Author: Noah Weisberg

03 Oct

A Solicitor’s Duty and Will Drafting

Noah Weisberg Estate & Trust, Estate Litigation, Estate Planning, Wills Tags: , , , , , , 0 Comments

What is a solicitor’s duty when preparing a Will?

Those seeking to answer this question should start their journey with the BC Court of Appeal decision of Chalmers v Uzelac.  Here, Madam Justice Southin noted that, “every solicitor who, as part of his or her practice, draws wills should read, mark and inwardly digest at least once each year the judgment of Sir John Alexander Boyd, C. in Murphy v. Lamphier (1914), 31 O.L.R. 287, the Canadian locus classicus on a solicitor’s duty in taking instructions”.

Murphy is a seminal case.  The Court found that it was wrong to assume that because a person can understand a question put to them, and give a rational answer, that they are of sound mind and capable of making a Will.  Instead, the Court emphasized that capacity must be judged in light of the nature of the act and all of the circumstances:

“A solicitor is usually called in to prepare a will because he is a skilled professional man. He has duties to perform which vary with the situation and condition of the testator. In the case of a person greatly enfeebled by old age or with faculties impaired by disease, and particularly in the case of one labouring under both disabilities, the solicitor does not discharge his duty by simply taking down and giving legal expression to the words of the client, without being satisfied by all available means that testable capacity exists and is being freely and intelligently exercised in the disposition of the property. The solicitor is brought in for the very purpose of ascertaining the mind and will of the testator touching his worldly substance and his comprehension of its extent and character and of those who may be considered proper and natural objects of his bounty. The Court reprobates the conduct of a solicitor who needlessly draws a will without getting personal instructions from the testator, and, for one reason, that the business of the solicitor is to see that the will represents the intelligent act of a free and competent person.”

Expanding on this, the Ontario Court of Appeal in Hall v Bennett Estate references an article by M.M. Litman & G.B. Robertson which identifies common errors that have been either the subject of criticism by the courts or the basis of liability for professional negligence in the preparation of a Will, including failing to: obtain a mental status examination; interview the testator in sufficient depth;  properly record/maintain notes; test for capacity; and, provide proper interview conditions.

Read, mark, and inwardly digest this blog at least once a year accordingly.

Noah Weisberg

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01 Oct

Art & Taxes (& Estates)

Noah Weisberg Estate Planning Tags: , , , , , , , , , , , 0 Comments

I try to seize every opportunity I can to learn about art.  In preparing today’s blog, I was intrigued to read about the UK’s Cultural Gifts Scheme and its relationship to estates.

The Cultural Gifts Scheme & Acceptance in Lieu allows UK taxpayers to donate important works of art and other heritage objects in return for a tax reduction, which includes inheritance tax.  The donated work is then held for the benefit of the public or the nation at an eligible museum or gallery.  According to this article from the Guardian, the Scheme was first introduced in 1910 as a way of allowing individuals to offset inheritance tax bills, and later, in 2013, to allow individuals to be able to make donations during their lifetime in order to offset future tax liabilities.

Any art admirer should have a look at the 2018-2019 Annual Report which provides a list of items that were received, along with some pretty pictures of the items :).  It is a feast for the eyes and the senses.  Some of the highlights include:

  • a Portrait of the Emperor Charles V by Peter Rubens, which has gone to the Royal Armouries in Leeds
  • a platinum and diamond necklace with black velvet ribbons, convertible to a brooch, made by Cartier in Paris c. 1908-1910, which has been allocated to the Victoria and Albert Museum
  • 361 botanical drawings by the illustrator Florence Helen Woolward
  • Bernardo Bellotto’s painting of Venice on Ascension Day, which settled £7 million of tax
  • Damien Hirst’s Wretched War sculpture, given by the artist’s former business manager Frank Dunphy settling £90,000 in tax

In Canada, although art can be subject to capital gains, and possibly other taxes, it is possible for a donor to limit, or avoid the tax altogether, including by way of claiming a charitable tax credit.  Individuals thinking about estate planning and/or donating art should seek the advice of a professional advisor to maximize the amount of savings.

Thanks for reading,
Noah Weisberg

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30 Sep

Should a Millennial Have a Will?

Noah Weisberg Estate & Trust, Estate Planning, Wills Tags: , , , , , , , , , 0 Comments

I am not sure why, but whenever I talk to my friends about the benefits of having a Will, they seem to dismiss the advice, thinking that Wills are only meant for old people.  I was thus delighted to come across this article which highlights millennial-centric reasons for having a Will, some of which are as follows:

Digital Assets – while many millennials attest to not being flush with cash, many are flush with digital assets.  I have previously written about my digital presence, admitting that I have two personal e-mail addresses, four social media accounts, and so many points through reward programs such as Aeroplan, Indigo, Greenhouse Juice – the list goes on and on.  These assets carry both a financial and personal value.  Millennials preparing a Will should think about how they wish to transfer these assets.

Young Children – if a child is a minor, under the Children’s Law Reform Act,  it is possible for a testator to appoint one or more persons to have custody of that child in a Will.  It is also possible to set up a trust in the Will to ensure that the child’s inheritance is spent responsibly.  I often tell people that in making a Will, do not think of it as being done to benefit oneself (i.e. the testator), but to benefit and help your loved ones.  Being able to take care of minor children is a great example of this.

Pets Pets Pets – without engaging in the dog vs cat debate, it is suffice to say that many millennials have pets.  In fact, millennials these days are opting for pets over parenthood – just walk through Trinity Belwoods Park on a Saturday afternoon.  In Ontario, pets are considered property, and thus require specific estate planning.  Some options include leaving a cash legacy to a pet guardian or setting up a trust for a pet guardian, both of which can be accomplished in a Will.

Hoping that my millennial friends now agree that Wills aren’t just for old people!

Noah Weisberg

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02 Jul

Attorney for Personal Care Denied Request for Accounting

Noah Weisberg Guardianship, Passing of Accounts, Power of Attorney Tags: , , , , , , , , , , , 0 Comments

The recent Ontario Court of Appeal decision in Dzelme v Dzelme acts as a helpful reminder that even if an attorney has standing to seek a passing of accounts, the Court may still refuse to grant the passing.

John was named as the attorney for personal care for his father, Ritvers, and sought an accounting of Ritver’s financial affairs from his brother Arnis (Ritvers’ other son) who was the attorney for property.  Both John and Arnis agreed that John, given that he was an attorney for personal care, could apply under section 42(4)(1) of the Substitute Decisions Act for a passing of accounts without leave.  Nonetheless, the Court of Appeal identified that even if a person has standing to apply for an accounting, it remains the discretion of the Court to order a passing of accounts.

In deciding whether to order the passing, the superior court judge made the following findings of fact: (i) both the father and mother were capable when they executed written instructions to Arnis not to produce any financial information about his affairs to John; (ii) the mother maintained this position in response to John’s motion; (iii) a capacity assessment found that the mother was capable of making her own decisions; (iv) a third brother corroborated Arnis’ evidence that he was abiding by his parent’s wishes; (v) the application judge did not doubt that Arnis was following his mother’s wishes; and, (vi) there was no reason to suspect that Arnis was acting improperly with respect to certain transactions.

On this basis, the Court of Appeal upheld the application judge’s dismissal of John’s request for an order that Arnis pass his accounts of Ritver’s property.

Noah Weisberg

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27 Jun

What is the Limitation Period in Setting aside a Marriage Contract?

Noah Weisberg Litigation Tags: , , , , , , , 0 Comments

The recent Ontario Superior Court of Justice decision in F.K. v. E.A. addresses limitation periods and discoverability in the context of setting aside a marriage contract.

By way of background,  husband and wife began their relationship in 2000, cohabitating in June of 2004, and marrying on July 20, 2005.  Shortly before marriage, on July 14, 2005, the (soon to be) husband and wife entered into a marriage contract.  The marriage contract was prepared by the wife who obtained a template off the internet.  The husband and wife eventually separated on August 13, 2012.  A dispute arose over certain terms of the marriage contract.  The husband thereafter brought a claim on August 24, 2017 for spousal support, equalization, as well as setting aside the marriage contract.  Two of the issues that the Court addressed included whether (i) the relief sought to set aside the marriage contract is subject to the two year limitation period and, if so, (2) whether the husband brought his claim in time.

Regarding the first issue, the Court found that the husband’s claim to set aside the marriage contract is a claim as defined in section 1 of the Limitations Act and therefore subject to the two year limitation period.

As it relates to the second issue of discoverability, evidence was adduced that the husband met with a lawyer in October 2012 to discuss the dispute with his wife and certain legal issues arising with respect to the marriage contract.  Based on this evidence, the Court established that by that date at the latest, he first knew: that the injury, loss or damage had occurred; that the injury, loss or damage was caused by or contributed to by an act or omission; and, that the act or omission was that of the person against whom the claim is made.  The Court dismissed the husband’s claim finding that the two years began running the date he met with his lawyer.

 

Noah Weisberg 

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04 Apr

When Estates Become Public

Noah Weisberg Estate & Trust, In the News Tags: , , , , , , , , , 0 Comments

One of the consequences of having to probate a Will (now referred to in Ontario as applying for a Certificate of Appointment of Estate Trustee) is that the Will, along with the assets covered by the Will, are made public.

I was intrigued to read about the estate of the billionaire co-founder of Microsoft, Paul Allen.   In addition to Allen’s Last Will being made public,  multiple news articles have published a list of some of the amazing properties owned by him, including a:

  • condominium in Portland, Oregon ($700,000 to &850,000)
  • 20-acre property in Santa Fee purchased from Georgia O’Keefe’s estate ($15 million)
  • 2,066-acre ranch in Utah ($25 million)
  • Silicon Valley 22,005 square foot house ($30 million)
  • New York City penthouse on 4 East 66th Street ($50 million)
  • double property in Idaho totalling 3,600 acres ($50 million)
  • 3 acre compound on the Big Island in Hawaii ($50 million)
  • 18 bedroom mansion in the South of France ($100 million)
  • 387 acre camp in Lopez Island, Washington ($150 million)
  • 8 acres of land on Mercer Island, Washington ($130 million)
  • 400 foot Octopus Yacht (up to $130 million)

While I have no intention to address the efficacy of Allen’s estate plan, I thought the publicity of his estate provides a reminder that careful estate planning can ensure that privacy is maintained, and the payment of probate tax be avoided.  In Ontario, there are numerous options available including preparing a secondary (or tertiary) Will, placing assets in joint ownership with the right of survivorship, or simply gifting assets prior to death.  This is by no means an exhaustive list, and each option carries certain advantages and disadvantages.

While I expect that few people have the impressive catalogue of properties that Allen had, it should by no means preclude careful estate planning.

 

Thanks for reading!

Noah Weisberg

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02 Apr

The Ups and Downs of Estate Trustee Compensation

Noah Weisberg Executors and Trustees, Passing of Accounts, Trustees Tags: , , , , , , , , 0 Comments

When is it appropriate for a court to reduce estate trustee compensation?  The Supreme Court of Nova Scotia addressed this issue in Atlantic Jewish Foundation v Leventhal Estate (“AJF”).

Before getting into the AJF decision, it is worthwhile to include the caveat that determination of estate trustee compensation in Ontario (a summary of which can be found in my paper here) differs somewhat as compared to Nova Scotia.  Nonetheless, both provinces use 5% of the value of the estate, subject to the discretion of the court, as the starting point in determining the quantum of compensation.  As such, AJF remains informative in Ontario.

The deceased left a Will naming his friend, who was also a lawyer, as his Estate Trustee.  AJF was named as the residuary beneficiary.  The Will was silent as to estate trustee compensation.  As the estate was valued at over $15 million, the Estate Trustee sought compensation in the approximate amount of $896,000, being 5% of the gross adjusted value of the estate.  AJF maintained that the amount was excessive and proposed compensation in the amount of $300,000.

In determining how much compensation the Estate Trustee should be entitled to, and applying an approach similar to Ontario’s ‘five factors’, the court made the following observations: the level of responsibility is often greater for higher value estates; the increasing level of responsibility does not necessarily rise in direct proportion to the size of the estate; the Estate Trustee arranged and supervised the funeral and burial, which was mainly handled by telephone; the Estate Trustee acted promptly in selling the house; many of the assets were already in the form of cash, and the Estate Trustee knew the banks the deceased used; the Estate Trustee was diligent, wise and prudent and had to be a hands-on executor; the Estate Trustee made no mistakes; a large part of the estate was made up of investments that were readily converted into cash for distribution; and, the estate was larger rather than complex.

The court noted that 5% should be reserved for estates where there are complicating features that require more than wise and careful planning to maximize the value of the estate.  Therefore, the court awarded compensation in the amount of $450,000, being slightly more than 50% of the maximum amount that could be awarded.  A larger amount of compensation would have the effect of reading into the Will a bequest to the Estate Trustee that the deceased did not intend to make.

Noah Weisberg

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01 Apr

How to Dispense with an Administration Bond

Noah Weisberg Executors and Trustees, Trustees Tags: , 0 Comments

The requirement to post a bond can be found in section 35 of the Estates Act.  An Estate Trustee will be required to obtain an administration bond in instances including where: the deceased passed away without a will; the will does not name the applicant seeking to be appointed; or, the Estate Trustee resides outside of Ontario.

The amount of the bond is to be double the sworn value of the estate.  However, practice has developed (see D’Angelo Estate) such that the size of the bond has been reduced to the sworn value of the estate.

While section 36(1) of the Estates Act sets out specific instances where security is not required, it is section 37(2) which gives the court the general power to reduce the amount of the bond or dispense with it altogether.  In the helpful decision of Henderson (Re), the court indicates that the applicant Estate Trustee who seeks an order dispensing with the requirement to post a bond, should file affidavit evidence in support, containing the following:

  1. The identity of all beneficiaries of the estate;
  2. The identity of any beneficiary of the estate who is a minor or incapable person;
  3. The value of the interest of any minor or incapable beneficiary in the estate;
  4. Executed consents from all beneficiaries who are sui juris to the appointment of the applicant as estate trustee and to an order dispensing with an administration bond should be attached as exhibits to the affidavit. If consents cannot be obtained from all the beneficiaries, the applicant must explain how he or she intends to protect the interests of those beneficiaries by way of posting security or otherwise;
  5. The last occupation of the deceased;
  6. Evidence as to whether all the debts of the deceased have been paid, including any obligations under support agreements or orders;
  7. Evidence as to whether the deceased operated a business at the time of death and, if so, whether any debts of that business have been or may be claimed against the estate, and a description of each debt and its amount;
  8. If all the debts of the estate have not been paid, evidence of the value of the assets of the estate, the particulars of each debt – amount and name of creditor – and an explanation of what arrangements have been made with those creditors and what security the applicant proposes to put in place in order to protect those creditors.

Applicants should make sure to address each of these factors when applying to dispense with an administration bond.

Noah Weisberg

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03 Jan

Can a Non-Party Attend and Assist Counsel at an Examination?

Noah Weisberg Litigation Tags: , , , , , 0 Comments

The Rules of Civil Procedure govern examinations for discovery.  Silent though, is when a non-party will be permitted to attend an examination for discovery and assist counsel.  The answer can be found in case law.

An examination for discovery is not a public hearing, and as such non-parties cannot simply show up like they can at court.  Instead, the party seeking the non-party’s attendance and assistance must either get the consent of counsel or permission from the court.

Master Dash in Poulton v. A&P Properties Ltd., set out the following governing principles:

  1. since a cross-examination on an affidavit is not a public hearing, a non-party may attend to assist a party only on the consent of the other side or on the order of the court;
  2. the onus is on the party seeking such an order to prove entitlement to it;
  3. the non-party should not be a witness at the subsequent trial;
  4. the attendance of the non-party must not disrupt the examination process;
  5. the non-party must not take the role of witness or assist the witness is answering questions; and
  6. a court in exercising its jurisdiction as to whether to allow the presence of a non-party must do so having regard to both substantive fairness to the parties and the appearance of fairness.

While every case will turn on the specific facts, it appears that generally speaking experts may attend to assist with technical and complex evidence (although they cannot later be an expert witness at trial), as well as a resource person or expert assistant who is familiar with a file in a document-intensive case.

Noah Weisberg

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31 Dec

The Top Estate & Trust Cases from 2018

Noah Weisberg General Interest, New Media Observations, News & Events, Trustees, Wills Tags: , , , , , , , , , , 0 Comments

It is nearly a new year.  It is during this time that we reflect on the past year, make goals for the upcoming year, and come across all sorts of ‘best of’ and ‘most popular’ rankings.

As such, I herewith present the most popular estate and trust cases from 2018, as decided solely by me (and without regard to any actual data):

  • Moore v Sweet – the Supreme Court of Canada provided clarification regarding the juristic reason competent of the test for unjust enrichment, as well as confirmed the circumstances in which a constructive trust remedy is appropriate in the context of unjust enrichment.
  • Re Milne Estate & Re Panda – In Re Milne (currently under appeal), the Superior Court of Justice found that multiple Wills were invalid where so-called ‘allocation clauses’ (also referred to as basket clauses) in the Wills provided the Estate Trustees with the discretion to determine which estate assets fell under which Will. Conversely, in Re Panda, the Superior Court of Justice declined to follow Re Milne and probated the Will notwithstanding the presence of an allocation clause.  The Superior Court of Justice also addressed the roles of the court as either the ‘court of probate’ or ‘court of construction’ and whether a Will is a trust that is subject to the three certainties.
  • Wall v Shaw – the Court of Appeal (sitting as the Divisional Court) held that there is no limitation period to objecting to accounts in an Application to Pass Accounts. The Court reasoned that a notice of objection does not commence a ‘proceeding’ for the purposes of section 4 of the Limitations Act.
  • Seguin v Pearson – the Ontario Court of Appeal reiterated the different tests for undue influence that apply in the inter vivos and the testamentary context.
  • Valard Construction Ltd. v. Bird Construction Co. – the Supreme Court of Canada found that a trustee had a fiduciary duty to disclose the terms of a trust (here, it was a bond) to the beneficiary, notwithstanding the fact that the express terms of the trust did not stipulate this requirement.

 

 

Thanks for reading!
Noah Weisberg

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