Author: Natalia R. Angelini

14 Feb

Elder Law Litigation Needs to Increase?

Natalia R. Angelini Elder Law, Litigation Tags: , , 0 Comments

In the last couple of decades we have seen a rise in estate, capacity and trust litigation due in large part to the aging demographic.  One would think that elder law disputes – disputes involving retirement residences, nursing homes and/or long-term care facilities – would similarly be on the rise.  What was highlighted for the attendees at a recent Personal Injury and Elder Law CLE presentation, however, is that there is limited case law in the elder law area. Although the knee-jerk reaction may be to see few cases litigated through to a final hearing as a positive state of affairs, that is not so. Rather, it seems that there are an insufficient number of claims being made, and an even fewer number that are pursued all the way to trial.

The panel sees ageism as contributing to this set of circumstances. Damage awards are typically lower for the elderly, the rationale seemingly that they have already lived most of their lives and are going to die anyway. The converse “Golden Years Doctrine” was cited as a means to argue for the better protection of elderly plaintiffs, grounded in the argument that the elderly suffer more and are more severely impacted from an injury than their younger counterparts.

Taking such cases to trial and increasing awareness (e.g. media coverage) is a way to create progress and change in this area of the law. The panel advocated for this approach, as well as stressed the importance of electing to have such cases heard in front of a jury, who may be more willing to award larger sums to litigants.

If this advice is followed, we can hope to see more decisions that can build upon the few noted cases in the area (this article references some of them), and more just outcomes for the elderly, their families and/or their estates.

Thanks for reading and have a great day,

Natalia R. Angelini

12 Feb

Can Typography Expose a Sham Trust?

Natalia R. Angelini Estate & Trust, Litigation, Uncategorized Tags: , , 0 Comments

In estate litigation it is not uncommon to have reason to engage handwriting experts to attest to the authenticity of a signature on a testamentary document. However, the need to engage a typography expert to speak to the font used on such a document is a much rarer occasion. In McGoey (Re) such an expert was used to expose a sham trust.

In this case, upon Mr. McGoey’s assignment into bankruptcy, the trustee in bankruptcy sought to realize on the assets, seeking a declaration that Mr. McGoey’s interest in two properties held jointly with his wife were assets of the estate and subject to creditor claims. Mr. McGoey and his wife argued that they held title to the properties in trust for their children and, thus, outside the reach of creditors. They asserted that the trust documentation was executed in 1995 for one property and in 2004 for the other.

Upon examination by a typography expert, it was revealed that the dates of execution of the documents were not accurate, as neither Cambria (the typeface on the 1995 document), nor Calibri (the typeface on the 2004 document), were available for use by the general public until 2007. The court accepted the expert’s evidence. However, the issue was not fully resolved, since Mr. McGoey’s financial predicament was not apparent until 2010. He and his wife may have lawfully created trusts for their children between 2007 and 2010.

The court turned its scrutiny to the other circumstances of the case. Although several red flags or “badges of fraud” were found and are cited in the decision, most notable was the fact that nothing distinguished the McGoey’s use of the properties from that of an owner – they used the properties as they desired, encumbered them when they wanted and described themselves as the owners in legal papers. Accordingly, the court concluded that the trusts were shams.

Although both the expert testimony and the surrounding circumstances contributed to the court’s ruling, it seems the evidence of the typography expert would have been definitive on the question had the factual timeline been different. I expect with the ongoing creation of new fonts that we can expect to see increased use of such expert testimony in estate litigation.

Thanks for reading and have a great day,

Natalia R. Angelini

11 Feb

Getting Frozen out of Cryptocurrency?

Natalia R. Angelini Estate & Trust, Estate Planning, Executors and Trustees, General Interest, In the News, News & Events Tags: , , 0 Comments

Cryptocurrency is  aptly described in a recent post as “digital cash stored on an electronic file and traded online… like online banking but with no central bank or regulator. It also has virtual wallets which store the cryptocurrency.”

As with any online assets, access to a deceased person’s cryptocurrency is vital. Without it, heirs will not receive their intended entitlements and the cryptocurrency will remain dormant.  A stark example of such a problem can be found in the QuadrigaCX debacle.

QuadrigaCX is Canada’s biggest cryptocurrency exchange. Its’ founder, Gerald Cotton, died unexpectedly and prematurely at age 30. He was the only one who knew the password to access the holdings of the company’s clients. Once news of his death got out, thousands of clients were rushing to withdraw millions in funds. They have not yet been successful, the reason being, as one author explains, is that “…Cotten was the sole person responsible for transferring QuadrigaCX funds between the company’s “cold wallet” — secure, offline storage — and its “hot wallet” or online server…Very little cryptocurrency was stored in the hot wallet for security purposes. Cotten’s laptop was encrypted, and his widow, Jennifer Robertson, and the expert she hired have been unable to access any of its contents.”

QuadrigaCX is evidently now in financial straits. It has filed for creditor protection in the Nova Scotia Supreme Court. Further, Ms. Robertson has reportedly sought the appointment of Ernst & Young to oversee the company’s dealings while attempts to recover the lost holdings continue.

This unfortunate situation highlights the risk that may accompany cryptocurrency’s lack of regulation. It also serves as a reminder to us that with ownership of digital assets growing, we need to think about how to ensure that gifting such assets is effected, including making sure to inform our intended estate trustees of how to access the assets. Doing so is helpful because, as the above case demonstrates, it is a must in the case of cryptocurrencies to have the password relevant to the wallet where the currency is held. Further, with an asset as volatile as cryptocurrency can be, a fully informed estate trustee will be in a better position to avoid delays in the administration of an estate and/or allegations of mismanagement if he/she is able to quickly access and distribute such assets.

Thanks for reading and have a great day,

Natalia R. Angelini

06 Dec

A Way to Honour Those No Longer With Us

Natalia R. Angelini General Interest, In the News, Uncategorized Tags: , 0 Comments

The Holiday season is full of merriment and celebration. But it may be difficult for those who have lost a loved one to partake in the festivities, as the sense of loss and loneliness is often deepened at this time of year.

A recent article tells us about holiday remembrance services that can offer relief to those coping without a person who meant a great deal to them. The author speaks of the death of his mother and of his attendance at a holiday remembrance service he learned of through his local Funeral Centre, which gave him great comfort. He touchingly notes:

“Sharing tales about my mother eased my sense of loss and helped me cope with the first Christmas without her. I felt no guilt about depressing others at Christmas. Instead I was instilled with the powerful sense of relief that comes from knowing others feel the same way. Being able to share my grief freely and without feeling like a burden is an emotional and powerful way to ease the pain and to comfort others too.”

I expect, as the author points out, that the most difficult time after our nearest and dearest pass away is not in the blur of the days immediately following the death and funeral, but when the hustle and bustle of that emotional time is over and everyone returns to living their lives.  So it is nice to learn that holiday remembrance services that can help us honour loved ones and lift spirits are run by many funeral homes across the Greater Toronto Area.

 

Thanks for reading,

Natalia Angelini

04 Dec

Do you Wish to Appoint a Foreign Executor? Three Things to First Consider

Natalia R. Angelini Estate Planning, Executors and Trustees Tags: , 0 Comments

A critical decision when making your estate plan is deciding who will administer your assets after your demise.  Given the importance of appointing someone you trust, some find it to be a painstaking decision, at times complicated for those having loved ones living outside of Canada.  The attached article speaks to three things to first consider before naming a foreign executor:

  1. Bond Requirement – If the executor is a non-resident he/she will generally need to post an administration bond equal to the value of the estate when applying for probate. The process to obtain a bond is time-consuming and costly. Bringing a motion asking the court to dispense with the bond requirement also adds expense.
  2. Tax Implications – An estate may be deemed to be non-resident for tax purposes as a result of a foreign executor in control. The ensuing added cost to the estate could include losing preferential capital gains and Canadian dividend tax treatments. An estate’s reporting and tax withholding obligations are also increased. Further, even if the estate is considered Canadian, there lies a risk that it will be subject to the tax laws of the executor’s country.
  3. Practical Challenges — Among an estate trustee’s duties are the obligations to gather the assets, inventory them, preserve them and distribute them. Such administrative tasks take time and are made more challenging when the executor is in another jurisdiction. If there is no trusted local individual, one work-around is to appoint a professional trust company, which has the added bonus of eliminating the bond requirement and tax risks noted above.

It may be prudent depending upon one’s individual circumstances to get the comfort of legal advice on the issue.

Thanks for reading and have a great day,

Natalia Angelini

27 Sep

A Potential Halt to Significant Changes for ODSP Recipients

Natalia R. Angelini Estate & Trust, Estate Planning, In the News Tags: , , 0 Comments

Several newsworthy changes to the Ontario Disability Support Program Act, 1997 (the “Act”), came into force last year. For estates and trusts lawyers, the most important changes were increases in cash exemption limits, as well as increases in permissible payments to ODSP recipients.  Specifically:

  1. basic cash exemption limits were increased for a single person (from $5,000 to $40,000), and for a spouse included with the person (from $7,500  to $50,000); and
  2. permissible payments from a trust fund, segregated fund, gifts and other voluntary payments were increased from $6,000 to $10,000 over a twelve-month period.

This year, further to the Wynn’s Government’s 2018 Budget, a change was to have been made to subsection 43(1) of the general Regulation of the Act. Subsection 43(1) currently delineates several items that shall not be included in income, including the following at paragraph 13:

“Payments in addition to a payment under paragraphs 1 to 12 that are payments from a trust or life insurance policy or gifts or other voluntary payments up to a maximum of $10,000 for any 12-month period.” [emphasis added]

The contemplated amendment is a striking of the words: “up to a maximum of $10,000 for any 12-month period“.  The attached article reviews the intended change and its significance. The author cites that with these words being removed, other paragraphs relating to certain allowable gifts and voluntary payments would also be removed.  The impact would reportedly include that beneficiaries of a trust may receive unlimited monies, and that recipients of ODSP benefits could receive unlimited gifts and voluntary payments.  The $40,000 and $50,000 asset limits noted above would still apply, but RRSPs and TFSAs would no longer fall within the scope of such assets.

The modification to subsection 43(1) was to have already come into force, in part, but has not further to the Ford Government’s July 31, 2018 press release announcing that:

“Over the next 100 days, Ontario will work on a plan to reform social assistance…While work is underway, people receiving support through the Ontario Disability Support Program will receive a 1.5 per cent cost of living increase on September 1, 2018…While work is underway…Ontario will not proceed with initiatives announced in Chapter 1, Section 7 of the previous government’s 2018 Budget.”

It will be interesting to see what reform will be communicated to the public next month. We will keep you posted!

Thanks for reading and have a great day,

Natalia R. Angelini

25 Sep

Three Ways to Improve Protection for The Vulnerable Investor?

Natalia R. Angelini Uncategorized 0 Comments

I have seen an improvement in recent years in the readability of my investment statements.  Previously, I barely gave them a second glance, not out of disinterest, but because the mental gymnastics involved in making sense of them was more than I could muster.  I was not alone. A recent article reviews this common frustration, and looks at the ways in which financial services and disclosure can and are being improved, particularly for the aging and vulnerable investor.  Here are three ways that things are changing:

1.Clarity – Making the font larger in written communications. Reducing jargon and limiting the fine print. In short, communicating in plain English.

2.Enhanced Enforcement – Several provinces are moving to enact legislation that will permit the Investment Industry Regulatory Organization of Canada (IIROC) to have its decisions registered with the courts, making them akin to civil judgments, which should improve the ability to collect fines. Reportedly, 30% or more of complaints to the IIROC involve the older investor, so enforcement in this area should have a tangible impact on this more vulnerable cohort.

3.Trusted Contact – The Ontario Securities Commission is proposing an added layer of communication that, if ultimately enacted, would require registrants to make efforts to obtain contact information for someone the client designates as a “trusted contact person.” This contact would not have attorney for property status or duties. However, if concerns arise about a client’s capacity, the advisor could reach out to that individual. This idea carries with it the added caveat that advisors would need to ensure that the “trusted contact” is truly communicating in the client’s best interest. Otherwise, the input received may be unhelpful. Even worse, the “trusted contact” could be the influencer behind the investor’s change in conduct or investment instructions. This rings true in some of the estate litigation cases we see involving attorneys for property that abuse the trust placed in them to administer the grantor’s assets in their best interest. So caution is a must.

Measures like the above may make headway in the goal of better protection for the aging population, which would likely have the added benefit of reducing litigation and/or negligence claims for advisors in this area.

Thanks for reading and have a great day,

Natalia Angelini

24 Sep

A Hot-Button Decision on Multiple Wills

Natalia R. Angelini Uncategorized 0 Comments

Milne Estate (Re) is a recent decision that has generated lively discussion in our office.  In this case, a deceased couple died on the same day, each leaving identical primary and secondary wills. The primary wills applied to: “all property owned by me at the time of my death EXCEPT…[certain named assets and] any other assets for which my Trustees determine a grant of authority by a court of competent jurisdiction is not required for a transfer or realization thereof”.  The secondary wills, expressly not revoking the primary wills, applied to “all property owned by me at the time of my death INCLUDING…[certain named assets and] any other assets for which my Trustees determine a grant of authority by a court of competent jurisdiction is not required for a transfer or realization thereof”.

The executors of the estates applied for probate in respect of the primary wills, specifically seeking grants limited to the assets referred to in the wills. After written submissions were sought and provided, an oral hearing was conducted. The applications were unopposed.

The Court treated the central issue as whether or not a will is valid if there is uncertainty as to the subject-matter of the trust created by it. The estate trustees submitted (1) that questions of construction or interpretation of the will are no bar to probate, and (2) that there was no uncertainty because the excluded assets are sufficiently defined in the primary wills.

In respect of (1), the Court relied upon Neuberger v. York as providing it with the entitlement to examine the validity of the will where questions arise from an ex facie examination of the will itself. As for (2) the Court proclaimed that a will is a form of trust, such that in order to be valid, it must create a valid trust [and satisfy the formal requirements of the Succession Law Reform Act, which it did]. The primary wills in this case did not create a valid trust as certainty of subject-matter, one of the “three certainties” needed to create a valid trust, was absent.  The Court did not accept it as sufficient for the assets to be determined later by the estate trustees. It reasoned that “If multiple wills are to be employed…the property must be ascertainable objectively based upon the expressed intent of the testator without regard to discretion of the Estate Trustees exercised afterwards.”

I expect this case will generate debate on several points, including the Court’s assessment of validity at the probate stage, the pronouncement that a will must satisfy the three certainties to create a valid trust, and the conclusion that a will is not valid if it confers upon executors the discretion to retroactively determine the assets included therein.

Thanks for reading and have a great day,

Natalia R. Angelini

19 Jul

Interpretation of Wills … and Trusts

Natalia R. Angelini Estate Planning, Litigation, Uncategorized, Wills Tags: , , 0 Comments

The interpretation of wills was the subject matter of my blog earlier this week.  Today I add to that a comment on the decision of Campbell v. Evert, a case where a son and daughter were disputing whether the daughter’s entitlement under a family trust supplants a bequest under the deceased mother’s will.

The will gifts the sister $145,000 (a gift of equal value was previously given to the brother) and divides the residue equally between the brother and sister.  Several years after making the will, the mother settled an inter vivos trust, which provides that the daughter is to receive $150,000 from the trust assets, with the balance divided equally between the son and daughter.

Upon the mother’s death, the trust assets were distributed.  The son asserted that the estate assets should be divided equally, in keeping with his mother’s intention that the daughter receives $150,000 from the trust instead of $145,000 under the will. The daughter argued that with both the trust and will terms being honoured the result was equal, taking into consideration that the gift to the brother made years earlier was appreciating over time.  Nonetheless, the will was clear and unambiguous such that there was no legal basis for a different outcome, and extrinsic intention evidence was not admissible.

There was no dispute that the mother generally intended to treat her children equally in the will.  The real dispute was the mother’s intention when she subsequently created the trust.

Even though the trust agreement is not a will, the Court reasoned that the trust provisions in issue relate to the distribution of the trust assets upon death, such that those provisions have testamentary effect.  In these circumstances, the Court was satisfied that the same rules of construction apply.  Applying the principles set out in Robinson Estate in the context of the trust agreement, the Court found in favour of the daughter.  In so doing, it considered the trust agreement itself and the surrounding circumstances, and found no ambiguity or indication that the mother had intended to replace the specific bequest in the will. It also took note that the will was never amended after the trust was settled. Further, the Court ignored extrinsic evidence of the mother’s intention that the son put forward, as there was no equivocation present in this case that would make such evidence admissible.

The less common arguments of ademption by advancement and presumption against double portions were also put forward unsuccessfully, but for the sake of space I refer you to the case itself for consideration of those arguments.

Thanks for reading and have a great day,

Natalia R. Angelini

17 Jul

Legal vs. Beneficial Ownership – Not so easily distinguished?

Natalia R. Angelini Uncategorized 0 Comments

Khan v. Estate of Ahmed I. Khan et al., 2018 ONSC 4063 is a recent decision in which the primary issue between the widow of the deceased and two of the deceased’s siblings was the beneficial ownership of a real property.

The property was purchased in 1995, with title held as between the deceased’s brother and sister as joint tenants (75:25). The deceased resided in the property and paid its expenses until his death in 2014. Prior to this death, the deceased sought agreement to have the property transferred to himself, but the transfer did not proceed.

The deceased’s widow (his second spouse) pursued a claim to the property on behalf of the deceased’s estate, asserting that it was bought by the deceased as the beneficial owner and that legal title was in the names of his siblings because of the deceased’s matrimonial proceedings. The sister and brother counter-sued, saying that they bought the property to assist the deceased financially during a difficult time and let him live in the property provided he pay the day-to-day expenses. There were also allegations on both sides of loans owing as between them.

A large part of the debate centered on the contributions towards the purchase price and whether or not that constituted evidence of the purchase of a beneficial interest in the property, which was an issue muddied by allegations regarding the source of funds paid from the bank account in question (the account was in the name of the sister, but to which the deceased had access and to which other siblings contributed).

The Court heard oral testimony, and concluded that although legal title to the property was in the names of the sister and brother, the deceased was the beneficial owner and his sister and brother were bare trustees. In so doing, it made various factual findings, including that (i) there was no evidence that the brother contributed towards the purchase price, (ii) at the time of purchase the subject bank account was comprised of monies from multiple sources, including the deceased, (iii) the deceased was entitled to the use of and had control over the monies in the account, (iv) neither the deceased nor his sister could independently fund the full purchase price (one would have needed a loan from the other), and (v) on balance, it was more likely that the sister loaned monies to the deceased to fund the purchase price.

Interestingly, section 10 of the Statute of Frauds was found to apply, thereby saving the claim from being barred as a result of the application of section 9.

Thanks for reading and have a great day,

Natalia Angelini

Other blog posts you may enjoy:

Cheques and Balances: the Enforceability of Promises to Gift

Where is the Trust?

Joint Tenancy Trap

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