Listen to Mutual Wills
This week on Hull on Estate and Succession Planning Jonathan Morse and Chris Graham discuss aspects of mutual wills and the doctrine of mutual wills. They look into some interesting cases related to this topic as well advantages and disadvantages of mutual wills.
If you have any comments, send us an email at hull.lawyers@gmail.com or leave a comment on our blog.
Listen to Terminating or Varying a Trust
This week on Hull on Estates, Jonathan Morse and Natalia Angelini discuss trusts; specifically they discuss terminating or varying a trust.
They look at an article by Debra Stevens and give their thoughts.
If you have any comments, send us an email at hull.lawyers@gmail.com or leave a comment on our blog.
Natalia Angelini: Hello and welcome to
Welcome to
Jonathan Morse: Hi and welcome to another episode on
Natalia Angelini: And I’m Natalia Angelini.
Jonathan Morse: If you want to be heard on
Natalia Angelini: So hi, Jonathan, it’s good to be podcasting with you today.
Jonathan Morse: It’s great to be podcasting with you.
Natalia Angelini: It’s our first time, so let’s hope it’s not going to be too painful.
Jonathan Morse: It will be fine, I’m sure.
Natalia Angelini: Okay, so today we’re going to talk about trusts and specifically terminating or varying a trust. And we’re really taking…we’re going to be looking at an article that Debra Stephens authored and it’s called “Trusts - When is a Termination a Variation?”. And she presented her paper at the most recent 09 Six Minute Estates Lawyer and it was really interesting for us. And so we thought we would touch upon it and give you some of our thoughts.
Jonathan Morse: To begin, I think it’s important to point to the central issue in the paper and really I’ll briefly point out that in Ontario, a trust can be terminated generally two ways: under the rule of Saunders and Voce; and under the statutory powers of the Court to vary or revoke trusts.
Natalia Angelini: Right Jonathan, and with respect to Saunders and Voce, that rule is in essence, as I understand it, when there’s a trust provision in a Will but there’s no gift over provision in place upon death of the beneficiary of that gift, then the trust could essentially be collapsed when they reach the age of 18 and that’s essentially the effect of that case. So for those people that are really supposed to have a trust held on their behalf until they’re 25 or 30, they can get their entitlement much sooner and so that’s one effective way of terminating a trust.
Jonathan Morse: That’s right. Thank you for pointing that out. Often in Wills and when a trust is set up under a Will or otherwise, the trustees are given certain powers, one of which is absolute discretion. And in that instance, the issue that Debra Stephens points to in her paper is to what extent can trustees exercise that absolute discretion, and particularly can they exercise it to the extent that they simply choose to collapse the trust.
Natalia Angelini: Right, because that’s where now we’re talking about potentially the third way to do it, and that is through exercising a trustee’s discretion. And I guess that sort of begs the question, is their discretion truly absolute?
Jonathan Morse: I think at this point, certainly the paper refers to a lot of cases and some of the principles that come out of the cases. And of course they are old cases because we’re talking trust law. In, for example, Tempest and Lord Camoys stems from an 1882 decision, or it is an 1882 decision. And it basically stands for the idea that trustees can exercise absolute discretion but they can’t do it improperly. Which leads us then to the question, of course, what is an improper exercise of discretion?
Natalia Angelini: Right and there are several circumstances that I suppose can be considered, or that may be considered when determining whether a trustee has acted reasonably. And some of these that are noted in Wittifield, so I can direct you there. But they’re also highlighted in Ms. Stephens’ paper. And some of them include the circumstances surrounding the exercise of power; the motive of the trustee in exercising the power or not exercising the power; if there’s any conflicting interest that the trustee has with that of the beneficiaries, and a couple more that I don’t think I’ll touch upon.
Jonathan Morse: So just to continue with the case law, another case Re Blow which is a little more contemporary, it’s a 1977 case in the Ontario High Court, really looked at examining further what is improper
Natalia Angelini: That’s right because a trustee has to exercise his or her discretion judiciously. And so to not do so at all…and I suppose that depends on the actual extent of discretion given to the trustee and how particularized that was in the trust document or Will.
Jonathan Morse: Just to continue, let’s look at one particular example. And it comes from a case Hedley Estate and Grant and that’s a 1998 case, Ontario General Division. And this is interesting because it gets down to whether discretion was being exercised properly. And in this case, the testator divided the residue into equal shares, 5 beneficiaries, with direction that if a beneficiary was not then living and left issue, it would be divided amongst his or her issue to be held in trust. So 2 of the 5 beneficiaries predeceased and children, grandchildren remained. And the trustee at that point wanted to basically place the shares that were due to the 11 grandchildren into the hands of the parents so that they could, in effect, manage the money for their own children.
Natalia Angelini: Right, rather than the trustee holding the property in trust.
Jonathan Morse: That’s correct. So effectively in this case, the trustee was looking to effectively delegate her duties to the parents of those younger children. And Justice Hoylett held that the trustee was hoping to relieve herself of the obligation imposed by her under the Will. The Court went on to say the relief requested was not merely an incident of the exercise of powers, it was the very purpose of her intended exercise of the power.
Natalia Angelini: So I think these facts are, you know, this type of situation can happen more often than one would expect, and it probably leads to various questions that the Court would pose or have to think about in order to render its decision. And some of those could be, you know, what if the parents die or become incapable? Who would be the new trustee? You know, what if these children…I mean in this case the children were supposed to get the money at the age of 18 years of age. And I think one of the questions is, what if the issue don’t live that long?
Jonathan Morse: Absolutely. And so if the issue doesn’t live that long, to the age that they’re supposed to get the proceeds of the trust under the original trust when the monies then pass to the parents, do those same rules apply? The answer to that would be uncertain and the uncertainty to that answer would be what would cause a judge to, you know, put the brakes on this variation.
Natalia Angelini: Yeah, and another point is if the original trust had a discretionary power to encroach on capital rather, would that power pass to the parents?
Jonathan Morse: Right, yeah. Another issue, and again we’re sort of looking at what might be going through a judge’s mind…often trustees have to be bonded, and that is, they need to put up security to the Court to basically ensure that they’re going to abide by…
Natalia Angelini: Right, to show that they’re going to manage and administer the estate properly and if they don’t…
Jonathan Morse: Then the bond would be forfeited. And in this case, again the trustee delegated to the next level, to the parents and the grandchildren, would those parents themselves have to be bonded?
Natalia Angelini: Right and then I think another question, and just for our listener’s benefit, this case and several other cases can be found in Ms. Stephens’ paper. And we’re not going to go through all of them for the sake of time but I do recommend you read it if this topic interests you. But one last sort of question that this type of scenario raises is, how do you deal with an accounting? Do the parents account to the original trustee? You know, to the Children’s Lawyer? You know, how is that going to work? And I suppose if you’re bringing this type of matter before the Court, that it would be a good idea to think of all the various questions that they could raise and make sure your Affidavit addresses them.
So, you know, when reviewing all of these cases, the principal that really comes through is really, you know, something that is not too surprising, but it’s that each case is going to be determinative upon its own set of specific facts. Although certain factors that I think you can be sure will be relevant to a Court will definitely be as I’ve said earlier, you know, the value of the trust property, the number of the beneficiaries, the circumstances of the beneficiaries, of each individual one, and on the wording of the trust or Will document. I think those are surely going to be relevant in most cases.
Jonathan Morse: That’s right. And it seems that in
Natalia Angelini: It is interesting because it seems that the trustee, even if he or she has absolute discretion, that it’s going to be overseen by a Court at some point if this type of step is what a trustee intends on taking. So I guess in that sense, the discretion really may not be absolute.
Jonathan Morse: That’s right. Just to follow-up with Natalia’s last point. Because discretion of the trustee may not be absolute, it is certainly advisable that consents of all the beneficiaries be obtained and whenever there is any question, Court approval is likely the safer way to go for protection of the trustees and also protection of the beneficiaries.
Natalia Angelini: That’s right. It’s the best way to avoid exposure to future litigation. And it is noteworthy that when you’re dealing with minors, the Children’s Lawyer’s position is that they should be put on notice and Court approval should be obtained.
So I think that’s sort of our last little point on the topic. So before we wrap up, why don’t we give you our co-ordinates.
Jonathan Morse: We look forward to hearing from our listeners. You can certainly send us an e-mail at hull.lawyers@gmail.com. Be sure to visit our blog at estatelaw.hullandhull.com (and that’s hullandhull, not an “&”; it’s “and” - hullandhull.com) where you’ll find even more information and discussion on today’s practice of estate law.
We hope that you enjoyed the show. I’m Jonathan Morse.
Natalia Angelini: And I’m Natalia Angelini. Until next time, take care.
This has been
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.
Listen to Q + A with Rodney Hull
This week on Hull on Estates Jonathan Morse interviews Rodney Hull about his career as a lawyer. He discusses how he got started in estate litigation, how Hull and Hull was founded, how the practice of estate litigation has changed and the effect of electronic means of communicating on the practice of law.
Feel free to send us an email at hull.lawyers@gmail.com or leave us a comment on the Hull on Estates blog.
Illustrating the Use of Technology - Hull on Estate and Succession Planning #163
Posted on May 5, 2009 by Hull & Hull LLP
Welcome to Hull on Estates and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag. The podcast you’re listening to 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 to episode 163 of our podcast on Tuesday, May 4, 2009.
Ian Hull: Hi Suzana.
Suzana Popovic-Montag: Hi Ian.
Ian Hull: Well today we thought we would reminisce a little and talk about a project that is something in the technology scheme. We’ve been talking about lots of legal issues and last week we touched on some technology issues and so we thought we would finish the thought, so to speak. And what we thought we’d talk a little bit about today is an experiment at first and now part of our firm, to maybe illustrate the use of technology and where it can help and where it can hurt presumably. We have talked a little bit about, no doubt in a future podcast we’ll touch on Twitter and its growth. We’ve been on Twitter for quite a while and its not new to us but its now hitting the mainstream so its sort of fun to watch. But what we did probably 5 years ago was start an unknown concept called Knowledge Management. And why we want to talk about it today was because I think it really helps illustrate a little bit about where, if you’re going to practice in this area, where we found it was effective to focus. And we’ve grown from a small operation in our firm of Knowledge Management now to a designated lawyer and a systemized procedure for Knowledge Management.
But let’s start first of all, if you could, explain to us what you’re talking about Knowledge Management.
Suzana Popovic-Montag: Well Ian as lawyers, our job is really to communicate knowledge and information to our clients to assist them with their particular issues. And when you specialize in an area of law, as estates and trusts for instance, you need to really know your area of law and you need to know it better than anyone else. And because there is so much information out there and because the law does tend to change, maybe not radically but certainly there are cases that update other cases. And you want to stay on the leading edge of every bit of information you can. You try to, and we’ve tried to, sort of co-ordinate our information, so that it’s in one place. That information being the legal information, that being precedents, that being case law, that being anything that we rely on in our daily practices and make it available to all of us internally. And that’s what we really mean by Knowledge Management. Managing our knowledge within our firm.
Ian Hull: And it really is more than just precedent management. As lawyers and as any professional, you do something once and you think well, you know what, I might be able to tweak that the next time and use the law to that product again. That’s not what this is about. This isn’t about just saving the latest Statement of Claim you drew in a pile in the corner. This is about organizing office information and inside and outside information. And we broke it down into many categories and I think part of it that’s worth talking about is it’s a testament to the organization skills of our Manager of Knowledge Management, Sharon Davis. But one of the things that I’m struck by is that there are sort of two components to Knowledge Management. There’s the legal substantive component which we will talk about but there’s also the non-legal. How many times a day are we asked for do you know someone who can do x or y, who are in the affiliated professional sphere of our day. And we have branched our Knowledge Management into that as well. And maybe you could give us an illustration of the kinds of sources that we might have in Knowledge Management to help move that issue along in the day.
Suzana Popovic-Montag: Well Ian, many times we’ll have different issues arise in our practice like the need, for instance, for a capacity assessor. The need, for instance, of a real estate lawyer who might be able to deal with a particular aspect on an estate matter. We might need contact information for a private investigator, an airship searcher or something like that. And what we’ve done with our Knowledge Management system is create a database of individuals, a list of these people, these go-to’s for everyone to sort of find in one place the quickest answer, so that when someone does say do you know of, we can just go to one place within our system internally and find an answer for that individual.
Ian Hull: And I think, and we mentioned a couple of podcasts ago, it also is tested individuals. You’re trusted with, you know, how many times if you see an issue for say two years, you think geez, I had a person who did a great job on a triple butterfly succession planning move in Nelson, British Columbia. I just can’t remember the name of that person. You’ve got it in your system. You click it and you find it. And I mean it’s more than a glorified phone book. It’s a glorified service. It is a service to our clients that is available. And to our referring sources, that is available. A: its fast, it’s available to us fast so that helps us. We don’t have to spend a lot of time doing. But B, most importantly, it’s a reliable source and it’s a tested source. And there’s this old saying that garbage in, garbage out in any data organizing and that’s the same with Knowledge Management. If you put garbage in, you put sources in that aren’t trusted, verifiable sources, then when you go and do it quickly and you don’t think and you say there’s the name from Nelson, British Columbia, you’re putting at risk your whole sort of reputation as to a referring source. So that’s the one wing of Knowledge Management that I think that has a global sort of usefulness to it. And the tools that we use with it, the software and stuff, I mean just spend some time on the internet. You’ll see two or three different products. The product we use, of course, is now pretty well out of service but that’s what happens when you use software. You have to manipulate and adapt. And we’re looking at upgrading it and working that around. But I wanted to start there because I thought that was really global use of Knowledge Management.
But now let’s just spend a couple of minutes talking about the specific use of Knowledge Management we do at our estates practice. And I think the easy illustration is drafting solicitors have available to them precedent books that are updated regularly. And so if you’re going to on-line, not just books, but on-line service. So if you have that available, that’s one thing. But if someone says geez, I want to do an RRSP clause and there’s resources available to us as lawyers to look at how it was done before and done in the future. But if you want to have an article on the recent trend of RRSP clauses and think about well, what about adding a different revocation language or something like that, we link that as well. So we have an ability to link to our most recent draft of that clause, we subcategorize that clause to say, you know, to second wife, to first wife. And then the final thing is that we’ll link to a recent article. So that we can refresh and be more enhanced with our analysis. So that we’re not just taking a precedent, popping it in and not thinking. We’re taking a precedent, popping it in, looking at a source document to remind us of the issues we should be tuned into once we’ve taken the document out. And when they’re altogether and in our system we simply have it linked, so it’s not a re-inventing of the wheel.
So from a substantive drafting standpoint, it can mean much more enhanced materials. We obviously don’t…I mean no precedent is worth anything really. It’s just saving you some key strokes. The precedent has to be adapted to your circumstances.
Suzana Popovic-Montag: But it is definitely a good starting point. And particularly we’ve found internally very helpful as we bring in younger, newer lawyers into the system who are trying to learn the whole area of law. It really does help to synthesize the knowledge all in one place. And I think back to the days when we went in law school and we were still looking up in the hard copies of books and things like that. And with the wonders of technology, it has just taken the burden of that research, of that learning, of that locating and made it so much more accessible and easier and faster.
Ian Hull: Absolutely. Alright, well I think that wraps up our talk on technology and Knowledge Management and next week we have a really neat topic on substantive law issues that we want to delve into. So I hope everybody has enjoyed our little soiree outside of the core estate issues. But we’re going to come back with some more substantive stuff. So thank you very much Suzana, and I appreciate everybody joining us today.
Suzana Popovic-Montag: Bye now.
You have been listening to Hull on Estates and Succession Planning by Ian Hull and Suzana Popovic-Montag. The podcast that 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 leave any questions or comments, please visit our website at hullestatemediation.com.
Illustrating the Use of Technology - Hull on Estate and Succession Planning #163
Posted on May 5, 2009 by Hull & Hull LLP
Welcome to Hull on Estates and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag. The podcast you’re listening to 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 to episode 163 of our podcast on Tuesday, May 4, 2009.
Ian Hull: Hi Suzana.
Suzana Popovic-Montag: Hi Ian.
Ian Hull: Well today we thought we would reminisce a little and talk about a project that is something in the technology scheme. We’ve been talking about lots of legal issues and last week we touched on some technology issues and so we thought we would finish the thought, so to speak. And what we thought we’d talk a little bit about today is an experiment at first and now part of our firm, to maybe illustrate the use of technology and where it can help and where it can hurt presumably. We have talked a little bit about, no doubt in a future podcast we’ll touch on Twitter and its growth. We’ve been on Twitter for quite a while and its not new to us but its now hitting the mainstream so its sort of fun to watch. But what we did probably 5 years ago was start an unknown concept called Knowledge Management. And why we want to talk about it today was because I think it really helps illustrate a little bit about where, if you’re going to practice in this area, where we found it was effective to focus. And we’ve grown from a small operation in our firm of Knowledge Management now to a designated lawyer and a systemized procedure for Knowledge Management.
But let’s start first of all, if you could, explain to us what you’re talking about Knowledge Management.
Suzana Popovic-Montag: Well Ian as lawyers, our job is really to communicate knowledge and information to our clients to assist them with their particular issues. And when you specialize in an area of law, as estates and trusts for instance, you need to really know your area of law and you need to know it better than anyone else. And because there is so much information out there and because the law does tend to change, maybe not radically but certainly there are cases that update other cases. And you want to stay on the leading edge of every bit of information you can. You try to, and we’ve tried to, sort of co-ordinate our information, so that it’s in one place. That information being the legal information, that being precedents, that being case law, that being anything that we rely on in our daily practices and make it available to all of us internally. And that’s what we really mean by Knowledge Management. Managing our knowledge within our firm.
Ian Hull: And it really is more than just precedent management. As lawyers and as any professional, you do something once and you think well, you know what, I might be able to tweak that the next time and use the law to that product again. That’s not what this is about. This isn’t about just saving the latest Statement of Claim you drew in a pile in the corner. This is about organizing office information and inside and outside information. And we broke it down into many categories and I think part of it that’s worth talking about is it’s a testament to the organization skills of our Manager of Knowledge Management, Sharon Davis. But one of the things that I’m struck by is that there are sort of two components to Knowledge Management. There’s the legal substantive component which we will talk about but there’s also the non-legal. How many times a day are we asked for do you know someone who can do x or y, who are in the affiliated professional sphere of our day. And we have branched our Knowledge Management into that as well. And maybe you could give us an illustration of the kinds of sources that we might have in Knowledge Management to help move that issue along in the day.
Suzana Popovic-Montag: Well Ian, many times we’ll have different issues arise in our practice like the need, for instance, for a capacity assessor. The need, for instance, of a real estate lawyer who might be able to deal with a particular aspect on an estate matter. We might need contact information for a private investigator, an airship searcher or something like that. And what we’ve done with our Knowledge Management system is create a database of individuals, a list of these people, these go-to’s for everyone to sort of find in one place the quickest answer, so that when someone does say do you know of, we can just go to one place within our system internally and find an answer for that individual.
Ian Hull: And I think, and we mentioned a couple of podcasts ago, it also is tested individuals. You’re trusted with, you know, how many times if you see an issue for say two years, you think geez, I had a person who did a great job on a triple butterfly succession planning move in Nelson, British Columbia. I just can’t remember the name of that person. You’ve got it in your system. You click it and you find it. And I mean it’s more than a glorified phone book. It’s a glorified service. It is a service to our clients that is available. And to our referring sources, that is available. A: its fast, it’s available to us fast so that helps us. We don’t have to spend a lot of time doing. But B, most importantly, it’s a reliable source and it’s a tested source. And there’s this old saying that garbage in, garbage out in any data organizing and that’s the same with Knowledge Management. If you put garbage in, you put sources in that aren’t trusted, verifiable sources, then when you go and do it quickly and you don’t think and you say there’s the name from Nelson, British Columbia, you’re putting at risk your whole sort of reputation as to a referring source. So that’s the one wing of Knowledge Management that I think that has a global sort of usefulness to it. And the tools that we use with it, the software and stuff, I mean just spend some time on the internet. You’ll see two or three different products. The product we use, of course, is now pretty well out of service but that’s what happens when you use software. You have to manipulate and adapt. And we’re looking at upgrading it and working that around. But I wanted to start there because I thought that was really global use of Knowledge Management.
But now let’s just spend a couple of minutes talking about the specific use of Knowledge Management we do at our estates practice. And I think the easy illustration is drafting solicitors have available to them precedent books that are updated regularly. And so if you’re going to on-line, not just books, but on-line service. So if you have that available, that’s one thing. But if someone says geez, I want to do an RRSP clause and there’s resources available to us as lawyers to look at how it was done before and done in the future. But if you want to have an article on the recent trend of RRSP clauses and think about well, what about adding a different revocation language or something like that, we link that as well. So we have an ability to link to our most recent draft of that clause, we subcategorize that clause to say, you know, to second wife, to first wife. And then the final thing is that we’ll link to a recent article. So that we can refresh and be more enhanced with our analysis. So that we’re not just taking a precedent, popping it in and not thinking. We’re taking a precedent, popping it in, looking at a source document to remind us of the issues we should be tuned into once we’ve taken the document out. And when they’re altogether and in our system we simply have it linked, so it’s not a re-inventing of the wheel.
So from a substantive drafting standpoint, it can mean much more enhanced materials. We obviously don’t…I mean no precedent is worth anything really. It’s just saving you some key strokes. The precedent has to be adapted to your circumstances.
Suzana Popovic-Montag: But it is definitely a good starting point. And particularly we’ve found internally very helpful as we bring in younger, newer lawyers into the system who are trying to learn the whole area of law. It really does help to synthesize the knowledge all in one place. And I think back to the days when we went in law school and we were still looking up in the hard copies of books and things like that. And with the wonders of technology, it has just taken the burden of that research, of that learning, of that locating and made it so much more accessible and easier and faster.
Ian Hull: Absolutely. Alright, well I think that wraps up our talk on technology and Knowledge Management and next week we have a really neat topic on substantive law issues that we want to delve into. So I hope everybody has enjoyed our little soiree outside of the core estate issues. But we’re going to come back with some more substantive stuff. So thank you very much Suzana, and I appreciate everybody joining us today.
Suzana Popovic-Montag: Bye now.
You have been listening to Hull on Estates and Succession Planning by Ian Hull and Suzana Popovic-Montag. The podcast that 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 leave any questions or comments, please visit our website at hullestatemediation.com.
Often in the context of estate matters issues arise around real estate because it is often one of the largest assets comprising an estate. A recent decision in British Columbia is a case in point.
Last week the BC Court of Appeal overturned a lower Court decision that found a defrauded financial institution was to be reimbursed by the unsuspecting widow whose home had been fraudulently mortgaged. A direct link to the BC Court of Appeal decision is helpful. The citation is Re Oehlerking Estate, 2009 BCCA 138.
This case is especially relevant to estate law in that the widow attempted to transfer the property, held in the name of her deceased husband, to her own name in 2006 and only then realized a fraud had occurred whereby a mortgage had been taken out on the property after it was transferred to someone else. The lower Court decided the property should be returned to the widow but she was liable for the mortgage. The Court of Appeal did not agree.
There are significant issues at stake, not least of which is the increased risk to financial institutions which may lead to an appeal to the Supreme Court. Similar cases have occurred in Ontario.
A web search on real estate fraud led me to a Criminal Intelligence Service Canada assessment of mortgage fraud, prepared in 2007. Further, the Ontario government provides tips on its website to protect against real estate fraud.
Estate Trustees ought to be vigilant regarding mortgage and real estate fraud especially because identity theft often occurs after a recent death.
Thank you for reading.
Jonathan
Listen to Rose v. Rose
This week on Hull on Estates, Rodney Hull and Jonathan Morse discuss the case of Rose v. Rose [which can be found at 24ETR(3D)217 or 81OR(3D)349]. The case is valuable and instructive as it raises questions about rectification, rescission and removal of the trustees.
Feel free to send us an email at hull.lawyers@gmail.com or leave us a comment on the Hull on Estates blog.
Rose v. Rose - Hull on Estates Podcast #139
Posted on December 2nd, 2008 by Hull & Hull LLP
Jonathan Morse: Hello and welcome to Hull on Estates. You’re listening to episode 139 on Tuesday, December 2nd, 2008.
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.
Rodney Hull: Hi and welcome to another episode of Hull on Estates. I’d Rodney Hull.
Jonathan Morse: And I’m Jonathan Morse.
Rodney Hull: If you want to be heard on Hull Estates, you can participate by leaving us a comment. E-mail us at hull.lawyers@gmail.com or you can visit our blog at estatelaw.hullandhull.com.
Jonathan Morse: Thank you for that, Rodney. Today I thought, with your agreement, that we would discuss a case which is called Rose and Rose. And it’s a decision of the Ontario Superior Court of Justice. It’s 24 E.T.R. (3d) 217. Also found at 81 O.R. (3d) 349. And I might just spend a moment introducing the facts of this case. The decision was by Justice Lissaman. The decision was made August 2, 2005. Sorry, the judge was June 19, 2006. It was heard August 2, 2005 as well as March 6 and 7, 2006.
And in this case, it deals with a trust that was established. A cottage property was put in a trust in 1992 and at the time, there were two children who were the beneficiaries of the trust. The children were age 7 and 9. And at the time the trust was created, the relationship between the husband and wife was friendly. And unfortunately, as matters progressed, the relationship, the marriage broke down and, of course, the trust issue arose. And we both had a chance to speak about this, and I thought I might ask your thoughts, Rodney, on the value of this case.
Rodney Hull: Well I think this is a very valuable case, from a standpoint of lawyers practising in the trusts and estates field because it deals with the subjects of rectification, rescission, removal of trustees and just some general principles of interpretation. Its descriptive, it’s incisive and it’s well written, this judgment, and very educational, in my view. Written in plain terms and readily understandable.
Jonathan Morse: If you would, Rodney, would you just maybe speak about the rectification aspect of the case to start us off.
Rodney Hull: Well the questions raised by, in rectification, rescission and removal of the trustee are dealt with by the trial judge. And he finds that none of these particular forms of relief are available in the circumstances because the law simply does not go far enough to permit it in this particular case. And where he does linger for the most part is on the question as to whether or not he can use, occupy and enjoy the property during his lifetime or during the period of the trust. And some general principles of interpretation are dealt with. The unfortunate part was that the trust deed did not deal with use, occupation and enjoyment, nor does there appear to be any consideration given to a right to occupy and enjoy. The question, of course, raised is if it had been raised by the estate planner, it seems to me that it would just call on bidden to the lips the response well, don’t worry, the children will let me on the property any time I want, so we don’t have to provide it. And it might as well have had some adverse tax consequences upon a reading of Section 105 of the Income Tax Act of Canada, had it been specifically included as a provision in the agreement, perhaps as a benefit or some other right to enjoy, which had a value.
Jonathan Morse: And just on that point, Rodney, if I may. I understand on the facts that there was a disagreement between the husband and wife as to the purpose of the trust and the husband’s view was that it was motivated for tax reasons.
Rodney Hull: Yes.
Jonathan Morse: But the wife, her view was that the trust was established essentially to give the property to the two children. So I guess the intention of the parties, they had a disagreement as to their intention and that affected, played into whether there could be any rectification, is that right?
Rodney Hull: Well, I think so. And I can say this that the tenor of the relationship between the father and his daughters and the father and the mother were such that the judge held that they simply couldn’t co-exist on the same property and accordingly, he had to meet the question of use and occupation and enjoyment on general principles of interpretation. And he simply wasn’t able to come to the conclusion that there was a use, occupation and enjoyment right in the father who had given the property to the children. I have to say that it’s an extremely difficult decision for the trial judge by reason of the fact that the feelings were so bad that he had to consider that probably as the most important consideration to be dealt with in making the determinations.
Jonathan Morse: And one further question, if I may. Clearly the trust document, the deed of trust, it could have addressed this issue of use, is that correct?
Rodney Hull: Yes it could have.
Jonathan Morse: And because it didn’t, there was no room to interpret that the husband, the settlor had any right to use the property.
Rodney Hull: That is so. I think the judge based his decision on the fact that he could not act on surmise or guesswork. And in this case, he simply had to deal head-on with the general principle of interpretation that I set out earlier in this discussion.
Jonathan Morse: And just one other, a few other issues come up but we are running out of time. On the conflict issue, I think the judge held simply that the husband could not continue to act as a trustee when he had a personal interest in the use of the property but also had a role as a trustee. And therefore had to step down as trustee.
Rodney Hull: Well I think the trial judge was faced with the plain and simple fact that the children and the father were not able to get along together and how can a trust be properly administered by a trustee when such bad feelings arise between them? And there’s lots of authority for that proposition and I think the judge came to the correct conclusion in removing the father as a trustee in the circumstances. However, I note that I had the general feeling that the trial judge really wanted to help the husband in some way but was unable to do so. But I noted that the costs on the highest level were awarded out of the assets of the trust. And I think that would fortify my feeling that the judge felt very uncomfortable in disposing of the matter to the detriment of the husband.
Jonathan Morse: Well I think we’ve discussed a few different aspects of this case and as I understand, it’s quite an important case in this area. I think that brings us to the end of this week’s discussion. Thanks for listening and thanks for joining me and Rodney today. It was a pleasure to be able to work with you, Rodney, on this podcast. And I look forward to podcasting with you again soon.
Rodney Hull: The pleasure is mine. Thank you.
Jonathan Morse: We look forward to hearing from our listeners. You can send us an e-mail at hull.lawyers@gmail.com. Be sure to visit our blog at estatelaw.hullandhull.com where you’ll find even more information and discussion on today’s practise of estate law. We hope that you enjoyed the show. I’m Jonathan Morse.
Rodney Hull: And I’m Rodney Hull. Until next week, so long.
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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Listen to A Review of Dependant Support Claims
This week on Hull on Estates, David Smith and Jonathan Morse review some of the recent podcasts and hone in on some of the evidentiary requirements of a common-law spousal relationship as it relates to dependant support claims under the Succession Law Reform Act. They look at some recent case law and some of the requirements under the Ontario statute.
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.
A Review of Dependant Support Claims - Hull on Estates Podcast #130
Posted on September 30th, 2008 by Hull & Hull LLP
David Smith: Hello and welcome to Hull on Estates. You’re listening to Episode #130 on Tuesday, September 30th, 2008.
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.
Jonathan Morse: Hi and welcome to another episode on Hull on Estates. I’m Jonathan Morse.
David Smith: And I’m David Smith.
Jonathan Morse: If you want to be heard on Hull on Estates you can participate in our discussion by leaving a comment. Give us a call at 206-350-6636. The number is in the show notes along with our e-mail address, hull.lawyers@gmail.com, or you can visit our blog at estatelaw.hullandhull.com.
David Smith: Good morning, Jonathan.
Jonathan Morse: Good morning, David. As I am a relatively new associate at Hull and Hull, I thought I would review several of the recent podcasts to see if I could identify a topic that has not been covered in depth for some time.
David Smith: Well that was quite an undertaking, Jonathan. How did you make out?
Jonathan Morse: Well, I enjoyed myself, to start.
David Smith: There’s certainly a lot of material, isn’t there?
Jonathan Morse: There sure is. I focused on podcasts so far in 2008, and with the blogs I went back a bit further. I honed in on the topic of dependant support claims, and particularly, the evidence required to make a successful claim by dependants. And to hone in even more, I realized that Section 57 of the SLRA, that’s the Succession Law Reform Act defines dependant. One of the categories of dependant is spouse, and I thought it would be helpful, certainly for me anyway, and I thought for listeners, to delve into the evidentiary requirements for spouse, particularly some of the elements of common-law spouse required under the SLRA.
David Smith: You know that’s a great topic, Jonathan, and what I’d say about that topic, specifically, is that nine times out of ten, when you go in front of a judge on a support claim when you’re contemplating a claim, either defending the claim or advancing the claim, I find that the biggest growth area right now is where people are trying to push the envelope as to who is a spouse, and whether there’s been cohabitation for a sufficient period of time. So a good topic and a lot of interesting stuff on that.
Jonathan Morse: Thank you. Before we delve too far into that distinction, I guess I’d like to remind listeners of some recent podcasts on this topic, to provide some context for today’s discussion of dependant support claims, and particularly the evidence required to prove a common-law relationship.
David Smith: Okay, thanks, Jonathan. You know the topic of today is fitting, especially when you see by looking at yesterday’s blog by Bianca La Neve. It’s a situation where a widow there applied for support from the deceased’s estate. And in that case, McDougall and McDougall Estate, a 2008 Ontario Superior Court decision, that was a second marriage and not a common-law situation. But you know, it does highlight the point that support claims are more and more common as I said at the outset. And here in this case, the widow’s claim was denied because it was not driven by need but rather her wish to live the lifestyle she had enjoyed with the deceased prior to a period long before he became ill. And an important point to remember is that the Court looks at support and dependency immediately before death. While there is some case law that suggests, that can be a bit fuzzy on that point, that was an important point to highlight for sure.
Jonathan Morse: I guess following that, a classic example of a common-law situation is when the children of the first marriage hope to deny that their parent had a common-law relationship with the person claiming that he or she was a common-law spouse. Looking further in my review of our recent material, more than two years ago, Suzana Popovic-Montag wrote in her blog, several entries in a series that asked the question, is there support after death? In Part 3 of that, she answered the question of who is a dependant, and that was on June 28, 2006. More recently, on May 20, 2008, Rick Bickhram and Sean Graham discussed evidence issues in estates, when a main party is deceased. In particular, they focused on Section 13 of the Evidence Act and the requirement for corroborative evidence.
David Smith: And let’s just touch on that a little bit more and just explain that requirement. The key witness in any of these claims, Jonathan, is deceased, right? I mean we’ve got a situation where the person who could best tell whether the claimant was, in fact, being supported by the deceased, obviously is deceased. Section 13 speaks to that, it says you’ve got to have corroboration, you’ve got to have material evidence that touches on the issue. The kind of corroboration you want may be in the manner of, if there’s a challenge to whether the two were living together, you’re going to want perhaps bills that were mailed to the address showing both names of both people who were living there together, you’re going to want some witnesses who can attest to the nature of the relationship, that sort of thing, so a very important point. And as I understand it Jonathan, you also found another podcast that touched on this issue.
Jonathan Morse: That’s right, thank you David. I refer listeners to July 1, 2008, just at the beginning of the summer. The podcast by Natalia Angelini and Craig Vander Zee, and they discussed dependant relief and again, the Succession Law Reform Act. In particular, they focused on recent case law, including the line of cases culminating in Cummings and Cummings, decided by the Supreme Court. They left off their discussion by citing two other cases, Reid and Reid, that’s R E I D and Reid, a 2005 Ontario Superior Court of Justice case and Parelli and Foley Estate, a 2006 decision by the Ontario Superior Court of Justice.
David Smith: Right, and just one clarification there or comment, Jonathan, is that, of course, Cummings was a Court of Appeal decision. But I understand that Reid and Parelli, it’s expanded upon some of that and why don’t you tell me a little bit about those.
Jonathan Morse: Sure. In Reid and Reid, it was useful because of Justice Snowie’s analysis of the particular evidence. It’s not necessarily on point with this discussion regarding common-law spouses, but I’ll be brief. Reid and Reid involved the daughter and two grandchildren of the testator, and the three claimants were claiming that they were dependant on the testator. The estate was about $200,000. The son of the testator, so the brother of one of the claimants, did not agree that his sister and niece and nephew were dependants. The Court found they were dependants and that a testator’s support need not be direct financial support.
David Smith: I think that’s an important point, and you know, that’s an important clarification of the blog that we referenced that Bianca did, where, in that case, the Court was critical of the fact that there was no need. Certainly coming out of Cummings we have a regime which clearly says that you do not have to be in need, in financial need and in dependency in a financial sense to be eligible for support. Cummings has expanded the need and the concept of support beyond simply financial need.
Jonathan Morse: Thanks, David. The next case, Parelli and Foley Estate, that was decided in 2006 and it’s certainly more on point with today’s discussion. And in this case, James Foley separated from his wife and subsequently moved to Niagara Falls, and that was in 1988, to a home that he purchased. His girlfriend at the time, a woman named Paula Parelli, gave up her apartment in Toronto that same year and moved to live with Foley. Foley relied on his income from investments while Parelli, she continued to work. Their incomes were comparable, according to the findings by the Court, and in the range of about $25,000. They each contributed to the upkeep, maintenance and operation of the household in Niagara Falls. Foley cooked, did the yard work, washed the kitchen floor, while Parelli cleaned up after dinner, did the laundry and cleaned the house generally. So in 1998, Foley developed Alzheimer’s and in 2000 Parelli quit her job to look after Foley. Then Foley, unfortunately died in 2003.
So in this instance, the estate, including the value of the home, was about $510,000. There were bequests to family members and allowance for Parelli to stay in the home five months after Foley’s death. In this case, Parelli claimed a constructive trust, which the Court allowed, but only for the period during which she had to give up her job to care for Foley, so that was from the period of 2000 to 2003. The Court did not find there was a nexus to the property though, so the dependant’s support claim for the common-law spouse succeeded by increasing the amount of money left to her on top of the money left to her in the Will.
David Smith: You know, that’s a good illustration, Jonathan, of the interplay between a constructive trust claim and a support claim. And it helps also advise counsel as to creative lateral thinking, because there the Court considered the fact that Section 62 provides that housekeeping and domestic services provided by the spouse can be factored into any calculation of a support claim. So an interesting way, and it shows the power of Part 5 of the Succession Law Reform Act, and the degree to which it allows the support claimant to realize an entitlement that they couldn’t realize from a constructive trust claim. Really good point.
Jonathan Morse: Just to hone in on a definition for a moment, David, the SLRA defines spouse, does it not?
David Smith: That’s right. A spouse is either of two persons who are not married to each other, and who have either cohabited continuously for a period of not less than three years, or in a relationship of some permanence, if they are natural or adoptive parents of a child. So it’s a looser definition of spouse than under the FLA, for example.
Jonathan Morse: And I guess I’m envisioning that in sort of the world of different relationships that arise, that trying to determine whether a relationship is actually common-law or not, can be quite tricky sometimes. And I think the definition leaves room for debate because there seem to be so many unique facts, or different fact scenarios. I guess I point to a case, and it was an earlier case in 1999, in Saskatchewan, which provides insight into the evidentiary issues that arise in determining whether or not a common-law spousal relationship exists. And I think the same factors would apply in Ontario, and maybe you can speak to that, David.
David Smith: Yeah, one thing I would say is generally across Canada, the support regimes are very similar, there’s very little difference among any of them. And, you know, a lot of the cases from one province can be used and applied in another, subject to any minor discrepancies in wording. But you know, Jonathan, looking at the time, I see that we’re actually getting close to our limit here in terms of having to wrap this up, and I know that there’s an awful lot we can talk about here. But maybe just in summarizing, can you just give me a sense of what you gleaned in a sort of summary way from your review of the blogs and podcasts?
Jonathan Morse: From the review of the blogs, well we certainly have, we provided a lot of material and I think, certainly for a new lawyer in this area, it can be somewhat overwhelming because there is a large amount of information. But it’s helpful information as well and provides good direction, a good resource to certainly dig into cases and I think texts, in some respects, to provide good guidance with respect to these different issues including that of common-law relationships and what constitutes the common-law relationship.
David Smith: And tell me, Jonathan, just as a lawyer newly specializing in this are of law, were you surprised by the power and breadth of the Succession Law Reform Act as it relates to the dependency claims?
Jonathan Morse: I think I am, yes, because it’s a powerful tool, and certainly clients are recognizing its power and certainly in this time when there’s a lot of wealth transfer happening, individuals are certainly looking to, when an estate arises, they’re looking to how they might resolve situations that have arisen within their family context and coming to us to look at their options under the Succession Law Reform Act.
David Smith: Right, and you know on a final point, I think it highlights the obligation that there should be upon a drafting solicitor who’s making a Will, to ensure that the testator is aware that dependants or people who might qualify as dependants could make claims against the estate and effectively undermine what the testator might think is his last Will. So it’s always a good point for a drafting solicitor to consider. Well, look, Jonathan, lots of fun. I really enjoyed podcasting with you, and I think that brings us to the end of this week’s discussion. Thanks for listening, and thanks for joining us today.
Jonathan Morse: It was a pleasure, David. I look forward to podcasting with you again soon.
David Smith: And that’s right, and you know, Jonathan, we look forward to hearing from our listeners. You can send us an e-mail at hull.lawyers@gmail.com, as we said at the outset, or just pick up the phone and leave us a message on our comment line at 206-350-6636. And be sure to visit our blog at estatelaw.hullandhull.com\ where you’ll find even more information and discussion on today’s practice of estate law. We hope you enjoyed the show. I’m Dave Smith.
Jonathan Morse: And I’m Jonathan Morse. Until next week, so long.
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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