Although one of the perils of running an estate blog over the past month has been (with apologies to CNN) the risk of over-reporting on the estate of Michael Jackson, the media frenzy has nonetheless served to shine a light on certain aspects of estate planning that otherwise go unnoticed.
A clause appointing a guardian for one's child(ren) is not always one that younger testators choose to put in their wills. This may in part be due to the statistical unlikelihood of both parents dying before a child reaches the age of eighteen. In such a tragic eventuality, and as Natalia Angelini noted in her recent blog on the subject, the ultimate decision on guardianship is in the court's discretion.
A recent article posted online by the Canadian Press comments on the difficulty that couples may encounter in trying to agree on a guardian for their child(ren). Some will want a friend; others will insist on a family member. Complicating any decision may be such considerations as the likelihood of the proposed guardian relocating to a foreign jurisdiction or remarrying someone who, in hindsight, may not prove to be a good parent to the children.
It is always a good idea to plan for any statistical anomaly. The Courts will typically respect the choice of the testator and assign great weight to his or her wishes. The alternative of leaving the decision completely unfettered by such wishes is not one that any parent of a young child would want to contemplate.
This week on Hull on Estate and Succession Planning, Suzana Popovic-Montag speaks with Rodney Hull about how the law has changed in Canada as it pertains to the appointment of guardians. Rodney suggests that today's laws (post-1994) are clearer than they were in the past.
If you have any comments, send us an email at hullandhull@gmail.com 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 & Hull in Toronto, here are Ian and Suzana.
Suzana Popovic-Montag: Hi and welcome to Hull on Estate and Succession Planning. You’re listening, and some of you may be watching, episode 142 of our podcast on Tuesday, December 9th, 2008.
Hello there Rodney.
Rodney Hull: Hi Suzana.
Suzana Popovic-Montag: I’m very pleased to have Rodney Hull join me again this week to fill in for Ian Hull. We’re very pleased to have you and thank you for joining us, Rodney.
Rodney Hull: Thank you very much for having me.
Suzana Popovic-Montag: What I thought we might do a little bit today, since we have you sort of here in the hot seat is to get your thoughts, and I know we’ve talked a lot in the past about capacity litigation and this whole grey zone as to whether or not someone is capable or incapable and what happens if they’re no longer capable. And so I thought having you here, we’d have the opportunity to maybe talk a little bit about the change in the law since when you started practicing back in 1957 and we still called it like a committeeship, and how things may have changed since 1994 when the new Substitute Decisions Act came into place.
Rodney Hull: Well in the pre-1994 legislation, the first distinction was that they changed the fiduciary, the name of the fiduciary from a committee to what it is today, which is the…
Suzana Popovic-Montag: Guardian.
Rodney Hull: Guardian. And basically though the function of the guardian is the same today as it was then. There is a far superior structure created by the new Substitute Decisions Act which gives a great deal more guidance to persons involved in committeeships as we used to call them. Before you simply applied, we did the same thing: we had psychiatrists and one would say this and one would say that, we would have doctors, we would have bankers, we would have investment people saying whatever their opinion was, and a committee was appointed for the person if it could be shown that the person was not capable of managing his or her affairs. Now it’s exactly the same but we have guidelines, much more direct, clear guidelines as to who we use, what we’re doing, we have referees, we have persons who are directed to make decisions as to whether or not there is the capacity to manage your own affairs. That’s clear, they’ve been set out. Before it was by guess and by God. The judge would listen to the evidence and it would be the judge that made the determination. Not a very satisfactory way of doing it, not because the judges weren’t every bit as good then as they are now or had less ability. It’s just that there is a scientific aspect to the appointment of guardians that I think we didn’t realize as much then as we do now, and that it isn’t basically simply a judicial function. It’s a function that involves almost all the aspects that one would put into ordinary daily living concepts.
Suzana Popovic-Montag: Right and you say that comes about because of the clearer definition that’s set out in our statute now.
Rodney Hull: That is correct. Yes, I think so. I think it gives us great guidance. It makes clear what we should be doing and the procedure is far, far more closely defined. Before it was, as I say, by guess and by God. You brought an application to have a committee appointed under the Act and of course the Children’s Lawyer would sometimes be involved, and the Public Guardian and Trustee was involved, as they are today.
Suzana Popovic-Montag: That’s right. And now that’s certainly from the financial perspective. So when we’re appointing someone to manage property, but how would you say, if at all, its changed in terms of having someone appointed for personal care?
Rodney Hull: That, of course, is probably the most difficult aspect to try and deal with.
Suzana Popovic-Montag: Yeah.
Rodney Hull: You know you…there are some people you don’t want to have the ability to pull the plug on you, that’s for certain. And we can all figure out who some of them are. But basically, I think the ones that are nearest and dearest to you are the ones that should have that decision. There is nothing worse, in my mind, than having no direction really, no written direction, but to have a gathering of 6 or 7 people around and there you are with one of these breathing devices in you, you hate it, your arms are tethered, you can’t tear it out, and they’re sitting around the table arguing whether or not it should be pulled out. We want Dad or Mom or Auntie so and so to have every chance to live and come back, even though the doctors say he or she is going to be a vegetable. That’s not good. But to be able to show the directing people that you have the authority to do it I think is very important. Finding that person is where the rubber hits the road.
Suzana Popovic-Montag: It’s so true and, you know, I wonder, from your experience, like I know certainly judges are reluctant these days to make those kinds of decisions, because those are such personal decisions that they don’t necessarily feel qualified in many cases to make that kind of a determination. Was it any different under the prior legislation?
Rodney Hull: Oh I don’t…I think myself that there was no clear authority to do it but the doctors looked after it pretty well.
Suzana Popovic-Montag: That’s true.
Rodney Hull: But everybody has become very conscious of taking on any responsibility that might involve you with bad feelings between people and I think that basically is how it was done. It was just done by guess and by God and sometimes oxygen didn’t get through, that’s all, sorry about that.
Suzana Popovic-Montag: It really seems to underscore, to me anyway, the importance of this planning, of planning during your lifetime, of telling people what it is you want and why it is you want it so that when these tough decisions have to be made, then you know at least you’ve got some guideposts.
Rodney Hull: You really don’t have to be too clear as to what you want. You don’t want to be going through a lifetime of pain and suffering and stuck with one of those things in your head backed up, and the pump going and you’re there, you’re not conscious. You don’t have to be a Rhodes scholar to figure that person doesn’t want to hang around very long.
Suzana Popovic-Montag: That’s for sure.
Rodney Hull: You know.
Suzana Popovic-Montag: So just in terms of some advice, Rodney, what would you say to people who are dealing with individuals who are sort of in this grey zone, where we’re just not sure if they are fully cognizant and capable or maybe they’re on the cusp of no longer having capacity? Any thoughts or any guidance for us in terms of dealing with those kinds of individuals?
Rodney Hull: Well I guess kindness is the only word that really comes on bidden to the lips. It’s a very difficult responsibility to take on; it’s a very difficult responsibility to pass on. So it just has to be guided by common sense and as I say, kindness, probably.
Suzana Popovic-Montag: Yeah. Well thank you very, very much, Rodney. It was a pleasure having the opportunity to podcast with you again, and to seek some of your thoughts and guidance to us, so thank you for joining us.
Rodney Hull: Thank you, Suzana, for having me.
Suzana Popovic-Montag: And just a quick reminder to everyone to feel free to provide us with any comments, any feedback, at hullandhull@gmail.com or feel free to visit our blog at estatelaw.hullandhull.com.
You have been listening to Hull on Estates and Succession Planning by 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 issues in estates and estate planning. It is not legal advice and you are reminded to always speak with a legal professional regarding your specific circumstance.
To listen to other Hull & Hull podcasts, or to leave any questions or comments, please visit our website at hullestatemediation.com.
On Tuesday of this week, I blogged on s.35.1 of the Substitute Decisions Act. This section of the Act provides that a guardian of property for an incapable person has an obligation to preserve property that is subject to a specific legacy in the incapable person's Will unless that property must be used to fund the needs of the incapable person. As I noted, litigation can ensue on the death of the incapable person if a disappointed beneficiary is not in receipt of his or her legacy. The disappointed beneficiary must demonstrate that the guardian knew or ought to have known the contents of the incapable person's Will. While the Act itself provides an imperative in this regard, it is not at all clear what other evidence would be admissible. Specifically, the notes and records of the solicitor who drew the incapable person's Will may shed some light on whether the guardian knew of the contents of the Will. The question, of course, is whether such solicitor's notes are privileged.
In a conventional will challenge, little thought is given to the potentially sticky issue of privilege. Indeed, solicitor's notes and records are produced as a matter of course when the validity of a Will is challenged. But when the notes are sought, not to challenge the Will but, rather, to establish the knowledge of someone other than the testator as to the contents of the Will, it is not at all clear whether privilege would be waived by the Court.
As a corollary to the entitlement of a beneficiary under a Will to make enquiry under s.35.1, a recent decision which Megan Connolly blogged on supports the obligation of a guardian (who is also an estate trustee) to account to such beneficiaries.
Section 35 of the Substitute Decisions Act ("Act") states that "a guardian of property shall not dispose of property that the guardian knows is subject to a specific testamentary gift in the incapable person's will." And under s 33.1 of the Act, a guardian of property needs to make reasonable efforts to determine "whether the incapable person has a Will" and, if so, "what the provisions of the Will are."
Under the authority of these sections of the Act, a beneficiary of a specific testamentary gift can legitimately make enquiry into the actions of the guardian who, more often than not, is also the estate trustee under the Will. Take, for instance, a demonstrative legacy of a bank account at a specific financial institution. If the account is no longer in existence at the date of death, the legacy will usually be subject to ademption: the gift has failed because the account was closed before the date of death. But what if the account was accessed by the guardian either: (i) for his own purposes or (ii) for the care of the incapable person when there where other assets available to fund the care of the incapable person? In such a situation, the beneficiary of the account under the Will may seek redress.
To prove his or her case, the beneficiary will seek an accounting from the guardian in order to ascertain to what extent his or her beneficial entitlement was wrongfully encroached upon in breach of the Act. Given the imperative under s. 33.1 of the Act, it questionable whether the guardian/estate trustee could ever successfully argue ignorance of the terms of the Will as a defence to such claim.
