Author: Doreen So

08 Jul

OPGT as Temporary Guardian: The Public Guardian and Trustee v. Willis

Doreen So General Interest, In the News, Litigation Tags: , , , , , 0 Comments

I blogged on the Ontario Public Guardian and Trustee’s Guardianship Investigations Unit, and the OPGT power to bring an application for a temporary guardianship under certain circumstances earlier this week.  In The Public Guardian and Trustee v. Willis et al, 2020 ONSC 3660, the OPGT brought an application for Andrew Willis to pass his accounts with respect to his management of his mother’s Ruth Irene Willis’ property, and for an order that the OPGT be appointed as Mrs. Willis’ temporary guardian of property which would replace Andrew Willis as Mrs. Willis’ POA.

Mrs. Willis suffers from moderate to severe dementia and she lives in MacKenzie Place Nursing Home.  Mrs. Willis is a widow and Andrew is her only living child.  Mrs. Willis’ only asset is her home in Richmond Hill.  There are four mortgages registered against the home, which total $3.35M.  However, according to the last appraisal, the home was only estimated to be worth $2.8M after various renovations are complete.  The extent of the mortgages and Andrew’s role in arranging them, and as a personal guarantor in the event of Mrs. Willis’ default, was the basis for the OPGT’s accounting request.

What led to the OPGT to seek to replace Andrew as Mrs. Willis’ substitute decision maker was serious enough to convince the Court:

  • Andrew was found to be consumed by the home renovations when Mrs. Willis’ basic living expenses at the nursing home were left unpaid. The Court was particularly concerned that,

“Andrew does not do what he says he will do. He made many promises to MacKenzie Place to pay his mother’s arrears but did not. There are still arrears owing of $15,000. Andrew has not made his mother’s needs a priority. As a result, his mother is living in a ward with other residents in a facility which has experienced COVID-19 cases and with minimal services. Mrs. Willis’ quality of life must be improved.”

  • Willis also owes unpaid taxes to the Canada Revenue Agency. Her only bank account was found to have been used for Andrew’s personal expenses, such as his Granite Club fees, groceries, gas, alcohol, hockey equipment and his child support payments before the account was frozen by RBC.
  • Despite Andrew’s efforts in listing the property for sale, the only offer that Andrew had received was less than the total mortgages.
  • Andrew had also failed to make an application for survivor’s pension to increase Mrs. Willis’ monthly income.

The Court ultimately gave Andrew another 1.5 months to sell the house as Mrs. Willis’ attorney for property before the OPGT takes over regardless of whether the home has sold.  If you are interested in learning more about Willis, click here for Rebecca Rauws’ blog on the accounting aspects of this case.

Thanks for reading!

Doreen So

06 Jul

Investigating Britney’s Allegations in Ontario: the OPGT Investigations Unit

Doreen So General Interest, In the News, Litigation, Uncategorized Tags: , , , , , 0 Comments

Britney Spears’ recent statement to the Court on the abuses of her conservatorship has stunned the world.  Spears spoke of being abused and traumatized by her conservators.  Spears gave examples of being forced to do a concert tour against her wishes and under threat of breach of contract; and of being prevented from marrying and having more children of her own.

Spears’ father, who is at the center of this controversy as one of Spears’ conservators for the last 13 years, has filed his own petition for the Court to investigate the allegations in Spears’ statement.  Spears’ father has also expressed criticism over Spears’ conservator of person care, Jodi Montgomery, to which Ms. Montgomery has made the following statement according to Variety,

“…conservatorships in California are subject to the strictest laws in the nation to protect against any potential abuses, including a licensing requirement for all professional fiduciaries. Ms. Montgomery is a licensed private professional fiduciary who, unlike family members who serve as conservators, is required to follow a Code of Ethics…Private professional fiduciaries often serve in cases as a neutral decision-maker when there are complex family dynamics, as in this case…

Because Ms. Montgomery does not have any power or authority over the conservatorship of the estate, every expenditure made by Ms. Montgomery for Britney has had to be first approved by Jamie Spears as the conservator of the estate…Practically speaking, since everything costs money, no expenditures can happen without going through Mr. Spears and Mr. Spears approving them.”

There is similar provision in Ontario for how guardians of property are required to work with the guardians of person.  Section 32(1.2) of the Ontario Substitute Decisions Act, 1992 provides that, “A guardian shall manage a person’s property in a manner consistent with decisions concerning the person’s personal care that are made by the person who has authority to make those decisions.”

File Stack and Magnifying Glass

The Ontario Substitute Decisions Act, 1992 also imposes a positive duty on the Public Guardian and Trustee (“OPGT“) to investigate “any allegation that a person is incapable of managing property or personal care and that serious adverse effects are occurring or may occur as a result” (see sections 27 and 62 of the Act).  According to the OPGT,

“With respect to finances, “serious adverse effects” includes “loss of a significant part of one’s property or failure to provide the necessities of life for oneself or dependents”. Incapacity may, for example, lead a person to give large sums of money away to strangers or to face loss of their home for failure to pay taxes. An incapable person may face starvation or eviction if they cannot look after paying rent or buying food.

With respect to personal welfare, “serious adverse effects” includes “serious illness or injury, or deprivation of liberty and personal security”. Incapacity may, for example, result in a person being unable to remove themselves from a very dangerous situation or to take steps to stop physical or sexual abuse.

[…]

Throughout the investigation, the investigator tries to facilitate solutions that will serve to protect the person without the need for a formal court process. Respect for the dignity of the person and objectivity about the circumstances are paramount considerations in every investigation.”

If a formal court process is found to be necessary, the OPGT will make an application to the Court for a temporary guardianship, and the OPGT can also apply to make the temporary guardianship permanent.  The OPGT is a branch of the Ontario Ministry of Attorney General, and they are meant to provide Ontarians with protective safeguards.  While this specific investigative process is not technically meant to terminate an existing guardianship, it can temporarily or even permanently place the OPGT in charge as guardian of property and person.

Thanks for reading!

Doreen So

05 Jul

Terminating Guardianships: Zheng v. Zheng, 2012 ONSC 3045

Doreen So General Interest, In the News, Litigation Tags: , , , , , 0 Comments

Britney Spears has been the subject of worldwide discussion for most of her life.  The attention on Spears is once again at its height after Spears gave evidence in Court to contest and lay bare the abuses that she has suffered in the course of her 13-year conservatorship. You can read a slightly edited transcript of Spears’ 24-minute statement here.

Spears has been under a conservatorship ordered by the Los Angeles Superior Court since 2008.  The order was made following a number of publicly scandalous events such as the time when Spears was photographed driving with her baby on her lap, and the time when she was photographed shaving her own head.  Spears’ father, Jamie Spears, and a lawyer were named as her conservators which gave them the authority to make decisions about Spears’ property and health.  Spears’ conservatorship was routinely back before the Court and extensions of the arrangement were granted throughout its 13-year history.  A full timeline can be found here.

Recently, in 2019, Jamie Spears sought to extend the conservatorship across multiple states so that he would be similarly authorized to deal with Spears and her property in Louisiana, Hawaii, and Florida.  That same year, Jamie Spears stepped down as the primary conservator after criticisms from Spears’ 14-year old son.  In 2020, Spears sought to remove Jamie Spears as one of her conservators all together.  Fast forward to now, Spears tells Los Angeles probate Judge Brenda Penny that she didn’t know she could petition to end the conservatorship, and that she wanted it to end without being evaluatedDays later, on June 30th, an old application to remove Jamie Spears was dismissed and a wealth management company, Bessemer Trust, was appointed to act as a co-conservator with Jamie Spears, although Spears is not precluded from bringing new applications in the future.

Here in Ontario, our version of a conservatorship is known as a guardianship under the Substitute Decisions Act, 1992.  A petition to terminate a guardianship can be brought by motion under section 28 of the Act.  This was done in one instance by Y. Zheng in Zheng v. ZhengZheng v. Zheng, 2012 ONSC 3045, is a Division Court decision by Justice Wilton-Siegel which granted Zheng leave to appeal an order that she be assessed as a part of her motion to terminate her guardianship.

In Zheng, Zheng was found to be incapable of managing property and personal care in 2007 and Zheng’s brother became appointed as her guardian.  When Zheng applied to terminate the guardianship in 2012, Zheng submitted four current assessments, all of which found Zheng to be capable.  The assessments were done by a qualified assessor under the Act, a staff psychiatrist at CAMH, and an in-home occupational therapist.  The psychiatrist, in particular, had found that Zheng is currently capable with respect to treatment of her psychiatric condition, which was diagnosed as a psychotic disorder due to a head injury.

Zheng’s brother opposed the termination.  Zheng’s brother had the assessments reviewed by the same neuro-psychologist who assessed Zheng in his 2007 guardianship application and concerns were raised about the sufficiency of these new assessments.  Thereafter, Zheng retained her own neuro-psychologist to do conduct the same review, and Zheng’s neuro-psychologist came to the opposite conclusion in Zheng’s support.  Given the conflicting review, Zheng’s brother brought a motion for Zheng to undergo a further assessment by an assessor of his choice. This was ordered by Justice B. O’Marra, and leave to appeal this order was granted by Justice Wilton-Siegel.  Unfortunately for us, there does not appear to be any further reported decisions in this matter and I do not know if the assessment appeal or the broader motion to terminate was pursued further.

At the end of the day, I hope Spears’ conservatorship will be resolved to Spears’ satisfaction.  It may very well be that an evaluation of some sort will be required on Spears’ part but, like Zheng, perhaps Spears’ evaluations can be done on her own terms.

Thanks for reading!

Doreen So

08 Apr

Incapacity to Sue under section 7 of the Limitations Act, 2002

Doreen So Capacity, Continuing Legal Education, Estate & Trust, Estate Litigation, Ethical Issues, Uncategorized Tags: , , , , 0 Comments

The basic limitation period under section 4 of the Limitations Act, 2002 provides that a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.  However, pursuant to section 7(1) of the Act,  the “clock” does not run when the person with the claim,

(a)  is incapable of commencing a proceeding in respect of the claim because of his or her physical, mental or psychological condition; and

(b)  is not represented by a litigation guardian in relation to the claim.

A person is also presumed to be capable of commencing a proceeding in respect of a claim at all time unless the contrary is proved (section 7(2)), although minors are dealt with separately under section 6 of the Act.

The issue of the plaintiff’s capacity to commence a proceeding in respect of his claim was considered at length by the Court of Appeal in Carmichael v. GlaxoSmithKline Inc., 2020 ONCA 447Carmichael is a tragic case involving the murder of the plaintiff’s 11 year old son.  The plaintiff strangled his son to death in 2004 when he was suffering from mental illness and psychotic delusions.  During this time, the plaintiff was also taking an anti-depressant that was manufactured by the defendant drug company.  The plaintiff was charged with murder and he was found to be not criminally responsible as a result of his mental disorder.  He later received an absolute discharge from the Ontario Review Board on December 2, 2009.  Nearly two years after that, the plaintiff commenced his claims against the drug company on October 5, 2011.

The defendant drug company brought a motion for summary judgment to dismiss the plaintiff’s claim as statute barred.  The motions judge dismissed the motion because he found that the plaintiff was incapable of commencing a proceeding because of his psychological condition until the day of his absolute discharge from the Ontario Review Board.  The Court of Appeal disagreed.

The Court of Appeal affirmed the use of the Huang/Hengeveld indicators as a list of non-exhaustive, objectively verifiable indicators of incapacity under section 7(1)(a) of the Act (see paras. 94-96):

  • a person’s ability to know or understand the minimum choices or decisions required to make them;
  • an appreciation of the consequences and effects of his or her choices or decisions;
  • an appreciation of the nature of the proceedings;
  • a person’s ability to choose and keep counsel;
  • a person’s ability to represent him or herself;
  • a person’s ability to distinguish between the relevant and irrelevant issues; and,
  • a person’s mistaken beliefs regarding the law or court procedures.

Moreover, the plaintiff’s physical, mental, or psychological condition must be the cause for the incapacity in order to meet section 7(1)(a).  The incapacity cannot arise from other sources, such as lack of sophistication, education, or cultural differences (para. 101).

The Court of Appeal ultimately found that the plaintiff had the capacity to sue the defendant drug company prior to his absolute discharge from the Ontario Review Board.  The Court disagreed with the motions judge’s view of the plaintiff’s expert evidence.  The plaintiff’s expert witness was criticized for never having prepared a capacity assessment before and for making conclusions that were unsupported by the evidence.  Rather,

“The evidence shows that Mr. Carmichael had several reasons for not suing GSK before December 2, 2009: he did not believe he had the necessary expert evidence until he received the genetic test from Dr. Lucire in October 2009; he was worried about repercussions if the Hospital decided that he was not taking responsibility for his actions; and he was concerned for his own and his family’s well-being. These are understandable reasons for not commencing a lawsuit. But in my view, none of these reasons, alone or together, prove that Mr. Carmichael was incapable of suing GSK until December 2, 2009 because of his psychological condition.” (para. 163)

Leave to appeal to the Supreme Court of Canada was denied last week.

Thanks for reading!

Doreen So

06 Apr

How to Deal with the Two-Year Limitation Period under Section 38(3) of the Trustee Act

Doreen So Estate Litigation, Executors and Trustees, Litigation, Uncategorized Tags: , , 0 Comments

Section 38 of the Trustee Act, except in cases of libel and slander, permits estate trustees to commence actions, on the deceased’s behalf, for all torts or injuries to the person or to the property of the deceased, and vice versa for those seeking to commence actions with respect to a wrong committed by a deceased person, so long as those claims are brought within two years of the deceased’s death.

The discoverability principles under the Limitations Act, 2002 are not applicable to toll the two-year limitation period under section 38(3) of the Trustee Act.  The application of this strict two-year limitation period is only mitigated by common law principles such as the doctrine of fraudulent concealment: Giroux Estate v. Trillium Health Centre, 2005 CanLII 1488 (ONCA), Bikur Cholim Jewish Volunteer Services v. Penna Estate, 2009 ONCA 196, and  Levesque v. Crampton Estate, 2017 ONCA 455.

Turning off an alarm clock

Recently, the Court of Appeal has considered limitations defences in three of its estates decisions so far in 2021.  One of them was the case of Zachariadis Estate v. Giannopoulos, 2021 ONCA 158, which I blogged about the other day.  The other two cases were Beaudoin Estate v. Campbellford Memorial Hospital, 2021 ONCA 57, and Hayward v. Hayward, 2021 ONCA 175.

The Beaudoin Estate is a medical malpractice claim by the Beaudoin Estate and the deceased’s wife, daughter, grandchildren as claimants under the Family Law Act.  The claimants alleged that the deceased was negligently diagnosed and treated when he was brought to the hospital’s emergency department which led to a delay in surgery that could have saved his life.  Mr. Beaudoin died on January 9, 2015 and the action as commenced on April 27, 2017 by way of a statement of claim.  The defendants asserted amongst other things in their statement of defence that the plaintiffs were statue barred pursuant to section 38(3) of the Trustee Act.  The plaintiffs then alleged that the hospital had fraudulently concealed their cause of action by failing to provide them with the deceased’s complete medical records when they were requested from the hospital, particularly certain CT imaging that was not provided to them until May, 2017.

The hospital then brought a rule 21.01(1)(a) motion to determine an issue of law raised by the pleadings so as to dispose of the action without trial.  It is important to note that, unlike a motion for summary judgment under Rule 20, no evidence is admissible on a motion under r. 21.01(1)(a), except with leave of a judge or on consent of the parties: r. 21.01(2)(a).

The Court of Appeal found that the motion judge erred in deciding the question of fraudulent concealment as a question of law under r. 21.01(2)(a).  Motions under r. 21.01(1)(a) are not the proper procedural vehicle for weighing evidence or making findings of fact (para. 30).  Similar to limitations issues under the Limitations Act, 2002 and the factual dispute surrounding the discovery of a claim, factual disputes surrounding the fraudulent concealment of a cause of action are more properly determined under a motion for summary judgment under Rule 20.  To do so would be unfair to a plaintiff when no evidence is admissible on such a motion except with leave of the court or on consent (para. 34).

In Hayward v. Hayward, the appellants raised as a ground of appeal that the trial judge erred by failing to find that the applicants were statute bared.  The Court of Appeal dismissed this ground of appeal on the basis that the defence was not raised by counsel regardless of the fact that the application did not have full pleadings like an action would.  The trial judge cannot be criticized for failing to respond to a defence that was not raised by counsel (para. 7).

Thanks for reading!

Doreen So

05 Apr

A Tale of Substantial Indemnity: Zachariadis Estate v. Giannopoulos

Doreen So Continuing Legal Education, Estate & Trust, Estate Litigation, Executors and Trustees, Litigation, Uncategorized Tags: , , 0 Comments

Dr. Zachariadis was divorced and estranged from his two daughters.  After his divorce, he began a romantic relationship with Ms. Giannopoulos.  They were together for almost twenty years as common law spouses until Dr. Zachariadis’ passing.  A year before his death, Dr. Zachariadis moved in with Ms. Giannopoulos and they had plans to marry.  Dr. Zachariadis transferred his medical practice to Ms. Giannopoulos’ son Aris, and he gave Ms. Giannopoulos a bank draft for $700,000.00 which she deposited into her own bank account.  He died within six months of that bank draft.

Dr. Zachariadis did not have a relationship with his daughters from his first marriage.  He was not invited to their weddings and he has never met his grandchildren.  Dr. Zachariadis died without a Will and his daughters became the estate trustees and beneficiaries of this Estate.  More than two years after Dr. Zachariadis’ passing, the daughters commenced an action against Ms. Giannopoulos to recover the payment of $700,000.00 to her on the basis of breach of trust, fraud at equity, conversion and unjust enrichment.  The action was dismissed on a motion of summary judgment by Justice Koehnen.  The appeal of Justice Koehnen’s decision, 2019 ONSC 6505, and his Honour’s costs order, 2020 ONSC 588, were also dismissed by the Court of Appeal, 2021 ONCA 158.

 

On the motion for summary judgment, Justice Koehnen found that the daughters were statute barred by section 38(3) of the Trustee Act in failing to commence their claims within two years of Dr. Zachariadis’ death.  The daughters failed to make out any fraudulent concealment on Ms. Giannopoulos’ part that would toll the operation of section 38(3).  Rather, Justice Koehnen found that there was no positive obligation on Ms. Giannopoulos’ part to tell the daughters about the payment, and he found that the payment was a gift in any event.  All of which were upheld by the Court of Appeal.

The Court of Appeal also found that there was no basis to interfere with Justice Koehnen’s costs order.  The Estate and the daughters, in their personal capacities, were ordered to pay Giannopoulos costs of $199,602.46 on a substantial indemnity scale.   The allegations of fraud in the underlying claim were unsupported and pursued to the end.  Justice Koehnen noted that the daughters could have pursued their claims on the basis of constructive trust and resulting trust without going so far as alleging fraud.  The daughters were also found to have taken unnecessarily aggressive steps and to have lengthened the proceeding due to their lack of cooperation with Ms. Giannopoulos’ counsel while Ms. Giannopoulos’ offers to settle were weighed against them.  Issue was also taken with the length of the daughters’ materials which were noted to be in violation of the page limits and other formatting requirements for facta.    Lastly, Justice Koehnen rejected the daughters’ argument that they were only pursuing the claim to ensure the due administration of the Estate and out of their concern that the Estate would have sufficient funds to pay its CRA liability. Interestingly enough, Justice Koehnen commented that, if that were the case, the daughters could have simply turned over the claim for CRA to pursue.

Thanks for reading!

Doreen So 

21 Jan

Nova Scotia: North America’s First “Opt-Out” Organ Donation Program

Doreen So Elder Law, Ethical Issues, General Interest, Health / Medical, In the News, News & Events, Uncategorized Tags: , , , 0 Comments

 

 

 

 

Who is ready for some good news?  Our firm has been interested in the issue of organ donation for some time now.  In 2012, we blogged about whether P.E.I. may be the first province in Canada to automatically enroll all of its people as organ donors until you chose to actively “opt-out”.  In 2014 and 2019, we blogged about Nova Scotia’s efforts in this regard.

Today, we are happy to report that this is now the new reality in Nova Scotia as of January 18, 2021.

The Human Organ Tissue and Donation Act was passed in April, 2019.  The Act, when it came into effect this Monday, meant that everyone in Nova Scotia are now considered to a potential organ donor until they “opt-out”.  This new “opt-out” system is the first of its kind in North America according to the Huffington Post. Ontario, like everywhere else, has an “opt-in” program where you have to actively sign up in order to be considered as a potential organ donor whereas the “opt-out” system is the opposite of that.  Nova Scotia is hoping that this will dramatically increase the rate of organ donation in the province like the 35% increase that has been noted in certain European countries.

In order to balance and respect the wishes of each individual, the director of the organ donation program has indicated that the known wishes of an individual will be respected even if he/she has not formally opted out.

This is an issue that is personally meaningful to me because of the statistics surrounding organ donors and organ recipients of colour.  People of colour tend to be underrepresented within “opt-in” systems of organ donation.  According to the Gift of Life, while race and ethnicity is not determinative of a match, a match is more likely to be found within one’s own ethnic community because of compatible blood types and tissue markers.  60% of patients waiting for a transplant are from communities of colour.  I, myself, am registered with the Gift of Life and I can attest to how easy and painless it was to sign up.

Thanks for reading!

Doreen So

 

19 Jan

PGT vs. Cherneyko, Part 2: Breaches of Fiduciary Duty in the Time of Covid

Doreen So Capacity, Ethical Issues, Executors and Trustees, Guardianship, Litigation, Power of Attorney Tags: , , , , , 0 Comments

Yesterday, I blogged on Public Guardian and Trustee v. Cherneyko et al, 2021 ONSC 107.  Today’s blog will focus on some of the breaches of fiduciary duty that were found by the Court.  For those who have not read yesterday’s blog, this is a case that involves Jean, a 90 year old woman, and Tina, the attorney for property, who was purportedly given a gift of $250,000.00 just days before Jean was hospitalized for acute delirium and progressive cognitive decline.

While the purported gift of $250,000.00 to Tina was found to be invalid, the Court went on to find that Tina was in breach of her fiduciary duty to Jean by accepting the money.  Tina was in breach because she knew that Jean was exhibiting signs of cognitive decline when they went to the bank.  In the Court’s view,

“a person acting in a fiduciary capacity for a person actively demonstrating moments of irrationality should be very cautious about any big financial moves that person claims they want to make in and around such periods of demonstrated incapacity. Even if Jean was clearly acting in a competent manner during the few hours she attended the CIBC with Tina on August 27, 2019, I agree with the submissions of the PGT it is no answer to an accusation of breach of duty to assert that an attorney was simply acting in accordance with the wishes of the grantor of the attorney. Tina should have proceeded with caution at that time. I find she did not exercise the appropriate degree of caution and good judgment given the circumstances about which she knew.” (para 42)

The Court also reiterated Justice Penny’s comments in Ontario (Public Guardian and Trustee) v. Harkins, [2011] O.J. No. 3313,  that a fiduciary’s first duty is to see to the best interest of the person regardless of what their stated wishes may be.  The Court was very critical of how a $250,000.00 gift to Tina could possibly benefit Jean, and expressed disapproval on how there was no evidence of any effort on Tina’s part in considering whether this money would better serve Jean if it was applied towards Jean’s in-home care instead of admitting Jean to a long term care home.

Of relevance to the unique circumstances that surround the care of others during Covid-19, the Court commented that,

“since March 2020 more than at any time in the past, any genuinely concerned person charged with caring for an elderly person in long term care would have at least considered the issue of taking whatever steps could be taken to remove the person from this situation if it was in any way possible.” (para. 47)

Instead, Tina allowed her adult son to move into Jean’s home, and she was found to be actively misusing Jean’s assets for her own and her family’s benefit which were additional breaches of her duties as fiduciary.  The Court also disapproved of how Tina did not take any steps to sell Jean’s house in order to maximize or preserve its value which, reading between the lines, seem to be a concern for the uncertainty in today’s markets.

Thanks for reading!  Stay safe!

Doreen So

 

18 Jan

PGT vs. Cherneyko, Part 1: Context and Timing is Everything

Doreen So Capacity, Elder Law, General Interest, Guardianship, Power of Attorney, Uncategorized Tags: , , , , , 0 Comments

Right from the start, 2021 is starting to look like it will be another extraordinary year of historic significance.  In the world of estates, trusts, and capacity litigation, there was a decision released on January 5th where serious breaches of fiduciary duty by an attorney for property were found and the PGT was ordered to take over.  The facts in Public Guardian and Trustee v. Cherneyko et al, 2021 ONSC 107, read like a law school case study and the reasons are worth noting.

Jean Cherneyko is a 90 year old woman.  Jean did not have any children of her own.  Her closest known relative was a niece in the US.  By the time of the PGT application, Jean was in a long term care home.  Prior to that, Jean lived alone in the same home that she had lived in since 1969.  Jean had a friend named Tina who she had known for about five years.  On August 15, 2019, Jean and Tina went to a lawyer’s office.  Jean named Tina as her attorney for property and personal care.  Jean also made a new Will which named Tina as the estate trustee and sole beneficiary of her estate.  A week or so later on August 27th, Jean and Tina went to Jean’s bank where $250,000.00 was transferred to Tina, and $195,329.50 was transferred to Jean’s niece.  Days later on August 31st, Jean was hospitalized for acute delirium and progressive cognitive decline.  During Jean’s admission, Tina noted that Jean had become increasingly confused over the prior few months and that Jean exhibited lethargic behaviour and complained of bodily soreness.  On September 1, 2019, Jean was diagnosed as being cognitively impaired.  Thereafter, Jean was transferred to long term care on October 1st based on Tina’s authorization as Jean’s attorney for property.  Short time after that, Tina’s son moved into Jean’s home and the PGT started to investigate in March, 2020 when the bank froze Jean’s accounts.

As a result of their investigation, the PGT brought an application to remove and replace Tina as Jean’s attorney for property.  The PGT also sought to set aside the $250,000.00 transfer to Tina and the return of various other sums that were received by Tina, which totalled approximately $350,000.00.

First, the Court found that the transfer of $250,000.00 to Tina was not a gift.  Tina failed to rebut the presumption of resulting trust for the gratuitous transfer.  Tina put forth evidence that there was a bank manager who spoke to Jean at the time of the transfer, and that the banker told Jean that she would have still have enough money to live after the transfers to Tina and the her niece.  This evidence was tendered through Tina’s affidavit without any direct evidence from the banker.  The Court disregarded Tina’s reliance on the banker’s involvement because Tina herself had deposed that Jean was having “moments of delirium and irrationality, her condition fluctuated between lucidity and confusion” in late August, 2019 (para. 31) and there was no evidence that the banker was informed.

The Court also seriously questioned whether any of the payments to Tina were truly what “Jean wanted” because Jean’s power of attorney for property clearly stated that there was to be no compensation.  The Court agreed with the PGT’s contention that Tina should not have paid herself $2,000.00 per month in compensation and on how that sum was unreasonably high given that Jean’s long term care costs were only $2,701.61 per month.

The value of the transfers, which was about a quarter of Jean’s net worth at the time, when considered in the context of Jean’s September 1st diagnosis also led the Court to find that Jean lacked capacity to gift Tina such a substantial sum.

The Court’s focus on context, timing, and proportionality as benchmarks in its analysis are very important for litigators and advisors to keep in mind.

Stayed tuned this week for Part 2 on Cherneyko: the breaches of fiduciary duty.

Thanks for reading,

Doreen So

 

22 Oct

Art Reunited: A Tale of an Indefinite Administration

Doreen So Disappointed Beneficiaries, General Interest, In the News, Uncategorized Tags: , , , , , 0 Comments

I’ve always loved a good story.  I found this story from CNN particularly intriguing as it has to do with art that was stolen by the Nazis, and how this stolen piece of art eventually made its way to the U.S. just like its family had done after the Nazis came to power.

According to the Mosse Art Restitution Project, Rudolf Mosse was a successful Jewish entrepreneur in the late 19th and early 20th century.  He had a large publishing and advertising business that included the publication of 130 newspapers and journals.  In 1900, Mosse purchased “Winter” directly from the artist, Gari Melchers, at the Great Berlin Art Exhibit.  Mosse later died in 1920.  The sole heir of his estate was his daughter, Felicia Lachmann-Mosse.  Thus, Felicia came to own Mosse’s extensive art collection.  Felicia and her husband also took over and ran one of Mosse’s most prominent publications, Berliner Tageblatt, and the newspaper was renowned for its criticism of Adolf Hilter.  When Hilter came to power in 1933, Felicia and her husband were forced to leave Germany.  According to CNN, “Winter” was amongst the art that was seized by the Nazis when the Mosse family fled their home but “Winter” was only one painting out of the hundreds of pieces of artwork that were stolen at the time.

Some of this art was auctioned off by the Nazis; some have simply disappeared.  “Winter” left the Nazis’ possession and changed hands a number of times before Barlett Arkell bought it, as an innocent purchaser who was none the wiser, from a prominent gallery in 1934.  Since 1934, “Winter” has been displayed in the Arkell Museum in Canajoharie, New York.  When the Museum discovered that “Winter” was taken illegally from its original owner, the painting was surrendered to the FBI in 2019.

“Winter” has since been reunited with the Mosse family by way of the Mosse Foundation which represents the remaining heirs of Felicia Lachmann-Mosse.  To date, the Mosse Art Restitution Project remains actively engaged in their work to recover all of the artwork that was stolen by the Nazis.

The Mosse Foundation and the Project have plans to auction “Winter” in the near future and it is estimated to be worth hundreds of thousands of dollars.

Talk about a never-ending estate administration.

Thanks for reading!

Doreen So

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