We have covered legacies from several angles at Hull & Hull; there are 25 hits when "legacy" is searched on the Blogs and Podcasts section of our website.  The law dictionary defines legacy as "A gift by will, esp. of personal property and often of money;  a bequest."

Individuals can leave a legacy in their respective Wills, but as the Globe & Mail column highlights, people who have the means enjoy the satisfaction of leaving a legacy during their lifetime. Stories abound, as www.leavealegacy.ca illustrates.  There are as many reasons to leave a legacy as there are donors.

The principle of leaving a successful legacy applies to many realms, including the family business.  In some instances, it is advisable to not leave the kids the family business.  Rick Spence, of Moneysense, suggests passing on values, rather than gifting the family business.  Certainly we are not all in the position of "firing the kids", but there may be many good reasons to do now what you would otherwise do in your Will. 

Jonathan

The issue of a failed gift is a common subject in the context of will interpretations. The Ontario Legislature has considered failed gifts in sections 23 and 31 of the Succession Law Reform Act.

In essence, Section 23 states that unless a contrary intention appears in the subject-will, when a devisee or legatee predeceases the testator, the failed gift falls into the residue of the testator’s estate. 

Section 31 is commonly referred to as the "anti-lapse provision."  Section 31 prevents devises or bequests from failing by virtue of the devisee or legatee predeceasing the testator. In such a scenario, a gift is saved if the devise or bequest was left for a child, grand-child, brother or sister of the testator and the pre-deceased devisee or legatee died leaving a spouse or issue who survived the testator. If these conditions have been met, the devise or bequest will not fall into the residue, however it will take effect as if it had been made directly to the spouse or issue of predeceased devisee or legatee. 

Thank you for reading,

Rick Bickhram

This week on Hull on Estates, Ian and Suzana discuss developments in will changes. They reference cases from Key Developments in Estates and Trusts Law in Ontario ed. 2008.

Comments? Send us an email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.

Say Joe Smith is the executor of an estate but also received gifts from his mother the testator during her lifetime.  One of these gifts, say, came in the form of a transfer of a bank account into joint ownership between the two of them. 

Wearing his executor's hat (to use some traditional vernacular), Joe may have a duty to determine whether the bank account transfer was not a gift at all and actually subject to a resulting trust in which case the estate might have a claim to the asset.  Joe may need to do so because, as executor, his duty is to identify estate assets and bring them into the estate. 

However, wearing his hat as a recipient of the bank account, Joe is unlikely to want to give the bank account back to the estate. 

In short, Joe may have a conflict of interest.

In such circumstances, Joe may need two lawyers, one to advise him as estate trustee, the other to protect him personally.  Sometimes an executor’s conflict is such that he cannot continue to act as estate trustee. 

While this example may be simple enough, there is a tremendous range of conflicts that can creep into estate matters.

Thanks for reading.

Sean Graham

 In 1911, Yale history professor Hiram Bingham III stumbled upon Machu Picchu, 'the lost city of the Incas' (click here for an incredible virtual tour).  For centuries, the treasure trove of ancient Incan art and artifacts had been lost to the Peruvian people.  Backed by Yale and the National Geographic Society, Bingham excavated nearly 5,000 objects over the course of several trips to the sacred site, including statues, jewellery, instruments and human remains.  He then sent the relics to Yale's Peabody Museum in New Haven, Connecticut.

Was their transfer a loan or a gift?

In 2003, when Yale launched a major touring exhibition featuring the artifacts, the Peruvian government commenced negotiations to get them back.  Their argument rested on the existence of a letter discovered in the National Geographic Society archives by Terry Garcia, executive VP of the Society.  The letter, written by Bingham to Yale University, revealed that the artifacts "do not belong to us, but to the Peruvian government, who allowed us to take them out of the country on the condition that they be returned in eighteen months."  The National Geographic Society concluded that the artifacts that had been removed from Machu Picchu were indeed a loan from the Peruvian government, and not a gift.

Artifact ownership is a sticky issue.  Thomas Kline, of George Washington University explained to the National Geographic Channel that if a museum returns ancient artifacts too quickly, they may not be honouring their duty to "preserve and protect objects in the collection".

Yale and the Peruvian government ultimately worked out a compromise of sorts.  Yale agreed to return most of the objects following the completion of the travelling exhibition co-sponsored by the two parties, and has since acknowledged Peru's title to all of the excavated objects.

This fact situation was recently considered by Jenkins J. in Bale v. Bale.

The two disappointed sons were not actively involved in Mom's care. The other son lived with Mom, and helped her extensively. The court found that Mom relied on the one son for her care and well being.

The lawyer on the transfer said that Mom, who was 93, understood the transaction and what she was signing. A doctor confirmed her capacity.

Notwithstanding this capacity, the judge concluded that the relationship between Mom and son was one of dependency. The presumption of undue influence was triggered. Although the court found that Mom had great affection for her one son, this was not sufficient to validate the transfer of the property to him. The court concluded that the transfer of the farm was influenced by Mom’s dependence on the one son. The transfer was set aside.

When considering the value of an estate, one should consider any transfers by the deceased prior to his or her death; particularly where any such transfer might have resulted from undue influence due to a dependency.

Thank you for reading

Paul Trudelle