forger in an attempt to duplicate the testator's signature. Such attempts at forgery are remarkably crude when considered in the context of advances in scanners and software which present new challenges to those charged with trying to detect a fraud.
Billionaire and recently deceased American shopping mall developer Melvin Simon's heirs are fighting over his last will. Mr. Simon's children from his first marriage are challenging a will that changed the distribution of his estate in favour of his second wife. Aside from the glamour factor, the case is interesting in that an allegation of fraud was recently dismissed on the grounds that "[t]he complaints fail to allege affirmative misrepresentations that can support a claim of actual fraud".
This illustrates an important point in estate and trust litigation. Ontario's Rules of Civil Procedure similarly requires pleadings that contain allegations of fraud or breach of trust to contain full particulars:
"Rule 25.06(8) Where fraud, misrepresentation, breach of trust, malice or intent is alleged, the pleading shall contain full particulars, but knowledge may be alleged as a fact without pleading the circumstances from which it is to be inferred."
This could theoretically present beneficiaries challenging the actions of a trustee, since the trustee frequently has the particulars and the beneficiaries do not. In practice, this problem rarely arises because most litigation occurs in the context of a passing of accounts, where it is unnecessary to make allegations against the estate trustee. Instead, under the procedure in Rule 74, the beneficiaries can simply file and serve a Notice of Objection to Accounts challenging transactions or omissions in the trustee's accounts.
After filing their Notice of Objection to Accounts, the beneficiaries can then bring a motion for an order giving directions (or an order for assistance) that will provide for the disclosure of the particulars they think exist. After receiving full disclosure, the beneficiaries should in a position to make a better-informed decision on whether to add such allegations to their pleadings.
Where this process is anticipated, the order should specifically authorize the parties to return to court for further directions. Of course, it would rarely even be necessary to allege fraud at all, since the facts that support the allegation of fraud can form the basis of an objection to the accounts without using the words "fraud" or "breach of trust", and this can achieve the same practical result without the risks associated with alleging fraud. Beneficiaries can also avoid the risk of having their pleadings struck at an early stage.
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 Codeof Canadaaddresses 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.”
On Tuesday I blogged about mortgage fraud and suggested that financial institutions may be at greater risk because of the B.C. Court of Appeal decision: Re Oehlerking Estate, 2009 BCCA 138.
Why would they be at increased risk?
In the B.C. case, the Judge ordered that the fraudster’s title be set aside and that a new title be issued in the name of the plaintiff executrix. However, the Judge was satisfied that the financial institution had not “participated in the fraud” therefore the mortgage remained as a valid charge on title to the land.
The B.C. Court of Appeal overturned that latter point when it declared that the mortgage is null and void as against the plaintiff and her title.
The reasons were the same as those presented in a B.C. Court of Appeal decision released on the same day in Gill v. Bucholtz (2009 BCCA 137). There is a thorough review of the Torrens land registry system and the development of B.C.'s Land Title Act. Land title systems differ per province but the B.C. decision is likely persuasive.
In Gill v Bucholtz, the Court held that the B.C. Legislature adopted the policy that the cost of frauds perpetrated against mortgagees and other chargeholders should be borne not by the public (as the funders of the Assurance Fund but by lenders and other chargeholders themselves.”
Parties to real estate transactions rely on title searches. The case law shows that title searches have limitations, especially if a fraudster has used someone else’s identification to change the title document. It is up to lenders to now perform due diligence that may require that they delve deeper than the documents alone. Sometimes good old fashioned shoe leather might be put to work to check out the property in question; even a knock on the door to ensure that the owner is actually refinancing by way of a new mortgage. This extra work may come with a fee though.
The cooler weather is cause for many people, retirees especially, to plan an annual sojourn south.
In preparing for the winter, protecting real property -- often a significant asset -- may be top of mind.
My colleague, Paul Trudelle, wrote about "Real Estate Transactions Involving Powers of Attorney" in July 2008. While travelling south for the winter does not require a sale, steps can be taken to minimize risks to real property. The Government of Ontario suggests that to avoid real estate fraud one should protect his or her identity and be alert to identity theft.
Regarding a Power of Attorney, the government also suggests caution: "Whenever you give another person a power of attorney that permits them to deal with your personal assets, you should consult with your lawyers or advisers regarding appropriate limitations."
In a 2004 Canadian Bar Association paper -- Cross-Border Issues for Snowbirds and Roaming Retirees - Marilyn Piccini Roy wrote: "If the Snowbird owns real estate elsewhere, this power of attorney may not be recognized there if the law of the situs applies its own law to the formal or substantive validity of the power of attorney or to its effectiveness vis-à-vis third parties." If a Power of Attorney deals with assets in different jurisdictions, one should seek legal advice in the jurisdiction of the asset(s).
Recent Ontario case law highlights issues that can arise regarding real estate when a fraudulent Power of Attorney is used. Reviczky v. Meleknia; Caplan (Intervenor) 2007 Canlii 56494 (On. S.C.) raises quesitons about a solicitor's duty to"go behind" a Power of Attorney by enquiring about the donor's mental capacity at the time of signing and later, as well as evidentiary requirements. The recent case law reminds all of us, including snowbirds, of the risks that exist with a Power of Attorney.
This week on Hull on Estate and Succession Planning, Ian and Suzana continue their discussion on the Will Challenge Process, step by step.
They discuss fraud as one of the most serious ways in which a will can be challenged. Evidential requirements are important when allegations of fraud or forgery are made. Handwriting analysis and other scientific means of determining the legitimacy of evidence can be employed to determine whether or not fraud has occurred. Ian and Suzana also talk about lack of proper execution being grounds to challenge a will.
If you have any comments, send us an email at hullandhull@gmail.com or call us on the comment line at 206-457-1985 or leave a comment on our blog.
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, here are Ian and Suzana.
Suzana Popovic-Montag: Hi, and welcome to Hull on Estate and Succession Planning. You’re listening to Episode #132 of our podcast on Tuesday, September 30th, 2008.
Ian Hull: Hi, Suzana.
Suzana Popovic-Montag: Hi there, Ian. How are you?
Ian Hull: Just terrific, thank you. I’m looking forward to today’s podcast and videocast because it touches on one of the areas of the Will challenge process that I find somewhat intriguing and probably the most intriguing. We finished our last podcast talking about the issues, the core central issues, well we really spent the most of our last podcast on undue influence. Today, let’s wrap up these issues as best we can in terms of the legal issues, and let’s talk for a minute, as we said in our last podcast, it’s not worthy of a lot of attention because there’s so few cases that deal with the question of fraud. But the one area where it does get dealt with is fascinating.
Suzana Popovic-Montag: And that’s when the allegation is that the Will that’s actually being put forward was not, in fact, signed by the deceased, so that it was essentially forged. And that allegation of fraud is one of the most serious allegations you can make at law. And so Ian has said in our earlier podcast we, as counsel, are very, very careful in advising clients whether or not to pursue this allegation because once you make it, there are serious consequences associated with that allegation.
Ian Hull: And those are, of course, that if you’re wrong, you could be exposed to every cent of the cost in the process. And judges come down very hard on you if you allege fraud and don’t prove it. So that’s hovering around, and that’s a big part of why fraud is not used because the judges in Will challenges aren’t as rough on you if you’re alleging undue influence and capacity in the costs context. But the forged Will is one that does come up from time to time, and there is a fairly easy way to deal with it and one that, as I say, is fascinating, because if you read these reports, it’s like magic. And that is, is that you can get handwriting analysis done. So you get the Will, the client comes in and says, look, my dad was not well, but more importantly, there’s no way this is his signature. So one of the things we would do is, is that maybe even before we allege the fraud, we would move fairly quickly if we could get a copy of the original, to get a report from a forensic, and one of the great ones, Diane Kruger, who is one of Canada’s leading experts, and Brian Lindbloom, is another Canadian expert in this area. We get an expert opinion as to whether or not that’s the valid signature of the deceased. And how they do it is kind of a neat process, and the first steps that we take to do that.
Suzana Popovic-Montag: And it’s a really scientific process that’s based on comparison with other original signatures. And so when we’re talking, and we’ve talked in previous podcasts about this intense investigation stage, one of the things that we may be looking for if the allegation is, in fact, a fraud or forgery, is for documents that bear the testator’s original handwriting, their signature and other ways that we can demonstrate that this was the way that someone would typically sign something or that someone would write something. And those kinds of evidential requirements are really important when you make these kinds of allegations.
Ian Hull: And so when you come into this, and where you’re looking at it is, this is the homework that we’re going to impose on the client. They want to make that allegation, we’ll typically say, okay, go back and seek out signature specimens. And these experts will typically say we want specimens that are time specific. They will say as close to the time that the signature of the Will was made, because as we know, elderly people, and all of us, our signatures change over the years, so the more current, the more effective the evidence is. And this really, this evidence can really explode a law suit and, obviously, the question of fraud is a tremendous emotional question as well. So whatever we can do at the outset to deal with it quickly, get lots of good specimens and get the opinion out of our expert, and get a good expert, is another sophisticated level that we can take this.
Now Suzana, let’s talk for a minute about that possibility that we can’t get at: (a) original specimen signatures; or (b) we can’t get access to the original Will because the other side’s being difficult. What do we do then?
Suzana Popovic-Montag: Well that’s another situation with another level of possible litigation where you’re going to have to possibly consider bringing a Motion before a Court, in order to have the authority to compel the individual with the original Last Will and Testament to bring it into Court, so that you can have the opportunity to provide that and any other specimen signatures to the individual who’s going to prepare your report for you. And that, you know, when we talk about these extras, or the bells and whistles to litigation, sometimes these steps will arise. We could never predict that we would have such a difficult time getting it, but there are mechanisms that we can, fortunately, turn to in order to be able to get this for our clients.
Ian Hull: And this is sort of a procedural side show. And there’s orders for assistance we can get for a lot of different relief that we’d want, and we’re going to talk about those orders for assistance at a different podcast. But, you’re right, Suzana, if there’s a mechanism available, it’s an additional cost, delay, it’s another part of the battle, but it can be done. So, we’ve wrapped up the question of fraud which is the classic scenario. There’s obviously other areas where fraud is pursued, but that’s the classic one.
Let’s just take a minute now to look at the question of lack of proper execution. Not because, we haven’t ignored it because it isn’t important. In fact, this can be the fatal blow. And why do I say that? Why do I say this could be the fatal blow, Suzana?
Suzana Popovic-Montag: Well, again, Ian, just because it’s one of those grounds. And if you can demonstrate that a Will is not a valid testamentary document, then the game’s over. The Will challenge is over in the sense that that document is set aside so you’re looking to either a prior Will or possibly an intestacy.
Ian Hull: And we love the fact that these podcasts are listened to all over the world and all across Canada, and so we try to, whenever we can, be fairly global about what some of our comments are and where the law trends are going. And one of the trends with lack of due execution in Ontario is there was some case law bouncing around over the last 10 years, but it’s come down pretty clear that the terms of the Succession Law Reform Act must be followed. You must have two witnesses in the room at the same time when the individual signs it, no excuses, no what they call substantial compliance. There’s no way of getting out of it. The alternative, of course, is in some of the other jurisdictions and that is, the question of substantial compliance.
Suzana Popovic-Montag: And that really is the key, because what had happened in Ontario is that the judges were recognizing the fact that in other provinces in Canada, sometimes Wills were being allowed to be probated or were being upheld by judges when there was perhaps only one witness or when there was some other form of less than perfect compliance with the legislation. So, substantial in the sense that close enough was good enough in those jurisdictions. But our Courts here in Ontario have come down quite strongly on the fact that no, we have legislation, it provides for specific requirements, and those requirements have to be met if a Will is going to be valid here in Ontario.
Ian Hull: Manitoba’s an example of a substantial compliant province, and there are others as well, so it’s worth exploring because the different jurisdictions approach it differently. But, it’s a mandatory compliance rule in Ontario. It’s a full stop if the Will hasn’t been executed properly in most situations. There are some variations on every theme, any time you put an absolute, you’ll have a judge to say, wait, there’s no absolute. But it’s an important issue to always check off on the checklist, that we always do with our clients.
So, those are the sort of five important areas of attack, and there are more, and there are other strategic steps that we want to consider, now that we’re into the Will challenge process. We are into the litigation. We’ve talked enough about process a few podcasts ago. We’re into it, and these are the kinds of strategic and legal considerations we’re going to start to make. And we’ll talk about some of the other ones in our next podcast. So, thanks very much, Suzana.
Suzana Popovic-Montag: Thanks to you, too, Ian. And just a reminder if anyone would like to send us some feedback, feel free to send us an e-mail at hullandhull@gmail.com.
Ian Hull: And our call-in number - 206-457-1985. Thanks very much for listening.
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 any questions or comments, please visit our website at hullestatemediation.com.
Or, listen to Will Challenge Litigation - Part 6 by clicking here.
This week on Hull on Estate and Succession Planning, Ian and Suzana continue their discussion on the Will Challenge Process, step by step.
They pick up where they left off last week by addressing undue influence. What is undue influence and how do we prove it? Next week they will continue their discussion on the different grounds upon which a will can be challenged.
If you have any comments, send us an email at hullandhull@gmail.com or call us on the comment line at 206-457-1985 or leave a comment on our blog.
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, here are Ian and Suzana.
Suzana Popovic-Montag: Hi, and welcome to Hull on Estate and Succession Planning. You’re listening to Episode #131 of our podcast on Tuesday, September 23rd, 2008. Hi there, Ian.
Ian Hull: Hi, Suzana. How are you doing today?
Suzana Popovic-Montag: I’m well thank you, how are you?
Ian Hull: Just terrific. We are thinking through this Will challenge process and we’re trying to hopefully take it beyond the typical Will challenge and talk about some sophisticated steps that are often involved, (a) because they’re good, they’re helpful hopefully, for people who want to get into these Will challenges, but (b) it’s helpful to know what you get yourself into. And this is part of it. We talked about in our last podcast getting a retrospective opinion. This is not uncommon, but it’s also a very expensive process. You have to pick the right expert, you have to make sure the report is clear and concise in a way that a judge is going to receive it well, because judges are people, too. They don’t want to see a 20 page report full of esoteric medical terms that nobody can follow. So there’s a strategy within the strategy of bringing that on.
Let’s talk now about how we deal with the question of undue influence because we described in our last podcast what undue influence was, and that is coercion, and that is the arm-twisting. So, let’s talk a little bit about what do we mean by that and, more importantly, how do we prove it?
Suzana Popovic-Montag: And really, the allegation of undue influence is that the testator, at the time that he or she created their Will, was not doing it on their own free volition. And so as Ian classically describes it as this arm-twisting, the judges call it that in a lot of cases as well. And the idea there is that someone has influenced you to do something that you would not otherwise have wanted to, or at least not to that extent. So maybe yes, you did want to provide for little Johnny but not to the extent of your full estate, and to the exclusion of your daughter Betty. So that’s the kind of idea when we say undue influence. Certainly there’s a level of influence that we all have on our family members. The question is, when is that influence undue in the sense that it could compromise your capacity to make a valid Will.
Ian Hull: And the classic example in the case law of what is undue is, when you sit across the table from your mother and you say, if you don’t do what I say, I’m going to put you in a nursing home. That’s a graphic and obviously, hopefully, never said illustration, but in our world we do see it and we see that it’s being alleged to have been said, and that’s a classic undue influence. The thing that really we’re troubled with, with undue influence is that the nature of the claims and the allegations are typically so volatile, they’re so, some people say, mean-spirited because if you’re going to unduly influence you have probably behaved very badly. And so one side of the case is going to say you behaved very badly and spell it out, so it looks like allegations of egregious behaviour, and the other side is going to have a complete opposite. So just the nature of the evidence itself turns this litigation into volatile, typically aggressive, litigation in and of itself. So that’s an important strategy point that we always like to walk through our clients as saying, you go down that road of alleging undue influence, you create a new environment and sometimes a very distasteful litigation environment. So,
Suzana Popovic-Montag: And I was going to say, Ian, and it’s very hard to go back. Once you’ve done that, you’ve sort of crossed the line, it’s very hard to take that back. When you’re dealing with family members, you’re dealing with loved ones, these are really nasty allegations many times. They don’t necessarily have to be, but most of the times we see that they are. And so it becomes a he-said, she-said situation. And by virtue of the allegation itself that someone was unduly influenced, one of the biggest concerns or one of the biggest issues that we face as lawyers, is getting proof of that undue influence.
Ian Hull: Absolutely, and that’s really, so first of all, we don’t like to go down that road because you’re going to have to say some very nasty things or defend very nasty things, and you’re going to create a volatile litigation environment. But the second point is exactly what Suzana has said, and that is that we’re stuck with the legal parameters. I mean the concept of undue influence has been around for hundreds of years. We’re stuck with the legal parameters and the two points within that category are this: one is, is that to allege undue influence is a very tough case to meet. The Courts have said it is the highest of expectation to prove that there was undue influence. The second component is the source of the undue influence has to come, and I may be overstating it, but basically has to come from third party non-participant evidence. And what do we mean by that?
Suzana Popovic-Montag: Well, Ian, what we are suggesting there is that when you make an allegation of undue influence, then your evidence in support of that will be viewed, if it’s directly your evidence, probably by a judge, as self-serving evidence. Well, of course you’re going to say that you saw this or that this happened or that that happened, because that helps your case. But if you want to add credence to your allegations, you’ve got to have the evidence of someone else, someone who’s not vested in the process or the result of the process, who’s going to say yes, I saw that kind of behaviour being exhibited, I saw these threats being made to the testator, I know that this is what actually happened.
Ian Hull: And a classic example to follow through with that is, we talked about the son sitting across the table from mom saying, you do what I say or I move you into an old folks’ home or a nursing home. That threat is seen by the next-door neighbour who happens to be over at the house helping out this nice elderly individual. And that neighbour has no vested interest, is a third party source and is someone that, what we call, corroborates the evidence. And so we remember that we’ve got very difficult expectations. The Courts, undue influence is akin to fraud. It’s like you say that, you’re basically alleging fraud. So the Courts say there’s a very high standard on those who want to pursue that claim. Part of that high standard is that you need corroborative evidence and in that component, the third component is Suzana, what are we getting at when we say corroborative evidence and why does that matter in estate matters?
Suzana Popovic-Montag: Well corroborative evidence, of course Ian, is evidence that’s going to prove additional evidence that you have, so the allegations that have been made in support of the fact that someone was unduly influenced. And one of the key things with this type of evidence, of course, is that if you are in fact, an undue influencer, you’re probably smart enough not to be doing it in front of others. So that you don’t have these third party witnesses or individuals who overhear these threats being made, don’t see this kind of behaviour being exhibited and so it’s very difficult, we tend to find in these situations, to come up with this corroborative, this additional evidence in support of the allegation.
Ian Hull: Absolutely. And because it’s so difficult though, it’s also a non-starter if you don’t have it in many cases. And that’s because the Courts have sat back and said, if you’re going to allege that certain things were said by someone who is now dead, you have to source that beyond your own evidence. You have to buff that up. You can’t just say that, you can’t speak for the dead so to speak. And that is really, which is a great old common law tradition, and evidentiary expectation, that you corroborate. When you’re going to put words in the mouth of a dead person, you have to corroborate it.
So, that’s really, I think, the core spin in terms of the evidence and in terms of the expectations of the Courts with undue influence. But the last point I was going to say in terms of the process here, and these are, as we talk about these legal issues and we’re going to move on to some of the other ones briefly after this, is that really, typically, an estate challenge, a Will challenge, you’re going to look to lack of testamentary capacity and you’re going to look to undue influence. And at the outset, almost always you’re going to allege both or both are going to be alleged against you. But the trick is, and the strategy is, is when do you let go? And do you let go, I mean we talked about it for cost consequences, but with undue influence, you want to, I tell our clients, we have to monitor that issue on a regular, regular basis. Because there’s always the chance if you let go, you’re not going to get stung like a bee by having alleged it. Because it’s not such a terrible thing to suggest because it’s one of the four or five cornerstone issues in a Will challenge.
Suzana Popovic-Montag: And I guess, Ian, just in terms of winding up, just one thing I think we should make mention of the fact is that even though there are these traditional five grounds of challenging a Will, not all five have to be present in every case. And in most cases they’re not. And you may just have a Will challenge based simply on undue influence or simply on lack of testamentary capacity or a Will not having been properly executed. So these are not things that have to be found altogether, they’re mutually exclusive. They can, however, be joined in a claim for a challenge to a Will.
Ian Hull: So if we’re ready, from a strategy standpoint, we want to maybe put one, two, three or four out on the table, but also be mindful of the fact that, while you may have a right to investigate those circumstances, you may not want to hang on to that allegation forever.
So, I think from that standpoint, before we cover off one of the last issues, and that is the question of undue, I mean the lack of due execution and then some of the corporate machinations in a corporate context of how these Will challenges go, I just want to say that, my last comment is on the question of fraud. As we said before, it really is not worthy of a ton of discussion. It’s just not typically alleged. But in our next podcast, we’ll start with that issue just because of the one rare occasion when it’s alleged, it can be dealt with on a very, fairly pinpointed and sophisticated basis which we’re going to talk a little bit about in our next podcast, and that’s when we have forged Wills. So thank you very much, Suzana.
Suzana Popovic-Montag: Thanks to you, too, Ian. And to all of you who are listening and watching us by video podcast, a quick reminder that if you have any comments and you’d like to share them with us, we’d certainly appreciate them. Feel free to call us 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 any questions or comments, please visit our website at hullestatemediation.com.
Or, listen to the audio version of Will Challenge Litigation - Part 5
This week on Hull on Estate and Succession Planning, Ian and Suzana continue their discussion on the Will Challenge Process, step by step.
They continue to discuss the process of will challenges in closer detail. What makes a good case? They talk about the five different grounds upon which a will can be challenged:
Lack of testamentary capacity
Existence of suspicious circumstances
Will not having been properly executed
Existence of undue influence
Possibility of fraud
If you have any comments, send us an email at hullandhull@gmail.com or call us on the comment line at 206-457-1985 or leave a comment on our blog.
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.”
“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.
This blog completes my week-long rogue’s gallery of criminal convictions in estate matters. So far I’ve talked about the Criminal Code in general plus specific cases involving breach of trust and theft.
On to fraud.
In R. v. Moore (1998 Carswell Nfld 276), an accused along with a deceased’s four siblings signed and filed with the court false documents stating that the whereabouts of the deceased’s four children were unknown, that the deceased left no will, and that the accused knew of no one else with an interest in the estate. This is chronicled at length in a set of reasons dealing with the deceased’s remarkable and inspiring life. The accused, though equally remarkable, was hardly inspiring. The criminal charges marked the culmination of her complex scheme of lies and deceit.
The accused claimed she doubted whether her brother was born to the deceased, and said her doubts in this regard justified her behaviour. The Court found that the accused was “resourceful, and articulate”, but used her talents by “persist[ing] in [a] despicable charade” to defraud her brother, nieces and nephews.
For all her trouble, the accused received $10,000, plus a conviction for fraud. It is often bizarre the extent someone will go for what seems, objectively, to be a small amount of money.
An interesting aspect of the case is that the deceased in question, mother of the accused/convicted, was by all indications a font of kindness and compassion, taking several children under her wing during her lifetime. The reasons dwell at length on what a fine person the deceased was, implying quite clearly that the accused failed to measure up to her mother’s legacy.
We will not be posting a blog on Good Friday, April 6, 2007.
A victim of fraud made payment into a Nigerian bank account through an English branch which funds were promptly removed from the bank by the fraudsters who disappeared. The victim sought damages against the Nigerian bank by way of a proceeding commenced in England.
Having lost at trial, the Plaintiff appealed, arguing that the bank had knowingly assisted in the fraudster’s breach of trust. The Court of Appeal (Civil Division) dismissed the appeal and, in so doing, comprehensively reviewed the authorities.
In short, a finding that the bank had knowingly assisted in the breach of trust would require a dishonest state of mind such that the bank had knowledge that rendered its participation “contrary to normally acceptable standards of honest conduct.”
Such a state of mind could involve suspicions combined with a conscious decision not to make enquiries. Applied to the case at hand, the Court considered that, although the bank had general suspicions that the account holder who subsequently committed the fraud was possibly involved in money laundering, the bank had no knowledge of any specific act of dishonesty regarding the transactions in question.
