Author: Paul Emile Trudelle

19 Jul

Quitting As Estate Trustee: Not Always Easy

Paul Emile Trudelle Estate & Trust, Estate Litigation, Estate Planning, Trustees, Wills 0 Comments

Often, estate trustees no longer want the job, and want to be removed. This is particularly the case when they are required to deal with difficult beneficiaries. In most cases, where a Certificate of Appointment has been issued or where they have acted as estate trustee in any way, a court order is required. However, as illustrated in Pierce v. Zock, 2019 ONSC 4156, getting an order removing oneself as estate trustee is not always straightforward.

There, the deceased appointed two of his children, Gary and Norma, as estate trustees. The wills, primary and secondary, established a trust for the benefit of another child, Stephen. The relationship between Gary and Norma on the one part, and Stephen on the other broke down. Gary and Norma brought an application to remove themselves as estate trustees.

Under the trusts established by the wills, Stephen was entitled to remain in the deceased’s real property as long as he was capable of maintaining the property and managing his personal care. If these conditions were not met, the property was to be sold and the proceeds divided amongst the deceased’s four children, with Stephen’s share being held in a trust administered by the estate trustees. The estate trustees also sought directions from the court as to whether these conditions were being met, and if not, whether the real property could be sold.

The court noted that a trustee cannot be forced to continue to serve as a trustee if he or she is  no longer willing or able to continue. However, in this case, the estate trustees were not able to suggest an alternate to act as estate trustee. No institutional trustee or individual was willing to act. Further , the Public Guardian and Trustee was not willing to act.

During oral argument, Gary indicated a willingness to continue to act on a short term basis, if the court allowed the sale of the real property. The court seized upon this reluctant willingness, and ordered that Norma be removed, but that Gary stay on as estate trustee. The court imposed conditions, which included that Stephen shall have no contact with Gary except through legal counsel.

On the question of the sale of the property, the court refused to allow the sale. The court found that there was insufficient evidence that Stephen was not maintaining the property or was incapable of managing his personal care.

In conclusion, Gary was kept on as estate trustee and was not permitted to resign. The property was not to be sold.

Such a possible outcome should be kept in mind when accepting an appointment as estate trustee. Further, testators should consider naming alternate estate trustees in event that the appointed estate trustees are not able or willing to continue in the role.

Have a great weekend.
Paul Trudelle

12 Jul

Intervention: Trying to Get In The Game

Paul Emile Trudelle Beneficiary Designations, Estate & Trust, Estate Litigation, Estate Planning, Uncategorized Tags: , , , , 0 Comments

Sometimes, you are added as a party to a proceeding when you don’t really want to be. In other cases, a proceeding is started, and you are not a party, but want to be. What can be done about this? Intervention.

Under Rule 13.01(1) of the Rules of Civil Procedure, a person who is not a party to a proceeding may move for leave to intervene as an added party if the person claims:

  1. an interest in the subject matter of the proceeding;
  2. that the person may be adversely affected by a judgment in the proceeding, or
  3. that there exists between the proposed intervenor and one or more of the parties a question of law or fact in common with one or more of the questions in issue in the proceeding.

Rule 13.01(2) adds another consideration. The court shall consider whether the intervention will unduly delay or prejudice the determination of the rights of the parties to the proceeding.

Intervention was considered in the decision of Arnold v. Arnold, 2019 ONSC 3679. There, the proceeding involved a Power of Attorney dispute between 3 of the incapable person’s children. The issue was whether a 2011 Power of Attorney, which appointed children 1, 2 and 3 as attorneys, governed or whether a 2019 Power of Attorney, which only appointed children 2 and 3 as attorneys governed.

The proposed intervenor was child 4. He was not named as attorney in any of the Powers of Attorney, and was not a party to the proceeding. Child 4 was diagnosed with schizophrenia and lived in his mother’s, the incapable person’s, house. He was receiving support from her. He sought to intervene to ensure that his needs were protected.

The court considered the criteria for intervening, and refused to allow child 4 to intervene.

As to the first criteria, the court found that essence of the application was who was to be responsible for the management of mother’s property, not how it was to be managed. While child 4 may have an interest in how the property was being managed, he had not genuine interest in who.

Regarding the second criteria, child 4 acknowledged that he was not adversely affected by the management of mother’s property, as long as the responsible person fulfills that role properly. The court added that child 4 would benefit from the determination of the question raised in the proceeding, as he would then know with whom he is dealing.

With respect to the third criteria, child 4 argued that he had potential claims as against his father’s estate and his mother for child support. The court found that the questions raised in those potential proceedings were not the same as the questions raised in the existing proceeding regarding who was to care for mother. Further, child 4’s lack of intervenor status would not prejudice his claims.

The court also found that allowing child 4 to intervene would result in undue delay and prejudice. The proceeding was already being expedited, and was scheduled to be heard two weeks after child 4’s motion to intervene. Allowing child 4 to intervene would likely delay the proceeding. Had child 4 moved to intervene sooner, this might not have been the case.

Costs were awarded against child 4. However, due to his being on ODSP, costs were awarded against child 4 in the amount of $4,000 to each of the other groups of litigants. Payment was deferred until child 4 received his share, if any, of his mother’s estate.

Thanks for reading.
Paul Trudelle

05 Jul

Estate Planning With Drake: Money in the Grave

Paul Emile Trudelle Estate & Trust, Estate Litigation, Estate Planning, Trustees, Wills Tags: , , 0 Comments

In a recent recording, “Money in the Grave”, Drake asks that he be buried with his money. He sings:

In the next life, I’m tryna stay paid
When I die, put my money in the grave.

Several issues come to mind.

First, Drake’s wish to be buried with his money is not binding on his estate trustee unless it is in a properly executed testamentary instrument.

Second, even if the money is buried with Drake, his estate trustee may have to pay Estate Administration Tax on the buried money if the will is to be probated. Drake may want to consider multiple wills. (Well-considered primary and secondary wills might also avoid the payment of Estate Administration Tax on the value of all of his chains, and other bling.)

Third, the act of destroying money is illegal in many jurisdictions. In Canada, under the Currency Act, it is illegal to “melt down, break up or use otherwise than as currency any coin that is legal tender in Canada”. The Criminal Code creates an offence for defacing a current coin. There is no similar prohibition on defacing or destroying paper money. However, in the US, burning money or any other act that renders a note “unfit to be reissued” is illegal. Arguably, the act of burying money is not the same as destroying money.

(Read Stuart Clark’s blog, here, about a woman who cut up the equivalent of $1.4m CDN to disinherit her heirs.)

Fourth, Drake’s estate trustee might be accused of waste. He or she may want to seek the opinion, advice or direction of the court before they “Bury my [expletive] Chase Bank.”

More on point, in the US decision of Eyerman v. Mercantile Trust Co., 524 S.w.2d 210 (1975), the testator directed that her house be burned down, the lot sold, and the proceeds added to the residue of her estate. A neighbour wasn’t too crazy about the idea, and applied for an injunction.  The injunction was, at first, denied. On appeal, the court held that the direction in the will was against public policy.

The court in Eyerman cited the decision of In re Scott’s Will, 88 Minn. 386 (1903). There, the testator directed his estate trustee to destroy money belonging to the estate. The court there found that the clause was void. The court also quoted from Restatement, Second, Trusts, 124, at 267.

“Although a person may deal capriciously with his own property, his self interest ordinarily will restrain him from doing so. Where an attempt is made to confer such a power upon a person who is given no other interest in the property, there is no such restraint and it is against public policy to allow him to exercise the power if the purpose is merely capricious.”

In Restatement, an example is given of a bequest from A’s estate to B in trust to throw the money into the sea. (Query: more lyrical or less lyrical than Drake’s direction?) “B holds the money upon a resulting trust for the estate of A and is liable to the estate of A if he throws the money into the sea.”

In another, earlier Drake ditty, “Crew Love”, Drake boasted about spending $50K on a vacation, and needing restaurant reservations for twenty. “I never really been one for the preservation of money. Much rather spend it all while I’m breathing.” It seems that he now has so much money that he may not be able to spend it all while living, and he is turning his thoughts to succession planning. He may want to get some professional estate planning advice.

Thank you for reading.

Paul Trudelle

28 Jun

Court Gestures: Dying Declarations

Paul Emile Trudelle Estate & Trust, Estate Litigation, Estate Planning, Uncategorized Tags: , , 0 Comments

In the Ontario Court of Appeal decision of R. v. Nurse, 2019 ONCA 260, the gestures of a dying man were relied upon to support a murder conviction.

In that case, N owed rent money to his landlord, K. Rather than pay, N lured K to his home, where K was repeatedly and viciously stabbed.

N denied that he was involved in the stabbing, and claimed that another unknown person had stabbed K.

While K was being treated by police on the scene, N approached K and the police. K, who was in obvious and extreme distress, pointed to his stomach stab wounds, and then pointed to N.

The trial judge found that the gesture fell within the “dying declaration” exception to the hearsay rule. The Court of Appeal agreed. They also agreed that evidence of the gesture was admissible under the principled approach to hearsay.

A dying declaration is usually a verbal statement or utterance. However, a gesture can also convey meaning, and may be considered to be a statement or utterance to which the dying declaration exception to the hearsay rule applies.

With respect to the dying declaration exception to the hearsay rule, the Court of Appeal said that the exception could be traced back to the 1789 decision of The King v. Woodcock. There, the court stated:

Now the general principle on which this species of evidence is admitted is, that they are declarations made in extremity, when the party is at the point of death, and when every hope of this world is gone: when every motive to falsehood is silenced, and the mind is induced by the most powerful considerations to speak the truth; a situation so solemn, and so awful, is considered by the law as creating an obligation equal to that which is imposed by a positive oath administered in a Court of Justice.

The trial judge was therefore correct in instructing the jury to consider the evidence of whether K was pointing to N, and if he was, what he meant by this.

Another ground of appeal was with respect to incriminating messages retrieved from N’s cell phone. When N was first arrested, his phone was seized. An analysis of the data on the phone revealed only limited interaction between N and his co-accused. However, about a year later, the analysis software was updated, and a further analysis of the phone revealed the plan to kill K. N argued that the second analysis was a fresh search that was not authorized by the first search warrant. This argument was rejected.

Have a great weekend.

Paul Trudelle

21 Jun

Dying to Golf

Paul Emile Trudelle Estate & Trust, Estate Litigation, Estate Planning, Uncategorized Tags: , , , 0 Comments

Ian’s questions and answers from Wednesday’s blog on various topics, including death and golfing, led me to consider another issue: people dying on a golf course.

One of my favourite scenes from my favourite movie, Caddy Shack, involves a Bishop playing the best round of golf of his life in a raging rainstorm. When asked if play should continue, greens keeper Carl Spackler (Bill Murray) advises: “I’d keep playing. I don’t think, the heavy stuff’s going to come down for quite a while.” The Bishop plays on, misses his final putt, and turns to curse the sky, whereupon he is struck by lightning. See the clip, here.

Although the Bishop lived (but renounced God), many others have not been as lucky.

According to Golfsupport.com, golfing (with 1.8 injuries per 1,000 people) is more dangerous than rugby (only 1.5 injuries per 1,000). In the U.S., golf carts are responsible for 15,000 injuries per year. 40,000 golfers seek treatment each year for injuries caused by errant golf balls and flying club heads.

Golf Digest has published a list of “The 10 Worst Ways To Die On a Golf Course”. These include:

  • A man who was fatally kicked in the chest when a group of golfers lost patience with the man while he was searching for a lost ball.
  • A man in Ireland who died after a rat ran up his leg, urinated and bit him while the man was searching for his ball in a ditch. The rat carried the fatal Weil’s disease.
  • A man who died after slamming his club against a bench after a poor shot. The club shattered, and a piece of the club pierced his chest.

Fore!

Paul Trudelle

14 Jun

Getting Whited-Out of A Will

Paul Emile Trudelle Beneficiary Designations, Estate & Trust, Estate Litigation, Estate Planning, Trustees, Uncategorized, Wills 0 Comments

After making her will, the deceased “whited-out” the name of a beneficiary using white-out or liquid paper. Was this an effective amendment to the will?

This question was answered in Levesque Estate (Re), 2019 BCSC 927 (CanLII). There, the deceased made a formal will which left the residue of her estate to 7 beneficiaries. However, at some point between the making the will and her death, the deceased obscured the name of one of her beneficiaries using white-out. The estate trustees applied to the court for the opinion of the court with respect to whether this “alteration” was effective.

Applying B.C. law, the court determined that the alteration would be effective if either the alteration made the word or provision illegible, or if the alteration was deemed by the court to represent the intention of the deceased to alter the will.

With respect to the first test, the court found that the whited out provision did NOT render the name beneath to be “impossible to read by ordinary inspection … without chemical or other analysis”. Therefore, the alteration was not valid on this basis.

(In another case out of Newfoundland, the court held that provisions were “whited out” to the extent that “no part of the previous text [was] apparent”. Apparently, the testator used a heavier hand when whiting out. In that case, the whiting out of the text was found to be an effective revocation.)

In Levesque, however, the court went on to apply the second test of substantial compliance, and found that the alteration was a “deliberate or fixed and final expression of the Deceased’s intention” to remove the beneficiary from her will. “Carefully dabbing white-out over the provision in question was undoubtedly a considered and deliberate act on the part of the Deceased. She was applying the white-out to the original Will. It was not a casual act. The only reasonable inference is that her intention was to remove the provision from the Will.” The court was able to use its curative powers to give effect to the alteration.

In giving effect to the alteration, the court applied s. 58 of B.C.’s Wills, Estates and Succession Act, which gives the court authority to give effect to the alteration of a will even if there is not strict compliance with the formal requirements of the Act. In Ontario, there is no similar “substantial compliance” provision. It is not clear that the whited-out changes would have been effective in Ontario.

For another blog on white-out and wills, see “Revocation of Wills: White Out of this World”.

Have a great weekend.

Paul Trudelle

07 Jun

Wills, Divorce and Tying Up Loose Ends

Paul Emile Trudelle Estate & Trust, Estate Litigation, Estate Planning, Uncategorized Tags: , , 0 Comments

In Ontario, by reason of s. 17(2) of the Succession Law Reform Act, if a testator’s marriage is terminated by a judgment absolute of divorce or is declared a nullity, any devise or bequest to his or her former spouse, any appointment of his or her former spouse as estate trustee, or any grant of a power of appointment to his or her former spouse is revoked, and the will is to be construed as if the former spouse had predeceased the testator.

This is subject to a contrary intention appearing in the will.

This provision was enacted in 1974. Prior to that, bequests to a former spouse remained valid until the testator made a new will, revoked the will, or remarried. (S. 16 of the SLRA provides that a will is revoked by marriage, subject to certain exceptions.)

In Page Estate v. Sachs (H.C.J.), 1990 CanLII 6903, the court had to grapple with the question of the retrospective application of this section. There, the testator made a will in 1968. The will gave the estate to the testator’s spouse. The testator and his spouse were divorced in 1974. The testator died in 1986. The question for the court was whether s. 17(2) would apply in those circumstances.

The court found that s. 17(2) has retrospective application. The gift to the spouse was revoked. The testator’s estate was distributed as if the former spouse had predeceased.

In the decision, the judge quoted from the “Report On The Impact of Divorce on Existing Wills” by the Ontario Law Reform Commission. It was said that s. 17(2) “represents remedial reform legislation in aid of those former spouses who neglect to alter their wills following a divorce and thereby bestowed upon their former spouse unintended windfall benefits.” The judge went on to observe that the section “simply asserts the finality which a decree absolute renders to the relationship and status of the former spouses and ties up any inadvertent loose ends which could resurrect the spousal status.”

Note that the provision only comes into play where there is a divorce or the marriage is declared a nullity. Separated spouses should “tie up any loose ends” and ensure that they consider revising their will upon separation. My first exposure to estates law involved a matter where a wife moved to divorce her husband. The husband was so irate that he vowed that she would not get anything from him in the divorce, and committed suicide. He did not revise his will. As a divorce had not yet been granted, his entire estate passed to his wife, which was clearly contrary to his intentions.

Don’t leave your ends loose.

Paul Trudelle

31 May

One Expensive Dock!

Paul Emile Trudelle Estate & Trust, Estate Litigation, Estate Planning Tags: , , , 0 Comments

As spring leans toward summer, many begin to think about spending time sitting on a dock. While sitting on a dock (or a patio, if that is more your thing), consider the recent decision of Krieser v. Garber, [2019] O.J. No. 1619.

In 2012, the Garbers decided to build a dock attached to their property on Lake Simcoe. They retained Nealon Wood Products to do so. It must have been a nice dock. The cost was $150,000.

Unfortunately, the dock was not built according to Ministry of Natural Resources-approved plans. It was built 17 feet to the west of where it was supposed to be. Boulders placed around the dock for ice protection extended over the projected lot line of Garbers’ neighbour, the Kriesers. While the placement of the dock improved the view of the Garbers, it did not improve the Kriesers’ view. Additionally, it interfered with the Kriesers’ ability to access their own property by boat.

At trial, the court found that injunctive relief was appropriate. The Garbers were ordered to remove the dock from its current location, and repair the lake bed. In addition, the Garbers and Nealon were ordered to pay the Kriesers $100,000 in punitive damages.

On the issue of costs, reported here, the court awarded the Plaintiff costs of $518,000 for the two week trial, payable by the Garbers and Nealon, jointly and severally. The Garbers were ordered to pay an additional $80,000 for costs “thrown away” in relation to an earlier adjournment of the trial.

In awarding costs, the court noted that the Plaintiff had made a very reasonable offer to settle. The offer was, according to the judge, “the most generous offer to settle I have ever seen”.

In their offer, the Kriesers offered to pay for all of the costs of having the dock and the protective boulders moved. It was estimated that this costs could be in the $150,000 range. This “with prejudice” offer was relied on, in part, to support an award of substantial indemnity costs. It also was a factor in the award of punitive damages.

Thanks for reading. Have a great weekend.

Paul Trudelle

17 May

Lawyers at Borders

Paul Emile Trudelle Estate & Trust, Estate Litigation, Estate Planning, Uncategorized Tags: , , , , 0 Comments

On May 5, 2019, CBC reported on a story of a lawyer who had his cell phone and laptop seized by the Canada Border Services Agency when he refused to give them his passwords.

According to the report, Nick Wright was returning to Canada after a 4 month trip to Guatemala and Colombia. After his bags were searched, the Canada Border Services officer asked for the passwords to his phone and laptop, so that they could be searched as well. Wright refused, telling the officer that his devices contained confidential solicitor-client information. His devices were then confiscated, to be sent to a government lab which would try to determine the passwords and search the files.

According to Canada Border Services, digital devices are classified as “goods”, and Canada Border Services is allowed to examine the goods, including any electronic files on the device, for customs purposes. If a traveller refuses to reveal their password, Canada Border Services may seize the device. According to the policy manual, although an arrest would “appear to be legally supported, a restrained approach will be adopted until the matter is settled in ongoing court proceedings.”

U.S. customs and border protection officials have similar rights to search devices. Refusal to disclose passwords may result in confiscation or a denial of entry.

Such digital device searches do not occur frequent. In the 17 months between November 2017 and March 2019, 19,515 travellers entering Canada (0.015% of all travellers) had their digital devices examined by Canada Border Services.

The Canadian Bar Association warns about the risks of such searches to lawyers. Lawyers have a duty to keep client communications private. This applies to all information about a client or former client. The duty extends to staff, as well. “Your client has a right to privacy which requires you not to disclose to anyone, with exceptions, when any communications between you relate to legal advice sought or given.”

The Canadian Bar Association says that a breach could result in a loss of client trust, a client lawsuit for negligence, an E&O claim, disciplinary action and public criticism.

The Canadian Bar Association suggests that when crossing a border, lawyers should travel with a “clean device”. They should use cloud technology to store any solicitor-client information. Lawyers should erase all privileged information from their devices, including contact lists with clients’ names, addresses and contact information. The search by border services does not allow them to access information on the cloud. Once across the border, this information can easily be reinstalled from the cloud.

Happy travelling.

Paul Trudelle

10 May

A “Good News” Story on Compensation

Paul Emile Trudelle Elder Law, Estate & Trust, Estate Litigation, Estate Planning, Passing of Accounts, Trustees, Uncategorized, Wills Tags: , , , 0 Comments

In Daniel Estate (Re), 2019 ONSC 2790 (CanLII), the applicants applied to have their estate trustee and attorneyship accounts passed. As stated by the judge hearing the application, “Unlike many applications to pass accounts, this is a “good news” story.”

The applicants were the friends and former neighbours of a high net worth, elderly couple, Isabel and Wayne. For over 20 years, the applicants provided extensive personal assistance to the elderly couple. “In many ways, [the applicants] acted like loyal and dutiful family members.” In addition to completing simple neighbourly tasks, the applicants helped the couple in many other ways. They eventually became the attorneys for property and personal care for the couple. When Wayne died, the applicants took on the role of acting as his Estate Trustee.

The application to pass accounts was supported by an affidavit from Isabel, who indicated that she was content with the claim for compensation being made by the applicants. The application materials also included an accounting analysis prepared by a Chartered Accountant, who reviewed the accounts in detail, and also an analysis by a Certified Case Manager  and Certified Canadian Life Care Planner, who assessed the value of the personal services provided by the applicants.

In the end, the court awarded the applicants compensation for administering Wayne’s estate of $129,775; compensation for acting as attorneys for property of $435,772.36 and compensation for acting as attorneys for personal care, for a total of $757,659.

With respect to costs, the court awarded the applicants their costs of $125,021 for the unopposed passing of accounts. According the judge, “While this amount seems at first blush high, I note the accounting report alone was worth $45,000. In my view of the detailed, thorough and helpful material filed and in view of the hours it took to assemble, digest and present the financial information provided, I find that the fees and disbursements claimed are reasonable.”

The court appears to have been impressed by the extent and quality of the assistance provided by the applicants to Isabel and Wayne. Further, the court appears to have been impressed with the detailed and extensive materials put before the court in order to justify the claims on the passing.

Thanks for reading.

Paul Trudelle

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