Author: Juanita Valencia

26 Aug

Can an Estate be Sued 30 Years Later?

Juanita Valencia Estate Litigation, General Interest, In the News, News & Events Tags: , , , , , 0 Comments

A baby in a swimming pool reaching for a $1 bill. Music lovers would instantly recognize this description as the album cover of Nirvana’s 1991 album “Nevermind.”

Until recently, Spencer Elden – the baby in question – embraced the fame that came with being on the cover of one of the most recognizable albums of all time. Elden even recreated the notorious photo several times over the last 30 years to mark the album’s 10th, 20th, and 25th anniversaries. In those photos, Elden is wearing swimming trunks.

Earlier this week, Elden made headlines when the media learned that he was suing the parties involved for sexual exploitation. Elden argues that his parents never authorized the use of his photograph for the Nirvana album, and that the band used the image to promote their music at his expense. Elden is seeking $150,000.00 USD in damages from each of the 15 defendants, which include the photographer Kirk Weddle, the surviving band members, and Kurt Cobain’s Estate.

Elden’s lawsuit has many people wondering: can an Estate be sued 30 years after an incident took place?

In California, where Elden began his lawsuit, victims of sexual abuse crimes who were children at the time of the alleged incident have until their 40th birthday or 5 years from the date that they discovered their abuse to file a civil action.

What if this claim had been commenced in Ontario? On March 9, 2016, the Limitations Act, 2002, S.O. 2002, c. 24 Sched. B was amended to remove all limitation periods for civil claims based on sexual assault. Therefore, assuming that a judge would find that Elden’s lawsuit can be properly classified as sexual abuse, Elden would be well-within his rights in bringing this claim.

However, if a judge ultimately found that Elden’s claim is not a civil claim based on sexual assault, different limitation periods would apply. Generally, the Limitations Act, 2002, provides an individual with two years from the date on which a claim is “discovered” to commence a claim before it is statute barred. However, individuals intending to commence a claim against someone who has died, such as Kurt Cobain, must also consider the much stricter limitation period imposed by section 38 of the Trustee Act, R.S.O. 1990, c. T.23.

Section 38 of the Trustee Act imposes a strict two year limitation period from the date of death for any individual to commence a claim against a deceased individual in tort. This limitation period is much more strict, as it is not subject to the same “discoverability” principle as the limitation period imposed by the Limitations Act. We have previously blogged about the limitation period imposed by section 38 of the Trustee Act here.

It remains to be seen whether Elden will be successful in his claim. However, this case should serve as a reminder to Estate Trustees and solicitors that Estates may be held accountable for events that took place well before the Deceased’s death, depending on the nature of the claim.

Thank you for reading,

Juanita Valencia

24 Aug

The Original Copy of a Will: When to Release It and To Whom?

Juanita Valencia Estate & Trust, Estate Planning, Wills Tags: , , 0 Comments

The importance of safeguarding the original copy of a Will cannot be overstated. For one, the original copy is required to apply for a Certificate of Appointment of Estate Trustee with a Will. Perhaps more importantly, when an original Will cannot be located upon death, there is a presumption that the Will was destroyed by the testator with the intention to revoke it.  We have previously blogged about this presumption and how to rebut it here.

Given the importance of the original copy of a Will, many drafting solicitors offer to hold it. In these circumstances, the drafting solicitor might wonder who is entitled to see the original Will, and when.

Of course, the original Will should be available to the Testator, should they wish to review, amend and/or revoke the document.

In addition, the original Will should also be made available to the named Estate Trustee(s) upon the Testator’s death. Drafting solicitors should be mindful of the fact that there might be multiple Estate Trustees and/or alternate Estate Trustees. If there are multiple Estate Trustees, the drafting solicitor should consider getting a direction from all of them before releasing the Will. Before releasing the original Will, it is also prudent to obtain a copy of the death certificate of the Testator and to ask the Estate Trustee(s) for documentation to confirm their identity.

Can the original copy of the Will be released if the Testator becomes incapable? If so, to whom? If the Testator had appointed an Attorney for Property prior to becoming incapable, the Attorney is entitled to obtain the original copy of the Will pursuant to section 33.2 of the Substitute Decisions Act 1992, S.O. 1992, c. 30. Importantly, the named Estate Trustee(s) is not entitled to obtain the original copy of the Will before the Testator’s death, unless they are also the Attorney for Property for the Testator.

Are the beneficiaries ever entitled to the original copy of the Will? Put simply, they are not. However, at the time of the Application for a Certificate of Appointment of Estate Trustee with a Will, beneficiaries are entitled to receive a copy of the Will and the Notice of Application. Beneficiaries who are entitled to inherit a portion of the residue of the estate are entitled to receive a copy of the entire Will, while beneficiaries who are going to inherit a specific item or a specific sum of money are only legally entitled to a copy of the provision granting the gift or bequest.

Finally, keep in mind that, once an Application for a Certificate of Appointment of Estate Trustee with a Will is filed with the Court, the Will becomes a public document and any individual can contact the court office to request a copy.

Thank you for reading.

Juanita Valencia

23 Aug

Unjust Enrichment in the Context of Insurance Proceeds and Beneficiary Designations

Juanita Valencia Beneficiary Designations, Estate & Trust, RRSPs/Insurance Policies Tags: , , 0 Comments

In the decision of Knowles v LeBlanc, 2021 BCSC 482, the Supreme Court of British Columbia was tasked with determining which party was entitled to insurance proceeds pursuant to the doctrine of unjust enrichment.

This case involved a life insurance policy held by the Deceased, Peter Knowles,  with the CUMIS Life Insurance Company. The policy named the Deceased’s ex-wife, Ms. Knowles, as the sole beneficiary. On the date of Mr. Knowles’ death, the benefit payable under the policy was $100,000.

The Deceased designated Ms. Knowles as the sole beneficiary in 1987, shortly before the two separated. Their divorce was finalized in 1991, when they entered into a consent order, which provided that each party would retain their own property and chattels in their possession or control.

After his separation, the Deceased met Ms. LeBlanc in 1988. They lived in an exclusive common-law relationship until the time of his death in 2019. Throughout their relationship, they shared expenses and made joint decisions about their family property.

After Mr. Knowles passed, Ms. LeBlanc received the proceeds from every other life insurance policy that he held as well as all of his other assets by way of right of survivorship. When she did not receive the proceeds from the CUMIS policy, Ms. LeBlanc contacted the company, who advised her that she was not the named beneficiary of the policy. Ms. Leblanc and Ms. Knowles subsequently made competing claims over the proceeds of the insurance policy.

The Court discussed Mr. Knowles’ intentions, as well as whether he ever attempted to change his beneficiary designation in the life insurance policy. The Court found that Mr. Knowles maintained feelings of hostility toward Ms. Knowles after their divorce, and that he not only intended to change the designated beneficiary on his life insurance policy to Ms. LeBlanc, but that he verily believed that he had done so. As a result, the Court concludes that Mr. Knowles clearly intended to remove Ms. Knowles as a beneficiary from his CUMIS life insurance policy but forgot or neglected to do so.

The Court then considered whether the consent order that Mr. and Ms. Knowles entered into in 1991 precluded Ms. Knowles from recovering the life insurance proceeds. The Court ultimately found that the consent order did not prevent Ms. Knowles from claiming the proceeds of the life insurance policy for three reasons. First, the order did not explicitly refer to the life insurance policy. Second, the order did not specifically revoke Mr. Knowles’ designation of Ms. Knowles as a beneficiary of the life insurance policy. Third, the order did not refer to a “full and final” settlement, or a relinquishment of all claims

Finally, the Court considered whether Ms. LeBlanc had  a claim in unjust enrichment giving rise to a constructive trust remedy. In doing so, the Court applied the test for unjust enrichment from Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57  which requires:

  1. an enrichment of the defendant;
  2. a corresponding deprivation of the plaintiff; and
  3. an absence of juristic reason for the enrichment.

The Court easily found that the first two factors had been met. Ms. LeBlanc suffered a deprivation because the premiums of the life insurance policy were automatically deducted from her joint account with Mr. Knowles for many years. Moreover, because Ms. Knowles stood to benefit from receiving the proceeds of the life insurance policy, there was also a corresponding enrichment to Ms. Knowles at the expense of Ms. LeBlanc.

The third element of an unjust enrichment claim is twofold. First, the plaintiff must show that no juristic reason from an established category exists to deny recovery. Second, the defendant may rebut the plaintiff’s recovery by showing that there is another reason to deny recovery.

In their analysis, the Court concluded that the Insurance Act, RSBC 2021, c 1 does not preclude Ms. LeBlanc’s claim in unjust enrichment. In other words, it does not provide a juristic reason for Ms. Knowles to retain the proceeds against Ms. Leblanc’s corresponding deprivation. The Court also failed to find another juristic reason that would apply in the circumstances of the case.

Ms. Knowles was not able to show that there was a residual reason to deny Ms. LeBlanc’s recovery of the life insurance proceeds. The Court focused on the fact that Mr. Knowles was estranged from Ms. Knowles and their two children since their divorce. As a result, it was not reasonable for Ms. Knowles to expect that she would benefit from the insurance policy. The Court was also not able to find a basis in public policy to rebut Ms. LeBlanc’s recovery.

In determining the appropriate remedy, the Court acknowledged that a personal remedy against Ms. Knowles would not be appropriate, as CUMIS had not paid out the proceeds of the life insurance policy to her. Ultimately, the Court imposed a constructive trust to the full extent of the life insurance proceeds in Ms. LeBlanc’s favour.

Finally, the Court cautioned CUMIS to consider updating its records more frequently and to remind its long-standing policyholders of their designated beneficiaries to avoid similar disputes in the future.

This case was similar to Moore v. Sweet, 2018 SCC 52, where the Supreme Court of Canada held that a beneficiary designation was not a juristic reason to deprive the appellant of the insurance proceeds to which she was entitled under an oral agreement. As you may recall, Ian M. Hull, Suzana Popovic‑Montag and David M. Smith represented the appellant before the Supreme Court of Canada, and blogged about their experience here.

Thank you for reading!

Juanita Valencia

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