Author: Arielle Di Iulio

11 Mar

Dewaele v Roobroeck: The Costs of Bad Conduct

Arielle Di Iulio Estate Litigation, Litigation Tags: , , , 0 Comments

Estate litigation can be expensive. Sometimes a court may award costs to be paid personally by a party in an estates matter. Parties should always try to act reasonably throughout the litigation, as anything less may attract such adverse costs consequences. A recent example of this is the case of Dewaele v. Roobroeck, 2021 ONSC 1604.

The underlying application arose from the inability of three siblings to agree on how the estates of their late parents should be administered. The siblings were the sole beneficiaries and co-estate trustees of their parents’ estates. The daughter of the deceased parents brought an application against her two brothers seeking various relief, including an order removing them as co-estate trustees and appointing her as the sole estate trustee. Her application was successful and she sought costs against her brothers. Specifically, the applicant sought an order that her substantial indemnity costs be paid by her brothers and that the balance of her full indemnity costs be paid by the estates.

The decision on the issue of costs was given by the Honourable Justice Sheard, who held in favour of the applicant. In her written reasons, Justice Sheard provides a concise summary of the law governing the determination of cost awards in estates matters. First, she cites s.131 of the Courts of Justice Act,  R.S.O. 1990, c. C.43 as amended, which provides that, subject to the provisions of an Act or rules of court, the court has discretion to determine by whom and to what extent costs should be paid. The factors set out in Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 guide the court’s exercise of this discretion. The overriding objective in a cost award is that it be fair and reasonable, which is, in part, determined by the reasonable expectations of the parties concerning the quantum of costs.

Justice Sheard further explains that in estate litigation, the general rule is that estate trustees are entitled to be indemnified for costs reasonably incurred in the administration of the estate. However, the “loser pays” costs regime applies to estate matters, and a blended cost award – in which a portion of the costs is paid by the litigants and a portion from the estate – is within the court’s discretion.

In this case, the applicant asked for substantial indemnity costs from her respondent brothers. Justice Sheard affirms at paragraph 19 of her decision that such an award may be made “where the losing party has engaged in behaviour worthy of sanction”. Moreover, elevated costs should only be awarded where “there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties”. Here, the respondents failed in their obligations as estate trustees, deliberately interfered with the applicant’s ability to complete the administration of the estates, and failed to comply with previous court orders made. Justice Sheard found that this conduct was worthy of sanction and can be characterized as reprehensible and outrageous. As such, an elevated costs award was appropriate. Justice Sheard ultimately decided that the applicant was entitled to be fully indemnified for the costs she incurred in respect of the application, with the respondents liable to pay the majority of these costs (and the balance to be paid from the assets of the estates).

This costs decision is an excellent reminder of the importance of acting reasonably in estate litigation. If any party, including an estate trustee, chooses to act unreasonably then they may pay for it in the end.

Thanks for reading!

Arielle Di Iulio

09 Mar

Plan Well Guide’s Toolkit for Legal Practitioners: Helping You Help Your Clients Plan for Incapacity

Arielle Di Iulio Capacity, Elder Law, Health / Medical, Power of Attorney Tags: , , , , , 0 Comments

Last year, my colleague Nick Esterbauer blogged about the Plan Well Guide – a free online tool to assist individuals with their advance care planning. An advance care plan sets out how a person wishes to be treated during a serious illness or health crisis. The Plan Well Guide helps users to create a ‘Dear Doctor’ Letter explaining their values and preferences with respect to their future medical care, which can then be given to their physician and substitute decision-makers to ensure that their wishes are known. For a more in-depth look at the Plan Well Guide and the process of creating a Dear Doctor letter, you can read Nick’s blog here.

Recently, the Plan Well Guide launched a new toolkit designed for legal practitioners. This free online toolkit is intended to help lawyers help their clients become better prepared for future serious illness and incapacitation. In addition to various educational resources for both lawyers and their clients, the toolkit includes:

  • a sample power of attorney for personal care;
  • a sample advanced health care directive;
  • a sample personal directive;
  • a sample ‘Dear Doctor’ letter; and
  • a step-by-step guide on how lawyers can incorporate the Plan Well Guide into their practice.

Of course, the sample legal documents contained in the toolkit should be amended to reflect the client’s specific set of circumstances and the laws of the applicable jurisdiction.

What I like most about the Plan Well Guide’s new toolkit is that it highlights the importance of a multidisciplinary approach to advance care planning. An effective advance care plan – that is, a plan which facilitates medical substitute decision-making that is consistent with the incapable person’s actual values and preferences – depends on the collaborative efforts of a person’s lawyers, doctors, and substitute decision-makers. The Plan Well Guide and its new toolkit offer accessible ways for legal professionals, health care professionals, and their clients/patients to coordinate their efforts to make serious illness planning more effective. If a lawyer is interested in improving the quality of future medical decision-making and patient outcomes for their clients, the Plan Well Guide’s toolkit for legal practitioners is certainly worth looking into.

Thanks for reading!

Arielle Di Iulio

08 Mar

Dying with a Double Life and Secret Wife

Arielle Di Iulio Common Law Spouses, Estate Litigation, Intestacy, Support After Death Tags: , , , , , , 0 Comments

Living a double life can be complicated. A double life that involves a secret second family can be especially complicated, both during the deceiver’s life and after their death. How is the deceiver’s estate to be divided as between his first family and his secret second family? What rights does the unmarried secret spouse in particular have in the deceased’s estate? The Supreme Court of British Columbia addresses these issues in its recent decision of Boughton v Widner Estate, 2021 BCSC 325.

Boughton concerns the Estate of Michael Gregory Widern. Michael was a known member of the infamous Hells Angels and died on March 9, 2017 by homicide. Michael left behind his married spouse, Sabrina, and their two children. He also left behind Sara – whom he had been seeing for roughly eight years unbeknownst to his wife – and their two children. While Michael was alive he spent time with both of his families, alternating between the two households. Sabrina had no knowledge of Michael’s second family until after he passed away.

Michael died without a last will and testament, leaving his estate to be distributed in accordance with the intestacy provisions set out in British Columbia’s Wills, Estates and Successions Act (“WESA”). In Boughton, Sara brought a claim against Michael’s estate seeking, amongst other things, a declaration that she is a spouse of Michael for the purposes of the WESA and is consequently entitled to a share of his estate. As such, one of the issues to be dealt with by the court was whether the WESA permits the division of an estate as between two individuals who were in concurrent, subsisting spousal relationships with the deceased at the time of death.

The honourable Justice Jennifer Duncan declared that Sara was a spouse for the purposes of the WESA. Section 2 of the WESA provides that two persons are spouses of each other if immediately before the deceased person’s death they were married to each other or they had lived together in a marriage-like relationship for at least two years. Justice Duncan found that on his death, Michael was still married to Sabrina and was also in a marriage-like relationship with Sara. Section 22 of the WESA states that if two or more persons are entitled to a spousal share of an intestate estate, they share the spousal share in the portions to which they agree or as determined by the court. Justice Duncan reasoned that this section clearly provides for more than one spousal share in the estate of an intestate. She also analyzed the legislative intent of section 22 and found that the intention of the Legislature was to continue to provide for individuals in a marriage-like relationship with an individual who was still married to someone else at the time of death. On this basis, Justice Duncan held that Sara was entitled to a declaration that she is a spouse of Michael as that term is defined in the WESA. It was further ordered that Sara and Sabrina were each entitled to half of Michael’s estate.

If this case were decided under Ontario law we would likely see a different result. Ontario’s Succession Law Reform Act (“SLRA”) has no provision equivalent to section 22 of the WESA which recognizes a “spousal share” in an intestate estate for someone other than the deceased’s married spouse. For purposes of intestate succession in Ontario, “spouse” has the same meaning as in section 1 of the Family Law Act (“FLA”), which is in essence a married person. It follows that an unmarried secret spouse would likely have no statutory entitlement to share in their deceased spouse’s estate. However, a secret spouse in Ontario could potentially claim an interest in their spouse’s estate pursuant to the dependent support provisions contained in Part V of the SLRA. In Part V, “spouse” has the same meaning as in section 29 of the FLA, which defines “spouse” more broadly as including persons not married to each other and have cohabited continuously for a period of not less than three years, or have children together and are in a relationship of some permanence. If a secret spouse meets this definition, they may still have a right to a portion of their deceased spouse’s estate by way of a dependent support claim.

Thanks for reading!

Arielle Di Iulio

17 Dec

Cross-examination: Pursue it or Lose it

Arielle Di Iulio Litigation Tags: , , , , , 0 Comments

A party has a prima facie right to test the evidence given by a witness through cross-examination. This is a critical means to building a body of evidence to support one’s case. However, if a party does not make adequate efforts to avail themselves of the opportunity to cross-examine, they may lose this benefit. The Honourable Madam Justice Sylvia Corthorn of the Ontario Superior Court of Justice addresses this issue in her recent decision in Clayton v. Clayton et al., 2020 ONSC 7592.

Clayton involves an application to remove the trustees of two trusts that form part of an estate. The applicant in this case brought a motion for an order striking the affidavit sworn by one of the respondents and trustees, Shirley. Pursuant to a notice of cross-examination, Shirley was to be cross-examined on her affidavit on November 22, 2019.  However, prior to the commencement of cross-examinations, Shirley’s counsel advised that she would not be produced for cross-examination due to concerns about her mental capacity. Counsel agreed that an assessment of Shirley’s capacity to be cross-examined was necessary and consequently, she was not cross-examined. The applicant did not obtain a certificate of non-attendance with respect to Shirley’s cross-examination and no notice to cross-examine Shirley on a subsequent date was served.

The geriatric assessment of Shirley was scheduled for May 2020 and then postponed to the fall of 2020 due to COVID-19. There was no evidence before the court as to whether this assessment was ever done. The hearing of the application was likewise delayed as a result of the pandemic. The application is currently scheduled to be heard in January 2021.

At no point after November 2019 did the applicant pursue cross-examination of Shirley. When the application returned to court in September 2020, the applicant took the position that Shirley’s affidavit cannot be used on the application in light of her supposed incapacity and the respondents’ alleged refusal to permit cross-examination. The applicant then brought a motion requesting that the affidavit be struck in its entirety on the grounds that the admission of this evidence would be prejudicial to the fairness of the hearing and constitute an abuse of process.

Justice Corthorn dismissed the applicant’s motion. She found that he did not take any steps, prior to bringing this motion, to seek the assistance of the court in determining the steps required to address concerns with respect to Shirley’s affidavit and whether she could be cross-examined. She also considered that the application had already been adjourned three times and that the applicant had not requested a further adjournment to permit cross-examination of Shirley. Justice Corthorn affirmed that the court has discretion to prevent or limit cross-examination where it is in the interests of justice to do so. She decided that in this case, it is fair to both the process and the parties to admit Shirley’s affidavit and leave the issue of the weight to be given to her evidence to be determined with the benefit of the complete record. The parties would also have the opportunity to make submissions with respect to the weight to be given to Shirley’s evidence, and this will permit the court to control the process and avoid an abuse of it.

Thanks for reading!

Arielle Di Iulio

15 Dec

What Happens When Substitute Decision Makers Cannot Agree?

Arielle Di Iulio Uncategorized Tags: , , , , , , 0 Comments

The highly anticipated COVID-19 vaccine is being rolled out in Ontario, with some of the first shots having already been administered yesterday. The University Health Network in Toronto and The Ottawa Hospital will be the first to administer the vaccine. Frontline healthcare workers in hospitals, long-term care homes, and other high-risk settings will be given priority. Vaccinations are expected to expand to residents in long-term care homes, home care patients with chronic conditions, and First Nation communities and urban Indigenous populations later in the winter of 2021. The province has not said when vaccines will become available for every Ontarian who wishes to be immunized. However, once available, the province confirms that vaccines will not be mandated but strongly encouraged.

The mass administration of the COVID-19 vaccine could be a real game changer in the battle against coronavirus. However, a recent public opinion poll conducted by Maru Blue shows that only one-third of Canadians would take the vaccine immediately, about half of Canadians would bide their time to assess its safety or use, and the rest have no intention of getting the shot at all. So it appears that Canadians are somewhat divided on the question of whether and when to get vaccinated.

Given the difference of opinion regarding this new vaccine, it is not inconceivable that multiple substitute-decision makers (SDMs) could disagree on whether to give or refuse consent to the shot on behalf of an incapable person. How would such a disagreement be resolved?

First, it is important to note that Ontario’s capacity legislation sets out a hierarchy of SDMs.  Pursuant to section 20 of the Health Care Consent Act (HCCA), the guardian of the person is at the top of this hierarchy, followed by an attorney for personal care, representative appointed by the Consent and Capacity Board (CCB), spouse or partner, parent or children, siblings, any other relatives, and lastly the Public Guardian and Trustee (PGT). The decision of the highest ranking SDM will prevail over dissenting opinions from those who are lower on the hierarchy.

If there are multiple equally ranked SDMs acting with respect to a particular decision, they all have to be in agreement – the majority does not rule. If the SDMs fail to reach a consensus, any of the SDMs could apply to the CCB to try and be appointed the sole representative to make the decision.  However, this option is not available where the incapable person already has a guardian of person or attorney for personal care. Another option is for the SDMs to attend mediation to try to come to an agreement. If mediation is not successful, the health practitioner must turn to the PGT for a decision. Section 20(6) of the HCCA states that the PGT is required to act and cannot decline to act in this situation.

Thanks for reading!

Arielle Di Iulio

14 Dec

A Long-Lost Child’s Right to Inherit From Their Parent’s Estate

Arielle Di Iulio In the News, Wills Tags: , , , , , , , , 0 Comments

On November 25, 2020, the beautiful game lost one of its greatest legends, Diego Maradona. The famous Argentine footballer passed away at the young age of 60 years old, leaving behind millions of admirers around the world to mourn his death.

Maradona also left behind many children. In addition to his eight recognized children, there are supposedly at least two others claiming to be his offspring.[1] The net worth of Maradona’s estate remains to be determined, as does the question of whether he made a Will. Nevertheless, should any opportunistic long-lost children succeed in proving paternity, they may have a claim to a share of Maradona’s estate.

In Ontario, a long-lost child could likewise benefit from their parent’s estate. A child has a statutory entitlement to a share of their parent’s estate where the parent dies without a Will. Pursuant to Part II of the Succession law Reform Act, those who have a right to inherit on an intestacy include the surviving spouse and the “issue”, or descendants, of the deceased. [2] The courts have confirmed that for the purposes of intestate succession, descendants are restricted to blood relatives (with the exception of adopted children, who have the same rights as a biological child).[3] Thus, any purported child seeking an interest in an intestate estate must prove that they are the biological child of the deceased. If an illegitimate child can establish parentage, then they are entitled to share equally in an intestate estate with those born inside of marriage.

In the case of a testate estate, an alleged child of a deceased person may have a right to any bequest made in the deceased’s Will that is based on parentage. For example, a Will may provide for a gift to the testator’s “issue” or “children”. Unless a contrary intention is included in the Will, any person born outside of marriage who successfully proves parentage could be considered a part of the class of “children” or “issue” entitled to the gift.

Those purporting to be a child of the deceased can prove their familial relationship by presenting documentation like an Ontario Birth Certificate from a Vital Statistics Agency. If this documentation is not available or further evidence of kinship is requested by the estate trustee, DNA testing can also be used. Courts have recognized DNA testing as a reliable, efficient, and effective method of establishing parenthood in probate matters.[4]  Section 17.2 of the Children’s Law Reform Act and section 105(2) of the Courts of Justice Act grant Ontario courts the jurisdiction to order DNA testing to assist in determining a person’s parentage.[5]

Thanks for reading!

Arielle Di Iulio

[1] Joshua Nevett. Maradona: Why the football icon’s inheritance could be messy (December 6, 2020), online:  BBC News <https://www.bbc.com/news/world-latin-america-55173630>

[2] Succession Law Reform Act, R.S.O. 1990, c. S.26, s. 44 to 49 <https://www.ontario.ca/laws/statute/90s26#BK84>

[3] Peters Estate (Re), 2015 ABQB 168 (CanLII), <http://canlii.ca/t/ggmgg>; Child, Youth and Family Services Act 2017, S.O. 2017, c. 14, Sched. 1, s. 217 <https://www.ontario.ca/laws/statute/17c14#BK297>

[4] Proulx v. Kelly, 2010 ONSC 5817 (CanLII), <http://canlii.ca/t/2dkmz>

[5] Children’s Law Reform Act, R.S.O. 1990, c. C.12, s. 17.2 <https://www.ontario.ca/laws/statute/90c12#BK23>; Courts of Justice Act, R.S.O. 1990, c. C.43, s.105(2) <https://www.ontario.ca/laws/statute/90c43#BK146>

17 Sep

Advance Care Planning for COVID-19

Arielle Di Iulio Capacity, General Interest, Health / Medical, In the News, Power of Attorney Tags: , , 0 Comments

The looming threat of COVID-19 has caused some people to see their own mortality in a new and clearer light. In addition to the existential and/or religious contemplation that may arise from this reality, individuals are also turning their minds to more practical end of life planning.

An end of life plan, also referred to as an advance care plan (“ACP”), sets out how an individual would like to be cared for in the final months of their life. In Ontario, an ACP will usually include a Power of Attorney for Personal Care designating a trusted person(s) to make healthcare decisions on behalf of an individual in the event of their incapacity.

An ACP may also include an advance directive, or “living will”, which is a written statement of wishes about future care. Unlike a Power of Attorney, advance directives are not referenced in Ontario’s health care legislation and are not a legal document. However, Ontario law does recognize that wishes and preferences regarding future care choices that are expressed when mentally capable ought to be respected and followed, if possible.[1] Thus, a Power of Attorney or other substitute decision maker is expected to abide by an advance directive to the extent possible. This makes advance directives a useful tool for anyone seeking greater control over the medical treatment they receive while incapable.

Interestingly, a COVID-19-specific advance directive has emerged in the United States. Dr. Andrea Kittrell, a head and neck surgeon practicing in Virginia, established an organization called Save Other Souls (“SOS”) whose objective is to assist individuals with their advance care planning as it pertains to COVID-19-related medical treatment. Specifically, SOS provides guidance on preparing a document that has been coined the “COVID-19 SOS Directive”. This document is a type of altruistic advance directive wherein a person expresses their wish to defer lifesaving critical care hospital placement, medication, and/or equipment to another patient in need during a declared emergency and where there are insufficient health care resources to go around.

Since the COVID-19 SOS Directive was developed for use in jurisdictions outside of Ontario, I will not opine on the effectiveness of this particular document. However, the document is a reminder of the importance of considering one’s own ACP in light of the global pandemic. For information on COVID-19-related advance care planning for Canadians, you can check out Dying With Dignity Canada’s COVID-19 ACP Toolkit. Another helpful resource is the Plan Well Guide which is discussed in Nick Esterbauer’s blog here.

Thanks for reading!

Arielle Di Iulio

[1] See Malette v. Shulman, 1990 CanLII 6868 (ON CA), http://canlii.ca/t/g1757; and Fleming v. Reid, 1991 CanLII 2728 (ON CA), http://canlii.ca/t/1p78q

15 Sep

Recording the Remote Execution of a Will

Arielle Di Iulio Wills Tags: , , 0 Comments

In response to the COVID-19 pandemic, the Ontario government enacted O. Reg. 129/20 (the “Regulation”), which allows for the remote execution of wills and powers of attorney using video conferencing and counterpart. The Regulation was effective as of April 22, 2020 and was recently extended until September 22, 2020.

In light of the above, we can presume that many of the wills executed over the past five months were done using video conferencing. According to the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020, the Regulation may be extended by further orders up to July 24, 2021. Thus, it is possible that the remote execution of wills may continue in the weeks to come.

As with all client meetings, the execution of a will using video conferencing should be well-documented. In most cases, the attendees of a video conference have the option to record both the audio and visual of the meeting. Thus, those who seek a more comprehensive account of the virtual meeting might consider recording the video conference. For information on the benefits and risks of recording client meetings using virtual communication technologies, such as a will signing by video conference, you can visit the Law Society’s COVID-19 Practice Management FAQs.

In the event of a challenge to the will, any video recording of the will signing that may exist will likely be producible documentation. This recording has the potential to be a crucial piece of evidence in the dispute. First, the recording can be used to show that the requirements for due execution of the will have been complied with. To the extent that the testator commented on the dispositions made in their will during the will signing meeting, the video recording may also assist in confirming the testator’s wishes and providing a rationale for their testamentary choices. A video recording could also help demonstrate that the testator was of sound mind at the time they signed their will.

However, it is also important to note that any video recording of the will signing will probably be heavily scrutinized by the person challenging the will. Any behaviour displayed by the testator that could be perceived as hesitation, uncertainty, forgetfulness, or misunderstanding could potentially be used to undermine the validity of the will. As such, depending on the idiosyncrasies of the testator, and how they react to being on camera, retaining a video record of the execution of the will might not be especially helpful in warding off challenges to the will.

Thanks for reading!

Arielle Di Iulio

14 Sep

Adopting Remote Processes, Adapting to Win

Arielle Di Iulio In the News, Litigation Tags: , 0 Comments

While remote communication has become the norm for many, there continues to be resistance to using technology in the legal sphere. A recent decision by Justice Myers of the Ontario Superior Court of Justice suggests that, in 2020, the court will not easily acquiesce to such resistance.

In Arconti v. Smith, the plaintiffs sued their former lawyer and his partner for negligence, breaches of duty, and other causes of action in connection with the lawyer’s representation of the plaintiffs in a securities fraud case. In January 2020, Justice Myers ruled that a focused mini-trial was required to determine if summary judgment ought to be granted with respect to one of the issues. In a later case conference, he agreed with the plaintiffs that they should be entitled to further examination for discovery of the defendants prior to the mini-trial. An examination of one of the defendants was then scheduled for May 6, 2020.

However, at a case conference held on May 1, 2020, counsel for the plaintiffs advised that his clients did not want the examination of the defendant to proceed by video conference. He argued that because in-person examination is not possible due to the implementation of social distancing in response to the pandemic, the proceedings should be delayed until the requirement for social distancing is ended. The plaintiffs objected to a videoconference examination on the bases that:

  1. they need to be with their counsel to assist with documents and facts during the examination;
  2. it is more difficult to assess a witness’s demeanour remotely;
  3. the lack of physical presence in a neutral setting deprives the occasion of solemnity and a morally persuasive environment; and
  4. the plaintiffs do not trust the defendants not to engage in sleight of hand to abuse the process.

In his case conference endorsement, 2020 ONSC 2782 (the “Decision”), Justice Myers dealt with the issue of whether the plaintiffs ought to be required to conduct an examination out-of-court by video conference rather than in person. He ultimately held that if the plaintiffs wish to take advantage of the opportunity to examine the defendant out-of-court, before the upcoming mini-trial, they must do so remotely by video conference. The general sentiment of Justice Myer’s reasons is captured in paragraph 19 of the Decision:

“In my view, the simplest answer to this issue is, “It’s 2020”. We no longer record evidence using quill and ink. In fact, we apparently do not even teach children to use cursive writing in all schools anymore. We now have the technological ability to communicate remotely effectively. Using it is more efficient and far less costly than personal attendance. We should not be going back.”

Justice Myers further explained that the use of readily available technology is a necessary component of a civil litigator’s basic skillset. Like other tools at a lawyer’s disposal, technology does not produce perfection and parties ought to remain vigilant to the risks and shortcomings associated with remote processes. However, one’s own unfamiliarity with the technology is not a good basis to decline to use available technology, particularly where remote processes can help move a proceeding forward more efficiently and affordably.

As the Decision suggests, justice will not be served by sitting and waiting for the pandemic to pass. We must learn to accept our circumstances and adapt to the new normal. As Max McKeown wrote, “adaptability is about the powerful difference between adapting to cope and adapting to win.” It is becoming increasingly evident that in today’s legal system, adopting technological processes is adapting to win.

Thanks for reading!

Arielle Di Iulio

18 Jun

Disclaiming an Inheritance for Another’s Benefit

Arielle Di Iulio Estate & Trust, General Interest, In the News, Wills Tags: , , , , , 0 Comments

The last will and testament of the gunman responsible for Nova Scotia’s mass shooting in April 2020 was recently made public. The gunman’s will names his common law spouse as the executor of his estate, estimated to be worth around $1.2 million. However, the gunman’s spouse has renounced her right to be executor of his estate and it is now being administered by the Public Trustee. It was also rumoured that the spouse had renounced any interest she may have had in the gunman’s sizable estate.

Whether the gunman’s partner did in fact relinquish any inheritance remains to be confirmed. However, there are a multitude of reasons why someone may choose to waive their right to an inheritance, including:

  • Emotional grounds;
  • Personal moral or ethical grounds;
  • To avoid taking possession of an undesirable or costly asset, such as real property that requires significant repairs or maintenance;
  • To avoid subjecting assets to potential creditors if the beneficiary is on the brink of bankruptcy or involved in a lawsuit; or
  • To allow the asset to pass to a secondary beneficiary.

For an overview of what is required to properly disclaim an inheritance, you can read Ian Hull’s blog here.

As shown by the above list, even where a beneficiary does not plan to benefit personally from an inheritance they may still be interested in what happens to that inheritance. In such situations, the beneficiary may want to think carefully about whether disclaiming their inheritance is the best option.

It is important to note that a person can only disclaim a gift if they have not yet benefited from the assets and, once disclaimed, that person has no control over the assets. In other words, a beneficiary who renounces a gift should not have anything to do with those assets either before or after they have been disclaimed. This also means that the beneficiary should not have any say in who receives the inheritance.

If a person wants to disclaim their inheritance in order for it to pass to a secondary beneficiary, they should confirm whether the deceased’s will or intestacy laws, as applicable, provide for that outcome. If it does not, or if the person wishes to direct their inheritance to some other individual or charity, there is another option: they can accept the inheritance and give some or all of the assets to whomever they choose. Depending on the beneficiary’s particular goals and circumstances, accepting an inheritance and distributing the assets as they see fit may be preferable to disclaiming the assets.

Thanks for reading!

Arielle Di Iulio

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