Author: Lisa-Renee

24 Mar

Distribution of Personal Property

Lisa-Renee Estate & Trust, Executors and Trustees Tags: , , , , , , , 0 Comments

After being embroiled in a lengthy legal dispute, Audrey Hepburn’s sons appear to have settled the division of their late mother’s personal property.

By way of background, Audrey Hepburn left her estate in equal shares to her two sons.  Her will, however, did not provide any directions as to how her personal belongings were to be distributed.  Many of the items in dispute are famous memorabilia acquired throughout her lengthy acting career.

In Ontario, all property belonging to a deceased person who dies with a will immediately vests in his or her estate trustee. However, it is not entirely clear as to whether an estate trustee has the authority, absent specific direction from the testator, to distribute the personal effects of the deceased.

In Re Bucovetsky Estate, [1942] O.J. No. 303 it was held that in specie distributions are not permitted in the absence of a specific direction in the will or unanimous consent of all beneficiaries.   Accordingly, without specific authority or unanimous consent of all beneficiaries, an estate trustee should take care to avoid distributing personal items.

Some options that may be available to an estate trustee who is confronted with the difficulty of determining how to deal with the distribution of personal effects of a deceased person include:

  • seeking directions from the court pursuant to section 60 of the Trustee Act, R.S.O. 1990 c T. 23; or
  • selling and converting the personal items into cash in accordance with the testator’s will or by section 17 of the Estate Administration Act, S.O. 1990, c. E.22

Other articles you might enjoy:

Don’t Be too Quick to Distribute an Estate
Dividing Your Estate Equally
Purchase of Estate Assets by an Estate Trustee

Thank you for reading and have a great weekend!

Lisa Haseley

23 Mar

Single and Alone? Who will inherit your estate?

Lisa-Renee Estate & Trust, Estate Planning, General Interest, Wills Tags: , , , , , , , 0 Comments

It is not uncommon to encounter situations where an individual dies without a will, having never been married, widowed, separated or divorced and without children.  It can, however, be uncommon to come across situations where an individual dies under these circumstance but also leaves behind no known close relatives or next of kin.  When this occurs, the question that immediately arises is: who will inherit the deceased person’s estate?

In Ontario, the distribution of the estate of an unmarried, childless person who has died without a will is governed by Part II of the Succession Law Reform Act (the “Act”).  The Act provides a statutory scheme that sets out classes of individuals who will inherit on such a persons’ intestacy.  The order of entitlement is as follows:

  1. Parents;
  2. Siblings;
  3. Nieces and Nephews; and finally,
  4. Next of Kin.

When none of the above individuals can be identified or located, section 47(7) of the Act states that the property of the deceased person becomes the property of the Crown, and the Escheats Act, 2015 applies.

Depending on the circumstances, individuals without a family may wish to consider if there is a charitable organization or community activity that they belong to that they would prefer to benefit from their estate under a will.  In the alterative they may wish to take proactive steps to locate their distant relatives during their lifetime.

Some other Articles you may be interested in reading:

Getting “Escheated” out of an Inheritance Get to know your distant relatives What happens if you do not have a Will?

Thank you for reading.

Lisa

21 Mar

Testamentary Wishes Must be Respected

Lisa-Renee Estate & Trust, General Interest, In the News, Wills Tags: , , , , , , , 0 Comments

In a recent case, Ilott v. The Blue Corss & Ors, [2017] UKSC 17 (15 March 2017), the Supreme Court of the United Kingdom has affirmed that a testator has testamentary freedom to disinherit his or her child.

As outlined in a recent National Post article, the Court rejected a daughter’s proceeding to set aside her late mother’s will, which left the majority of the mother’s estate to several animal charities.  In the will, the mother also directed the executors of her estate to resist any efforts her daughter may make to challenge the will.

The disappointed daughter exercised her rights pursuant to the Inheritance (Provision for Family and Dependants) Act 1975 (the “1975 Act”), which allows certain individuals such as spouses and children to make a claim for reasonable financial provision from an estate.

Unlike Part V of Ontario’s Succession Law Reform Act, the 1975 Act does not require the deceased testator to have provided his or her dependant with support or to have been under a legal obligation to provide support immediately before his or her death.  Rather, the 1975 Act requires the surviving child to prove that the deceased’s will did not include reasonable financial provision for his or her child in light of the child’s own financial resources and needs.

Interestingly, the daughter appealed the District Judge’s award of £50,000.00 to her and the Court of Appeal’s decision awarding her £143,000.00 to buy the house she lived in and an additional £20,000.00.  On appeal, the Supreme Court reversed the Court of Appeal’s decision and restored the District Judge’s decision on the basis that the District Judge’s decision struck an appropriate balance between the mother’s testamentary wishes and the daughter’s claim for reasonable financial provision from the estate. In doing so, the Supreme Court upheld the long standing principal that people remain at liberty to dispose of their assets and property subject to provisions of the 1975 Act.

Other Articles you May be Interested In:

Testamentary Freedom Reconsidered
Is Discrimination a Restriction on Testamentary Freedom?
Validity of In Terrorem Conditions

Thanks for reading!

Lisa Haseley

23 Dec

Community Land Trusts are Coming to Toronto

Lisa-Renee Estate & Trust, In the News Tags: , , , 0 Comments

A recent Metro News article reported that Friends of Kensington Market will take steps to combat residential and commercial gentrification by establishing a community land trust.

imagesAccording to the Canadian Mortgage and Housing Corporation, community land trusts are local private not-for-profit organizations that purchase land and use it for the benefit of a community.  The main purpose of this type of trust is to make the land and/or properties owned by the trust, available to residents of a particular community at affordable prices.

In creating a community land trust, the Friends of Kensington Market goal is to acquire buildings for residential and commercial use.  The properties owned by the community land trust will be rented to long-term tenants. Since Kensington Market is known for its eclectic mixture of vintage clothing shops, restaurants and cafés, the aim is not to make a profit but to help keep the Kensington Market area affordable for vulnerable long-term renters and small business owners.

The establishment of a community land trust may allow the trustee to not only control the rental costs but also the incoming demographic of newcomers to the Kensington Market neighbourhood.

While community land trusts are not yet common in Ontario, it is a creative way to protect the social, cultural and economic diversity that has made Kensington Market known as one of Toronto’s most unique communities.

Thanks for reading and happy holidays!

Lisa Haseley

22 Dec

Revocation by Divorce

Lisa-Renee Beneficiary Designations, Estate & Trust, Estate Planning, General Interest, Uncategorized, Wills Tags: , , , , , , 0 Comments

Earlier this week, we discussed the effect a well drafted separation agreement has on an individual’s estate plan.  But what effect does a divorce have?

In most instances, going through a divorce can be stressful and contentious.  As a result, necessary changes to an individual’s estate plan may be overlooked.  Fortunately, section 17(2) of the Succession Law Reform Act provides divorced couples with some piece of mind:

“Except when a contrary intention appears by the will, where, after the testator makes a will, his or her marriage is terminated by a judgment absolute of divorce or is declared a nullity,

(a) a devise orWills bequest of a beneficial interest in property to his or her former spouse;

(b) an appointment of his or her former spouse as executor or trustee; and

(c) the conferring of a general or special power of appointment on his or her former spouse,

are revoked and the will shall be construed as if the former spouse had predeceased the testator.”

While the SLRA provides a divorced spouse’s estate with some protection against honouring unintended gifts after divorce, the termination of a marriage is nonetheless a good time for divorced persons to review their estate plans, especially as joint bank accounts and beneficiary designations do not have the benefit of the remedial provisions of the aforementioned statute.

You may also be interested in:

Estate Planning After Your Second Marriage
The Positive Side of the Second Marriage
Thanks for reading!

Lisa Haseley

20 Dec

The Effect of a Carefully Drafted Separation Agreement

Lisa-Renee Estate Planning, General Interest Tags: , , , , , , , , 0 Comments

According to a 2007 Yahoo survey, the upcoming holiday season is a time when some people are twice as likely to consider breaking up with their significant other. This is partly because the individual may want to begin the new year with a fresh start.

photo-1444427169197-de497742b62dAn effective way of ensuring a fresh start after the end of a long-term relationship is to sign a separation agreement.  A separation agreement allows parting spouses to contractually set out each party’s rights and obligations regarding issues with respect to property, debts and child and/or spousal support.

By the same token, a well drafted separation agreement can include provisions that allow former spouses to essentially contract out of any benefit conferred to them under each other’s Will. From an estates perspective, it may be useful for a separation agreement to include clear and unambiguous terms with respect to whether the surviving spouse:

  • is entitled to take as a beneficiary upon death, whether by way of will, intestacy or beneficiary designation;
  • has any rights to make a claim against the estate of the deceased spouse; and
  • may act as the estate trustee or personal representative of the deceased spouse.

The decision in Makarchuk v. Makarchuk, 2011 ONSC 4633 is a great example of the importance of a well drafted separation agreement.

In Makarchuk v. Makarchuk, the spouses had been married for over 40 years.  After separation, the couple entered into a separation agreement but they did not divorce.  Five years later the husband died without changing his will, which named his former wife as the sole executor and beneficiary of his estate.

The separation agreement included the following provision:

Except as provided in this agreement, and subject to any additional gifts from one of the parties to the other in any will validly made after the date of this agreement, the husband and wife each release all rights which he or she has or may acquire under the laws of any jurisdiction in the estate of the other and in particular:….

Following the husband’s death, the wife sought directions from the Court as to whether, by virtue of the separation agreement, she had released her right to be the sole estate trustee and beneficiary of the estate.

The Court found that the wording contained in the separation agreement did not clearly address the terms of the deceased’s Will.  In particular, the husband and wife only released all rights that they may acquire under the law.  It was the Court’s view that such language was too broad to oust the wife from receiving her entitlement under the deceased’s Will.

Thanks for reading!

Lisa-Renee Haseley

28 Oct

A Cautionary Tale on Trustee Liability

Lisa-Renee Executors and Trustees, Litigation, Trustees Tags: , , , , , , 0 Comments

Acting as a Trustee is not only an onerous task but comes with a significant exposure to personal liability.

A trust can be established where three certainties are present: (a) certainty of intention – the Trustee knows that he or she will hold property for the benefit of another; (b) certainty of the subject matter – the property to be held by the Trustee is clearly identified; and (c) certain of objects – the beneficiary of the trust is clearly established.

Trustee exposed to personal liability even when acting honestly upon mistaken facts.
“This decision is a good example of how easily a trust can be created and a Trustee can attract personal liability even when acting honestly upon mistaken facts.”

In Ahmed v. Ibrahim, 2016 ONSC 6430 (ONSC Div. Court), the mother of the plaintiff (Amina) received a settlement payment from a motor vehicle accident. The settlement funds totalling $27,335.03 were deposited into Amal’s bank account.  At the time of the deposit, Amal had $19,656.00 in her account.  Upon receiving the settlement funds and on Amina’s request, Amal transferred the balance of her bank account (i.e. $46,996.03) to her mother.  Amina in turn transferred the funds to a bank account owned by Mohamed (the “Trust Funds”).  Believing the Trust Funds belonged to Amina, Mohamed agreed to hold the funds in trust.  When Amal demanded her share of the Trust Funds, Mohamed advised that he had already disbursed all of the Trust Funds to Amina in accordance with Amina’s instructions.

Amal sued Mohamed and Amina.  At trial, Amina argued that the Trust Funds belonged solely to her and that Amal had no entitlement to the Trust Funds.  Amal, however, presented sufficient evidence to show that $19,656.00 of the Trust Funds belonged to her and that none of the funds disbursed by Mohamed had been used for her (Amal’s) benefit.  It was Mohamed’s evidence that he believed the Trust Funds belonged solely to Amina and that, in any event, Amina told him the Trust Funds withdrawn by him were used for Amal’s benefit.  The judge preferred Amal’s version of the events over Amina and ordered Mohamed, to pay $19,656.00 to Amal.

On appeal Mohamed argued that the trial judge’s decision against him should be reversed because he acted properly in withdrawing the funds, on Amina’s instructions, because he believed the Trust Funds belonged to solely to Amina.  In upholding the trial judge’s decision, the Divisional Court held that the trial judge’s findings of fact were owed deference since he had the opportunity to assess the credibility of the parties and accordingly the decision should stand.

This decision is a good example of how easily a trust can be created and a Trustee can attract personal liability even when acting honestly upon mistaken facts.

Thanks for reading and happy Friday!

Lisa-Renee Haseley

27 Oct

Timing of Summary Judgment Motion a factor in Dismissal

Lisa-Renee General Interest, Litigation Tags: , , , , , 0 Comments

The recent decision of the Ontario Superior Court Justice in Tait Estate v. Singh 2016 ONSC 6472 concerns whether it was in the “interest of justice” to make a determination in the Defendants’ late-stage summary judgment motion.

This case involves a medical malpractice claim.  The Plaintiff sued the deceased’s medical providers in her capacity as Estate Trustee and pursuant to section 61(1) of the Family Law Act (the “FLA”) as the deceased’s common law spouse.  A trial was scheduled to begin on November 7, 2016.

Court dismisses motion for summary judgment
“Failure to take the timing of a motion into consideration could lead to an unfavourable cost award.”

The Defendants served a notice of motion for summary judgment returnable on July 19, 2016. The motion was adjourned to October 3, 2016, approximately one month before the trial was scheduled to begin.  The scope of the motion was limited to the discrete issue of whether the Plaintiff’s claim pursuant to the FLA should be dismissed.

On hearing the motion, the court acknowledged that while Rule 20 of the Rules of Civil Procedure  does not impose a time period in which a motion for summary judgment may be brought, nothing could be gained from making a determination in the summary judgment motion.  It was the motion judge’s view that it would be more appropriate to litigate the issue at trial, and accordingly dismissed the motion with the issue of costs to be determined at a later date.

This ruling is an important reminder that consideration should be given to the appropriate timing to proceed with a motion for summary judgment.  Failure to take the timing of a motion into consideration could lead to an unfavourable cost award.

Thanks for reading!

Lisa-Renee Haseley

 

25 Oct

Principal Residence Exemption – New Reporting Requirements

Lisa-Renee Estate & Trust, Estate Planning, Executors and Trustees Tags: , , , , , , 0 Comments
Selling a house, principal residence exemption.
“…starting with the 2016 taxation year, the sale of a primary residence must be reported to the CRA to receive the benefit of the principal residence exemption.”

As you may have heard, new rules have recently come into effect that may not only have a stabilizing effect on the housing market in Canada but also usher in new Canada Revenue Agency (“CRA”) reporting requirements.

Until recently, when an individual sold their home, they did not have to report the sale on their income tax return to take advantage of the principal residence exemption.  However, on October 3, 2016, the Canadian government announced that, starting with the 2016 taxation year, the sale of a primary residence must be reported to the CRA to receive the benefit of the principal residence exemption.  This new reporting requirement will apply to any sale that took place on or after January 1, 2016.

The principal residence exemption is a benefit that provides a vendor with an exemption from capital gains earned on the sale of a property that has been used as their primary residence.  The exemption will apply for each year the property was designated as their primary residence.

With the new reporting requirement in place, to benefit from the principal residence exemption, the CRA will only allow the principal residence exemption if the sale and designation is reported. Accordingly, estate trustees and tax professionals should pay careful attention during the preparation of income and terminal tax returns to ensure compliance with this reporting obligation.

You may also be interested in reading:

Graduated Rate Estates and Changes to the Income Tax Act

Sharing Charitable Tax Credits After 2016

Tax Apportionment in Multiple Wills

Thanks for reading!
Lisa-Renee Haseley

05 Aug

Undue Influence Revisted

Lisa-Renee Beneficiary Designations, Estate & Trust, Litigation, Wills Tags: , , , , , , , 0 Comments

In a judgment released this week, Taylor-Reid v. Taylor 2016 ONSC 4751, the Ontario Superior Court has once again demonstrated just how difficult it is to set aside a Will on the basis that it was procured by undue influence.

The Deceased died September 22, 2011.  He was survived by his second wife, Shirley and his two children, Andrea and Kenneth.

The Deceased left a Will that named Shirley as the sole beneficiary of his Estate. Prior to the Deceased’s death, he transferred various assets held solely in his name or jointly with Andrea to Shirley. He also changed his several beneficiary designations from Andrea to Shirley.

6D2BBBEF99Almost two years after the death of the Deceased, Andrea commenced an action against Shirley on the grounds that the Deceased’s Will (and various beneficiary designations in favour of Shirley) were invalid as a result of Shirley’s undue influence.  The basis of Andrea’s claim was solely on allegations that Shirley “verbally or implicitly” threatened to leave the Deceased or divorce him immediately if he did not comply with her demands to make the Will, change the beneficiary designations, transfer the assets to her solely, and completely exclude Andrea from his Estate.

To support her claim, Andrea argued that there were suspicious circumstances surrounding the making of the Will and the beneficiary designations benefitting Shirley thereby giving rise to a presumption of undue influence.

The Court held that the principle of suspicious circumstances only becomes relevant when a Will is being challenged on the basis of knowledge and approval or lack of testamentary capacity.  Accordingly, no presumption of undue influence arises where a party seeks to set aside a Will solely on the ground of undue influence.

Shirley brought a motion for summary judgment pursuant to Rule 20 of the Rules of Civil Procedure claiming that Andrea’s claim disclosed no genuine issue to be tried. In granting the motion for summary judgment, the Court concluded that Andrea’s claim of undue influence must be unsuccessful because Andrea failed to put forward any corroborating evidence (required by section 13 of the Evidence Act, R.S.O. 1990, c.E.23).

Have a nice weekend!

You may also be interest in:

The High Hurdle of Undue Influence
The Presumption of Undue Influence
Testamentary Capacity and Undue Influence

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