Author: Suzana Popovic-Montag
Like many in the estates world, we have been closely following the evolvement of Bill 245, the Accelerating Access to Justice Act, 2021. Initially introduced in February of 2021, Bill 245 significantly alters Ontario’s estate laws. Bill 245 was proposed by the government in an effort to modernize an outdated system – a proposal that was welcomed by those in the estates community. The Estates Bar welcomes these developments and commends the Attorney General’s office for taking these significant steps in updating our legislation to better reflect the realities of life in the 2020s.
On April 19, 2021, Bill 245 received royal assent. The changes to Ontario’s estate laws are enumerated in Schedule 9 of Bill 245 and include the following:
- The Succession Law Reform Act (the “SLRA”) is amended to provide for the remote witnessing of wills through the means of audio-visual communication technology for wills made on and after April 7, 2020. The execution of a will in counterparts will now be permitted.
- Section 16 of the SLRA, which provides for the revocation of a will upon marriage, except in specific circumstances, is repealed.
- Subsection 17(2) of the SLRA is amended to include separated spouses. As such, any gift bequeathed to a spouse will be revoked upon separation.
- Section 21.1 is added to the SLRA and provides the Superior Court of Justice with the authority to, on application, make an order validating a document or writing that was not properly executed or made under the Act, if the Court is satisfied that the document or writing sets out the testamentary intentions of a deceased or an intention of a deceased to revoke, alter, or revive a will of the deceased.
- Section 43.1 is added to the SLRA to exclude separated spouses from inheriting on an intestacy.
Bill 245 does not, however, affect the rights of common-law spouses.
The repeal of the provision under the SLRA with respect to the automatic revocation of any pre-existing wills by marriage is an important first step in protecting vulnerable older Ontarians from predatory marriage scenarios. Similarly, the updated rights of separated spouses will, in most cases, result in a more appropriate treatment of separated spouses who do not take the step of obtaining a formal divorce.
The new will validation provision to be added to the SLRA will provide the courts with a mechanism to allow the intentions of individuals who may not be aware of the formal requirements for a valid will to be honoured. In the past, we have seen technicalities prevent what was clearly intended to be a will from functioning as one from a legal perspective.
These changes also have the potential to improve access to justice. In particular, the permanence of virtual witnessing provisions for both wills and powers of attorney has the potential to increase access to justice while preserving necessary safeguards in the will execution process. The emergency measures introduced during the pandemic will allow Ontarians improved access to legal assistance in their estate planning, regardless of where in the province they may be located.
The amendments relating to the remote witnessing of wills and counterpart execution are currently in effect. The remaining legislative amendments will not come into force until a day proclaimed by the Lieutenant Governor, which will not be earlier than January 1, 2022.
Thanks for reading and have a wonderful day,
Suzana Popovic-Montag & Tori Joseph
The great thing about having a Last Will and Testament is that it clearly spells out what happens to your estate upon your passing. Conversely, the terrible thing about not having this document in place when you die is that you have no control over how your assets are distributed, which may cause anguish and hardship to loved ones you would have otherwise chosen as beneficiaries.
When you die without a will, or intestate, Ontario’s Succession Law Reform Act (the “SLRA”) sets out how your estate is distributed. It provides that unless someone who is financially dependent on the deceased person makes a claim, the first $350,000 is given to the deceased person’s spouse.
A problem that immediately arises is defining the meaning of spouse. For the purposes of intestacy, the SLRA adopts the definition of spouse found in section 1 of the Family Law Act, which reads: “‘spouse’ means either of two persons who: (a) are married to each other, or (b) have together entered into a marriage that is voidable or void, in good faith on the part of a person relying on this clause to assert any right.”
As such, only married spouses are entitled to benefit under the intestacy regime. You may have had a long and loving common-law relationship with a person you regarded as a spouse, but if there is no formal wedding declaration, they could be denied the inheritance you wanted them to receive. A common-law spouse may potentially seek redress by making a dependant’s support claim against your estate, though it is an effort and expense that could have been avoided with a proper will.
If you have no spouse, your children will inherit the estate. Sounds simple enough, but again there may be an issue with the way in which the SLRA defines child, as it only accepts biological offspring or those who were adopted as children. With blended families, many people have developed loving and long-lasting relationships with their step-children. In the eyes of the SLRA, however, they are not given the same inheritance rights as biological and adopted children.
Things get a bit complicated from here. Allow me to summarize:
- If any children have died, that child’s children will inherit their share.
- If there is no spouse or children or grandchildren, the deceased person’s parents inherit the estate equally.
- If there are no surviving parents, the deceased person’s brothers and sisters inherit the estate.
- If any of the brothers and sisters have died, their children (the deceased person’s nieces and nephews) inherit their share.
- If there are no surviving brothers and sisters, the deceased person’s nieces and nephews inherit the estate equally. (If a niece or nephew has died, their share does not pass to their children.)
- When only more distant relatives survive (cousins, great-nieces or nephews, great aunts and uncles), the rules are complex and a lawyer’s advice is a good idea.
There are many other problems that arise with those who die intestate, such as deciding who will be executor and oversee the estate distribution. The closest relative is usually chosen by the courts for the position, which may mean that your children are in charge and not your common-law spouse, which could create tension and expensive legal battles.
If you have minor-age children and there is no other legal parent alive, the appointment of the guardian will be out of your control.
Perhaps you have promised your grandson that he will inherit your valued coin collection when you die. That probably won’t happen, since all assets of the estate will be valued and divided up under the SLRA rules. However, in a will you can leave specific instructions, directing who receives what items you are leaving behind.
You may feel indebted to a charity, church, or hospital for their work while you were alive, and you want to leave that institution some money. Again, that can’t happen without a will.
The final point to consider is that if you have no next-of-kin and you die without a will, your entire estate goes to the Ontario government, with the Office of the Public Guardian & Trustee stepping in to administer your estate and seize your assets.
Drawing up a Last Will and Testament is a simple way to avoid all these issues, saving anguish and needless paperwork when the time comes.
Thanks for reading, and have a great day!
Wage increases are not proportionate to the astronomical rise in the cost of living. As a result, it is not all that uncommon for some to live “pay cheque to pay cheque” – especially those millennials just beginning their careers, starting a family, and hoping to buy property. Even those who have attended graduate programs (many of whom spend several years paying off the massive debt accrued by such ambitions), have double income earning families, and who hold esteemed positions in the workforce, still struggle to put aside any significant amount of money for retirement. Consequently, many young people make the unwise mistake of counting on their impending inheritance to fund their retirement.
According to Ipsos Reid survey, 35% of Canadians are relying on an inheritance to fund their futures. Although baby boomers as a generation possess great wealth, there are several reasons why that fortune might not land in the hands of millennials.
Firstly, individuals might deplete their assets while still living. Given the steady increase in life expectancy, individuals are living longer and correspondingly, their wealth must last longer. For some, this might mean living lavishly in their retirement years and travelling the world. Others who aren’t so lucky might be plagued by illness requiring extensive care. In the latter scenario, savings can be quickly consumed by these unforeseen health care expenses. For context, a private room at a long-term care home in Ontario costs on average $2,640 a month. Retirement homes, not subsidized by the government, cost approximately $3,204 a month if an individual requires assistance.
Another reason why an inheritance should not be counted until it is received is due to the volatility of the stock market. An unexpected downturn in the stock market, or a poor investing decision, could result in a retirement portfolio plummeting and thus no inheritance left to pass along.
Lastly, some parents might share the same beliefs as investing icon Warren Buffett, who infamously remarked that he would leave his children “enough money so that they would feel they could do anything, but not so much that they could do nothing.” A 2014 study by the Insured Retirement Institute confirmed that although in the past over two-thirds of baby boomers reported that they would leave their children an inheritance, this number dropped to just 46% in 2014. It appears that more parents might agree with Buffet’s philosophy than expected. As a result, it seems wise to consider your potential inheritance as a welcome bonus rather than a given.
Thanks for reading – and enjoy the rest of your day!
Suzana Popovic-Montag & Tori Joseph
On November 18, 2020, we blogged about medical assistance in dying (“MAID”) accessibility. We discussed Bill C-7 and the government’s proposal to expand eligibility for assisted death. The government’s proposal was accepted by the Senate on March 17, 2021 and, as such, Bill C-7 is now in effect.
Our previous blog post largely centered on arguments in support of increasing MAID accessibility. What it did not consider was the controversy sparked by Bill C-7, especially in marginalized communities such as the disabled community.
Bill C-7 was initially proposed after a 2019 Superior Court of Quebec decision held that it was unconstitutional to limit MAID to those at the end of their lives. Accessibility to MAID has now been expanded as some of the more onerous conditions have been alleviated. Those eligible to receive MAID now include individuals suffering intolerably from severe illnesses and disabilities with no cure.
Those with disabilities and advocates of this community are concerned that MAID will disproportionately be accessed by individuals with disabilities who do not otherwise have access to adequate social supports. Proponents of the amendments to the legislation argue that there are safeguards in place to protect the floodgates from opening and to protect against legislative abuse. For example, patients who request MAID but are not nearing the end of their life will be informed of various social and communal supports which can assist in alleviating their suffering. However, there is no requirement necessitating those considering MAID to actually access these supports. Further, Bill C-7 requires medical professionals to conclude that the person applying for MAID has given “serious consideration” to their decision. Opponents of the Bill question the subjectivity and ambiguity of this loose requirement … what would actually amount to “serious consideration”?
Are there enough protective measures in place? Are these proposals encouraging ableism and fueling already pervasive stereotypes in our society?
Disability-rights organizations would answer the former in the negative and the latter in the affirmative. On February 24, 2021, over 125 Canadian organizations signed an open letter urging the government to reconsider the amendments proposed in Bill C-7. The letter states that “Bill C-7 sets apart people with disabilities and disabling conditions as the only Canadians to be offered assistance in dying when they are not actually dying.” Studies have shown that individuals with disabilities have higher rates of depression and more frequent occurrences of suicidal thoughts in comparison to the general public. Those who oppose Bill C-7 argue that the underlying causes of suffering must be addressed, such as the institutional and social problems causing suffering. They argue that these problems often outweigh any physical suffering.
Of course, not all individuals with disabilities find Bill C-7 to be offensive. For some, the expansion of MAID represents hope and the prevention of intolerable suffering. Suffering is subjective and individuals will now be able to decide when/if their suffering becomes too intolerable. For these people, MAID is a humane exit from a life that is too unbearable to be endured.
Thank you for reading, and enjoy the rest of your day,
Suzana Popovic-Montag and Tori Joseph
Estate planning clients are often under the misunderstanding that they have the ability to choose a permanent custodian or guardian for their minor children under a Last Will and Testament. However, while parents in Ontario can appoint someone in their wills to assume custody of their minor children upon death, the ultimate determination of custody is reserved for the court. It is important for estate planning lawyers to understand and explain to clients how these testamentary custodial appointments work.
It should also be noted that there is an important distinction between guardianship in terms of custody in relation to children (a form of guardianship of the person) and guardianship of a minor’s property. Where there are two parents with custody of a minor child and one parent dies, the surviving parent will automatically have the legal right to custody of the child. In contrast, a guardian of property refers to the individual appointed to manage a minor child’s assets until he or she reaches the age of majority. Parents do not have the automatic legal right to take guardianship of a child’s assets; rather, they must make a formal application to the court to obtain this authority. Most frequently, appointing a guardian for a minor child in a will refers to naming a custodian suitable to take the parent’s place rather than a guardian of property.
The Children’s Law Reform Act (the “CLRA”) provides parents the right to use a will to appoint someone to assume custody of minor children when they die. If two or more people are entitled to custody of the child and death occurs simultaneously, subsections 61(4)(b) and 61(5) of the CLRA provide that the appointment will only be effective if both parents appointed the same person as custodian. In the event that one parent predeceases the other, the appointment of the first parent to die is typically ineffective. In other words, the appointment under the will of the surviving parent prevails. The designated custodian(s) should also be consulted to ensure that they are comfortable with the proposed appointment when the will is prepared.
Upon the date of death, the parents’ decision with respect to testamentary custody is typically effective for 90 days. A formal application to the court must be made during the 90-day period in order to obtain permanent custody of the child, on notice to the Office of the Children’s Lawyer.
It is not uncommon for family members to dispute the custodian appointment and file a competing application for permanent custody of a child after his or her parents’ deaths. While a testator’s wishes with respect to custody are considered by the court – along with the child’s preference if they are of age to express them – the best interests of the child will always prevail. Courts may be reluctant to ignore the wishes of the parents as expressed in their wills unless evidence is brought forward to demonstrate that the appointed custodian would not be fit for the role and thus it would not be in the child’s best interests.
Section 24 of the CLRA sets out guidelines to determine the best interests of the child, stating that courts “shall give primary consideration to the child’s physical, emotional and psychological safety, security and well-being.” A more extensive list of factors to consider follows this initial preface, including “the child’s needs, given the child’s age and stage of development, such as the child’s need for stability” and “the ability and willingness of each person in respect of whom the order would apply to care for and meet the needs of the child.”
Particularly because of the temporary nature of testamentary custodial appointments, it is important to support one’s decision with a clear rationale. In addition to leaving clear instructions in a will or codicil, estate planning clients may wish to take steps to ensure that family members are aware of their testamentary custody wishes and that any disagreements are brought to light while the parents are able to explain their rationale for custody-related wishes. This may facilitate a transition in custody following the simultaneous death of the parents, for the benefit of the children and their new custodians.
It is also worth noting that, as of March 1, 2021 (and scheduled to be incorporated into the legislation later this month), the term “custody” was changed to “decision-making responsibility” under the Divorce Act. According to information from the Department of Justice, “the Divorce Act now features concepts and words that focus on relationships with children, such as parenting time, decision-making responsibility and contact. The term ‘parenting order’ replaces ‘custody order’ throughout the Act, for instance. Similarly, the term ‘contact order’ describes an order that sets out time for children to spend with important people who are not in a parental role, such as grandparents.”
Although it is unpleasant to consider the prospect of an untimely death which would result in a minor child being left behind, it is important that this scenario, however unlikely, is not only considered but adequately planned for when creating or amending an estate plan where minor children are involved.
Thanks for reading – enjoy the rest of your day!
Suzana Popovic-Montag and Tori Joseph
Your will sets out how your estate is to be divided upon your death, but it is up to your executor to settle your financial affairs and distribute the remaining assets to your beneficiaries. That is why choosing the right executor is so crucial. Here are some guidelines to help select who will perform this important role.
First, you may want to make sure the person lives in Canada. An estate is considered a trust, so there could be tax implications if it is controlled by a non-resident. Rules vary from province to province, so it is best to get someone close by since they will have to consult with your bank and lawyer when settling the estate.
Even with the simplest estate, your executor will have plenty of paperwork to complete. That includes gathering financial information required to file your final tax return, paying outstanding debts and estate expenses, and perhaps even applying to have the will validated by a court. Your executor should be comfortable with finances and dealing with government agencies. He or she should also not be afraid of asking for professional help when needed.
In many cases, trustworthiness is more important than expertise, as honesty trumps experience in this important role.
You will also want to make sure the person you appoint as executor is willing to devote the time and effort required to handle all these tasks, as the process can last for months, even years. In Ontario, more than one executor can be appointed under your will and you may want to consider obtaining consent before naming someone as an executor in your will.
If you are naming a single executor, however, it is wise to consider appointing an alternate. There is always the risk of your primary executor dying before you, or becoming ill, incapacitated or unwilling to act when it is time to settle your estate.
If you intend to leave the majority of your assets to a single person, such as your spouse, you may want him or her appointed as one of your executors. Adult children or other family members often serve in this role. That usually works well, but problems can arise if one family member feels he or she is performing more of the tasks than the others.
Tensions amongst surviving family members can cause problems within blended families, especially if a child from one marriage is put in charge of distributing your estate while those from another marriage watch suspiciously from the sidelines. Naming an executor from outside the family is definitely the better option in that situation.
There are also estate professionals who can be hired to act as executors. This may be a sensible alternative if your estate is complex, or if minors or disabled children have to be provided for through trusts. Having an outsider administer your estate may also be an effective way to avoid family conflict after you are gone.
Anyone serving as an executor of your estate can apply to the court for what is known as executor’s compensation, a form of remuneration for the work involved in settling an estate.
The age of your executor is also very important. While you may want a friend that you have known since childhood to be entrusted with this role, he or she may not be physically able to do the work that is needed when the time comes.
Just as you should be reviewing and updating your will on a regular basis, your choice of executor should also be revisited periodically. Personal circumstances change over time, and perhaps the person you chose to take on the task decades ago may not be as appropriate now.
Your estate is the last gift you will give to your family. Choosing the right executor ensures that the gift is distributed as you intended.
Thanks for reading … have a great day,
When Covid-19 swept across Canada in March of 2020, it proved to be a virus that does not discriminate between young and old or rich and poor. However, this virus took particular hold of our long-term care homes. In doing so, Covid-19 shed a glaring light on an already broken system. It exposed a deep-rooted and systemic problem. It revealed chronically understaffed homes with overworked caregivers, painfully lonely residents, and the innate need for social connection. It is amidst this bleak backdrop that advocates at Advantage Ontario have urged the provincial government to support more “Seniors’ Campuses of Care” (“Seniors’ Campuses”) across the province.
Seniors’ Campuses provide a range of housing options in a community-like setting, including: assisted living, affordable housing, retirement homes, and life leases. Seniors’ Campuses offer residents a variety of social programs as well as health supports. This model also offers elders continuity of care which, in turn, provides for a more stable environment and one that is conducive to developing deep relationships with fellow members of the community. As Jane Sinclair, Chair of the AdvantAge Ontario Board of Directors, stated, “they [Seniors’ Campuses]…are vibrant, age-friendly communities that promote friendships, social inclusion, mutual support, and positive aging.” Seniors’ Campuses give residents agency over their lives.
Not only do Seniors’ Campuses offer a vast array of benefits to their members, but the model also offers the government a cost-effective way to reduce the pressure on an already overwhelmed long-term care system. Members pay monthly fees to live on Seniors’ Campuses, which vary depending on the housing model they choose to reside in. Members are able to move from one model of housing to the next as their needs change. For example, if an individual was residing in an affordable housing unit and experienced a health deterioration, he/she could be transferred to assisted living. This integrated approach provides seniors with appropriate care and enables them to remain in the community and avoid unnecessary placement in long-term care homes for as long as possible. It is a model that encourages independence and allows seniors to maintain their dignity.
Thanks for reading… Have a wonderful day!
Suzana Popovic-Montag and Tori Joseph
It is generally understood that, in order to execute a valid Last Will and Testament, a testator must meet the legal test for capacity. Drafting solicitors must remain especially vigilant when preparing a Will for an elderly client.
On October 16, 2013, we blogged on the correlation found between oversleeping and mental incapacity. Though the cause for the correlation was unknown, studies conducted by Columbia University and Hospital University of Madrid concluded that those who regularly oversleep might be more likely to develop Dementia. “Oversleeping” was classified as sleeping for nine or more hours every night.
Researchers funded by the National Institute of Health have found evidence that the reverse is also true when it comes to sleep: those already suffering from progressive neurodegenerative disorders, such as Alzheimer’s Disease, may experience more severe symptoms and a quicker decline as a result of chronic lack of sleep. Sleep patterns can affect cognitive ability and, in turn, the ability to execute a Will. These findings negate some cultural beliefs that “sleep is for the weak” and instead suggest that sleep is more important than we might want to believe.
Just as we cleanse our physical bodies at the end of each day, the brain also undergoes a process to cleanse itself of its “waste,” otherwise known as amyloid plaques. This detoxification process occurs while we are sleeping. Amyloid plaques are produced throughout the day and, like any other plaque that is built up, they can cause harm to our bodies when not properly removed. Amyloid plaques, specifically, have been linked to brain functioning and associated with Alzheimer’s disease. Without a proper night’s sleep, our brains are unable to eliminate these damaging toxins and thus cannot maintain optimal functioning.
Given the compelling evidence linking sleep patterns to possible cognitive decline, if you wish to remain capable of executing a Will, the importance of a good night’s rest cannot be overstated.
Thanks for reading! Have a great day!
Suzana Popovic-Montag and Tori Joseph
In British Columbia (“BC”), there is a process known as wills variation, whereby a spouse or child of a testator can challenge the distribution set out in the will upon the death of the testator. In these will variation cases, the Court must balance the autonomy of the testator – to decide how to distribute his/her estate – with certain moral obligations that might be present. The BC legislation that allows for this equitable claim is unique.
The BC Supreme Court’s decision in the 2015 Kong v Kong (“Kong”) case confirmed that, although difficult given the ability to bring a wills variation claim, it is possible to disinherit your children in BC. Mr. Kong was survived by seven children, all of whom were adults, at the time of his death. Mr. Kong’s Will provided for the overwhelming majority of his estate to be left to his youngest son, thus disinheriting his remaining children. Four of Mr. Kong’s disinherited children initiated a wills variation claim in an effort to vary the Will in their favour. In order for the Court to consider variation, it must determine whether the reasons for an adult child’s disentitlement meet the criteria of “valid and rational.” The onus lies on those challenging a will to establish that there were no valid or rational reasons to justify the testator’s decision.
In BC, a testator’s moral obligation to his/her children does not necessarily require the testator to provide for an adult child where there has been estrangement, misconduct, or sufficient provision to the child in the testator’s lifetime. Satisfying one’s moral obligation does not require an equal distribution to all surviving children. In the Kong decision, Justice Sharma found inconsistent claims regarding the nature of the relationship between Mr. Kong and his children who brought the variation claim. Justice Sharma held that some of the disinherited children had been estranged from their father prior to his death. On an evidentiary note, Justice Sharma refused to limit the Court’s analysis solely to discussions between Mr. Kong and his lawyer when the Will was prepared. Instead, the Court engaged in an objective investigation into the relationship between each of the Kong children and their father. Upon reviewing the reasons found for the estrangement, Justice Sharma concluded that Mr. Kong had no moral obligation to provide for the children who had been estranged (and were at fault for this estrangement). As such, Justice Sharma upheld the father’s decision to disinherit two out of the four applicants. A five percent share of the estate was awarded to the remaining applicants.
The Kong case demonstrates that, even where a variation is justified, the Court will still give strong deference to the testator’s intentions as expressed in his/her will.
Thanks for reading!
Suzana Popovic-Montag & Tori Joseph
On December 2, 2020, we blogged on Germany’s recent decision to expand pension payments to spouses of Holocaust survivors who are now deceased. Under the amended criteria, spouses are entitled to this payment for up to nine months. Prior to this decision, pension payments expired upon the survivor’s death.
Deeply intrigued by this dark period in our relatively recent history and the effects it continues to have on the heirs and estates of survivors in our modern world, we have again chosen to focus our blog on Holocaust reparations – this time from the French government.
In 2014, France agreed to pay reparations, in the amount of $60 million to certain qualifying Holocaust survivors, their heirs and their estates (known as the “The 2014 Agreement”). This Agreement was proposed in response to a lawsuit initiated by non-French survivors who had been deported to death camps from France via S.N.C.F., which was a state-owned railway system. Survivors argued that S.N.C.F. was complicit with the Nazis’ premeditated murders during World War 2. France ultimately agreed to pay survivors who had been transported to concentration camps via S.N.C.F. reparations in exchange for recipients agreeing to renounce their right to sue.
The 2014 Agreement sought to distribute reparations to victims who had been largely ignored under prior agreements and settlements.
Former Ambassador and the State Department’s expert advisor on Holocaust issues, Stuart Eizenstat, assisted in negotiating this Agreement. As a result of the Agreement, forty-nine survivors received approximately $400,000 in reparations. Thirty-two spouses of survivors who had already passed on received up to $100,000 under this Agreement. Heirs and estates of deportees were also eligible for payment.
Holocaust survivors constitute a unique population of individuals who were robbed of the opportunity to inherit wealth. Though reparations cannot make up for the suffering of the past, they represent a recognition of fault and soothe, for some, the pain of loss.
Thanks for reading!
Suzana Popovic-Montag & Tori Joseph