Toronto Estate Law Blog : Toronto Estate Lawyer : Hull & Hull Law Firm : Trust Mediation and Succession Planning : Serving Ontario, Ottawa, Mississauga, Hamilton

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The Ontario Bar Association (OBA), Trusts and Estates Section, year end dinner is taking place on Tuesday, May 31, 2011 at the Archeo (Distillery District), 55 Mill Street, Building 45, Toronto. The Reception begins at 5:30 p.m. with Dinner at 6:30 p.m. As Chair of the Section, I will have the pleasure of bringing the past year to a close. As well, the Section Executive for 2011/2012 year will be announced. The Section will also pay tribute to this year’s recipient of the OBA Award for Excellence in Trusts and Estates, Mary MacGregor.

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

The criteria for the award is demonstrated leadership in the trusts and estates bar through knowledge, experience, skill, commitment, passion and strength of character, plus all or some of the following:

·         academic excellence through teaching at the Bar Admission Course, lecturing at a law school, participating in Continuing Legal Education and/or academic writing;

·         participation in the OBA Trusts and Estates Section Executive or the Law Society of Upper Canada on wills, trusts and estate matters; and

·         contribution to the development of wills, trusts and estate law.

Mary’s distinguished and esteemed career has included her unwavering commitment to, as well as the achievement of, excellence in these areas.   

In addition to the Award for Excellence, the Widdifield Award and the Hoffstein Book Prize will be presented.

For more information, please contact Blossom Pangowish, OBA Sections Co-ordinator, at (416) 869-1047, ext 399, or by email at blossom@oba.org.

Enjoy.

Craig R. Vander Zee - Click here for more information on Craig Vander Zee. 

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The Ontario Government’s recent Bill 173 (the Budget Bill) deals with, amongst many other things, proposed amendments to Estate Administration Tax Act, 1998 (Schedule 14).

Estate Administration Tax is applied to the value of an estate when the estate’s representative applies to the court for a certificate of appointment of estate trustee (often referred to as probate). Currently, court staff of the Ministry of the Attorney General administer the tax. Bill 173 proposes amendments to the Estate Administration Tax Act to enhance, it has been said, compliance by integrating the administration of this tax with audit and verification functions at the Ministry of Revenue, starting January 1, 2013.

It appears that the proposed amendments include, amongst others, amendments (i) to require an estate representative to give the Minister of Revenue prescribed information about a deceased person, (ii) to provide that it is an offence to fail to give the information or to give false or misleading information, (iii) to authorize the Minister of Revenue to assess taxes imposed under the Act, and (iv) related amendments to provide various rules concerning the administration and enforcement of the Act.

Again, it is being proposed that the amendments will apply in respect of applications for estate certificates that are made on or after January 1, 2013, or on or after such later date as may be prescribed by the Minister of Finance

The standing committee on financial and economic affairs was scheduled to meet on April 21, 2011 to consider Bill 173 and hear submissions on its proposed provisions.

If the amendments to the Estate Administration Tax Act pass, the manner in which the amendments are implemented and the regulations that might arise will be important to follow and consider as they will effect Estate Trustees and advice given by professionals advising Estate Trustees.

Thanks for reading,

Craig R. Vander Zee - Click here for more information on Craig Vander Zee. 

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In the days prior to the evolution of the Internet, planning and administering an estate was relatively simple as the physical belongings of the deceased could be carefully sorted through, packaged, and divided according to the Deceased’s testamentary document or the applicable legislation.

In the days since the  Internet has become a common household tool, planning and administering an estate has not been so easy. In a study commissioned by Remember A Charity, The Dying in a Digital Age, it was discovered that four in five people own digital assets, but only nine per cent have considered how these will be distributed upon their death.

According to the study, the nation's digital music collection is worth an estimated £900 million alone.

Three quarters of those surveyed for the study indicated that their digital music and photo collections had strong sentimental value, while eight out of ten said their digital assets were financially valuable.

Rob Cope, director of Remember A Charity said: ''Bank accounts, music and photograph collections are increasingly stored online…meaning families will wave goodbye to a small fortune if details are not passed on.”

There is now an entire cyber existence that both the Deceased and Trustees need to turn their mind to when planning or administering an Estate. For instance, what will become of Facebook, Twitter, Flickr and PayPal accounts? One easy solution is to subscribe to a website called Legacy Locker. Legacy Locker was created in 2009 and it maintains a master list of user names and programs for online bank accounts, social networking sites and document repositories. 

In the digital era, it is important that we consider and make arrangements for how our digital assets will be distributed, and for estate planners, it may be just as important that you consider including in your questionnaire or checklist, a question that forces a client to turn their mind to consider their digital assets. 

Thank you for reading, and have a great weekend.

Rick Bickhram - Click here for more information on Rick Bickhram.

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Within the next twenty years, Canada's baby boomers are in line to inherit a substantial fortune, which will represent the largest transfer of wealth from one generation to the next.

In an article written by Jennifer Power Scott and published in Canadian Living, Ms. Scott discusses the  bittersweet bonanza that many heirs face and cautions the impulsive spender: "There are a lot of people in this world who might go out and blow the whole thing in a week, and that's not appropriate. Unless you're well-heeled to begin with, flushing the funds into trips to Las Vegas, sexy cars and plush home theatres probably isn't the smart way to go."

In her article, Ms. Scott stresses the importance of carefully planning what to do with your inheritance, so that your inheritance can turn into a gift that lasts. Ms. Scott urges those who have received a windfall inheritance to:

1. Take a breath. Put your inheritance somewhere safe that earns a good guaranteed rate of interest for a few months while you think things through
2. Once you are ready to make a decision, speak to a certified financial planner
3. Consider your option, such as satisfying outstanding debts, investing into an RESP for your children, or an RRSP or RRIF for yourself

Essentially Ms. Scott's article forces her readers to consider their long-term goals as opposed to their short-term goals. "It pays to step back a little bit. Some people will immediately say, I've got this money, I don't deserve it all, and maybe I should start helping out my kids right away. But they need to make sure that their financial future is properly secured before they do that."

Thank you for reading, and have a great day,

Rick Bickhram - Click here for more information on Rick Bickhram.

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Dianne Nice, an author for The Globe and Mail, wrote a piece on her experience in planning her estate. Her article, "Will Mistakes: I've Made a Few", focuses on errors that she encountered when creating her estate plan. 

Ms. Nice states that while she was pregnant with her second child, she and her husband decided it was time to draw their wills. Ms. Nice and her husband met with a local estate lawyer and instructed the lawyer to prepare two simple wills with their children's welfare in mind.  However, no consideration was given to the possibility that either her or her husband could become incapacitated. If this unfortunate circumstance was to occur, it would likely lead to several other legal issues. For instance, after speaking with a reputable estate lawyer, Ms. Nice learned that even though her husband and her were joint owners of their home, if her husband became incapacitated and did not name her as his power of attorney, she would not have the right to sell or refinance their home.  Also, just because they are married, that did not mean she has the right to make financial decisions for her husband without a power of attorney or a guardianship order.

Other common errors that Ms. Nice pointed to were:

•           Placing too much trust in your delegated financial decision maker

•           Avoiding making a will by using beneficiary designations and joint ownership of assets

•           Leaving behind a handwritten or will kit will instead of retaining professional assistance

•           Neglecting to update your will as you enter marriage or a committed relationship

•           Not updating wills to reflect the life stages of your children

•           Trying to change your will by writing on the original or a copy of the will, or using too many codicils

The above errors should provide insight for consideration when we are considering our estate plan.

Until tomorrow,

Rick Bickhram - Click here for more information on Rick Bickhram.

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In an article published over the weekend, Alison Griffith of the Toronto Star writes that over 21 per cent of Canadian households had received an inheritance averaging $91,000.  This amount is likely to jump as our society continues to age.  As estate lawyers we are often so focused on the importance of advising clients of having an estate plan that we rarely consider the other side: after you have received your inheritance, how do you manage the new found wealth?

Ms. Griffith states: "unexpected money - and sometimes expected money - creates both financial and emotional challenges."Many of us who receive these windfalls often stress over the idea of what to do with the money and how will it be managed. 

In her article, Ms. Griffith recommends that anyone who has received a windfall should follow the following four steps, which will likely assist them in making more informed decisions:

1. Take a deep breath and acknowledge the reality of the situation.  If you received an inheritance the chances are there is a death of someone important in your life.

2. Don’t rush.  Ms. Griffith tells a story of an old friend who inherited over $200,000, following the death of her mother.  She advised that she intended on "playing around" in the stock market.  Six month later - she didn't want to talk about how "play time" ended.  Ms. Griffith states:  "As the calendar advances you almost certainly will change your mind about what you want to do with your windfall.  Meanwhile, park it in short-term GICs or high interest savings account."

3. Seek advice.  "Contact a fee-only or fee-for-service financial planner who doesn’t sell anything other than their services."

4. Reduce your expectations.  "Don’t expect your windfall magically to turn you into a blissful resident of Shangri-La."

Receiving an inheritance can cause the beneficiary to experience mixed emotions.   It is important to consider the above steps to avoid making an impulsive decision, which is likely to lead only to regret.  

Rick Bickhram - Click here for more information on Rick Bickhram.

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Can a deceased person, immediately before his or her death, be found to have been in a common law spousal relationship with two persons, each of whom could assert a claim for support as a dependant?  This was the interesting question recently considered on a motion for interim support under Ontario's Succession Law Reform Act ("SLRA").

In Blair v. Cooke, the Applicant commenced an Application against the Estate seeking dependant support, and subsequently brought a motion seeking interim support from the estate.   In support of her application, the Applicant filed an extensive affidavit describing the history of her relationship with the Deceased and argued that she is a dependant spouse of the Deceased, thus, entitled to support under the provisions of the SLRA.  The court was also provided with numerous affidavits of friends and acquaintances confirming the Applicant’s 11-year relationship with the Deceased.

The Respondent is the estate trustee of the estate for the Deceased, and also argues that she is the Deceased’s common law spouse.  It is important to clarify that the Respondent does not make a claim for dependant support, but rather opposes the Applicant’s application.  In doing so, the Respondent filed her own affidavit and the affidavit of friends and acquaintances, which would corroborate that she was the Deceased’s common law spouse.  The Respondent argued the court should not make any finding of entitlement to support for the Applicant, because doing so would preclude her from claiming support (if she decided to make a claim at a later date) or claiming that she was in fact the “spouse” of the deceased. 

In considering whether or not a person could have two spouses for the purpose of making a dependant support claim, the court considered section 57 of the SLRA, more particularly the following definitions:

1.      “Dependent” can be a  “spouse of the deceased...to whom the deceased was providing support or was under a legal obligation to provide support immediately before his or her death...”. 

2.      “Spousal” is further defined under the SLRA as “either of two persons who...are not married to each other and have co-habited...continuously for a period of not less than three years”; and

3.       “Co-habit” is defined to mean living together “in a conjugal relationship”.

The “twist” that I found interesting in this case, was that the court found that there was enough evidence to conclude that the deceased may have co-habited with two different women, in different homes.  The court stated that they did not have to determine that one party was a spouse and the other was not for purposes of awarding interim support; in fact both women could qualify.  The Applicant was awarded interim support.

Rick Bickhram - Click here for more information on Rick Bickhram.

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I hope everyone had great holiday season.

With the close of 2010, we turn and look to the promise of 2011. In looking ahead to 2011 many may wonder if they have properly protected and provided for those they intend to protect should something unexpected happen to them. Questions may also arise regarding whether a spouse or parent has taken steps to provide for themselves and/or those they intend to provide for.

While there are no doubt many things to consider for the new year from a family perspective, perhaps this is the year to resolve to consider, or reconsider, whether your family’s legal affairs have been properly planned.

I wish everyone a healthy, happy and prosperous 2011.

Craig R. Vander Zee - Click here for more information on Craig Vander Zee.

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

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

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

The criteria for the award is demonstrated leadership in the trusts and estates bar through knowledge, experience, skill, commitment, passion and strength of character, plus all or some of the following:

·         academic excellence through teaching at the Bar Admission Course, lecturing at a law school, participating in Continuing Legal Education and/or academic writing;

·         participation in the OBA Trusts and Estates Section Executive or the Law Society of Upper Canada on wills, trusts and estate matters; and

·         contribution to the development of wills, trusts and estate law.

Any member of the Trusts and Estates Section of the OBA in good standing is eligible to nominate a candidate by submission in writing, together with a curriculum vitae outlining the nominee's qualifications. The nominator must indicate that the candidate has been advised of the nomination prior to the nomination deadline and has consented thereto. The Award is typically presented at the Section’s Annual Awards dinner in late Spring.  

Nominations must be filed by 5:00 p.m. on Friday, January 14, 2011 to:

Blossom Pangowish, Sections Coordinator

Ontario Bar Association,

20 Toronto Street,

Suite 300,

Toronto, Ontario

M5C 2B8

Fax: 416-869-1390

For more information, and/or to obtain a Nomination Form, please contact Blossom Pangowish at (416) 869-0513, ext 399, or email at blossom@oba.org or by visiting on line at http://www.oba.org/en/admin/awards_en/tru_award.aspx.

Thanks for reading.

Craig R. Vander Zee - Click here for more information on Craig Vander Zee.

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Having an open conversation with your parents about their financial matters and the importance of estate planning is never an easy task. Medical studies have indicated that people who have lived through the Great Depression prefer to keep their financial affairs to themselves. This presents a challenging task for loved ones trying to discuss with their parents financial matters and particularly who is best equipped to handle their finances if they are unable or how they expect to pay for long-term care should the need arise.

The New York Times recently published an article entitled, “Talking with Depression-Era Parents About Money”. In this article, Tara Siegel Bernard, the author, suggests the different ways that adult children could broach the topic with their parents such as:

Show and Tell: “Adult children could talk about their own estate plans - a show and tell”. This forces the parent to give thought to their children’s estate plan and opens the door for the child to ask how the parents have handled their own affairs.

Parental Duty: “Appeal to their duties as parents.” 

Bring in a Pro: “Some parents may also feel more comfortable discussing their financial situation in front of a disinterested party, like a long time accountant, lawyer, or financial planner.” It appears that Ms. Bernard suggests having a disinterested party present could help the parent feel more secure, which likely would have the effect of the parent opening up about their financial matters. This sounds like a good idea; however, a word of caution, this suggestion also could lead to estate litigation, as arguments of undue influence could be advanced in the circumstances.

Timing: “Make sure you choose a good time and place to bring up the topic”. Obviously, having this sort of discussion at the family holiday party is not a good idea.  

Thank you for reading and have a good day.

Rick Bickhram - Click here for more information on Rick Bickhram.

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In the last of my series this week on recent trust cases of interest, today’s blog looks at the case of Nolan v. Kerry (Canada) Inc., 2009 SCC 39, [2009] 2 S.C.R. 678. This case provides guidance as to when costs, arising from litigation regarding a pension trust fund, are payable out of the pension trust fund. Though Nolan v. Kerry (Canada) Inc. is a pension case, the analysis might apply to a context where there is a proceeding involving a legitimate uncertainty as to how to properly administer a trust, and/or where there is a trust dispute (whether or not the proceeding is brought by trustees or by beneficiaries).

The issues in Nolan v. Kerry were related to the obligations of an employer under a pension plan for its employees.   

The Supreme Court of Canada dismissed the appeal and affirmed the decision of the Ontario Court of Appeal in favour of the respondents, the employer and the Superintendent of Financial Services. The Court of Appeal had declined to award costs to the Employees Pension Committee (the “Committee”) from the trust fund as the unsuccessful party in the litigation. 

The Supreme Court of Canada held: “In the end, of course, costs awards are quintessentially discretionary.” The key question on that point was, however, whether the litigation was adversarial or whether it was aimed at the due administration of the pension trust fund. The Supreme Court of Canada found that the rules in both Buckton v. Buckton [1907] 2 Ch.406.and Sutherland v. Hudson’s Bay Co. (2006) would allow a court to award costs out of the fund where there is a legitimate uncertainty as to how to properly administer the trust and where the dispute is not adversarial. Adversarial claims in the context of the Nolan case did not qualify for a costs award from the trust fund. Here, the litigation was adversarial in nature because it was ultimately about the propriety of the employer’s actions and because the Committee sought to have funds paid into the trust fund to the benefit of its members.  

Thanks for reading and enjoy the weekend.

Craig R. Vander Zee - Click here for more information on Craig Vander Zee.

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As part of my continuing series of blogs this week regarding recent trust law cases, today’s blog looks at the case of Gonder v. Gonder Estate, 2010 ONCA 172 (CanLII). The issue is this case dealt with whether an estate trustee of an estate could be removed without providing for the appointment of an alternate estate trustee or otherwise providing for the orderly administration of the estate. 

In this case the estate trustees brought a motion under section 37 of the Trustee Act (Act) for an order removing them as estate trustees of the Deceased’s estate on the basis of their personal circumstances, their location and other responsibilities and financial stress. They had also become creditors of the estate and were in a conflict of interest situation.

The deceased died in January 2008, leaving an estate consisting of some cash or a cash equivalent, and a modest home in Ontario.

Under the Deceased’s Will, the named beneficiaries were the testatrix’s sister, her mother, and her brother. More specifically, the testatrix left a life estate in the Ontario property to her mother, who was still living but was no longer able to stay in the house. The will further directed that the residue of the estate was to be divided equally among the testatrix’s mother, sister and brother.

In February 2008, the Deceased’s brother commenced an action against the estate, claiming that he was the beneficial owner of the property.   

The Estate Trustees, who lived in British Columbia, agreed to undertake the role of estate trustees and a Certificate of Appointment of Estate Trustee with a Will was issued to them.

The Estate Trustees had been unable to sell the property or to distribute the residue of the estate because of the deceased’s brother’s certificate of pending litigation registered on title to the property. The Estate Trustees alleged that, as a result, they had been required to spend their own money to defend the brother’s lawsuit against the estate.

At the time of the removal motion, the Estate Trustees moved for directions seeking, among other forms of relief, an order that the property be sold and the proceedings of the sale be paid into court pending the resolution of the competing interests. The Public Guardian and Trustee indicated that it did not intend to become involved in the estate.

The motions judge found that the continued service as Estate Trustees would cause substantial physical and financial hardship on the Estate Trustees and they had become creditors through no fault of their own. Furthermore, the motions judge found that section 37 of the Act did not require a trustee to provide a replacement before applying to be removed and allowed the motion.

Interestingly, the Ontario Court of Appeal found that the motion judge erred not in removing the trustees without appointing a replacement, but rather in removing them without making alternate provisions for the proper administration of the estate.

The Court of Appeal found in the specific circumstances of this case there were three objectives that ought to have been considered and addressed by the motion judge: (1) ensuring the orderly administration of the estate in the interests of the beneficiaries; (2) recognizing the plight of the respondents; and (3) providing for the timely resolution of the disputes concerning the estate.  

The Court of Appeal held that section 37(4) of the Act does not constrain the power of the court to remove a sole remaining trustee and provide for an alternative mechanism for administering the trust.

Thanks for reading.

Craig R. Vander Zee - Click here for more information on Craig Vander Zee.

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www.hullandhull.com/Lawyers/Craig-R-Zee.shtmlIn yesterday’s blog, I mentioned that my blogs for the balance of this week would focus on a selection of recent trust law cases. A case that merits mentioning in the category of foreign trustees is Herring Estate (Re), 2009 CanLII 44707 (ON. S.C). This is a decision by the Honourable Justice D.M. Brown that provides clear and helpful guidance as to the circumstances under which a foreign trustee can act as ancillary estate trustee.

In this case, the Deceased was a US resident who created an inter vivos trust in North Carolina naming a licensed trust company (the “trust company”) there as the sole trustee. The trust company was also named executor of his Will. The Deceased’s wife was the sole beneficiary of the trust and the trust was the sole beneficiary of his residuary estate. Probate of the Deceased’s Will was issued in North Carolina for the estate, which was substantial in value.

The Deceased owned a new condo unit in Toronto worth $360,000 but with respect to which the estate would owe $126,831 on occupancy date, which had not yet occurred. There were no debts owing in Ontario at the time of the application.

The trust company’s application for a certificate of ancillary appointment of estate trustee with a will was rejected by the Local Estates Registrar because the trust company was not an approved registered trust corporation under section 175(2) of the Loan and Trust Corporations Act, R.S.O. 1990, c. L.25 (that is no certificate could be issued to it).

The Court found that while section 175 permitted it to grant probate to a trust corporation registered under the Act without having to post security for acting as an executor or trustee, it did not prohibit the appointment as estate trustee, under an ancillary application, of a foreign trust company that is not registered under the Act.

Section 213(1) of the Act, which provides that "no person, other than a registered corporation, shall conduct, undertake or transact in Ontario the business of a loan corporation or of a trust corporation” also did not disqualify the trust company from acting as ancillary estate trustee. By fulfilling its duties under the will and the inter vivos trust, the Court found that the trust company would not be offering its services to the Ontario public.

The trust company was awarded the certificate of ancillary appointment of estate trustee with a will but was ordered to post a bond in the amount of $125,000, which was the approximate amount owing on the closing of the condominium as some security was required because the affidavit from the trust company did not contain a clear, unambiguous statement that the company, as estate trustee, intended to make the payment due on the interim occupancy date.

Thanks for reading.

Craig R. Vander Zee - Click here for more information on Craig Vander Zee.

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In a prior blog by Paul Trudelle, a partner at Hull & Hull LLP, he explained the decision of Rooney Estate v. Stewart Estate (2007). In Rooney Estate v. Stewart Estate, the court highlighted some of the roles the Estate Trustee and the estate solicitor and held responsible for including, among other things, arranging for the funeral and disposition of remains.

Arranging for the funeral and disposition of remains can be burdensome, especially if the estate trustee was related to the Deceased. This task becomes even more daunting when they are dealing with the expenses of a funeral in which case, fewer are in the mood to bargain. Regrettably, this leads many spending more then they have to. 

I recently came across an interesting article, How to Cut Funeral Costs, which was published in The Wall Street Journal. Under this article, the author provides us with a few tips on how to keep costs reasonable when arranging a funeral service:

 

1.                  Learn your Rights: Funeral homes are prohibited from charging certain fees, and there may be a requirement that compels funeral homes to provide a written fee list upon request

2.                  Pre-plan: “Have a conversation with your family about what you want and what’s going to be meaningful to them.”

3.                  Consider pre-owned plots: Purchasing a pre-owned plot has always been a common practice; but the purchaser has moved out of the area where his plot is purchased. 

4.                  Compare Funeral Home Prices: it’s worthwhile to shop around. Prices vary from one home to another

Thank you for reading,

Rick Bickhram - Click here for more information on Rick Bickhram.

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In an aging society, our elderly can easily fall prey to predators looking to exploit them. Elder abuse can take many different forms: physical, psychological or financial abuse, or simply neglect.

I read an article yesterday about Huguette Clark, the 104 year old heiress whose wealth is estimated at half a billion dollars. During her lifetime, Clark made generous gifts towards those who cared for her. For instance, it is reported that Clark gifted $10 million dollars to her social secretary. 

It is reported that Clark’s wealth is being managed by her lawyer and her accountant. 

A former paralegal who worked for Clark’s attorney, has now blown the whistle on what she alleges is improper behavior by Clark’s attorney and accountant. According to reports, it is alleged that they “drafted a will that would have left money to [one of them], trying repeatedly to persuade her to sign it — then joked about their client and cursed her behind her back when she would not sign the will.” It is also reported that her lawyer allegedly solicited from Clark $1.5 million dollars to build a security system for a community where his daughters and their families live. In addition he allegedly sold a Stradivarius violin for $6 million dollars and a Renoir painting for $23.5 million. 

A criminal investigation has now been launched by the Manhattan district attorney, who has the Elder Abuse Unit of the New York County District Attorney's Office looking into the handling of Clark's finances.

It bears repeating that the complaints at this stage are unproven allegations. Nonetheless, the mere thought that this could happen provides us with a dreadful reminder of what the elderly face in our society today.

Thank you for reading,

Rick Bickhram - Click here for more information on Rick Bickhram.

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Chinese real-estate tycoon, Yu Pengnian, announced this past April that he was donating the last $500 million of his fortune to his charitable foundation on philanthropy. He was asked by a reporter, whether his children were angry about his donations and responded by stating: “They didn’t oppose this idea, at least not in public.”

|It is not uncommon for billionaires to donate their fortune. For instance, Warren Buffet and Bill Gates started a campaign called "The Giving Pledge." At that time, they had four billionaires pledge to give away half of their fortune upon their death.  Now there are 40. My colleague, Nadia Harasymowycz, recently blogged on this topic, which can be found here: Leaving it all to Charity – A Good Plan or an Estate Litigator’s dream.

The idea of giving away your fortune is a strong shift from the traditional idea of passing down your wealth, from generation to generation. Why this switch in estate planning? Yu stated: “If my children are competent, they don’t need my money. If they’re not, leaving them a lot of money is only doing them harm.”

Yu’s message to wealthy families put simply: “Too many wealthy parents focus on preventing their children from failing. But in doing so, they also deprive their children of the joys of self-made success.”

Thank you for reading,

Rick Bickhram - Click here for more information on Rick Bickhram.

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Over the weekend, I was reading some international publications, when I came across a rather interesting article in The New York Times about Ben Novack Jr., and his Batman collection.  Novack is said to have the second largest, Batman themed collection, in the country.  To give you an idea of how big this collection is, Novack is said to have a full-size replica of the Batmobile!

About one year ago, Novack was found murdered at a hotel in New York, where he was staying with his wife.  The hotel records showed that no one had entered the hotel room with a key before the killing of Novack.  Novack's wife reported to the police that "she went down to breakfast about 7 a.m., leaving him asleep. When she returned 40 minutes later, she said, she found him bound and bloody on the floor."  Given the hotel records, and other circumstantial evidence, the police did not believe Novack's wife. 

It is reported that her goal was to seize control of Novack's fortune.  How much was his estate worth? $5-6 million dollars! 

Earlier this year in February, a Florida judge named Ms. Novack as the personal representative of Novack's estate before reversing the decision three days later. He ordered her to post a high bond before becoming personal representative, but Novack's wife never posted the bond.

The article does not mention whether Ms. Novack was convicted with the murder of her husband, however, in Ontario the Forfeiture Rule is well founded law for beneficiaries who perpetrate a criminal act against the testator.  The Forfeiture Rule was quoted in Re Benson Estate,  "A sane person who commits murder is debarred by public policy from taking any benefit under the Will or intestacy of his victim."

Thank you for reading,

Rick Bickhram - Click here for more information on Rick Bickhram.
 

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Bridging the gap between principle and common sense can be tough for parties involved in litigation.  

World renowned pop artist, Michael Jackson, died over one year ago on June 25, 2009.  As with most estate disputes, they tend to be costly both emotionally and financially, and this tends to be the focus of everyone watching, despite all the good deeds that one may have accomplished during his or her lifetime.

Over the past year, we have heard of issues surrounding the Guardianship of Michael's children, his mother Katherine Jackson's fight to be appointed as the executor for Michael's estate, and illegitimate children coming out of the woodwork claiming to be dependants of Michael.

Most recently, in an entertainment column published by TVNZ, Michael's father, Joe Jackson, has decided to appeal a court decision indicating that he had no right to object to the executors of his son's will.  

Joe Jackson initially accused the executors of Michael's estate, John Branca and John McClain, of fraud and embezzlement.  As Joe Jackson was not a beneficiary of Michael's estate, the court held that he was unable to object to the executors of his son's will.

Joe Jackson's lawyers now argue that Joe was financially dependent on Michael and should therefore have a right to object to the appointment of the executors who control the financial decisions of Michael's estate.  These claims of dependency are being refuted by the lawyer for Michael's children.

As I indicated above, bridging the gap between principle and common sense can be tough for parties involved in litigation.  Is this the legacy that Michael Jackson would have wanted to leave when he died?

Thank you for reading,

Rick Bickhram - Click here for more information on Rick Bickhram.

 

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Computers have become a staple in the lives of human beings, such that it is difficult to imagine that there was a point in time when they did not exist. In an effort to remain current with technology, some funeral homes have incorporated the use of technology in how loved ones say their final farewells.

The Toronto Star  recently featured an article about a funeral home that allows distant loved ones to say goodbye by watching the funeral service being streamed over the internet. It sounds eerie, and certainly, there will always be concerns about internet security, but for Brantford trooper Larry Zuidema Rudd, who died when a roadside bomb exploded, having an online funeral service allowed more then 40 of his colleagues in Afghanistan to pay their final respects from their distant base.

The so-called “sympathy casts,” have been growing in popularity. Helen Zuidema, the mother of our fallen solider Zuidema Rudd, says that the sympathy casts have “brought our family together without them having to come here … they’re still talking about it months later.” Zuidema still scans the funeral site, along with its many photos, tributes and messages, about once a week.  “It brings back a lot of memories that you kind of forget when you are grieving,” says Zuidema.

For funeral homes, embracing the advances of technology has created an appreciation amongst loved ones, faraway friends and relatives, who can now be included in saying their final farewell.

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As an avid sports fan, I enjoy watching the physical nature of most sports. Recently, our media has reported on the severity of head injuries, which are caused by “head shots”, and the need to implement rules in professional sports to prevent catastrophic head injuries from happening.

Alan Schwarz, an author for the New York Times, recently wrote an article about a loophole in the California workers compensation system that allows retired professional athletes to file a claim for injuries sustained decades before, particularly retired N.F.L. players.  

Schwarz states, “Most states require workers’ compensation claims to be filed within one to five years of the injury; California’s statute of limitations does not begin until the employer formally advises the injured worker of his or her right to workers’ compensation.” Also, California’s workers compensation statutes “require a professional athlete to have played only one game of his or her career within state borders to file a full claim for cumulative injuries.” The logical policy reason behind this legislation is to protect outside workers who temporarily pass through the state, like truckers or flight attendants.

As you can imagine, this loophole has opened the flood gates for retired athletes to file their workers compensation claim. In fact Schwarz states that “about 700 former N.F.L. players are pursuing cases in California, according to state records, with most of them in line to receive routine lump-sum settlements of about $100,000 to $200,000.”

What makes Schwarz’s article interesting is the claim filed by Ralph Wenzel. Wenzel has filed a claim arguing that his dementia at 67 years of age is related to his career as an N.F.L. lineman between the years of 1966 to 1973. The theory of Wenzel’s case is that “hitting your head over and over on the football field causes certain conditions.” In fact, researchers at “at the University of North Carolina have recently linked pro football careers and concussions with heightened rates of depression, mental decline and Alzheimer’s disease.” 

As we continue to see a rise in those who are diagnosed with dementia and Alzheimer’s, I think it will be interesting to see how the sporting industry reacts to this disease, particularly, the rules each professional league implements to eliminate “head shots.”

Thank you for reading.

Rick Bickhram-Click here for more information on Rick Bickhram

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We repeatedly hear about the grim details behind Alzheimer’s disease. In a previous blog titled “The Grim Toll of Alzheimer's”, I touched on a reported study called The Rising Tide: The Impact of Dementia in Canadian Society.   This study has cited that as our population continues to age, the number of people suffering from Alzheimer’s disease is expected to double to 1.25 million within 30 years. Again, another grim statistic.

Today, I blog on another Alzheimer’s study, which fortunately does not have such grim details. In a recent article, Lesley Ciarula Taylor states that specialists in Rochester, Minnesota have discovered “a cheap and easy memory test can predict who will develop Alzheimer’s disease with almost perfect accuracy.” The Free and Cued Selective Reminding Test is used to distinguish normal aging memory loss from a degenerative brain disease. 

Taylor states, “the cost is very low, much lower than an MRI. The hope is to be able to identify the disease as quickly as possible.”

There is no cure for Alzheimer’s. Diagnosing the likelihood of being vulnerable may not necessarily lead to a cure, but at least specialists in this area can now ask new questions that potentially could lead to different angles on handling this disease.

Thank you for reading,

Rick Bickhram-Click here for more information on Rick Bickhram

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In yesterday’s blog I touched upon the rule in Re Hallett’s Estate. In today’s blog I will touch upon the rule in Clayton's Case (1816), 1 Mer. 529, 35 ER 767 (Ch.). Again, the rules stem from situations where a trustee mixes trust funds with their own funds or with a different trust’s funds. 

The rule in Clayton’s Case is generally described as the "first in, first out" rule. It holds that where a trustee mixes money from two or more trusts in one account and then removes money from it, the trustee is deemed to have taken out the money that was first deposited in the account. The reason for the creation of the rule in Clayton's Case appears to be to facilitate the tracing of funds in situations where the equities were equal and there may be difficulty in ascertaining the proportionate share to be awarded to each of the trusts in question. At its lowest common denominator, the rule in Clayton's Case appears to be a rule of convenience and administrative expediency.*

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As I have been practising in the area of estate litigation for a few years, I occasionally think that I have seen it all; that every recurring story I hear about a family war tends to lose its originality. Not true. Take for instance a recent story that was posted online in the Telegraph, involving a U.S. estate fight.

Tasha Tudor was from New England and has been described as the “unconventional Martha Stewart.” Ms. Tudor died at the age of 92 following complications from a stroke.  The basis of Ms. Tudor’s estate dispute centers on her decision to leave almost her entire estate to her eldest son, virtually cutting out her three other children. 

The oldest son argues that his late mother intended to cut out his three siblings from her estate because they were estranged from her. One of the siblings, a U.S. Air Force lawyer, who claims he was not estranged from his late mother, has asserted that the 2001 Will is invalid on the basis that his older brother unduly influenced his late mother.

The dispute has gotten so acrimonious between the siblings that they could not even agree what to do with their mother's ashes. On motion to the Court, it was ordered that Ms. Tudor’s ashes be divided in half, with one-half to be given to the oldest son and the other half to his siblings. Lawyers are now fighting over who is responsible for a snow plough bill!

It is reported that some of the last words by Ms. Tudor were “Oh, will there ever be a cat and dogfight when I die. But I don't care. I won't be here to see it.” 

It is often difficult to comprehend the harsh realities of litigation until you step into the shoes of one of the parties. I wonder if Ms. Tudor were alive to witness the severity of this dispute whether she would take back those words?

Thank you for reading

Rick Bickhram

Rick Bickhram - Click here for more information on Rick Bickhram.

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I recently read an article composed by The Children’s Lawyer, Debra Stephens, named Minor Settlements: How to Ensure Court Approval. I found this article to be particularly helpful as the article speaks to the role of The Children’s Lawyer in litigious matters and explains the common issues that arise during settlements involving minors.

Fundamentally, it is important to understand the role of The Children’s Lawyer with respect to their involvement in settlements concerning minors, which Ms. Stephens describes as: “The Children’s Lawyer is not a party to the proceeding and is not in an adversarial role with any of the parties. Rather, The Children’s Lawyer acts as an advisor to the court, making recommendations to assist the judge in determining whether to approve the proposed settlement”.

In her article, Ms. Stephens talks about a few issues that commonly arise during settlements involving minors. One of those issues that Ms. Stephens touches on is legal fees. Ms. Stephens states that legal fees are an important factor in determining whether to approve a settlement on behalf of a minor. Factors that are relied on when considering the reasonableness of a solicitor’s account are set out in the Court of Appeal decision Cohen v. Kealey and Blaney and include:

1.                  time spent;

2.                  legal complexity;

3.                  degree of responsibility assumed by the lawyers;

4.                  monetary value of the matter in issue;

5.                  the importance of the matters to the client;

6.                  degree of skill of the lawyers, results achieved;

7.                  ability of the client to pay; and

8.                  expectation of the client with respect to the fee. 

Also, another factor not mentioned in the case above is ensuring that access to justice is obtained for parties under a disability. I found Ms. Stephens’ article to be particularly useful in my practice and I would certainly recommend it to any practitioner who ordinarily runs into issues involving The Children’s Lawyer.

Thank you for reading.

Rick Bickhram

Rick Bickhram - Click here for more information on Rick Bickhram.

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As most of us return to our offices from a long weekend, I would like to share with you an interesting case, which I read over the weekend and deals with an Application to declare a family member unworthy to inherit. S.R. (Succession de), 2008 QCCS 4015, is a decision released by the Quebec Superior Court.

In, S.R. (Succession de), the Deceased was survived by his spouse and four children.    The Deceased was a savvy businessman who, during his lifetime, was quite successful. In 1995, the Deceased asked a notary to prepare a Will. A draft Will was sent to the Deceased for his review but it appears that he never executed the Will. In 2000, the Deceased was diagnosed with cancer and subsequently died in 2003.

After the Deceased died, the children looked for their father’s Will in the home and at the Deceased’s office with no success. We are given to understand that all of the children, searched, under the bed, every closet, every brief case belonging to the Deceased, but were unable to recover a Will.   

One of the daughters prepared a proposal requesting the siblings to acknowledge that the Deceased promised to transfer a certain property to her. This would have the effect of increasing her entitlement under the Deceased’s estate. Her siblings refused to sign the acknowledgement, which led to the ensuing dispute. The disgruntled daughter, subsequently informed everyone that she had in fact, located a Will of the Deceased in an old briefcase, which was allegedly in the bedroom closet of the Deceased’s residence.

The discovered Will was similar to the draft Will prepared earlier, except that it included two additional provisions which favoured the disgruntled daughter, in the amount of $2.4 million dollars and was apparently executed by two witnesses from New York. 

The disgruntled daughter tried to probate this Will, but it was contested by her siblings and it was ultimately ruled that the Will could not be probated by the Honourable Justice Gagnon. Justice Gagnon held that there were all the sorts of question marks surrounding the validity and execution of the Will. 

After the Application for probate was refused, the disgruntled daughter then produced a document which was a blank cheque allegedly signed by the Deceased and which purported to give the disgruntled daughter her share in a building that she coveted and various other monies for her home. The siblings refused to admit the authenticity of the blank cheque and commenced proceedings against the disgruntled daughter to have her declared unworthy to inherit under the Deceased’s estate. 

Under the section 621 of the Civil Code of Quebec, it states that a person “may be declared unworthy of inheriting where a person is guilty of cruelty towards the deceased, and where the person has concealed, altered or destroyed in bad faith the Will of the deceased, or a person who has hindered the testator in the writing, amending or revoking of their Will.” 

In relying on this provision, the children advocated that the disgruntled should be precluded from inheriting because she concealed and altered, in bad faith the alleged Will of the Deceased. 

The court held that the disgruntled daughter had likely altered the Deceased’s Will, had taken the draft prepared by the notary and added some typewritten additions that benefited her to the detriment of her siblings and mother. The court further held that the disgruntled daughter likely had taken the blank cheque from the Deceased’s home and also forged that after his death.

Accordingly, the disgruntled daughter was declared unworthy to inherit and her claims against the estate were dismissed.

An interesting point, in Ontario we do not have any similar case law or legislation that would actually allow someone to commence a proceeding, seeking to have someone else precluded from receiving their entitlement absent criminal activity such as murder.

Have a great day,

Rick Bickhram

Rick Bickhram - Click here for more information on Rick Bickhram.

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As we are in the beginning of a new year, a quote from one of my favourite poets, T.S. Eliot, comes to mind:  “For last year's words belong to last year's language and next year's words await another voice.”  

I recently came across an article entitled "The 8 Life Stages of Estate Planning", authored by G.M. Filisko.  In his article, Mr. Filisko points out the obvious - during our life we will go through different phases and our estate plans should reflect these changes. Mr. Filisko lists the following stages to consider regardless of the phase one may be currently in:

1.      Young, single and carefree
2.      Single, but committed
3.      We’re Engaged
4.      Just Married
5.      The Joys of Parenting
6.      Divorce (if unfortunately applicable)
7.      The Middle Ages
8.      The Golden Years

Regardless of where one may fall in this spectrum, it is never to late to get started.

Since making New Year’s resolutions seems to be the theme around this time of the year, let’s make a resolution to be more organized this year and spend some time considering our estate plans.

Thank you for reading.

Rick Bickhram

Rick Bickhram - Click here for more information on Rick Bickhram.

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This is our last blog of 2009!

Thank you for reading our blog posts over the past year. We have enjoyed preparing them. We hope that we have been informative.

With the close of 2009, we turn and look to the promises of 2010. While there is no doubt many things are to be considered for the new years, from a family perspective, perhaps this is the year to resolve to consider, or reconsider, whether your family’s legal affairs have been properly planned.

On behalf of everyone at Hull & Hull LLP, I would like to wish you a wonderful new year. We hope that you have a safe, restful holiday. 

Happy New Year.

Rick Bickhram

Rick Bickhram - Click here for more information about Rick Bickhram.

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Planning your estate feels a lot like preparing for your taxes. It takes time and it’s something the average person hates to turn their mind to. Nevertheless, a solid estate plan is, without a doubt, the best defence against the potential threats to hard earned wealth posed by disgruntled family members or tax authorities.

Recently, I read an article written by Hyman Darling, an Attorney in the State of Massachusetts, in regards to the top 10 issues regarding wills. Mr. Darling states that the top 10 issues that are frequently being considered by the average person are:

1.                  Should I have a Will?

2.                  What kind of Will should I have?

3.                  How does a Will work when I die?

4.                  What if I have a Will but am not satisfied with it?

5.                  Do both spouses need Wills?

6.                  Is it possible to set up a Trust under my Will?

7.                  How can I include a charity in my Will?

8.                  How can a charitable bequest benefit me?

9.                  How much does a Will cost?

10.              How do I go about getting an attorney?

Mr. Darling does an exceptional job at considering each issue and I certainly recommend that everyone considering an estate plan review his article.

Thank you for reading,

Rick Bickhram

Rick Bickhram - Click here for more information on Rick Bickhram.

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Death planning now includes options like buying your coffin at your favourite retailer, purchasing jewellery keepsakes that hold a loved one's ashes, and even treating mourners at your funeral to ice cream.

For my final blog of the week, I thought that it would be appropriate to discuss Death Planning. In my limited experience, I recognize an ingredient of success is the ability to adapt to change.   Changing ideas about traditional funeral and burial practices are bringing change to this industry. A recent article in the New York Times by Gabrielle Glasser discusses personalizing your funeral service. 

Despite being in financially weary times, Glasser notes that your funeral is your last chance to be a big spender. Peter Moloney and his six brothers own six funeral homes on Long Island and have catered to customers who wish to have a customized send-off. For instance: “Bike lovers pay an extra $200 or so to take their last ride in a special hearse towed by a Harley-Davidson motorcycle. Gardeners select wildflower seed packets to include with their funeral programs. One gentleman wanted to be remembered for comforting his grandchildren with ice cream, so, after the funeral, mourners were greeted by a man in a Good Humor truck, handing out frozen treats.”

I have yet to hear of a funeral home that caters to customized send-offs north of the border, but I presume that we may be a little bit more reluctant to abandon our traditional religious funerals in favour of secular ceremonies.

Before I sign-off, I would like to point out that tonight is the final game of the Stanley Cup Playoffs. Two of the greats will be playing tonight for Pittsburgh, Sid the Kid and Evgeni Malkin. If you tune in tonight, I am sure that you will get the opportunity to see them outskate the older, and slower Detroit Red Wings. Looking on with anticipation…

Go Pittsburgh!

Rick Bickhram

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Being immersed in the world of law, we're constantly confronted with upsetting and often depressing stories.  It feels good to occasionally resurface to hear about a positive story.  

In the London Evening Standard, David Cohen writes about the new queen of Soho, a 23 year old, named Fawn James.  For those of you who are not familiar with the area, Soho is located in the centre of the West End of London, England, in the City of Westminster.  

Fawn James inherited £75 million from her grandfather Paul Raymond, who was well known as Soho's property tycoon.  Paul died approximately one year ago.

In his article, Fawn James is described in a manner that we can all relate to at some point in our life, a student living on a budget.  One year later, Fawn is £75 million richer and both her and her family now controls 60 of Soho's 87 acres.

In her first interview since inheriting her grandfather's treasure chest Fawn says that her "first mission will be to make Soho greener.  We're looking at retrofitting our entire stock of buildings to make them more environmentally friendly".   She's also committed to her community, "I think it's important to support charities operating Soho and in the coming months I'll be assessing which one we want to assist."  As she reflects back on her time with her grandfather her only concern now is "to make him proud".  

Thank you for reading,


Rick Bickhram

 

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

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

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

Thank you for reading,

Rick Bickhram

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An Estate Trustee During Litigation (“ETDL”) is typically seen as an officer of the court who represents the Deceased.  An ETDL has a wide variety of duties, which fundamentally includes administering assets, and paying the outstanding debts of the Deceased.  The purpose of today’s blog is to consider two Ontario decisions where an application seeking the appointment of an ETDL was rejected and granted, respectively.

Re Lloyd, 24 O.R. (2d) 340, is a 1979 decision by the Ontario Surrogate Court, as it was called.  In this case, the widow of the deceased filed a Notice of Objection challenging the Last Will and Testament of the deceased and sought the appointment of an ETDL.  On the motion, the evidence indicated that the Applicant was unhappy because she was not being kept aware of the status of the assets, but there were no allegations expressing a concern about the preservation of estate assets or that an ETDL was necessary to prevent waste or mismanagement.  In fact, the evidence indicated that the assets of the estate were well managed, and increasing in value.  Accordingly, the Honourable Justice Clements refused the appointment of the ETDL.  

Re Groner Estate, 1994 CarswellOnt 2478, is a decision by the Ontario Superior Court of Justice.  In this case, the Applicant filed a Notice of Objection challenging the Last Will and Testament of the Deceased and also sought the appointment of an ETDL.  The Applicant was concerned that the named estate trustee had been administering the estate, despite no legal authority to do so.  The named estate trustee opposed the appointment of an ETDL.  The Honourable Justice Greer held that the size of the estate was large, however the administration of the estate was uncomplicated.  Nevertheless, Justice Greer, expressed concern over the conflict in having the named estate trustee’s lawyers acting as de facto administrator.  Justice Greer held that assets cannot be administered in a vacuum and that the perception of neutrality must be seen.

From an evidentiary point of view, both cases provide insight into what Lawyers should consider when drafting materials seeking the appointment of an ETDL.

Thank you for reading, and have a great day.

Rick Bickhram

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I have learned that only a small percentage of applications for certificate of appointment of an estate trustee, filed in Toronto, are approved without being sent back for correction.  

Some common problems associated with these types of applications are, incorrect or inconsistent references to the deceased's name, problems concerning the mailing of the application to beneficiaries who have an interest in the subject estate, incorrect calculations of estate administration tax and in cases involving holographic wills, a missing affidavit attesting to the handwriting of the deceased.  Needless to mention, most of these errors can be avoided if the application is carefully reviewed.

But what happens if the deceased's name is spelled incorrectly in the Will?  If there is an error in the deceased's name in the Will, the heading on all of the documents should reflect the correct name, followed by a statement stating "incorrectly referred to in the Will as (insert the name is it appears in the Will).  It is also important to remember, that the names of beneficiaries shown in the notice of application must be identical to the way in which their names appear in the Will.  

Thanks for reading,

Rick Bickhram

 

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I recently attended a breakfast seminar hosted by Hull & Hull LLP, where I listened to my colleague, Natalia Angelini, speak about a testator's capacity to give instructions for the preparation of a Will.   
 
During Natalia's discussion, she spoke about the varying levels of capacity for different transactions.  Natalia also touched on the traditional grounds that a Will could be challenged.   I was particularly intrigued to learn that the circumstances surrounding the failure of a testator to make a will could be advanced as forming the basis for a will challenge.  

One of the traditional grounds for a will challenge is undue influence.  At its very basic form, undue influence occurs as a result of pressure brought to bear on the testator in giving instructions and executing the testamentary document.  The pressure brought on the testator, must be of such a degree that the testator has reached the point of thinking, "It is not my wish, but I must do it".

In contrast, "reverse" undue influence (as it has been called) occurs where a testator is being prevented from signing a Will.

As this interesting topic continues to evolve, I am confident that the estate & trust bar will be looking on with interest.

Rick Bickhram

 

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As I am sipping on my coffee this morning, I am thinking to myself, who can commence a will challenge? 

A will challenge can be commenced pursuant to 75.06(1) of the Rules of Civil Procedure. Rule 75.06(1) is a procedural remedy that permits any person who appears to have a financial interest in an estate to apply for directions or move for directions in another proceeding.   This begs the question, who is considered to have a financial interest in an estate? This issue was addressed in the Ontario Superior Court (Divisional Court) decision of Smith v. Vance.

In Smith, the Deceased died on October 27, 1995, leaving a will dated January 5, 1994 which named the applicants as the estate trustees.   A notice of objection was filed by three individuals who were cousins of the deceased through marriage. The objection was subsequently struck by the Honourable Justice Perras during the motion for directions on the grounds that the objectors did not have a financial interest in the subject-Estate. In this hearing, the objectors appealed this decision.

The objectors asserted their financial interest in the Estate based on their close relationship with and their physical and financial assistance for the deceased. There was also an earlier destroyed will in which the objectors were named beneficiaries. Finally a letter was allegedly written by the deceased wherein she acknowledged that the objector will have an interest in her estate.

The court acknowledged that a financial interest is not defined in the Rules of Civil Procedure. In such cases, words should be taken by its natural meaning. Black's legal dictionary defines financial interest as an interest equated with money or its equivalent. The court held that claimants must do more than simply assert an interest. They must present sufficient evidence of a genuine interest and meet a threshold test to justify inclusion as a party. The interest need not be conclusive evidence at that stage but must be evidence capable of supporting an inference that the claim is one that should be heard. 

If the evidence offered by an objector is capable of supporting an inference that the claim raises a genuine issue, and thus is one that should be heard, the objector is entitled to standing and should be granted permission to be added as a party. The appeal was allowed and the order by the Honourable Justice Perras was set aside.

I hope you had fun reading today's blog. Until tomorrow,

Rick Bickhram

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There is the view by some that issues surrounding the interpretations of Wills can be mind-numbing.  From time to time I tend to enjoy dusting off my book of consolidated estate statutes and reviewing some of the basic tenets of estate law, which makes our area of practice so dynamic.

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