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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Earlier this week, I came across a funny web page by Marjorie Gottlieb Wolfe. In “Wills, Clauses & Other “Narishkayt”, Ms. Wolfe sets out particulars of certain will clauses of note. (“Narishkayt”, she explains, is the Yiddish word for “foolishness”.)

Ms. Wolfe tells of Mark Gruenwald, a Marvel Comics writer, who in his will directed that his ashes be mixed with ink and used within the pages of a comic book. 4,000 “ink and ashes” issues of Squadron Supreme were produced after his death.

She tells of Portuguese aristocrat Luis Carlos de Noronha Cabral da Camara, who picked 70 random strangers from a Lisbon telephone book as his beneficiaries.

She tells of Onni Nurmi, a Finish businessman who left 780 shares of a rubber boot company to residents of a Finish nursing home. The company went on to become Nokia, and the residents became millionaires. (Another report, here, says that the bequest wasn’t to the residents, but to the town of Pukkila for the “recreation of the people living in the village’s old people’s home”. At one point, the shares were said to be worth $90m.)

In my personal favourite, she tells of Anthony Scott, who wrote in his will: “To my first wife, Sue, whom I always promised to mention in my will. Hello Sue!”

Ms. Wolfe concludes by reciting the saying: “The person who works and saves will someday have enough wealth to divide with those who don’t.”

Visit her web page to see the entire article, and browse other articles by her.

Have a great weekend.

Paul E. Trudelle - Click here for more information on Paul Trudelle.

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I have previously posted on the doctrine of “mutual wills”. See my Breakfast Seminar, here, and my blog of September 24, 2008, here.

The issue of mutual wills was front and centre in the July 26, 2010 decision of Re Hand Estate, 2010 NSSC 297 (CanLII).

There, Dr. Hand and Ms. Hand prepared wills in 1999. In his will, Dr. Hand conveyed a condominium to his son Richard if Ms. Hand was to predecease him (the condo was jointly owned with Ms. Hand). In Ms. Hand’s will, she provides that the condo is to go to Richard. Because of the joint ownership, this gift would fail if Ms. Hand was to predecease Dr. Hand, as the condo would pass to Dr. Hand by right of survivorship.

Ms. Hand predeceased Dr. Hand. The condo passed to Dr. Hand. Dr. Hand then revised his will, leaving most of his property to a daughter. He also transferred the condo into a trust.

Richard cried foul, arguing that the wills were mutual wills and therefore were subject to an agreement against revocation. Accordingly, he argued that he was entitled to a half interest in the condo.

The court disagreed. The court found that the wills were not “mutual”, and further, there was no agreement against revocation.

As to the first point, the court found that the different terms of the two wills meant that they could not meet the definition of “mutual wills”, which required that the wills contain reciprocal provisions.

Further, the different terms of the will suggested that there was no such agreement, and that the “flexible norm of revocability” applied. 

This conclusion was supported by evidence from the drafting solicitor, who advised Dr. Hand and Ms. Hand that upon the death of the first of them, the condo would pass to the other as the sole owner. This, the court held, raised the issue of freedom of the sole owner to do as he wishes with his property.

Subsequent events did not assist Richard. The fact that for a number of years after Ms. Hand’s death, Dr. Hand continued to provide that the condo would pass to Richard suggested, at most, that the intention remained. It did not provide evidence of a mutual agreement against revocation.

While the court is free to find an implied agreement not to revoke a will, the court will not do so except in the clearest of cases. If parties intend to create mutual wills, with the accompanying agreement not to subsequently revoke the wills, they should do so in the clearest of express terms.

Thank you for reading.

Paul E. Trudelle - Click here for more information on Paul Trudelle.

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What happens if a Will gives a life interest in an estate to A, with a gift over to B, C and D, or their issue alive upon A’s death, and A decides to disclaim her interest in the estate?

This issue was considered in Clarke v. Di Bella, 2010 BCSC 505 (CanLII).

There, the testator made a Will that provided that until the death of the survivor of the testator or A, the Estate was to pay the income and capital, as the trustees may decide, to A. Upon A’s death, the residue was to be divided amongst B, C and D. If any of B, C or D was to predecease A leaving children, then that person’s share would go to their children.

A decided to renounce her gift, and have the residue pass to B, C and D immediately. That is, the gift to B, C and D would be accelerated.

The Public Guardian and Trustee opposed, taking the position that acceleration of the gift was contrary to the intentions of the testator, and that acceleration would disentitle the children of B, C and D from a possible inheritance.

The Court disagreed with the PGT’s position, and allowed the acceleration. It held that from a review of the case law, there were four clear principles that applied:

a.                  Acceleration is presumed unless there is an indication to the contrary;

b.                  In assessing whether there is an intention to the contrary, the court must look at both the instrument and the surrounding circumstances;

c.                  The instrument must be examined in its entirety, and clauses must not be examined in isolation; and

d.                  The intentions must be viewed, as nearly as possible, from what would be the views of the testatrix, applying an objective standard.

While many cases have disallowed acceleration, the court did not feel that the present circumstances prevented acceleration.

The court did, however, agree that the intention of the testatrix was that no beneficiary would receive a bequest before the age of 25, and imposed a restriction on distribution before the beneficiaries turned 25.

Thank you for reading.

Paul E. Trudelle - Click here for more information on Paul Trudelle.

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A Nova Scotia judge recently ruled that a lottery prize was not assumed to be mutual asset to be divided upon the breakdown of a common-law relationship.

The National Post recently reported on a man and a woman who had been living together for a number of years and had won $50,000 on a scratch-and-win ticket. The ticket had been purchased by the man. Notwithstanding the fact that the couple had previously shared winnings, the winnings were deposited into a joint account, and part of the winnings were used for a down payment on a property that they both owned, the court found that there was no prior agreement to share the winnings.

(In another recent Ontario case, the judge found that in absence of cogent evidence of a clear intent to share winnings, there will be no requirement to share.)

Had the couple been married, there would have been a presumption that the lottery winnings were joint.

In Ontario, s. 14 of the Family Law Act creates a presumption that in the case of married spouses, the fact that property is held in the names of spouses as joint tenants is proof, in the absence of evidence to the contrary, that the spouses intended to own the property as joint tenants, and money on deposit in the name of both spouses shall be deemed to be in the name of the spouses as joint tenants. The provision does not apply to common-law spouses.

What are the possible lessons from this?

1. If you are buying lottery tickets with someone else, be they a friend or unmarried spouse, have some agreement in place to share the winnings.
2. As Beyonce says, if you liked it, then you should have put a ring on it.

Thank you for reading.

Paul E. Trudelle - Click here for more information on Paul Trudelle.

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Stieg Larsson’s latest book, The Girl Who Kicked the Hornet’s Nest, came out last week.

Earlier, Diane Vieira blogged here on the estate of the best-selling author, who died in 2004. Diane noted that Larsson’s common-law spouse of over 30 years received nothing from Larsson’s estate. Larsson died without a valid will, and his estate, estimated presently as having a value of $30 million, passed on an intestacy to his father and brother. Under Sweden’s inheritance laws, the common-law spouse received nothing, and did not have a claim against the estate.

In a lengthy New York Times Magazine article entitled “The Afterlife of Stieg Larsson”, Charles McGrath reports in detail on the life and events subsequent to the death of Larsson.

McGrath notes that Larsson died without a valid Will. (Apparently, Larrson did leave a 1977 will, in which he leaves his estate to the Socialist Party in Umea: the will was not witnessed and is said to have no legal validity.) Although his long-time companion, Eva Gabrielsson, received nothing from his estate, she has become an object of intense sympathy in Sweden.

Gabrielsson also has a laptop containing ¾ of a fourth novel by Larrson, and possibly an outline for others. Larsson’s estate offered to give her their half of Larsson’s apartment in exchange for the computer, but Gabriellson refused. Last November, the estate apparently offered her $2.6 million for the computer, but Gabrielsson didn’t respond.

McGrath states that while Gabrielsson has no claim, she has asserted “a kind of moral entitlement”. In a National Post article, Gabrielsson is said to be claiming that she co-authored the books.

As is usual in these types of matters, great animosity has developed between the spouse and the estate.

Thank you for reading.

Paul E. Trudelle - Click here for more information on Paul Trudelle.

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Yesterday, I discussed Fort Sackville Foundation v. Darby Estate, 2010 NSSC 27 (CanLII). Today, I will discuss the matter of the costs of the proceedings, reported at .Fort Sackville Foundation v. Darby Estate, 2010 NSSC 45 (CanLII)

The court had dismissed the application by the charity for a declaration that it was the successor charity, or that it was entitled to the bequest upon the application of the cy-pres doctrine.

The charity requested solicitor and client costs from the estate. The successful residual beneficiaries suggested that the charity should receive no costs at all, or at best, party and party costs. The residual beneficiaries noted that any award of costs would come from their entitlement under the estate, and thus, in effect, the successful parties would be paying the unsuccessful party’s costs.

The court awarded solicitor and client costs to the charity. The court noted that the “dispute” was created less by the parties, and more by the wording used by the testator, which wording “fuelled” the issues. Although the arguments of the charity failed, they were “justified” arguments, and arguments “based on reason”.

In Ontario, the court has made similar costs rulings in circumstances where it can be said that the parties have acted reasonably in bringing the matter before the court. However, a different outcome might result if the court was of the view that one of the parties acted unreasonably.

Thank you for reading.

Paul E. Trudelle - Click here for more information on Paul Trudelle.

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John Darby died in 2008. In his July 2007 Will, he left his residence and contents to the “Heritage Society of Bedford” [Nova Scotia] on specific conditions. The conditions included a requirement that the Society commit to retain his property and contents as a heritage property; a commitment to use the building to house a museum or some other specified uses; to make such commitments within 1 year; and to open the residence for the stipulated purposes within 3 years. If they did not, the property was to fall into the residue.

However, at the time of his death (or at the time of the making of the Will, for that matter), there was no entity known as the “Heritage Society of Bedford”. There was a charity known as the “Bedford Heritage Society”. However, that charity disposed of its assets and surrendered its certificate of incorporation many years earlier.

The Fort Sackville Foundation claimed that it was the successor charity. The court rejected this claim, holding that there was no amalgamation. While the court will take a broad approach to legal successorship in such circumstances, it cannot find a successor where an entity ceased to exist.

The court went on to consider whether the doctrine of cy-pres applied. The doctrine will be applied where:

a.      the gift as it stands is either impossible or impractical to effect; and

b.      the donor expressed a general charitable intent in making the gift.

The court held that neither test had been met. 

As to the first branch of the test, the gift was not impossible or impractical to effect. Because the gift provided for a gift-over, it could readily be given effect.

As to the second branch, the conditions of the gift narrowed the focus of the gift so as to take away a general charitable intent. The purpose of the gift was to preserve the deceased’s property. If that could not be done, the proceeds were to pass to the residual beneficiaries. Thus, it was held that there was no general charitable intent.

As a result, the proceeds of the sale passed to the residual beneficiaries.

See here for the reported decision.

Tomorrow, I will turn to the issue of costs.

Thank you for reading.

Paul E. Trudelle - Click here for more information on Paul Trudelle.

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In honour of Victoria Day, celebrated in Canada on the last Monday of May on or before May 24, and considered the first long weekend of the summer, I thought I would consider the terms of the last Will and Testament of Queen Victoria.

Queen Victoria was born on May 24, 1819, and died on January 22, 1901. She became Queen at the age of 18, and reigned as monarch for over 63 years, being the longest reigning monarch in history. She had 9 children (she was predeceased by 3 of her children), including her successor to the throne, Edward VII.

Unfortunately, very little information can be found online about Queen Victoria’s Will. However, while searching, I discovered that a legacy of sorts was recently sold at auction in Scotland. Queen Victoria’s stockings (circa 1870) were sold earlier this year for 8,000 pounds (about $12,000 CDN).                                                    

The prior owner, Mary Youings, said that her late mother gained possession of the stockings around 1910. She said that she did not know the circumstances of how her mother gained possession of the stockings. The Telegraph reported that upon Queen Victoria’s death, her undergarments and much of her wardrobe were distributed to members of the royal household.

In July, 2008, Youings sold a pair of Queen Victoria’s 50” waist bloomers for 4,500 pounds.

I hope you enjoyed your Victoria Day Weekend, and got a “leg up” on summer.

Paul E. Trudelle - Click here for more information on Paul Trudelle.

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Mr. Justice Brown recently considered whether to apply the doctrine of cy-pres in the matter of The Bank of Nova Scotia Trust Company v. Common Ground Women’s Centre, CanLII 2010 ONSC 63.

(The doctrine of cy-pres is discussed in Megan Connolly’s blog, here.)

In Common Ground, the deceased died in 2007, leaving a will dated 1997. The deceased’s will provided that the residue of her estate was to be divided “in equal shares among the following organizations which shall be in existence at my death…”, and went on to list 18 charities, one of which was “Common Ground Women’s Centre, 736 Bathurst Street, Toronto”. 

As it turned out, Common Ground Women’s Centre was in fact a charity, and had not been dissolved as at the date of death. However, it had ceased operations in or about 1997, and it had lost its charitable status.

An application to the court for directions was brought by the Estate Trustee. The following issues were raised in the application:

1. Was Common Ground in existence at the time of death?
2. If not, did the gift lapse, resulting in a partial intestacy, or did the doctrine of cy-pres apply?
3. If the doctrine of cy-pres applied, to whom should the Common Ground share be paid to?

As to the first issue, the court held that although Common Ground continued to have “legal” existence, the deceased’s wording of the Will was such that she intended that the charity be able to apply the gift to charitable purposes. Thus, the intention was that the charity be active and operating at the time of death: Common Ground was not.

As to the second point, the court found that the issue of determining whether there was a lapsed gift or whether the cy-pres doctrine applied did not arise. Rather, the specific language of the will, requiring that the charity “shall be in existence” avoided the problem.   As Common Ground was not in existence, the residue passed to the remaining 17 charities, in equal shares.

Thank you for reading. Have a great weekend.

Paul Trudelle

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Brittany Murphy, the star of many TV shows and movies (and, as I have just discovered, the voice of Luanne on TV’s The King of the Hill) died on December 20, 2009 at the age of 32.

It has just been disclosed that she has left her estate to her mother, Sharon Murphy. Her husband, with whom she was living, is expressly left out of the will. Her will, it is said, read: “I am married to Simon Monjack who I have intentionally left out of this will."

Monjack is reported to have requested that this clause be put in Murphy’s Will, which was made shortly after their marriage in 2007. In a prior handwritten will, Murphy also left her estate to her mother.

In Ontario, a married spouse who does not receive adequate provision under a spouse’s will has several options (should they choose to remedy the insufficient or non-existent bequest). The surviving spouse would have the right to elect for an equalization under the Family Law Act, or for support under the Succession Law Reform Act. The surviving spouse may also have a claim on the basis of a constructive trust, or proprietary estoppel.

Thanks for reading.

Paul Trudelle

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Sometimes confusion arises as to the distinction between commissioners for taking affidavits, and notaries public.

In Ontario, affidavits for use in court must be commissioned by a person authorized to administer oaths or affirmations.   The Commissioners for Taking Affidavits Act, R.S.O. 1990, c. C.17 stipulates how a person becomes authorized as a commissioner for taking affidavits. Any lawyer in Ontario is, by virtue of that office, a commissioner for taking affidavits in Ontario. There are other specific groups (such as judges or MPs) who are commissioners ex officio. Others can be appointed by the Lieutenant Governor as commissioners. Such appointments are limited in duration, and may be limited as to territory or purpose.

In other circumstances, documents or signatures often need to be notarized by a notary public. In our practice, banks and other institutions usually require an original of a document such as a power of attorney, will or Certificate of Appointment, or a notarial copy of it, before they will act on it.

Unlike commissioners for taking affidavits, lawyers are not automatically notaries public. Notaries are appointed pursuant to the Notaries Act, R.S.O. 1990, c.N.6. Notaries are also authorized as commissioners for taking affidavits in Ontario. To become a notary, an application must be made and the appropriate fees paid. The current fee for a lifetime appointment for a lawyer is $145. Lawyers do not need to take an examination to become a notary: anyone other than a lawyer must complete an examination. Applications may be requested from the Ministry of Government and Consumer Services, Official Documents Services, 9th Floor, 77 Grenville Street, Toronto, Ontario, M5S 1B3. The telephone number is 416-325-8416.

Thank you for reading.

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Last week I heard a report on CBC Radio, and read an article in the Globe and Mail about a new website, Please Rob Me, that takes information posted on Twitter from a location-sharing program Foursquare and posts it, showing when people are not home.
 

The point behind the website is to drive home the message that sharing too much information may be harmful, and can be easily misused.
 

However, as noted in the Globe article, break-ins are usually crimes of opportunity, and in most cases are not highly planned.  There are many low-tech ways of determining whether someone is home or not.
 

The story and the website reminded me of what was most likely an urban legend that I heard a long time ago to the effect that robbers  would review obituaries and determine the time of a deceased's funeral. They would then look up the deceased's address old-school style (using a phone book), and rob the deceased's home during the funeral, knowing that no one would likely be home, and that neighbours may also be at the funeral.
 

Same idea, different technology.
 

Thanks for reading,
 

Paul Trudelle

Paul E. Trudelle - Click here for more information on Paul Trudelle.
 

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The Globe and Mail recently featured a new book, Bargaining with the Devil: When to Negotiate, When to Fight, by Robert Mnookin. In reading the article, I was impressed with how relevant the discussion was to estates matters.

In the article, Mnookin says that some of the most difficult conflicts to negotiate are those where the adversary is seen as being untrustworthy - an adversary "who's either harmed you in the past or is out to harm you in the future and whom you may even think is evil." Matters in the estates context often pose these types of challenges. Disputes amongst family members often arise out of a lack of trust, and in many cases, the other family member is labelled as "evil". 

Further, in the estates context, emotions often run high. This, says Mnookin, is usually an impediment to a negotiated settlement. "Strong emotions can get in the way of clear thinking."

Mnookin also points to another impediment to negotiated resolutions that we see in many estates matters. In many cases, parties to a negotiation are wary of settlement because it is believed that what is good for their adversary is bad for them. Mnookin refers to this as "zero-sum thinking".

Taken a step further, even if a settlement is good for a party, it is often not acceptable to that party because the party does not want to let the other side off easily: the party wants to punish the adversary for what they have done, or for what it is believed that they did.

Mnookin concludes by noting that in many cases, emotion wants to fight, even though this may not be in your best long-term interests. However, there are other cases where the fight really is the better alternative.

Thank you for reading.

Paul Trudelle

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Hull and Hull LLP is named as the “Winner: best Multimedia website” in Canada in the December 2009 edition of National, a magazine published by the Canadian Bar Association.

To quote two of the judges:

Connie Crosby: “They are the only firm that has truly experimented with video and podcasting in a big way. The others I saw don’t understand that they need to produce episodes on a regular basis to explore a subject area, or that podcasts and videocasts need an RSS feed to be syndicated. Hull & Hull gets that.”

Omar Ha-Redeye: “They’ve probably been doing it as long as anyone, and have fully integrated videos and podcasts into their practice. Experience with these formats has not only resulted in a highly polished product, but also content that is actually relevant to what they do.”

Why, thank you.

Paul Trudelle

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Yesterday, I introduced the matter of Estate of William Lipson (Pattillo, J., December 1, 2009, not yet reported).

There, multiple wills were executed. Unfortunately, the second will purported to revoke the first. In addition, both wills purported to deal with all assets, except for shares in a private corporation.

One of the issues addressed was whether the Court could rectify the wills by adding or deleting words. The Court reviewed numerous cases, and concluded that words could be added or deleted from a will to correct an error. Before doing so, the Court must be satisfied that:

i.                    Upon a reading of the will as a whole, it is clear on its face that a mistake has occurred in the drafting of the will;

ii.                  The mistake does not accurately or completely express the testator's intentions as determined from the will as a whole;

iii.                The testator's intentions must be revealed so strongly from the words of the will that no other contrary intention can be supposed; and

iv.                The proposed correction of the mistake, by the deletion of words, the addition of words or both must give effect to the testator's intention, as determined from a reading of the will as a whole and in light of the surrounding circumstances.

The Court rectified the will by deleting the revocation clause of the second will (so that the first will was not therefore revoked), and by altering the disposition clause of the second will so that it only dealt with shares that the deceased owned in a private corporation.

These alterations, the Court concluded, best gave effect to the intentions of the testator.

Thank you for reading.

Paul Trudelle

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The recent decision in Estate of William Lipson (Pattillo, J., December 1, 2009, not yet reported) illustrates an important issue that can arise where multiple wills are executed.

Multiple wills can serve as a valuable estate planning tool for the purposes of saving Estate Administration Tax (probate fees). Simply put, one will deals with assets that require probate in order to be administered. The other will deals with assets that do not require probate: usually shares in a privately held corporation. Probate is only required for the one will, and probate fees are only payable with respect to those assets. As probate is not required for the other will, no probate fees are payable with respect to those assets where probate is not required.

The wills are usually executed at the same time. However, great care must be exercised so that the signing of the second will does not revoke the first.

This was precisely the problem in the matter of Estate of William Lipson. There, draft wills were prepared. Unfortunately, the clause that revokes all prior wills was not properly crafted, and each contained a clause that revoked all prior wills. Therefore, the execution of the second will revoked the first. The possible effect of this was that there was a partial intestacy with respect to all assets dealt with by the first will. The draft wills were executed by the testator prior to a final review.

(There was also a problem with how the two wills identified the assets: both wills purported to deal with all assets other than shares in a private corporation. Therefore there was a potential intestacy with respect to the shares.)

One lesson that can be taken from this decision is that when executing multiple wills, extreme caution must be taken in reviewing the wills and monitoring their execution so that one will does not inadvertently revoke the prior will.

More on this decision tomorrow.

Thanks for reading.

Paul Trudelle

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Lonnie Holloway of Saluda, South Carolina was recently buried sitting upright in the front seat of his 1973 Pontiac Catalina.

According to the New York Times report (there is a video link, too), the 90 year old, described by a cousin as a “stylin’ and profilin’” man, had always said that he had wanted to be buried that way. He was also buried with his gun collection. He had said that he didn’t want them falling into the wrong hands.

The expressed wishes of the deceased raise a number of interesting issues to consider. Some immediate include:

• Whether the directive regarding the means of burial is binding on the Estate Trustee. The rule is that directions contained in a deceased’s will are not binding on an executor. Additionally, an estate trustee is only allowed to recover reasonable burial expenses from the estate, taking into account the deceased’s position in life.
• In Canada, there are restrictions that would intervene with respect to the disposal of weapons.
• Will a Will that calls for the destruction of property be enforceable? In Wishart Estate (1992), 46 E.T.R. 311, the deceased left a will that called for the shooting of his four horses. The court found that the direction was void as being against public policy. In that case, the court referred to a Missouri Court of Appeals decision where a term in a will calling for the demolition of the deceased’s house was, similarly, found to be void as being in violation of public policy.

Have a great weekend. Keep your eyes on the road and your hands upon the wheel.

Paul Trudelle

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On Tuesday, I spoke to a wonderful group at the Chai Tikvah Foundation on the topic of estate planning and providing for a disabled beneficiary.

“Chai Tikvah” means “life” and “hope”. 

The Chai Tikvah Foundation provides housing, support and education to psychiatrically challenged adults in Jewish residential settings to enable them to lead more productive lives, and to help them integrate into the community. The Chai Tikvah Foundation operates a housing facility in North York, and offers additional support and education to the residents, non-residents, their families, and to the community.

Special estate planning concerns and considerations arise where individuals have family members who have special needs. It was a pleasure to address some of these issues with the group.

To the Chai Tikvah Foundation, thank you for having me and for the wonderful services that you provide. Keep up the good work!

Thank you for reading.

Paul Trudelle

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In October 2008, I spoke at the Hull and Hull Breakfast Seminar on the topic of obligations with respect to disposing of the deceased’s remains, as well as other issues that arise immediately upon death. (See my paper, here.)

In Lajhner v. Banoub, [2009] O.J. No. 1327, this issue was addressed once again. There, the deceased died on March 18, 2009 at the age of 24. He died without a Will. His parents on the one part, and his alleged spouse, on the other, sought to be appointed as Estate Trustees, primarily for the purpose of assuming the obligation of determining the disposition of the deceased’s remains.

Both sets of parties, the court found, were motivated by a desire to do what they believe the deceased would want.

The parents wanted to cremate the deceased’s remains. The alleged spouse opposed this, stating that the deceased was Muslim, and that the Muslim faith did not accept cremation.

The issue became who was most likely to be appointed as estate trustee under s. 29 of the Estates Act.

The court went on to find that the alleged spouse was not in a conjugal relationship with the deceased immediately before his death. The evidence was that they were not residing together, and that there was no intention of reconciliation. Thus, the court concluded that the parents would most likely be appointed as Estate Trustees, as the spouse did not qualify under s. 29 of the Estates Act. They were therefore entrusted with the obligation to dispose of the deceased’s remains.

The court once again confirmed prior case law to the effect that religious laws or beliefs are not a factor that the court may take into consideration. What the court must do is determine who is most properly appointed as Estate Trustee. As the alleged spouse did not qualify under s. 29 of the Estates Act, she could not be appointed as Estate Trustee.

Thanks for reading.

Paul Trudelle

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In a novel decision of the Ontario Superior Court of Justice, the court removed Estate Trustees who no longer wished to act in that role. No one else consented to act. What is novel is that no replacement Estate Trustee was appointed.

In the 2009 case of Evans v. Gonder, (incorrectly cited as 2000 CanLII 27170), the deceased named her sister and brother in law as Estate Trustees. A Certificate of Appointment was obtained by them. However, the Estate Trustees were elderly, and in poor health. They lived far away from the estate, and said that they could not afford to continue to defend litigation that was brought against the estate by one of the heirs. They had already spent $40,000 of their own money in defending the litigation.

The estate was said to be small, consisting of a modest house in Hamilton. By her Will, the deceased left a life interest in the house to her mother. The mother was still alive, but not able to live in the house: the house was vacant. 1/3 of the residue was left to a brother (who brought an action against the Estate, claiming that the house was held by the deceased for his benefit). It is not clear who the other beneficiaries were.

The brother opposed the motion for an Order removing the Estate Trustees. He argued that the legislation did not allow the court to remove Estate Trustees unless another person has consented to replace them. He made no suggestion as to how the Estate Trustees could be relieved of their duty, and submitted that “they are stuck with it”.

The court disagreed. It cited 1867 case law which found that “if there was no means by which a trustee could denude himself of that character, it would operate as a great discouragement to mankind to undertake so arduous a task”.   It also held that a trustee is not bound to show that someone else is ready to act. The court may, however, in an appropriate case, keep the Estate Trustee on, “taking care that the trustee shall not suffer thereby”.

In the present case, the court discharged the Estate Trustees. In the circumstances, it did not feel obliged to keep them before the court. The court ruled that the trustees were not in a position to do anything meaningful. They could not sell the house, due to the litigation, and could not settle the litigation, due to a tax lien that was registered against the property. The brother’s litigation was not prejudiced, as he could move to appoint a litigation administrator.

Thanks for reading.

Paul Trudelle

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There is nothing like sex to get someone’s attention. The matter of the estate of Paul Raymond was recently brought to my attention – mainly due to the deceased’s business undertakings. 

Britain’s Paul Raymond died on March 2, 2008 leaving an estimated estate of 650m pounds. Raymond is described as “the porn baron turned property tycoon”. Raymond is said to have built his empire on profits from his soft-porn business, which he launched in 1957. According to a BBC report, Raymond’s big break came when he side-stepped censorship laws that prevented naked women from moving on stage by having topless women stand on stage completely still. Britain’s Hugh Hefner went on to stage plays such as “Yes, We Have No Pyjamas”. He also launched various pornographic magazines and a strip club. He used earnings from these endeavours to invest heavily in real estate. According to the TimesOnline report, by 1992 he had overtaken the Duke of Westminster as the richest man in Britain, with a fortune estimated at 1.5 billion pounds. He is said to have become a recluse in his final years.

 He left his entire estate to his two granddaughters, aged 22 and 16. It is said that they now control 60 of the 87 acres that make up the Soho district of London. (See Rick Bickhram’s blog on one of the granddaughters, Fawn.) However, his illegitimate son is now contesting the will. Another son was also cut out of the will. It is not known whether that son will be challenging the will.

*According to the BBC article, Raymond described himself as a “spiv” (I had to look that one up), and behaved like one, “sporting fur coats, a Rolls Royce, a tiny mustache and a fake tan”.

Have a great weekend.

Paul Trudelle

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The recent decision of Brown J. in Re Willis Estate, 2009 CanLII 30681 (Ont. S.C.J.) addresses the issue of an appropriate sentence to impose on an attorney for property who has been found in contempt of a court order requiring him to account for his dealings with his mother’s property.

In that proceeding, the court ordered in January 2008 that a son produce an inventory of assets held by his mother either alone or jointly with him, and to provide a full accounting of all dealings with the joint assets.

The son failed to do so. Various further orders were made, and ultimately, a motion was brought to punish the contempt. 

In making a ruling, Brown J. reviewed the court’s contempt power. “A court exercises its contempt power to uphold the dignity and process of the court, thereby sustaining the rule of law and maintaining the orderly, fair and impartial administration of justice.”

Brown J. then considered whether the son had, in fact, complied with the orders, and found that the contempt had not been purged. 

Turning to sentencing, Brown J. noted the difference between criminal and civil contempt. The purpose of criminal contempt sentencing is to punish, whereas the purpose of civil contempt sentencing is coercive and persuasive, designed to enforce the rights of a private party and to secure compliance. As such, custodial sentences are rare, and lengthy custodial sentences even rarer. Incarceration, although not unheard of, is a sanction of last resort. 

The sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender.

After considering the nature of the contempt, and various mitigating and aggravating factors, the court ordered that the son pay a fine of $7,000, failing which, he was to be jailed for 7 days. He was also to retain professionals to assist him in preparing the accounting and inventories. Costs were to be spoken to.

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Yesterday, I set out the fact situation in Turner v. DiDonato (2009), 95 O.R. (3d) 147 (Ont. C.A.).

The trial judge decided that Dilia was entitled to the difference between the insurance proceeds that she received and the $100,000 insurance policy that was supposed to be in place. The trial decision was upheld on appeal.

The trial judge held that there was a clear breach of the Separation Agreement, and that the remedy was appropriate in order to put Dilia in the position that she would have been in had the contract been performed.

The Court of Appeal did not agree that the trial judge did not give properly interpret the Separation Agreement. In particular, it did not agree that the clause allowing Dilia to have a first charge against the estate for in the event that Albert died without insurance provided Dilia with the appropriate remedy. This clause, the Court of Appeal held, did not apply because Albert did, in fact, have insurance – it was simply insufficient. 

The Court of Appeal also dismissed the suggestion that the insurance policy was simply security for the support payments. Firstly, the Separation Agreement did not express that it was security. Secondly, the Separation Agreement did not allow Albert to reduce the amount of insurance as the support obligations diminished. Thirdly, it was held that allowing Dilia less under the Separation Agreement as a result of its breach by Albert than Dilia would have received but for the breach was “counterintuitive”. Fourthly, the estate’s suggestion that it would have a claim against Dilia for any insurance proceeds in excess of the support obligations was “at odds” with the stated intention of the parties in the Separation Agreement to fully settle their rights and obligations.

The Court of Appeal agreed that Dilia’s admission that her understanding was that the insurance policy was security for the support payments was not relevant. The Separation Agreement was unambiguous, and contained an “entire agreement” clause, and extrinsic evidence was irrelevant. Further, as such, corroboration under s. 13 of the Evidence Act was not required, as the decision was based on the interpretation of the agreement, and not the evidence of Dilia. Finally, the Court of Appeal dismissed the suggestion that Dilia received a windfall: it held that Dilia received simply what she was to receive under the Separation Agreement.

Did you concur or are you in dissent?

Paul Trudelle

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Today I will set out a fact situation and let you determine the outcome. Tomorrow I will let you know how the trial judge and Court of Appeal decided the matter.

(As observed by a judge in Newmarket recently, being appointed a judge is like going to heaven – all lawyers want to go there, but just not yet.)

The Facts:

Albert and Dilia separated. They entered into a Separation Agreement whereby Albert was to pay spousal support to Dilia until she turned 65. He was also required to maintain a policy of life insurance benefitting Dilia in the amount of $100,000 until Dilia turned 65. The policy also provided that in the event that Albert died without insurance in effect, then his support obligations would be a first charge on the estate.

Albert died before Dilia turned 65. At the time of his death, he didn’t have the required life insurance. Dilia only received insurance proceeds of $43,507.15. She then sued Albert’s estate and his second wife, claiming the difference between the $100,000 that she was to receive under the Separation Agreement, and the amount that she in fact received.

Albert’s estate and second spouse argued that the policy of insurance was only security for the spousal support that Dilia was to receive, and that the insurance proceeds that Dilia received were in excess of her support entitlement. (It was an agreed fact that the support obligations until the age of 65 were less than the insurance proceeds received.) They argued that an award of $100,000 would be a windfall to Dilia.

What did the Court (and Court of Appeal) do? Tune in tomorrow.

(For those who can’t wait, see Turner v. DiDonato (2009), 95 O.R. (3d) 147 (Ont. C.A.).)

Paul Trudelle

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I’m not sure what to make of this.

Coffin Couches is a US company that “recycles” coffins into couches. The company collects “used” coffins from funeral homes. Apparently, the coffins are not used for burial due to slight cosmetic inconsistencies, and cannot be resold. Coffin Couches reconfigures them into a “unique one of a kind coffin couch”. The couches even sport a biohazard insignia. According to the website, once a human body is placed in a coffin, it is considered biohazard tissue. The couches have to have the biohazard insignia “in the event body fluids are exchanged on these coffins”. (Increased “creepy” for many; increased “cool” for some.)

According to the website, Jesse James of West Coast Choppers, Kat Von D of LA Ink and the Los Angeles County Coroners Office each have a coffin couch.

US prices range from $3,500 to $4,500 ($2,800 for the Monster Chair), plus shipping.

I don’t expect to see one in our reception area any time soon.

Thanks for reading.

Paul Trudelle

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James Brown’s estate issues have appeared on our blog on a number of occasions: see here, here, here and here.

It appears that the matter may now be at an end. On Tuesday, a South Carolina judge approved a settlement that gives nearly half of his estate to a charitable trust, a quarter to his wife and young son, and a quarter to his six adult children, according to an Associated Press report on the Macleans.ca website.

James Brown died on December 25, 2006. Numerous issues arose following his death. There were allegations of improper management of his estate; a dispute over where and how to bury his body; and an issue as to the entitlement of his wife and son, both of whom came along after his will was made in 2000.

The exact size of the Godfather of Soul’s estate is unknown. His estate was said to be valued at $80m, but subject to substantial debt.

The settlement was reached in January 2009, but the court refused to approve the settlement, and required further information. That approval was granted on Tuesday.

But wait! There may be an encore. There are pending lawsuits by the prior estate administrators, and a former employee. We may not have heard the last of this matter.

Thank you for reading, and have a great weekend.

Paul Trudelle

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Ontario’s new harmonized sales tax is coming into effect on July 1, 2010. One of its effects will be to impose PST on funeral services: services that have previously been exempted from PST.

According to the harmonized sales tax, funeral services will now be taxed at the rate of 13%, up from 5%. The effect on a $5,000 funeral would be to raise the tax payable from $250 to $650.

The new harmonized tax may also have an effect on prepaid funeral services. According to a May 27, 2009 Toronto Star article, there are 224,257 prepaid funeral contracts in Ontario, and about 1 in 4 funerals in Ontario are prepaid.

The Ontario Minister of Finance has indicated that the government hopes to implement some sort of grandfathering clause, so that funeral services prepaid before a certain date remain exempted from the PST. However, nothing has been finalized yet. The cut-off date would likely be some time before July 1, 2010.

Those considering a prepaid funeral would be wise to complete their plans sooner rather than later. The new tax, like death, is approaching.

Thank you for reading.

Paul Trudelle

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Probably “123456”. No? Try “password”, or some variation of it.

Our heads are becoming jammed with passwords. Almost every website service we visit requires a password. 

A few diverse posts that I have come across have looked at password usage. 

In one study, which lists the 500 most popular passwords, reported here, the top 4 most common passwords are said to be “123456”, “password”, “12345678” and “1234”.

In another report, found here, Robert Graham writes about his analysis of the passwords of 20,000 users taken from a popular website and posted by a hacker.

He finds:

-16% of the passwords matched or were based on a person’s first name;

-14% were patterns on the keyboard, such as “123456” (I thought I was the only one to think of that) or “qwerty” or “1qaz2wsx” (check your keyboard);

-4% were variations of the word “password”, such as “passw0rd” or “password1”;

-4% referred to nearby items, such as the name brand on your computer or monitor;

-3% are swear words, or terms of endearment. The F-word is particularly popular;

-35% had 6 characters, 0.34% had 1 character, 1.14% had 10 characters.

See Robert Graham’s report for more detail, and check out the “Top 500” to see if your password makes the list.

As for estate practitioners, guessing their password is easy: 9 times out of 10 it is “intervivos1”.

Thanks for reading.

Paul Trudelle

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In the February 2009 edition of The Probator, I reported on the decision of Brown J. in Re McMichael Estate. There, Brown J. clarified the requirement that an application for a Certificate of Appointment be filed in the court office for the county or district in which the testator was living at the time of death.

In the recent decision of Re Pearsall released May 21, 2009, (Court File No. 05-36/09, not yet reported) Brown J. offers further clarification on the issue of where applications involving estates may be commenced. 

Rule 13.1 of the Rules of Civil Procedure provides that a proceeding must be commenced at the place required by the applicable statute or Rule. If no statute or Rule applies, it may be commenced at any court office.

While the Estates Act stipulates where an application for a Certificate of Appointment must be made, no statute or Rule dictates where an application to pass accounts must be brought, whether as Estate Trustee or guardian for property.

Thus, as held by Brown J., an application to pass accounts can be brought in any county, regardless of where the Certificate of Appointment may have been issued.

Thank you for reading.

Paul Trudelle

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An attorney acting under a power of attorney may be required to account to the beneficiaries of the grantor’s estate after the death of the grantor. This is the holding in the decision of McAllister Estate v. Hudgin. Megan Connolly blogged on this case here, on the issue of accounting, and here, on the issue of removal of an estate trustee.

In the May 11/18, 2009 issue of the Law Times, in a comment titled “The duty of an attorney to account”, John O’Sullivan and Lori M. Duffy comment further on the McAllister decision. They note other cases where an attorney for property has been compelled to account to the beneficiaries of an estate after the death of the grantor.

The authors suggest that in light of the duty to account, “the wisest course for a person exercising a power of attorney for property following these decisions is to assume that he or she will be required at some point in the future to account to persons opposed in interest, and to conduct themselves accordingly throughout their tenure as power of attorney.”

The authors go on to suggest that attorneys should, if they can, ensure that the power of attorney document provides protection for the costs that they may be forced to incur in preparing the accounts and passing them before the court.

Thank you for reading,

Paul Trudelle

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Following up on Jennifer Hartman’s excellent blog on Harry Houdini’s life and death, I came across information relating to the proposed exhumation of Harry Houdini.

In March 2007, his grandnephew announced that he was seeking to have Houdini's body exhumed in order to determine the true cause of death. As noted by Jennifer in her blog, Houdini is said to have died accidentally after being punched in the stomach. However, no autopsy was ever performed.

In a 2006 biography, The Secret Life of Houdini, it is suggested that enemies of Houdini, possibly members of the Spiritualist movement, poisoned Houdini because he often debunked their claims of being able to talk to the dead. 

Alas, the proposed exhumation has not (yet) proceeded. It has been said that the plan may have been part of a publicity stunt for the biography.

Have a great weekend.

Paul Trudelle

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This question is considered in the recent decision of Re Balanyk Estate, 2008 CanLII 63161 (Ont. S.C.).

There, the Applicant was successful in resisting a motion to dismiss her claim for dependant support. Costs were awarded to the Applicant, payable out of the estate.

After the motion, the Applicant and her lawyer had a falling out, and an issue arose as to who the costs award was payable to: the Applicant or her lawyer.

Henderson J. found that as a general principal, the costs of a proceeding are payable to the litigant, not the lawyer. Entitlement to costs is based on the principle of indemnity, and costs are awarded to a litigant to indemnify the litigant for monies that she may owe to her lawyer or a third party (although the law of costs has been expanded to allow for costs to unrepresented litigants).

Henderson J. held that any dispute between a litigant and her lawyer should not be dealt with in the main proceeding, but should be dealt with in another manner, such as an assessment.

Having said that the costs belong, prima facie, to the litigant, Henderson J. went on to consider whether the Applicant had contracted out of the general principle. The Applicant had signed an irrevocable direction in favour of the lawyer. However, Henderson J. reviewed the direction and found that it was not sufficiently broad to as to apply to the fact situation. Henderson J. held that if the parties wished to contract out of the general principle that the costs of a proceeding belong to the litigant, they must do so by way of a clear, precise written agreement.

Thank you for reading.

Paul Trudelle

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On February 26, 2009, the Canadian Radio-television and Telecommunications Commission (“CRTC”) approved an application for a French-language specialty programming service that would be dedicated to the broadcast of obituary notices, notices of hospitalization and messages of thanks and prayers. The channel, called “Je me souviens”, will also air documentaries on the life of popular or important individuals.

According to a Montreal Gazette report, the station plans to go to air this summer. If it is successfully, the promoter plans to launch an English language channel for the rest of Canada.

The channel will be able to air national ads. The channel will also raise money by charging a fee, as yet undisclosed, for airing the obituaries.

Gerald Dominique, the promoter, says that his channel will give family and friends an opportunity to broadcast more information about their deceased loved ones: more than what can be published in a standard death notice. “My goal is that no death goes unnoticed.”

Thank you for reading.

Paul Trudelle

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Normally, it is the estate trustee who has the authority to deal with the disposition of the deceased’s remains. A deceased’s stated wishes with respect to disposition, including donation, are seen as merely precatory.

However, Ontario’s Trillium Gift of Life Network Actvaries this usual authority, in a number of respects.

Firstly, a deceased’s consent to organ donation is “binding and is full authority for the use of the body…”.

Secondly, where the deceased has not specifically consented to a donation, the Act allows specified persons to consent to the donation of the person’s own body or body parts upon death. A spouse or other family members, in a specific order, are authorized to consent to such a donation if the deceased has not consented during his or her lifetime. One of the persons authorized to consent to the donation is “the person lawfully in possession of the body”. This appears to be a reference to the estate trustee.  However, the estate trustee’s authority to consent is low on the list, after the spouse, children, parents, siblings and other next of kin.

The consent of a spouse or other person listed in the legislation is “binding and full authority” for the use of the body. The legislation therefore appears to make a limited exception to the common law authority of the estate trustee.

Consent is not to be given if it is believed that the deceased would have objected during his or her lifetime, or if the deceased did not consent, if someone higher on the hierarchical list would object.

Have a great weekend.

Paul Trudelle

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Someone forwarded me a terrific article from the February 2, 2009 issue of Fortune magazine. In it, Jim Collins, the author of “Built to Last” and “Good to Great”, notes the current economic volatility and uncertainty and states that such instability is in fact “normal”, as contrasted to the relative stability from 1952 to 2000, which he feels was an aberration.

Collins states that in order to succeed in such unstable times, organizations need a fabric of values, of underlying ideals or principles that explain why it was important that they exist. In addition, companies need to understand that it is the calibre of their people that will see them through and allow them to succeed. He gives examples of companies that have used difficult times to beef up their personnel, contrary to the prevailing trends. 

Collins observes that under duress, there is a tendency to “zoom in” on the immediate problem. His counsel is that, rather, we should be “zooming out” and looking at the bigger picture.

Collins gives some employee relations advice along the way. On the topic of staffing, he says that the right people don’t need to be managed. “The moment you feel the need to tightly manage someone, you’ve made a hiring mistake.” “The right people don’t think they have a job: they have responsibilities.”

In the context of estates, death of a loved one can indeed trigger crisis. Similarly, estate litigation can be seen as a time of chaos and despair. Maintaining an ability to “zoom out” and see the bigger picture can not only help us through these tough times, but can also help us use the crisis to grow as humans.

Thank you for reading.

Paul Trudelle

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A eulogy is a speech or writing in praise of a person or thing. The word derives from the Greek (gotta love those Greeks) word “eulogia”, meaning “good” and “words”. Although a eulogy can be used for a living person, it normally refers to a funeral oration, given in tribute to a person who has recently died.

A eulogy can be contrasted with an “elegy”, which is a poem written in tribute to the dead. A eulogy can also be contrasted with an “obituary”, which is a written biography recounting the life of the deceased. However, a eulogy can often cross the line into an elegy or obituary.

As usual, the web has a myriad of resources to help those called upon to prepare a eulogy.

Speech-writers.com offers “a pack of relevant, proven and 100% risk free speeches and or poems for your eulogy”, as well as a 100% immediate refund if you are not satisfied! (It is not clear whether the guarantee extends to the satisfaction of the deceased or other funeral-goers.)

Eulogyspeech.net offers eulogy writing guides, samples, poems, quotes and famous last words, amongst other resources.

Suite101.com has a short by helpful guide to composing and delivering a funeral tribute.

And then there is Eulogy, a 2004 movie starring Hank Azaria, Jesse Bradford, Debra Winger, Ray Romano, Kelly Preston and Rip Torn. Described as a ”black comedy that follows three generations of a family, who come together for the funeral of the patriarch - unveiling a litany of family secrets and covert relationships”, the movie received 6.6 stars out of 10 on IMDB.com.

Thank you for reading.

Paul Trudelle

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The recent Ontario Superior Court of Justice decision of Re Steen Estate addresses the issue of getting funds paid into court pending a determination of ownership.

In that case, the deceased left a will that divided her estate equally amongst her three sons. There was also a prior “Family Agreement” in which the deceased and her three sons agreed that the deceased’s intent was that each of her three sons would receive a one third share of her financial assets upon her death. The agreement went on to provide that all existing accounts of the deceased, whether jointly held or otherwise, would be totalled, and the value divided into three upon the deceased’s death.

The plaintiff, one of the sons of the deceased was also the estate trustee, brought a claim as against the two other sons with respect to jointly held accounts held by the two other sons. It appears that the plaintiff also held a joint account with the deceased as well.

The plaintiff brought a motion requiring the two other sons to pay the monies they held jointly with the deceased into court pending a determination of the issue.

The Court considered the test for having funds paid into court under Rule 45 of Ontario’s Rules of Civil Procedure. The three-pronged test requires that the moving party show:

1.                  That the moving party has a right to a specific fund;

2.                  That there is a serious issue to be tried regarding the moving party’s right to that fund; and

3.                  That the balance of convenience favours granting the relief sought by the party.

The motion was dismissed. The court held that there was no “specific fund” as the joint account with one of the defendants had been transferred into his investment account: the fund no longer existed. There was no evidence with respect to the other joint accounts.

The court also found that there was no “serious issue to be tried”. The intention of the deceased with respect to dividing her estate was clear.

Finally, the court held that the balance of convenience did not favour the plaintiff. The plaintiff only sought that the defendants’ joint accounts be paid into court, and not his own joint account. The court held that it would be “grossly unfair” to require the defendants to pay their joint account funds into court while allowing the plaintiff to hold onto his joint account proceeds.

This last point seems to have resonated with the judge. The court noted at several points in the decision that the plaintiff was not seeking to have his jointly held funds be paid into court as well.

Thank you for reading,

Paul Trudelle

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In many estates, the estate trustee seeks to dispense with the normal requirement of posting an administration bond, if one is in fact necessary. (A bond is usually required where a person dies intestate, where the will does not name an estate trustee, where the will names a foreign estate trustee, or where the application is by a succeeding estate trustee where the will does not name a successor.)

The primary purpose of the bond is to ensure that the estate trustee pays the debts of the estate, and distributes the estate to those who are entitled to it. An applicant that wants to dispense with the bond must satisfy the court that the protection afforded by the bond is not required or will be met in some other way.

Brown J. in the recent decision of Re Henderson, 2008 CanLII 69136 addresses the issue, and highlights the evidence required by the court when determining whether a bond is to be dispensed with. He states that in order to allow the court to properly consider the matter, the applicant should file affidavit evidence setting out:

(a)               The identity of all beneficiaries of the estate;

(b)               The identity of any beneficiary who is a minor or incapable person;

(c)               The value of the interest of any minor or incapable person;

(d)               Executed consents from all sui juris beneficiaries to the appointment and to the dispensation of the bond. If consents cannot be obtained, the applicant must explain how the interests of those beneficiaries will be protected;

(e)               The last occupation of the deceased;

(f)                 Evidence as to whether all debts of the deceased have been paid, including any obligations under support agreements or orders;

(g)               Evidence as to whether the deceased operated a business at the time of death, and if so, whether any debts of that business have been or may be claimed against the estate, and a description of each debt and its amount;

(h)               If all debts of the estate have not been paid, evidence as to the value of the assets of the estate, particulars of each debt (amount and creditor), and an explanation of what arrangements have been made with those creditors to pay their debts and what security the applicant proposes to put in place to protect those creditors.

Thank you for reading.

Paul Trudelle

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Amending or altering a formal, attested will can be a difficult task. Such amendments may not be accepted by the Court, despite what may be the clear intentions of the testator.

The recent Ontario decision of CIBC Trust Corp. v. Horn is illustrative of the principles involved. There, the testator executed a formal, typed will. After execution, the testator made substantial handwritten changes to a number of bequests. The changes were not dated or signed. In addition, she added three unnumbered paragraphs to the will.

The court noted that any alteration to a will must be made in accordance with the formal requirements of the Succession Law Reform Act, unless the alteration renders part of the will completely obliterated. Alterations to a formal will must be signed and attested and signed by two witnesses. 

Alternatively, it is possible to make a holograph codicil to a formal will. However, this too requires compliance with the requirements of the Succession Law Reform Act. For a holograph will or codicil, it must be signed “at, after, following, under or beside or opposite the end of the will”. In this case, the handwritten changes were not signed at all.

In conclusion, the court found that none of the additions or deletions could be given effect, and the Estate Trustee was directed to administer the estate in accordance with the typewritten will, and without considering any of the handwritten changes or additions.

Practitioners may want to advise clients of the requirements for amending or altering provisions in a will. Otherwise, a testator’s intentions may not be truly reflected in the will document that he or she leaves.

Thank you for reading.

Paul Trudelle

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This is our final reminder to register for our Breakfast Series presentation scheduled for Thursday January 15, 2009 from 8:30 am to 9:30 am. The presentation is followed by an “Estates Roundtable” discussion from 9:30 am to 10:15 am. The presentation is being held at the Ontario Bar Association facilities at 20 Toronto Street, Toronto. If you can’t attend in person, you can dial in for live audio, or view the presentation from your PC via live webcast.

This Thursday’s presentation will cover the following topics:

• A Trustee's Discretion to Benefit vs. A Guardian's Obligation to Support – By David M. Smith;

• Dependant's Relief: Cummings and Beyond – By Craig Vander Zee; and

• Insolvent Estates – By Ian M. Hull.

Click here to download a registration form or contact Diane Labao at 416.369.1140.

If you can’t attend, call in or watch the webcast, you can view the presentation over the internet at a later date. Check out our website for details. You can also check our website for past seminar presentations.

I hope that you can participate.

Paul Trudelle

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Two certainties and a long-shot.

The Toronto Star reported on January 4, 2009 that on the day Donald Peters died, he unknowingly provided financial security for his wife of 59 years, and for their family.

Peters bought two Connecticut Lottery tickets on November 1, 2008. He died of a heart attack later that day. His wife, in her grief, didn’t check the tickets until some time later. In fact, she states that she almost threw them out before checking them. On January 2, 2009, she collected the winning prize of $10,000,000 (U.S.).

Considering this matter from an estate administration angle, a number of potential questions or issues arise.

For example, in Ontario, would Estate Administration Tax (“E.A.T.”) be payable on the winnings under the Estates Administration Tax Act? E.A.T. on $10,000,000 would be approximately $150,000.

E.A.T. under the Act is payable based on the “value of the estate”, the stripped-down definition of which is the value of all the property that belonged to the deceased at the time of his or her death. Presuming the lottery took place after death, the value of the ticket at the date of death would likely be its face value or purchase price. Until the lottery takes place, a $1 ticket is, in most cases, only worth $1. (Believe me, I’ve tried to sell them for more, but my family wouldn’t pay my asking price, no matter how lucky I told them the ticket was.)

However, if the draw was pre-death, but the ticket wasn’t checked until post-death, then one would presume that the winnings would need to be included as property belonging to the deceased at the time of death, and E.A.T. would be payable on the winnings.

Good luck and good health,

Paul Trudelle

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The 11^th Annual Estates and Trusts Summit was held in Toronto on November 19 and 20, 2008. This excellent program featured a number of experienced practitioners speaking on a broad array of estates and trusts topics.

Topics (and speakers) included:

• Family Law Update (Karon Bales)
• Shareholder Issues – The Family Business in Succession Planning (Frank Archibald)
• Dealing with Insolvent and Bankrupt Estates (Barry Corbin and Robert Klotz)
• The Non-Resident Factor in Estate Planning (Mary Anne Bueschkens and M. Elena Hoffstein)
• Update on the Trust and Estate Provisions in the Protocol to the Canada/U.S. Income Tax Treaty (Beth Webel and Jim Yager)
• New Strategies for Post-Mortem Tax Planning – The Eligible Dividend Rules and More (Heather Evans)
• Powers of Attorney and the Duty to Account – An Update (Liza Sheard)
• Powers of Appointment (Timothy Youdan)
• The Will is Not the Whole Picture - Integrating the Transfer of Wealth both Inside and Outside the Estate (Wendy Templeton)
• New Developments in Insurance and Estate Planning (Graham Carter)
• Update on Practice Directions for the Estates List (The Honourable Mr. Justice David M. Brown)
• Capacity and Other Issues in Power of Attorney and Guardianship Disputes (Jan Goddard)
• A Clinician’s Perspective on Assessing Testamentary Capacity and Related Capacities (Dr. Kenneth Shulman)
• Capacity Issues – The Perspective of the Hospital, Retirement Home and Group Home (Wendy Griesdorf)
• The Vulnerability of Pre-Death Gifts (Eric Hoffstein)
• The Scope of the Attorney’s Powers (Sender Tator)
• The Incapable Minor Turning 18 (Clare Burns)
• Remarks from the New Children’s Lawyer for the Province of Ontario (Debra Stephens)
• Marshalling the Evidence For and Against Capacity in a Will Challenge (Hilary Laidlaw)
• Short Circuiting the Frivolous Will Challenge (Hull and Hull’s Craig Vander Zee)
• Mediation of Capacity Issues – The Mediator’s Perspective (Felice Kirsh and Archie Rabinowitz)

If you were not able to attend, the seminar materials will be available from the Law Society of Upper Canada.

Thank you for reading,

Paul Trudelle

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Today is the final installment of my discussion of Hix v. Ewachniuk Estate, 2008 CarswellBC 1300 (Hinkson J.).

After dismissing the will challenge on the basis of due execution, testamentary capacity and knowledge and approval, the court turned to the issue of undue influence. Despite the presence of suspicious circumstances, the court held that the challengers, not the propounder, had the burden of proving undue influence. However, while the son did not have the burden of disproving coercion, his evidence was to be tested against the preponderance of probabilities that rationally emerge out the all the evidence in the case.

The deceased was found to be vulnerable and dependant upon her son for all aspects of her existence. Conversely, the son was found to have an aggressive and domineering personality, both in general and with respect to his desire for absolute ownership of the family holding company.

The court found that the son was very caring of his mother. However, it did not accept his evidence on the issue of undue influence. The court asked a number of rhetorical questions as to why the mother would make the will that she did, despite the circumstances. The court concluded that that will was procured by the undue influence of the son.

The will was therefore found to be invalid.

Paul Trudelle

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Yesterday, I discussed Hix v. Ewachniuk Estate, 2008 CarswellBC 1300 (Hinkson J.), and the finding of the judge that suspicious circumstances existed, placing the onus back on the propounder to prove testamentary capacity and knowledge and approval.

As to testamentary capacity, the court referred to the oft – quoted decision of Banks v. Goodfellow, and the test for testamentary capacity.

It noted that the capacity required to direct the distribution of one’s estate by Will is “modest”. To be of a sound and disposing mind and memory, a testator must:

1. be aware that they are making a will that takes effect on their death;
2. understand the nature and extent of the estate to be disposed of by Will;
3. be aware of those having a claim to the estate;
4. have no disorder of the mind.

The court reviewed the evidence of the plaintiffs and the witnesses (other than the son) as to testamentary capacity. The court was satisfied that on the preponderance of the evidence, the testator had the necessary capacity to direct the disposition of her estate by will as of the date of the will.

As to knowledge and approval, the court noted that a suspicious circumstances raised in the case required that the son, as the propounder of the will, prove that the deceased knew of and approved of the contents of the will. The court did not accept the evidence of the son to the effect that the deceased had to carefully read her will and discuss it with him on numerous occasions. Despite this, the court concluded that the deceased knew of the provisions of the will that she signed.

To this point, the will survived most of the challenges to it. Will the will be accepted to probate? Can it withstand the final challenge: undue influence? Tune in tomorrow.

Paul Trudelle

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Yesterday, I introduced the will challenge decision of Hix v. Ewachniuk Estate, 2008 CarswellBC 1300 (Hinkson J.).

After disposing of the issue of due execution, the court turned to the doctrine of “suspicious circumstances”. The court referred to these Supreme Court of Canada decision of Vout v. Hay, where it was held that suspicious circumstances maybe raised by circumstances surrounding the preparation of the will, circumstances tending to call into question the capacity of the testator; or circumstances tending to show that the free will of the testator was overborne by acts of coercion or fraud.

Generally, the propounder of a will has the legal burden with respect to due execution, knowledge and approval, and testamentary capacity. However, upon proof that the will was duly executed, the propounder is aided by the rebuttable presumption that the testator knew and approved of the contents and had the necessary testamentary capacity.

The burden of establishing suspicious circumstances rests on those attacking the will. If evidence can be adduced which, if accepted, would tend to negative knowledge and approval or testamentary capacity, this burden is satisfied and the legal burden reverts to the propounder.

In Hix, it was the son who drafted the challenged will. The Court quoted from Vout v. Hay as follows:

“… if a party writes or prepares a Will, under which he takes a benefit, that is a circumstance that ought generally to excite suspicion of the Court, and calls upon it to be vigilant and jealous in examining the evidence in support of the instrument, in favour of which it ought not to pronounce unless the suspicion is removed, and it is judicially satisfied that the paper propounded does express the true Will of the deceased.”

The court concluded that the son should never have agreed to draw the will for the deceased. The fact that he did in the circumstances “does more than raise suspicion; it cries out for it.”

Tomorrow: testamentary capacity, and knowledge and approval

Paul Trudelle

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A recent case out of the British Colombia Supreme Court provides an excellent illustration and discussion of various grounds upon which a will can be challenged.

In Hix v. Ewachniuk Estate, 2008 CarswellBC 1300 (Hinkson J.), the deceased was survived by a son and two daughters. The deceased, the son and the two daughters had varying levels of shareholdings in a holding company.

In a prior will, the deceased left her estate to her three children, equally. In a will drawn January 11, 2004, the deceased left her estate to her three children equally, on the condition that the two daughters transferred their shareholdings in the holding company to the son. The deceased died on June 1, 2006 at the age of 90. The daughters challenged the validity of the will, and the court considered the validity of the will from a number of perspectives.

The court first considered the issue of due execution of the will. The formal requirements necessary to execute a valid will are set out in the relevant legislation. While the court was not prepared to accept the evidence of the son with respect to the execution of the deceased’s will, it did accept the evidence of one of the two witnesses to the will. The court was satisfied that the will was signed by the testator in the presence of two witnesses who were present at the same time and who subscribed the will in the presence of each other and the testator.

Court concluded that the will was validly executed. This aspect of the will challenge was rejected.

More tomorrow.

Paul Trudelle

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It has commonly been assumed that a will challenge cannot proceed prior to the death of the testator. The will speaks only upon the death of the testator, and a testator enjoys testamentary freedom to revise or otherwise revoke the will at any time prior to death, or to deal freely with his or her assets.

However, as reported in the New Jersey Law Blog, a recent California case has determined that when a conservator secures court approval of an estate plan while an individual is still alive, any challenge to the will must be made at that time, and not after the death of the individual.

In Murphy v. Murphy, the Court of Appeal for the State of California, First Appellate District, Docket No. A115177, the testator had suffered a stroke. A conservator was appointed for the testator, who sought court approval of the testator’s estate plan. A son, who was left out of the estate plan, was put on notice and did not challenge the estate plan.

After death, the son sought to challenge the estate plan. The Court of Appeal held that the son’s claim was barred on the basis of “collateral estoppel”. The son was not allowed to relitigate matters that were litigated in a prior proceeding.

The blog’s author observes that the decision “essentially bulletproofs the will of a person found incompetent and placed under the protection of a conservator, if the Court approves a revised estate plan with appropriate notice being given to all parties in interest who may have any basis to object.”

In Ontario, there is no similar procedure for approval of an estate plan. In fact, an attorney for property or guardian for property is expressly barred from making a will on behalf of the incapable person.  

However, at least two Ontario decisions (Stern v. Stern and Weinstein v. Weinstein (Litigation Guardian of) have commented to the effect that the court should not “close its eyes to the fact that litigation among expectant heirs is no longer deferred as a matter of course until the death of an incapable person”.

Paul Trudelle

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Collection of legal fees can be an ongoing issue for lawyers. It is certainly an issue for a Chicago lawyer, who faces a 15 month suspension arising out of matters relating to the payment of his fees.

According to a report in the Chicago Tribune, the lawyer provided legal services to a client and members of her family on various matters. The lawyer and the client agreed that the client, an exotic dancer at the time, would perform nude dances for him in his office as a way to cut down on legal fees. The lawyer also received free nude dances at the club where she worked. 

The lawyer credited the client with $534 as against his accounts. 

The client later complained of sexual assault. A grand jury declined to indict the lawyer, but the Illinois Attorney Registration and Disciplinary Commission, a branch of the state Supreme Court, conducted an investigation leading to the suspension.

Thanks for reading.

Paul Trudelle

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At the October 2007 Hull and Hull Breakfast Seminar, I spoke on the concept of “Mutual Wills”. (See my paper, here.) In a recent decision out of Alberta, the Court again addressed the issue of mutual wills.

In Powell v. Glover, [2008] A.J. No. 961 (Alta. Q.B.)  the deceased and her spouse left wills that specifically provided that the wills were further to an agreement not to revoke or alter the will after the death of one of them. The wills went on to provide that the estate of the first to die was to pass to the surviving spouse. The wills further provided that upon the death of the surviving spouse, the surviving spouse’s estate was to pass to named residual beneficiaries, being children of the two spouses from prior marriages.

The husband died in 2003 and his estate passed to his spouse. She took the position that she was the sole beneficiary under her spouse’s will, and that she has no obligation to ensure that upon her death, any residue was to be distributed in accordance with the prior wills.

The Court had little difficulty in finding that the wills were mutual wills. The Court enforced the agreement between the spouses not to vary from the prior distribution agreement made while both spouses were alive. The surviving spouse’s estate (upon her death) was charged with a trust in favour of the residual beneficiaries of the mutual wills.

The fact that the surviving spouse was still alive did not make the Application premature.

The more difficult issue was what property was charged with the trust. The Court found that the trust would apply to all property acquired by the surviving spouse upon the death of the first spouse. The surviving spouse is allowed to deal with the property she acquired from the other during her lifetime, but is not entitled to divest her property intentionally in order to avoid the terms of the mutual will.

Paul Trudelle

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While I was in Court in Toronto on Friday, Mr. Justice Brown advised the court room in general that with respect to most Orders Giving Directions granted by him (and possibly other judges on the Estates List), the Order Giving Directions will include a Schedule that provides that the Applicant is to file with the Estates Office a tabbed, three ring, red 1” binder labelled “Endorsements/Orders Brief”, which is to be maintained as part of the record of the proceeding. Within five days after the making of any endorsement or Order in the proceeding, the Applicant is to file a copy of such endorsement or Order in the next available tab in the Brief.

Mr. Justice Brown observed that the purpose of such a Brief is to allow the presiding Judge on any subsequent hearing date to quickly determine the history of the proceeding, and all judicial determinations made to date.

The Schedule also provides that Factums are to be filed on all subsequent motions.

The utility of such a Brief and the requirement to file a Factum appears obvious. The requirements to create the Brief and to file a Factum will clearly assist the Court in determining the history of the proceeding, and allowing for the prompt and efficient determination of the matter before it.

Thank you for reading.

Paul Trudelle

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Does the act of a paraplegic testator in stamping his will with a stamp bearing his name constitute the act of signing the will within the meaning of section 4(1)(a) of the Succession Law Reform Act (“SLRA”)? 

That was the question that was posed to the Honourable Justice D. M. Brown in the matter of The Estate of Gerald Francis Clarke, 2008 CanLII 45541 (Ont. S.C.) released September 12, 2008.

There, the Applicants applied for a Certificate of Appointment of Estate Trustees for the estate of the late Gerald Francis Clarke.  The Application appears to have been unopposed.

The affidavit of execution indicated that the testator was a paraplegic and unable to take a pen in his hand to sign or initial the pages of his will.  The witness deposed that he saw the testator execute his will by placing a stamp which reads “Gerald F. Clarke” on the signature line at the end of the will and on each page of the will.  The witness further deposed that the testator executed the will in the presence of himself and another witness, as attesting witnesses.

Section 4(1)(a) of the SLRA provides that a will is not valid unless “at its end it is signed by the testator or by some other person in his or her presence and by his or her direction”. 

The Court relied upon In Re Bradshaw Estate, [1988] N.B.J. No. 709 (P.C.). There, in interpreting a similar provision in the New Brunswick Wills Act, the Court formulated the applicable test as follows:

(i) were the markings on the will made by the testator, and

(ii) were they intended as his signature and to represent the best that the testator could do by way of writing his name under his physical circumstances? 

Brown J. held that this test should be applied in determining whether a testator had complied with s. 4(1)(a) of the SLRA.

Brown J. concluded that on the evidence before him, the testator stamped the will with a stamp bearing his name and that his stamping of the will in that manner represented the best that he could do by way of writing his name given his physical circumstances. 

A Certificate of Appointment issued with respect to the stamped will.

Paul Trudelle

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Looking out of our office window on such a beautiful summer day, my mind drifted from blogging to golfing. I then struggled to make a connection between the world of trusts and estates, and thoughts of golfing.

The one thing that immediately came to mind was the comment of Rodney Dangerfield’s character Al Czervic from the movie “Caddyshack” that “Golf courses and cemeteries are the biggest waste of prime real estate in America.”

Looking a little deeper on the internet, I found a wealth of golf-related murder mysteries!  Yahoo hosts a group for golf mystery collectors. The Waterboro Public Library has compiled a list of well over 100 golf murder mysteries (I stopped counting at 100). 

Titles include “Death is a Two-Stroke Penalty”, “Deadly Divots”, “Death Under Par”, “Rotten Lies”, “Fairway to Heaven”, “Putt to Death”, “Par for the Corpse” and “Six Strokes Under”. There appears to be no limit to the punning.

Whether you’re reading, or golfing, or both, have a great summer!

Thank you for reading.

Paul Trudelle

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Recently, the Ontario Superior Court of Justice struck down an arbitration clause in a retainer agreement.

In Jean Estate v. Wires Jolley LLP 2008 CanLII 14538, an estate trustee and sole beneficiary of an estate entered into a retainer agreement with counsel that provided for a “success fee” of 10% of the value of the estate. The retainer agreement also provided that any dispute relating to the success fee was to be determined by an arbitrator. 

A dispute arose, and the solicitors sought to have the dispute resolved through arbitration. The client applied to the court to have the notice of arbitration struck out, and to have the dispute resolved by the court.

Madam Justice Low granted the application. She held that the provisions of the Solicitors Act applied prima facie. She went on to conclude that even though the parties had previously agreed to an arbitration provision, and could agree to keep private commercial disputes private, the relationship between lawyers and clients is “one which transcends a mere commercial transaction. The profession has a monopoly over the provision of legal services and the occasions upon which lawyers interact with members of the public occur often when the latter are in the most vulnerable of circumstances. There is therefore an overarching public interest to be served in the court’s supervision of the profession’s monopoly.”

As the arbitration provision was a derogation of the client’s statutory right to have the court scrutinize the propriety of the fees, it was not upheld.

Thank you for reading.

Paul Trudelle

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A few of our past blogs discussed eco-friendly or other alternatives to a natural burial. (See Eco-Funerals - Green to the Grave and Natural Burial.) In researching an issue regarding cremation and the scattering of ashes, I came across yet another alternative: resomation.

“Resomation” is described as “an environmentally responsible, flameless, water based ‘biocremation™’ which sympathetically returns the body to its constituent elements.” In the process, which involves alkaline hydrolysis, the body is placed into a special vessel containing a pool of water and potassium hydroxide, which is heated to a high temperature under pressure. This dissolves the body into its chemical components, leaving only calcium phosphate bone ash. In addition, any mercury fillings and prosthetics remain intact, and can be safely removed.

The web site “Ecogeek” described the process as “The Greenest Way to Die”, and notes that the process does not release harmful mercury vapours, and only uses 90 kWh of energy, compared to 250 kWh for a normal cremation.

The company behind resomation describes the process as “accelerating natural decomposition”. 

It does not appear that the process is available in Canada yet. 

Thank you for reading.

Paul Trudelle

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The common law in Ontario now appears to clearly provide for claims by “disappointed beneficiaries” against drafting solicitors where a bequest to a beneficiary fails as a result of the negligence of the solicitor. (See Harrison v. Fallis, 2006 CanLII 19457 (ON S.C.))

A decision out of the Saskatchewan Court of Queens Bench appears to open the window to this type of claim even wider. Disappointed beneficiaries may also have a cause of action as against financial institutions and others that provide estate planning advice.

In Mayer v. Nordstrom, 2003 SKQB 397 (CanLII), the deceased consulted with a financial adviser with respect to his estate plan. The deceased owned a mutual fund plan, and designated his son as the beneficiary. However, the plan was not registered, and the designation was therefore void.  The fund fell into the deceased’s estate, and the son received only half of the value of the fund as a beneficiary of the estate. The disappointed son sued the financial planner for negligence. 

The financial planner resisted the claim, taking the position that he did not owe a duty of care to the son.

The Court disagreed. The Court held that the “disappointed beneficiary” principles articulated in solicitors’ negligence cases such as Earl v. Wilhelm (2000), 183 D.L.R. (4^th) 45 (Sask. C.A.) and White v. Jones, [1995] 1 All E.R. 691 (H.L.) applied equally to other professions. The “disappointed beneficiary” principle “is not a function merely of the defendant’s occupation”. The planner was a professional who held himself out as possessing special skill, judgment and knowledge in financial planning, which included estate planning tools. The planner ought to have known that carelessness on his part would cause harm to a third party.

The duty of care to potential beneficiaries, opened in the White v. Jones decision, continues to expand.

Thank you for reading.

Paul Trudelle

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In order to attempt to combat what is felt to be a growing problem of real estate fraud, the Ontario government has put new registration requirements in place when a real estate document is being registered.

The requirements call for the making of certain “law statements” by an individual registering a real estate document (transfer or mortgage) under the authority of a power of attorney. The individual must make a statement that they are acting within the scope of the power of attorney. Further, the solicitor must discuss the power of attorney with the client and make a “law statement”. For most purposes, the solicitor must complete the following statement:

I, name of solicitor, confirm that I have reviewed the power of attorney with the attorney, and the attorney has confirmed that:

1. The attorney is the lawful party named in the power of attorney,

2. The attorney is acting within the scope of the authority granted under the power of attorney,

3. To the best of the attorney’s knowledge, information and belief, the power of attorney was lawfully given, and

4. The power of attorney has not been revoked.

In addition, the original signed and witnessed power of attorney must be scanned and registered. 

Lawyer and bencher Robert Aaron discussed the new requirements in a recent article in the Law Times, p. 12. Mr. Aaron stated that while the new requirements will allow the party on the other side of the transaction (and their solicitor) to review the power of attorney document, and provides an opportunity for defective powers of attorney to be caught, “I’m not sure that it will frankly do much to stop fraudulent powers of attorney.”

Thank you for reading.

Paul Trudelle

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Following up on Allan Socken’s blog of March 31, 2008 entitled “What is Legacy Coaching”, I came across an article in the American College of Trust and Estate Counsel Journal entitled “Is Your (Ethical) Will in Order?” (2008) 33 ACTEC Journal 154 by Zoe Hicks. In her article, the author reviews what an Ethical Will is, what types of topics are normally covered, the format of the Ethical Will, and how estate planning practitioners have embraced the concept of advising clients with respect to leaving an Ethical Will.

Essentially, an Ethical Will is a testament of what you want your survivors to know, rather than what material assets you want them to have. Ethical Wills can include expressions of wisdom, values and beliefs of the “testator”, reminders of heritage, apologies, explanations of actions taken or not taken, regrets, expressions of love and gratitude, and words of encouragement.

Ms. Hicks sets out numerous extracts from Ethical Wills so that the reader can get a flavour of the types of matters that an Ethical Will can to address. She concludes by observing that an Ethical Will can be a valuable exercise for both the writer and the recipient.

For more information, read her article, or visit www.ethicalwill.com. This site explains the concept, and provides several examples of Ethical Wills in different forms. 

Have a great weekend.

Paul Trudelle

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On April 23, 2008, I attended at the Ontario Bar Association’s Dinner with the Estates Lists Justices.

The evening began with a review of the Case of the Month by Barry Corbin. Barry discussed the Court of Appeal decision of Madore-Ogilvie v. Ogilvie Estate (This case was also discussed by Sean Graham and Rick Bickhram in Hull on Estates, Episode #103.) This case dealt with the inclusion of jointly owned insurance polices as “section 72” assets under the Succession Law Reform Act.

Following Barry’s excellent presentation, Madam Justice Allen, Madam Justice Conway and Mr. Justice Brown took to the dais. They discussed various ways that the bar can work with the bench in order to facilitate the decision-making process, while advocating the client’s position.

Practical tips include organizing the court file, filing meaningful confirmation forms, attending with a working draft of the Order Giving Directions, and filing chronologies and lists of beneficiaries were appropriate.

The importance of filing a Factum was emphasized. These are said to be extremely helpful, and not filing a Factum should be an exception rather than the norm. 

More tomorrow.

Paul Trudelle

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Mom dies, leaving a will that divides her estate among her three sons. The only trouble is that before she died, Mom gave the farm to one of her sons. Accordingly, the other two sons receive nothing upon Mom’s death. 

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

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

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

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

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

Thank you for reading

Paul Trudelle

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In determining whether to litigate, or how far to go with a claim, a paramount consideration must be the costs involved, and the prospect of their recovery or payment.

Recently, I came across a case that highlights the issue. There, a wrongful dismissal matter, the court awarded the employee 2 ½ months’ notice, or $9,166. However, in the costs ruling, the judge noted that the employee’s own costs, according to the employee’s bill of costs, were $14,246. (Actual costs incurred by a client are often in excess of the costs claimed in a bill of costs.) The judge, for various reasons, did not award any costs to any party.

There are a myriad of other examples.

There is also the old joke about the man who said he only went bankrupt twice: once when he lost a lawsuit, and once when he won.

Parties often state that it is the “principle” of the matter that warrants the fight. However, “principles” come with a cost, and this reality must always be kept in mind.

Parties to a piece of litigation must be aware of these costs, and these costs should inform, to a considerable extent, the actions of the parties. Hopefully, all parties will take reasonable approaches in light of the costs of proceeding to court.

This, however, is easier said than done, particularly in the context of estate litigation. Here, emotions are usually close to the surface, and often interfere with reasonable judgment. One of the functions of the litigation lawyer is to attempt to calm these emotions, and to bring a reasoned, objective vision to the table.

Thank you for reading,

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It’s just about tax time, so I thought I would briefly discuss the taxation of executor compensation.

The basic premise is that executor compensation is taxable in the hands of the recipient. It is either income from an office or employment (if the executor is not in the business of being an executor) or income from a business (if the executor is in the business of being an executor, or if such a function is in the executor’s usual course of business). Various consequences flow from the distinction, such as allowable deductions, and withholding requirements for EI and CPP.

CRA takes this obligation to report executor compensation quite seriously. An example of the lengths to which CRA will go is found in the decision of Oolup v. The Queen. There, Ms. Oolup, the executor held a joint account with her grandmother, the deceased. She was advised by her lawyer that upon the death of the deceased, the joint account became hers, by right of survivorship. However, for “reasons of family harmony”, she decided to keep only $10,000 from the joint account, and divided the rest with the deceased’s next of kin.

CRA took the position that the $10,000 was executor compensation, and was therefore taxable, and they assessed Ms. Oolup accordingly. To get to this point, they argued that the joint account was held on a resulting trust for the estate. The CRA argued that the presumption of resulting trust applied, and was not rebutted. Accordingly, they asserted that Ms. Oolup received the $10,000 from the estate, as executor compensation.

Luckily for Ms. Oolup, she was able to rebut the presumption, and the court found that the joint account funds became her property upon the death of the deceased. She received the money by right of survivorship. Therefore, her keeping $10,000 was not receipt of compensation by her, and was not to be included in her income.

Thank you for reading,

Paul Trudelle

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Environmental consciousness is spreading, and is making its way into the realm of estates.

There is a growing movement towards “natural burial” or “eco-cemeteries”, and away from more traditional practices such as a conventional burial or cremation. Both of these traditional practices are said to have adverse environmental effects that can be avoided through natural burial. 

Conventional burial normally involves the use of formaldehyde, a potential carcinogen. Vast amounts of steel, wood and cement are involved in the burial process. Cemeteries are often simply fields of grass, with grave markers, that require watering, mowing, pesticides and herbicides.

As for cremation, the process requires huge amounts of natural gas. Emissions from crematories contain hazardous materials.

In natural burial, the body is prepared without use of chemical preservatives such as embalming fluids, and the body is buried in a biodegradable casket or shroud. The physical layout of the cemetery is distinct in that traditional grave markers are avoided, and the grave markers are designed to blend in with the landscape. Pesticides and herbicides are avoided. 

For more information, visit the Natural Burial Co-operative website at http://www.naturalburial.coop/

According to their website, the Natural Burial Co-operative is currently working to establish Canada’s first natural burial preserve.

The movement still appears to be in its infancy; however, interest in the concept of natural burial is growing.

Have a great weekend.

Paul Trudelle

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One final note of caution arises from the Rooney (2007), CarswellOnt 6560 decision – a decision of the Ontario Superior Court of Justice that I have referred to in my blogs earlier this week. This caution refers to the release that the Estate Trustee seeks from the beneficiaries.

In Rooney, the beneficiary was provided with a form of accounts, and was told that if she signed a release, she could receive a distribution from the estate. (The court was critical of this practice.) The beneficiary did so.

Later, the beneficiary sought to compel a passing of accounts. The court allowed the Application.

The trustee had asserted that because of the release, the beneficiary could not compel a passing. The court stated “It is not an answer to say that the beneficiary approved of the accounts and gave a release. One of the obligations of the solicitor acting for the trustee is to ensure that all beneficiaries have competent, independent advice in reviewing the accounts. There is no suggestion by the solicitor that he advised the [beneficiary] to obtain independent legal advice when reviewing the trustee's accounts which he had prepared.”

Additionally, the court noted that the account rendered by the solicitor to the estate was a blended account, and included both solicitor’s work and trustee work. “The solicitor was in the best position to know what charges related to which services. He was also in the best position to know what portions of his fee account should be paid by the trustee out of her compensation or by the estate. There is no evidence that he gave any advice about these distinctions to the beneficiary so that she could consider them.”

The court concluded by stating that “There is no evidence that the beneficiary executed the release knowing that double charges for the trustee's work had been made against the estate. There is no evidence that the beneficiary knew the solicitor charged the estate more for legal and trustee's services than would arguably be allowed on quantum meruit basis. In these circumstances, the release was not a fully informed one; it cannot be enforced against the beneficiary.”

What is an Estate Trustee to do to protect himself or herself? The Estate Trustee might send out accounts that are as complete and informative as possible, so that the release can truly said to be an informed one.   Solicitor’s accounts might be included, and these accounts could specify the nature of the services provided. Beneficiaries should be advised to obtain independent legal advice. 

In many cases, an Estate Trustee may wish to obtain a court passing in any event.

Thanks for reading.

Paul Trudelle

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 Yesterday, I referred to the Ontario Superior Court decision of Rooney Estate v. Stewart Estate (2007), CarswellOnt 6560, which addressed the distinction between the role of the Estate Trustee and the role of the estate solicitor.

One of the responsibilities of the Estate Trustee is to prepare a set of accounts for the approval of the beneficiaries or the court, as may be required.

The decision expands on this requirement. Citing an article prepared by Rodney Hull, Q.C. (“Fundamental Principles and Concepts Relating to Executors and Trustees’ Accounts” (1983), Estates and Trusts Quarterly 146), the duty of an Estate Trustee in keeping accounts is said to include the duty:

1.                  To keep clear and accurate accounts of the estate, rendered at appropriate intervals to the beneficiaries;

2.                  To keep the accounts distinct from other accounts;

3.                  To retain supporting documents for all accounts;

4.                  To produce to any beneficiary the accounts when requested. Income or revenue beneficiaries are entitled to have accounts at reasonable intervals; accounts must be presented to residuary beneficiaries when entitled to possession;

5.                  To make all beneficiaries fully aware of their rights;

6.                  To disclose any and all breaches of trust;

7.                  To allow all beneficiaries adequate time to investigate the accounts;

8.                  To ensure that all beneficiaries have competent, independent advice in reviewing the accounts; and

9.                  To notify all interested beneficiaries of any court audit.

In Rooney, the court held that a release signed by a beneficiary was not a bar to compelling a passing of accounts. The beneficiary was not advised to obtain independent legal advice when reviewing the trustee’s accounts, and the accounts did not disclose that there were double charges for the trustee’s work made against the estate, or that the solicitor charged more for legal and trustee’s services than would arguably be allowed on a quantum meruit basis. As such, there was a breach of one of the obligations associated with keeping accounts. Furthermore, the release was not a fully informed one. Accordingly, it was not enforceable as against the beneficiary.

Thank you for reading.

Paul Trudelle

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The recent case of Rooney Estate v. Stewart Estate (2007), CarswellOnt 6560 serves to highlight the “distinct but complimentary” roles of the Estate Trustee and the estate solicitor. There, the court noted the responsibilities of each.

The court held that the Estate Trustee is responsible for:

1.         arranging for the funeral and disposition of remains;

2.         locating the will and instructing the solicitor to apply for the appropriate grant of appointment;

3.         locating all the assets of the estate, including making arrangements to secure, preserve, and dispose of such assets in accordance with the terms of the will;

4.         advertising for creditors and paying all debts of the estate including the filing of appropriate tax returns;

5.         preparing a set of accounts for the approval of the beneficiaries or the court, as is required; and

6.         distributing the estate.

The court noted that, generally, the role of the solicitor is to apply for a certificate of appointment for the trustee and to attend upon a passing of accounts. The Estate Trustee is entitled to pay these legal expenses out of the Estate.

The Estate Trustee can claim compensation for carrying out his or her duties. That compensation may also include reimbursement for professional help. However, the Estate Trustee cannot claim compensation for services provided by others whose services are charged to the estate.

Problems can arise where the solicitor performs work that falls within the Estate Trustee’s responsibilities. While this is permissible, the court will ensure that the estate is not being doubly charged. Further, the court will not normally allow a solicitor to charge solicitor’s rates for trustee work.

In the decision, the court cautions that the “solicitor should not perform trustee’s work unless instructed to do so by the trustee. If such a request is made, the solicitor should advise the trustee that he will render an account to the trustee personally for doing her work. Generally, the estate is not liable to pay this account; rather, it falls to the trustee to pay out of her compensation.”

Thanks for reading.

Paul Trudelle

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Does the Court have jurisdiction to set aside a Family Law Act election, or is such an election irrevocable?

This question was recently considered in the Ontario Superior Court of Justice decision of Iasenza v. Iasenza Estate 2007 CanLII 23351.

As background, Ontario’s Family Law Act (“FLA”) allows a surviving spouse to elect to either receive benefit under the deceased’s will (or on an intestacy if there is no will), or receive an equalization of net family property under the FLA. Normally, the surviving spouse seeks information regarding each of the options, and then elects for the greater benefit.

However, information regarding the values of each option is not always forthcoming in a timely fashion. The election must be filed within 6 months of the date of death, or the surviving spouse is deemed to elect to take under the will or on an intestacy.

The Court held that it did have discretion to set aside an election made in favour of an equalization. However, the Court noted that the discretion will be exercised sparingly and only in “restrictive circumstances where the interests of justice require it and where the balance of the interests of effected parties clearly warrants it.”

In considering whether to exercise its discretion, the Court will consider:

a.                  Was the election filed as a result of a material mistake of fact or law made in good faith?

b.                  Was there any responsibility or culpability on the part of the effected parties in relation to the election?

c.                  Was the notice of intent to seek revocation of the election given in a timely way, and in particular, how long after the 6 month filing period was notice given?

d.                  Has the estate been distributed or would interested parties otherwise be adversely effected?

e.                  Does the election result in an injustice to the surviving spouse in all of the circumstances?

On the particular facts of Iasenza, the Court decided to exercise its discretion and set aside the election filed by the surviving spouse. As a result, the spouse was entitled to receive 1/3 of the estate under the will, whereas she would have received nothing under the election.

Thanks for reading.

Paul Trudelle