Author: Garrett Horrocks

08 Nov

Honouring the Fallen – 100 Years of Remembrance

Garrett Horrocks General Interest, In the News 0 Comments

November 11, 2018 marks the 100th anniversary of Armistice Day.  A century earlier, at the eleventh hour of the eleventh day of the eleventh month, hostilities in the First World War came to an end.  Commonly observed in Canada and across the Commonwealth as Remembrance Day, memorial services are held to honour and commemorate those who served and those who died in service of their country.

Some symbols and acts of remembrance used to mark this solemn day, and their significance, are universal across all of the Commonwealth.  The poppy, for example, is a familiar emblem of remembrance in Canada and abroad.  Those of us who recall the poem “In Flanders Fields” by Canadian physician John McCrae may also credit it with the adoption of the poppy as a symbol of remembrance.

Fewer of us are likely aware that the custom of wearing a poppy should instead be credited to Moina Michael, a professor at the University of Georgia.  After the end of the First World War, Michael took inspiration from the well-known opening verse of McCrae’s poem and conceived the idea of selling silk poppies to raise funds to assist disabled veterans.  The practice was subsequently adopted by veterans’ groups in other nations including in Canada.  The Royal Canadian Legion’s Poppy Fund continues to provide financial assistance and support for Canadian veterans.

Canada also retains certain traditions that are unique to its celebration of remembrance.  The selection of a Silver Cross Mother is one such tradition.  This tradition is named for the Silver Cross, a medal historically awarded to the mother or next-of-kin of any member of the Canadian Forces who lost their life in the line of duty.  Each year dating back to 1936, the Royal Canadian Legion has chosen one such mother as the National Silver Cross Mother.  As part of the Remembrance Day ceremony at the National War Memorial in Ottawa, the Silver Cross Mother lays a wreath on behalf of all mothers who have lost a child or loved one in service of their country.

The selection of this year’s recipient, Anita Cenerini, is a watershed moment in dispelling the stigma surrounding mental illness and post-traumatic stress in veterans.  It is the first time in the history of the custom that the honour has been bestowed on a mother whose child’s life was taken not in active duty, but personally, after a battle with the effects of post-traumatic stress.  The Royal Canadian Legion is optimistic that this year’s ceremony will encourage veterans battling the effects of PTSD and mental illness, as well as their loved ones, to reach out for assistance and counselling.

Thanks for reading.  Lest we forget.

Garrett Horrocks

10 Sep

Dependent Relative Revocation: Succeeding on a Technicality

Garrett Horrocks Elder Law, Estate & Trust, Estate Planning, General Interest, Litigation 0 Comments

With the NFL season underway as of this past weekend, I thought this week would be an appropriate time to revisit a notion that is maybe as rare in sports as it is in contested estate matters: succeeding on a technicality.

Pursuant to section 15 of Ontario’s Succession Law Reform, a will may be revoked by, among other actions, the execution of a subsequent validly executed will or the destruction of that will by the testator, or by another individual in the presence of the testator acting on the testator’s instructions.

Consider the following scenario: a testator executes a subsequent will with the intention of revoking a prior will and, in the process, destroys the prior will.  To the dismay of the testator or his loved ones, the new will is held to be invalid.  In the ordinary course, this would lead to an intestacy, as no will would appear to govern – the prior will was expressly revoked and destroyed by the testator, and the subsequent will is not valid.

Rather than leave the testator or his loved ones in limbo, the doctrine of dependent relative revocation steps in to allow the revival of a prior will on a technicality.  This concept provides that the revocation of a prior will, as is a common term in many wills, is ultimately conditional on the validity of the subsequent will executed by the testator.  If, in the above scenario, the testator revoked and destroyed the prior will with the express intention of replacing it with a subsequent will, such revocation will be conditional on the subsequent will being valid.

Dependent relative revocation is a rare but critical technicality that prevents the absurd result of an intestacy, notwithstanding that a valid will would otherwise have governed but for subsequent execution of an invalid will.

Thanks for reading, and best of luck on your team’s campaign on the gridiron.

Garrett Horrocks

06 Sep

Planning for the Downsize: What to do with your “Stuff”

Garrett Horrocks Charities, General Interest, In the News 0 Comments

We are a society of “stuff.”  Furniture, electronics, collectibles and other memorabilia.  You name it; chances are, something along those lines is gathering dust in your home or that of a close family member.  This poses an inevitable question for those inching towards retirement age and who are considering downsizing their living arrangements – what are they to do with all of their “stuff”?

A recent article in Forbes magazine suggests that, despite the ostensibly good intentions of prospective retirees, their children will only tolerate so many personal effects being pawned off on them.  For many millennials, the reality is that living space is a premium, especially for condo dwellers in the city.  Absorbing an enormous credenza or an old television into already cramped quarters is simply not feasible for most.  Those looking to downsize in advance of retirement may therefore have to look outside their immediate family for relief.

Prospective retirees have several options at their disposal to alleviate the stress and anxiety that accompany the moving process.  A number of well-known charitable organizations, including the Salvation Army and Habitat for Humanity, among a slew of others, assist in receiving and repurposing donated furniture, electronics, and other personal effects.  Contributing to these organizations ensures that less fortunate individuals and families will be able to enjoy these effects for years to come, while simultaneously providing a solution to the retiree’s downsizing conundrum.

Junk removal services are another alternative that have exploded in popularity in the last decade or so.  These companies will typically provide the labour to arrive at your doorstep with a truck in tow, removing unwanted personal items for a small fee.  Many of these companies will, in turn, donate collected items to charitable organizations or other entities to reduce waste and ensure peace of mind the prospective retiree.

If downsizing is on your mind in the near future, consider these options to ensure your household items are given a second life.  Your children will be most appreciative!

Thanks for reading.

Garrett Horrocks

30 Aug

R.E.S.P.E.C.T. – Why Appoint an Estate Trustee?

Garrett Horrocks Elder Law, Estate & Trust, Estate Planning, Executors and Trustees, General Interest, Trustees Tags: , , 0 Comments

The death of the Queen of Soul, Aretha Franklin, on August 16 sent reverberations through Motown and the music industry as a whole.  However, equally as shocking to estates law practitioners is the fact that Franklin died intestate, that is, without having executed a valid Last Will and Testament.

Reports have emerged that Franklin died leaving an estate valued at approximately US$80 million.  Notwithstanding the insistence of her longtime lawyer to take proper estate planning steps, Franklin’s estate will now likely be distributed in accordance with Michigan intestacy laws rather than in accordance with her wishes.  As Franklin died leaving four children and no surviving spouse, a cursory review of applicable authorities in Michigan suggests her estate will be distributed equally amongst her children, as would be the case under Ontario intestate succession laws.

With that said, the fact that Franklin died intestate means that the courts will now be tasked with the appointment of a personal representative to consolidate and distribute the assets of her estate and attend to the payment of any liabilities.  In Ontario, where an individual dies intestate, the court is empowered to appoint an Estate Trustee without a Will pursuant to section 29(1) of the Estates Act.  While the appointee is entitled to seek professional assistance from lawyers, accountants, and certain other professionals to provide assistance, the administration of an estate, particularly one as large as Franklin’s, can be burdensome especially if the trustee is unsophisticated.

The size of Franklin’s estate will also likely lead to all manner of creditors coming out of the woodwork to stake their claim and create further headaches for the eventual executor.  As was the case with other celebrities who died intestate, the chaos that will presumably result is likely to be well-publicized in the media, notwithstanding the wishes of Franklin’s close family.  A well-crafted estate plan, including the selection of a willing and competent executor to administer the estate, may very well have allowed the administration of Franklin’s estate to remain largely private.  If recent history is any indication, that is no longer likely to be the case.

Thanks for reading.

Garrett Horrocks

28 Jun

Contextualizing Capacity: The ‘Who’, ‘What’ and ‘When’ of Decision-Making

Garrett Horrocks Capacity, Estate Planning, Guardianship Tags: , , , , 0 Comments

Capacity is a fundamental consideration in many aspects of estate, trust, and attorneyship litigation.  The capacity of an individual to take a particular legal step, for example, to effect a distribution of property or to make a valid testamentary document, will often form the basis of a claim or court application.  However, as set out in today’s blog, capacity is specific as to task, time, and situation.  Context is a key factor in assessing capacity or lack thereof.

Capacity is specific as to task, time, and situation.

Whether an individual will be found to be capable of taking a particular legal step depends on the nature of the step being taken and when this step was taken.  By way of example, the threshold for the capacity required by a testator to execute a valid Last Will and Testament differs from, and is considerably higher than, the threshold of an individual seeking to grant a power of attorney for property or personal care.

The capacity to make a valid will requires an individual to have a clear understanding of the nature and extent of their assets, and to understand the effects of the dispositions being made including any claims that might arise as a result.  The capacity to grant a power of attorney for property, while similar to testamentary capacity, is a lower threshold.  An individual will be capable of granting a power of attorney for property provided that,

  1. they have a general understanding of the nature and value of their property;
  2. are aware of the obligations owed to any of their dependants; and
  3. understand the nature of the rights being given to the attorney as well as the rights that they retain as the grantor of the power of attorney, for example, the right to revoke the power of attorney if capable.

While the capacity to grant a power of attorney for property only requires the grantor to have a general understanding of their property or their obligations, testamentary capacity requires specific knowledge and appreciation of potential legal ramifications.  Accordingly, an assessment of an individual’s capacity in each respect will impart different requirements.

Capacity is also specific as to time, particularly as an individual’s capacity may fluctuate depending on illness or circumstance.  While somewhat uncommon in practice, an individual who was previously assessed as incapable may subsequently regain the capacity to take a particular legal step.  Accordingly, when acting on behalf of an individual challenging the validity of a testamentary document or disposition of property, it is important to consider not only the grantor’s historical capacity or lack thereof, but also whether capacity may have been regained at some point prior to the disposition being challenged.

Thanks for reading.

Garrett Horrocks

21 Jun

The Great Irony: Testamentary Intent and Intestate Succession in Eissmann v Kunz

Garrett Horrocks Estate & Trust, Estate Planning, Executors and Trustees, Litigation, Wills Tags: , , , , 0 Comments

Testamentary freedom is a core tenet of estate planning in Ontario.  In general, testators are at liberty to set up their estate plan to include or exclude whomever they wish.  Where part or all of a testator’s estate plan fails as a result of an intestacy, Ontario’s Succession Law Reform Act (the “SLRA”) steps in to provide the parties who will benefit as a result.  Occasionally, the principles of testamentary freedom and intention and the laws of intestacy intersect in peculiar ways.  This intersection came to a head in the Eissmann v Kunz (2018 ONSC 3650) decision.

In Kunz, the testator, Siegfried Kunz, died leaving no fewer than four testamentary documents purporting to be wills, briefly summarized as follows:

  1. A will drawn in 1967, which divided Mr. Kunz’s estate between his wife and their daughter, Petra;

 

  1. A will drawn in 1982 in Mr. Kunz’s handwriting, which stated that the “beneficiary after [his] death is Petra”;

 

  1. A will drawn in 2000, again in Mr. Kunz’s handwriting, which purported to modify the 1967 will and listed a number of specific legacies to various beneficiaries. Mr. Kunz appears to have later written over the original bequests to increase the amount of each.  Petra was once again listed as the sole residuary beneficiary; and

 

  1. A will drawn in 2009, also in Mr. Kunz’s handwriting, which provided that Petra would “not receive a single Euro of out [the] Estate.” In the margin of the 2009 will, Mr. Kunz expressly indicated that the 2009 will was to be an “amendment” to the 2000 will.

The Court was first tasked with determining which will was to govern.  The Court concluded that the 2000 will was a valid holograph will, though noted that the subsequent handwritten amendments were of no force and effect as they did not comply with the formal requirements for valid alterations under the SLRA.  The Court concluded that the 2009 will operated instead as a codicil to the 2000 will as it did not dispose of any property on its face and, therefore, could not function as a standalone will.

The interplay between the 2000 will and the 2009 codicil is such that a conflict arose with respect to the disposition of the residue of Mr. Kunz’s estate.  The 2000 will names Petra as the sole residuary beneficiary.  The 2009 will revokes Petra’s interest entirely.  The 2009 codicil therefore created a partial intestacy with respect to the residue of Mr. Kunz’s estate, and the Court looked to the SLRA to determine who would inherit.

The hierarchy of beneficiaries on an intestacy is set out in Part II of the SLRA.  Mr. Kunz died leaving no surviving spouse, and so the next intestate beneficiaries were to be his children, that is, Petra.  In an ironic twist of fate, the Court concluded that Petra was solely entitled to all of the residue of Mr. Kunz’s estate, notwithstanding that he had intended to expressly disinherit her under the 2009 codicil.  The Court declined to give effect to Mr. Kunz’s apparent intention to exclude Petra.

Simple estate planning steps, such as the appointment of an alternate beneficiary under the 2009 will, could have prevented this great irony.  Ensure the effects of your testamentary dispositions are properly understood by taking time to review your will with a lawyer.

Thanks for reading.

Garrett Horrocks

14 Jun

The Eastman Estate: The Original Kodak Moment

Garrett Horrocks Capacity, Estate & Trust, Estate Planning, General Interest, In the News, Litigation, Public Policy, Wills Tags: , , , 0 Comments

On a recent trip to Rochester, New York, my fiancée and I had the pleasure of touring the George Eastman Museum and came across an interesting piece of estates lore.

George Eastman, the founder of Kodak and a pioneer of bringing photography to the mainstream, died leaving a Will drawn in 1925.  As his wife had predeceased him and they had no children, Mr. Eastman devised all of his real property and left a substantial cash legacy to his closest family member, his niece, Ellen Dryden.  Mr. Eastman’s estate held significant assets, and the value of liquid assets alone was estimated as exceeding the equivalent of USD$35 million today.

However, on March 9, 1932, only five days before his death, Mr. Eastman had a change of heart with respect to the distribution of his estate.  Rather than leave the bulk of his estate to an individual, Mr. Eastman wished to ensure that his legacy would be one of service to the community that had fostered his photography empire.  True to form as a philanthropist and benefactor of local enterprise, Mr. Eastman executed a Codicil to his Will, changing the primary beneficiary of his estate from his niece to the University of Rochester.

The testamentary dispositions under the Codicil represented a significant deviation from those under his Will.  Typically, where a testator’s dispositions vary substantially from one instrument to another, concerns may arise with respect to the their testamentary capacity or the presence of undue influence.

A shrewd entrepreneur in his own right, Mr. Eastman recognized the risk that the Codicil might later be the subject of scrutiny or litigation.  On the date the Codicil was to be executed, Mr. Eastman hosted a gathering at his residence and invited many guests and acquaintances.  He devoted time to speaking to each individual guest about topical, personal subjects so that they could attest to Mr. Eastman’s soundness of mind in the event that a certain disgruntled niece chose to commence a Will challenge.

In a way, Mr. Eastman’s goal is not too dissimilar from some of the criteria that are relied on even today to assess a testator’s capacity.  Third-party evidence that a testator appeared to be of sound mind immediately prior to the execution of a testamentary document may help a trier of fact draw a favourable conclusion with respect to capacity.  While the formal criteria to assess capacity primarily consider a testator’s appreciation and understanding of his or her assets, Mr. Eastman’s clever scheme demonstrates that he turned his mind to questions about his own capacity and took steps to mitigate the risks.

Mr. Eastman’s Codicil was not later subject to any litigation, and the University of Rochester received a handsome distribution out of his estate.

Thanks for reading.

Garrett Horrocks

10 Apr

The Policy of Setting Policy: Cotnam v Rousseau and Judicial Activism

Garrett Horrocks Beneficiary Designations, Estate & Trust, Estate Planning, Litigation, Pension Benefits, Public Policy, RRSPs/Insurance Policies, Support After Death Tags: , , , , 0 Comments

The practice of injecting policy considerations into court decisions has long been a tenet of the Ontario judiciary.  However, such considerations may arguably raise questions that go beyond the scope of the decision.  Cotnam v Rousseau, 2018 ONSC 216, is one such case.

In Cotnam, the Court was tasked with determining whether a pre-retirement death benefit received by a surviving spouse was available to be clawed back into an Estate pursuant to section 72 of the Succession Law Reform Act (the “SLRA”).  The Respondent took the position that section 48 of the Pension Benefits Act (the “PBA”) sheltered the death benefit from being clawed back given that she was the spouse of the Deceased.  The Court disagreed and held that such benefits ought to be available for claw back in order to prevent irrational outcomes resulting from their exclusion.

In the context of the facts at play in Cotnam, the Court reasoned in favour of equity, in particular, to ensure a dependant disabled child of the Deceased was properly provided for. However, the Court’s reasons appear to gloss over a fundamental conflict between the SLRA and the PBA, a clash about which the estates bar might have appreciated some judicial commentary.  Specifically, the Court held that the provisions of the SLRA ascribing pension death benefits as available to satisfy a claim of dependant’s relief ought to prevail over the PBA’s provisions sheltering them from claw back.

Section 114 of the PBA provides that, “[i]n the event of a conflict between this Act and any other Act […] [the PBA] prevails unless the other Act states that it is to prevail over [the PBA].”  The SLRA, in contrast, is silent as to whether its provisions are to prevail over those of the PBA.

However, the Court’s reasons make no mention of the interplay between section 114 of the PBA and the equities of ensuring the dependant daughter in Cotnam was properly provided for.  While we may opine on the fact that the outcome in Cotnam favours equity over rote statutory interpretation, the estates bar is left to grapple with the apparent inconsistency with the intention of the Ontario legislature, and whether it will affect similar decisions going forward.  As of this date, no written decisions have yet interpreted Cotnam, nor has the decision been appealed.  Accordingly, it may be some time before the impact of the decision, if any, is felt.

Thanks for reading.

Garrett Horrocks

If you enjoyed this blog, please consider these other related posts:

Dependant Support and Pre-Retirement Death Benefits

Rehel v Methot: Life Income Funds and Spousal Entitlements

05 Apr

Cheques and Balances: the Enforceability of Promises to Gift

Garrett Horrocks Capacity, Estate & Trust, General Interest, Public Policy Tags: , , , , 0 Comments
The delivery of “signed, blank cheques cannot amount to a complete gift”, as the drawer retains an interest in the amount of the cheque until it is cashed.

In November 2017, my colleague, Sayuri Kagami, blogged about the Ontario Court of Appeal’s decision in Teixeira v Markgraf Estate, which considered the validity of a gift in the form of a cheque cashed after the death of the payor.  Today’s blog discusses similar facts in the court’s decision in Rubner v Bistricer. That is, whether pre-signed blank cheques cashed after the payor is declared incapable of managing property constitute either an enforceable promise to gift or, in the alternative, a valid inter vivos gift.

In the late 1960s, the patriarch of the Rubner family, Karl, purchased a 10% stake in a real estate development in Oakville known as the Lower Fourth Joint Venture.  Karl kept legal title to this interest in the name of his wife, Eda, with the intention that their three children, Marvin, Joseph, and Brenda, each receive beneficial ownership of a one-third share in the Lower Fourth interest.

Brenda subsequently renounced her share in the Lower Fourth interest to avoid triggering certain tax consequences.  Accordingly, her share reverted back to Eda, who then set up an account into which the income generated by Brenda’s former share would be deposited.  Notwithstanding that she had disclaimed her share, however, Brenda nonetheless wanted to retain the income that her share generated.  In 2014, Eda agreed to sign several blank cheques for the benefit of Brenda and her husband, allowing them to collect the income from Brenda’s former share without incurring the tax liability.

In November 2016, Eda was assessed as being incapable of managing property.  Shortly thereafter, Brenda’s husband filled in and deposited two of the blank cheques previously signed by Eda in order to prevent Brenda’s brothers from using those funds to pay for Eda’s expenses.

Brenda’s brothers subsequently commenced an application seeking, amongst other relief, a declaration that the funds withdrawn by Brenda after Eda became incapable were held on a resulting or constructive trust for Eda’s benefit.  Brenda took the position that Eda had intended that these funds be considered gifts for Brenda’s benefit. She claimed that at a family meeting in 2012 or 2013, Eda had specifically agreed to gift to Brenda all future income generated by Brenda’s former share in Lower Fourth.

The court was tasked with considering whether a purported promise of future gifts could constitute valid inter vivos gifts.  In order to establish a valid inter vivos gift, the recipient must show:

  • An intention to make a gift on the part of the donor, without consideration or expectation of remuneration;
  • An acceptance of the gift by the donee, and
  • A sufficient act of delivery or transfer of the property to complete the transaction.

The court held that the first step and third steps in this analysis could not be satisfied once Eda had been declared incapable of managing her property.  Eda was deemed to have been unable to formulate the necessary intention to make a gift with respect to the blank cheques.  Moreover, the court held that the delivery of “signed, blank cheques cannot amount to a complete gift”, as the drawer retains an interest in the amount of the cheque until it is cashed.  Once Eda became incapable of managing her property, the gift could no longer be perfected.  The blank cheques that were cashed after Eda was assessed as incapable of managing her property were held to be invalid, and Brenda was ordered to repay the amounts withdrawn.

Thanks for reading.

Garrett Horrocks

29 Mar

Predatory Marriages: knowing what it means to say “I do.”

Garrett Horrocks Capacity, Common Law Spouses, Elder Law, Ethical Issues, General Interest, Health / Medical, In the News, Public Policy Tags: , , , , , 0 Comments

The interplay between evolving social norms and the legal foundations that predate or accelerate these changes has seen significant development in the last decade.  Courts of law and of public opinion have made important strides in shaping  social policy in many areas, such as medically-assisted death, gender diversity and inclusion, and marriage rights, to name a few.  A recent case out of the Ontario Superior Court of Justice considered this last issue, marriage rights, with a particular focus on predatory marriages.

A person has the capacity to enter into a marriage contract only if that person has the capacity to understand the duties and obligations created

In Hunt v Worrod, 2017 ONSC 7397, the Court was tasked with assessing whether an individual who had suffered a catastrophic brain injury possessed the necessary capacity to marry.  In 2011, Kevin Hunt suffered a serious head injury following an ATV accident and spent four months recuperating in hospital.  He was eventually discharged into the care of his two sons, but three days after his release, Mr. Hunt was whisked away by his on-and-off girlfriend, Kathleen Worrod, to be ostensibly married at a secret wedding ceremony.

Mr. Hunt’s children brought an application to the Court on his behalf to void the marriage, partly to preclude Ms. Worrod from accruing spousal rights to share in Mr. Hunt’s property or assets.  Ultimately, the Court concluded that Mr. Hunt did not possess the requisite capacity to enter into the marriage.

In its reasons, the Court relied heavily on the opinions of several expert witnesses and the existing body of legal authority.  The Court began by reviewing section 7 of Ontario’s Marriage Act, which provides that an officiant shall not “solemnize the marriage” of any person that the officiant has reasonable grounds to believe “lacks mental capacity to marry.”

The expert evidence tendered by the parties suggested that Mr. Hunt had significant impairments in his ability to make decisions, to engage in routine problem-solving, and to organize and carry out simple tasks.  He was characterized as “significantly cognitively impaired”, and was assessed as being incapable of managing his property, personal care, or safety and well-being.

The Court subsequently relied on the test for capacity to enter into a marriage contract established by the British Columbia Supreme Court in Ross-Scott v Potvin in 2014.  The Court held that a person has the capacity to enter into a marriage contract only if that person has the capacity to understand the duties and obligations created by marriage and the nature of the commitment more generally.

The Court also identified the tension between balancing Mr. Hunt’s autonomy as against the possibility that he lacked the capacity to appreciate the legal and social consequences of marriage.  Ultimately, the Court was satisfied that Mr. Hunt’s children had met their burden of demonstrating that their father lacked the necessary capacity to marry Ms. Worrod.  The marriage was declared void ab initio, and the attendant spousal property rights that would have otherwise flowed to Ms. Worrod were lost.

Thanks for reading.

Garrett Horrocks

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