30 Jul

Funeral Pre-Planning: Take a Lesson From a Pirate

Paul Emile Trudelle Estate Planning, General Interest Tags: , , 0 Comments

Sailors, and in particular, pirates are often depicted as wearing gold earrings. There are many legends as to why they adopted this particular fashion statement. One has a clearly estate-related basis.

Sailors were often given earrings to commemorate certain sailing milestones, such as crossing the equator or rounding the treacherous Cape Horn. Superstition also played a role, as many believed that gold earrings would improve their eyesight, prevent seasickness or even drowning. Wax was often pressed onto the earrings, which could serve as earplugs when firing a cannon. Another theory is that the gold earrings were just a way for pirates to show off their wealth.

From an estate planning point of view, sailors would wear valuable earrings so that their funerals could be paid for if their bodies washed ashore. If a pirate died on the ship, the value of the earrings could be used to cover the cost of transporting their body back home, so as to avoid a burial at sea (assuming that there is honour amongst thieves, and that the earrings were used as intended).

Actor (non-pirate) Morgan Freeman sports gold earrings. He has been reported as saying that his earrings are worth just enough to pay for a coffin in case he dies in a strange place.

Preplanning a funeral is always a good idea. It alleviates significant stress, both financial and emotional, on those left behind. It also allows the planner to ensure that they are given the burial they want. Take a lesson from a pirate: make a plan.

Thanks for reading. Have a great weekend.

Paul Trudelle

29 Jul

Options Available to a Surviving Spouse

Fred Tonelli Uncategorized Tags: , , , , , 0 Comments

In January 2021, a decision was made by the Ontario Superior Court regarding a motion in the ongoing Cohen v. Cohen Estate matter. This case involves a widow making a claim against the estate of her late husband on several grounds, including a decades-old marriage contract, an application for equalization of net family property, and a claim for dependent support.

As this matter demonstrates, a surviving spouse who believes themselves to have been unfairly left out of the will of their late spouse has several options in terms of litigation against the deceased’s estate. If a marriage contract existed between the spouses previously, providing for one spouse in the event of the death of the other, then the surviving spouse could move to enforce the marriage contract and make an appropriate claim upon the estate.

In the alternative, the surviving spouse can bring an application under the Family Law Act (“FLA”) to effect an equalization of net family property. This would be functionally similar to the process of asset equalization after a divorce or separation, only that the claim would be against the estate of the deceased spouse, rather than against their living person.

Also in the alternative, the surviving spouse can also bring an application under the Succession Law Reform Act (“SLRA”) for dependent support. Essentially, if the surviving spouse were to sufficiently prove to the Court that he or she was financially dependent upon the deceased while they were still living, then the surviving spouse could be entitled to an appropriate amount of cash to support their former lifestyle with their late spouse.

Finally, a surviving spouse can also make equitable claims of unjust enrichment, promissory estoppel, or proprietary estoppel. The essence of all three of these claims is that the deceased benefitted disproportionately from work that their spouse contributed to their relationship, and that the surviving spouse is therefore entitled to financial compensation, as a result.

Thank you for reading!

Fred Tonelli

28 Jul

Estates, Art and Valuations

Suzana Popovic-Montag Estate Planning Tags: , , , 0 Comments

This week, we thought it would be interesting to touch on the intersection of law and art in estate planning.

Artwork collections, whether they are comprised of a multitude of works or just one piece, are often a treasured possession of their owners, carrying deep emotional significance and/or high monetary value.

In estate planning, the sentimental and financial aspects of an art collection can become intertwined. Testators and beneficiaries may have competing views. As a simple example, there could be disagreement on whether the art should be sold or kept within the family. That being said, the valuation of artwork is an issue that may often fly under the radar.

The value of an artwork collection can have serious repercussions on the administration of an estate, especially where the estate lacks liquidity to address expenses, such as estate administration taxes.

However, the valuation of art may not always be a clear cut issue, as discussed by Mr. Ronald D. Spencer, Esq. in this article. Value can vary drastically over time, and even where the value remains stable, there may be significant challenges in finding buyers, especially where the collection is large or mostly one artist, potentially burdening the estate with tax liabilities and no certain financial benefit in exchange.

Understanding and articulating one’s wishes concerning their art collection is the first step in minimizing the impact of some of these issues. You will want to set out your intentions and wishes clearly in your will.

Avoiding uncertainty can be achieved through several means. The collection can be distributed through testamentary or inter vivos gifts where appropriate beneficiaries exist. It can be sold, which may carry advantages where the valuation and marketability of the collection is uncertain over time and a potential buyer has been found. Donation to a charitable organization is also an option, with many registered charities dedicated to art.

Whatever path one chooses, it is important to understand the implications from a tax and transactional perspective to ensure the most efficient execution of the testator’s intentions.

For those interested in further reading on art and law, our colleagues at Hull & Hull LLP have written some excellent blogs on the topic here and here.

Thank you for reading and have a great day!

Suzana Popovic-Montag & Raphael Leitz

27 Jul

Hull on Estates #618 – Notwithstanding any agreement to the contrary: Can you contract out of Dependant Support Obligations?

76admin Podcasts Tags: , 0 Comments

In today’s podcast, Jonathon Kappy and Sydney Osmar discuss the recent decision Virey v. Virey, 2021 ONSC 2893 which examines the Court’s broad discretion to order an award for support even in cases where the parties may have entered into an agreement to the contrary.

Should you have any questions, please email us at info@hullandhull.com or leave a comment on our blog.

Click here for more information on Jonathon Kappy

Click here for more information on Sydney Osmar

27 Jul

Calmusky in Limbo?

Fred Tonelli Uncategorized Tags: , , 0 Comments

One pertinent issue briefly discussed in the recent webinar I attended was that of the effect of the March 2020 Calmusky decision upon estate planning.

In Calmusky v. Calmusky, the Court decided that assets held in a Registered Income Fund (RIF) were presumed to constitute a resulting trust, instead of a direct transfer to the named beneficiary of the RIF. The anticipated impact of this decision on estate planning and administration – and, by proxy, litigation – has caused quite a stir in the legal community.

In the “Wills and Estates Refresher” webinar, the presenters expressed frustration with Calmusky and the complications of its application to their own estate planning practices. After all, designating a beneficiary of a RIF or similar investment account is an excellent tool an estate planner can use to transfer assets outside of a testator’s estate, thus reducing estate administration tax for a given estate. Imposing a resulting trust upon the assets in these accounts to the benefit of the estate quite explicitly defeats the purpose of using such an estate planning mechanism.

The presenters suggested that the estate planning bar was not overly enthusiastic about following Calmusky, for the reasons stated above. In the very recent 2021 decisions of Munro v. Thomas (May) and Mak (Estate) v. Mak (June), the Court was confronted with beneficiary designation fact scenarios quite similar to Calmusky, and decided quite differently. Mak Estate, in particular, directly addressed the legal reasoning in Calmusky and came to the opposite conclusion regarding the question of whether the assets ostensibly transferred to a designated beneficiary ought to be presumed to be held in resulting trust for the benefit of a deceased’s estate. This should be promising to estate planners nervous about the implications of Calmusky over the past year.

However, as Calmusky, Munro, and Mak Estate were all determined at the level of the Ontario Superior Court, until we hear otherwise from the Court of Appeal or Ontario Legislature, the practical impact of Calmusky is in a state of legal limbo.

Thank you for reading!

Fred Tonelli

26 Jul

Wills and Estates Refresher – A Reflection

Fred Tonelli Uncategorized Tags: , , 0 Comments

I recently had the pleasure of attending a Continuing Professional Development webinar offered by the Law Society of Ontario, namely the July 14, 2021 Wills and Estates Refresher.

The main topics discussed in this webinar related to both general issues in the process of estate planning, and particular issues related to the rise of virtual legal practice during the Covid-19 pandemic.

For example, the speakers discussed how many potential clients would approach an estate planning lawyer under the assumption that drafting their will and other testamentary documents would be a simple, uncomplicated process, until their lawyer soon discovered several issues with their assets and life situation that would actually significantly complicate their estate planning.

Six such factors outlined by the speakers were: 1) bequeathing a family cottage, 2) bequeathing a family business, 3) bequeathing to family members living in the United States or another foreign jurisdiction, 4) bequeathing real estate located in the US or another foreign jurisdiction, 5) bequeathing complex financial assets, and 6) bequeathing to children or spouses from a former marriage.

Imagine a situation in which a husband and wife are both married to each other for the second time, both have children from their previous marriages, with a daughter living in England, and a son living in Ireland, while owning a vacation property in Florida. One could understand why, in such a circumstance, drafting a will for the husband or wife would not be so “simple.”

Another cogent issue discussed was the rise of virtual client meetings and execution of wills over the course of the pandemic. Although this was a necessity during Covid, many virtual legal practices will likely continue into the future, as a convenience and cost-saving measure for both lawyers and clients. However, the speakers did note that a lawyer meeting virtually with a client should always be cautious, making sure that there are not other parties in the room with the client potentially unduly influencing their estate planning intentions. One speaker suggested that in the future, she would perform initial client meetings virtually, but would only commission the execution of wills in person. This seems like a reasonable compromise.

It remains to be seen how the profession will move forward in this regard, as many personal and professional restrictions related to the pandemic are gradually lifted.

Thanks for reading!

Fred Tonelli

23 Jul

Olympic Medals: Going for the Gold

Paul Emile Trudelle General Interest, In the News Tags: , , 0 Comments

Finally, the 2020 Olympics appear to be about to begin (at the time that this is being written).

The Tokyo Olympics will have 339 medal events. Approximately 5,000 medals have been minted. The medals are made from recycled materials.

This year, for the first time in recent memory and due to COVID concerns, athletes will be putting their medals around their own necks.

According to International Olympic Committee regulations, each medal must contain a depiction of Nike (the Greek goddess of victory, not the swoosh), the official name of the Games  (eg. XXXII Olympiad Tokyo 2020) and the Olympic five rings symbol.

Although the medals are probably priceless to the winner, they do have an actual value. The cost of the materials used to make the medals is said to be $1,010 CDN for a gold medal, $640 CDN for a silver medal, and $5 CDN for a bronze medal. The gold medal contains six grams of gold plating over silver, the silver medal is all silver, and the bronze medal is made of brass. The Olympic Committee stopped giving out pure gold medals after the 1912 Olympics.

The medals clearly have a value beyond their cost to produce. Most notably, one of Jesse Owens’ 4 gold medals from the 1936 Berlin Olympics was sold in 2013 for over $1.4m US.

On eBay, an original silver medal from the 1906 Olympic Games is available for $15,289 CDN. Replica medals from most Olympic Games are available on eBay for about $35.00 CDN.

In addition to having value in and of themselves, Olympic medals often come with a hefty bonus from the winner’s country. Singaporean winners get $1m, $500,000 or $250,000 US for bringing home a gold, silver or bronze medal. Canadian winners get $20,000, $15,000 or $10,000 depending on where they are on the podium.

For the intriguing story of the 1972 Olympic gold medal basketball game and what lead to a term in the will of competitor Kenny Davis prohibiting his descendants from ever accepting the silver medal from the 1972 Games, see Ian Hull’s blog, here.

May you be faster, higher, stronger this weekend.

Paul Trudelle

22 Jul

Thousands Have Unclaimed Funds Waiting for Them!

James Jacuta General Interest Tags: , , , , 0 Comments

Thousands of individuals have unclaimed funds waiting for them in inactive credit union accounts, as well as unpaid wages, overpayments to debt collectors, proceeds from courts, pension funds, estates and real estate deposits in British Columbia. The British Columbia Unclaimed Property Society (BCUPS), whose mission is to put unclaimed money back in the hands of rightful owners, returned $1,035,932 last year in forgotten funds.

BCUPS holds unclaimed property as the custodian for rightful owners. The Society maintains a free online database where people can search to see if they have any unclaimed money waiting for them. Individuals can claim the funds by completing a verification process. There is no limitation period to claim funds and no cost for BCUPS’s services. BCUPS also works with companies and organizations to help get dormant assets off their books. In 2020, BCUPS received $4,858,925 in unclaimed funds from the courts, the Public Guardian and Trustee of British Columbia, credit unions, insurance companies, various levels of government, companies in liquidation, among other organizations.

Technically, an account is deemed dormant when a prescribed period of time has transpired with no activity, from a year to 10 years, depending on the type of account involved. Under BC law, credit unions, debt collection agencies, real estate agencies, companies in liquidation, municipal and provincial courts and municipalities, which are classified as mandatory holders, are required to make a “reasonable effort” to identify forgotten account holders before transferring these funds to BCUPS. Other organizations holding trust funds, insurance policies, brokerage accounts and closed pension plans are encouraged to voluntarily transfer their unclaimed property accounts to BCUPS if the rightful owners cannot be located.

British Columbia is the only jurisdiction in North America that has set up a not-for-profit society to administer its unclaimed property program where a portion of funds are transferred to charity.

Unclaimed Property in British Columbia by the Numbers:

$148,933,709 – Total amount of money sitting in dormant accounts waiting to be claimed.

$4,858,925 – Amount of unclaimed funds BCUPS received from financial institutions, companies and organizations in 2020.

$1,035,932 – Amount of money returned to verified claimants in 2020.

$106,789,525 – Total amount of money from dormant accounts BCUPS has received since its inception on April 1, 2003.

$18,514,588 – Amount of money from dormant accounts BCUPS has returned to rightful owners since its inception.

$48.4 Million – Funds BCUPS has transferred to Vancouver Foundation for charitable purposes since its inception.

$1.01 Million – Largest amount claimed. An outstanding estate claimed in July 2019.

$1.9 Million – Largest dormant account in BC waiting to be claimed.

The above information was taken from the British Columbia Unclaimed Property Society (BCUPS) website.

Thanks for reading!

James Jacuta

21 Jul

You were left out of the will – what are your options?

Ian Hull Wills Tags: , , , 0 Comments

When parents are creating their Last Will and Testament, they often direct that assets are to be divided amongst their children. However, this is not always how it works, as the testator has the right to leave their estate to whomever they want unless they have dependents who must be financially taken care of.

Indeed, some very rich celebrities – Sting, Elton John, Mark Zuckerberg, Warren Buffet and others – reportedly have said that their children will not receive the bulk of their estates. Their reasons include giving them “some semblance of normality, some respect for money, some respect for work” and “huge sums of wealth … distorts anything they might do in creating their own path.”

You may not have multimillionaires as parents, but there is the chance that when they die, you will not be named as a beneficiary in the will. If that happens and you feel you are entitled to some portion of the estate, a legal challenge to the will can be mounted. But beware – the process will be difficult and the chances of success uncertain.

The first thing to keep in mind is that only a spouse or dependent children can contest a will that has disinherited them. You have to have a financial interest in the estate and must be able to show you were named in a prior will, or that the deceased had promised to take care of you after their passing.

If probate has not already been granted, you can file a Notice of Objection with the court registrar. If probate has been granted, then you have to bring a motion for the return of the certificate of appointment.

Before doing that, it is wise to discuss with legal counsel why you are objecting to the will. If your reasons are based on emotion rather than reason, you will likely be advised to walk away and accept the situation. The court has little tolerance for notices of objections based on frivolous claims, and you may end up having to pay the legal costs the estate incurred in defending against your claim.

You also have to consider if contesting the will makes financial sense. Does the potential gain outweigh the legal costs (not to mention the time, effort and emotional stress) the process may cause?

That being said, there are valid reasons for taking legal action. The two main ones are that there was a lack of testamentary capacity when the final Will and Testament was drawn up, or that the testator was subject to undue influence by someone. Other valid reasons for mounting these challenges include:

  • the will is unsigned or not properly witnessed
  • the testator was not aware of the full contents of their estate
  • there are ambiguous terms in the will that are open to interpretation
  • simple fraud is alleged

Any of these reasons are grounds for filing a Notice of Objection. If successful, the will may be declared invalid.

Cases that come before the court include instances where a person near the end of their life leaves their estate to a much younger person who was their caregiver or romantic partner. Family members who find themselves cut out of the inheritance have to prove that the new beneficiary exerted undue influence in the writing of the will.

That is difficult, as mental capacity is a fluid concept. A person may have the capacity to enter into a marriage, but be incapable of effectively managing their own financial affairs. As the population ages, with many people holding onto sizeable financial portfolios, we will likely see more of these predatory marriages in the future.

Challenging a will in court can be a costly, time-consuming and emotionally draining experience. Litigation can pit family members against each other, straining relationships in a time when they should be mourning. Even if they win, beneficiaries may have to wait for years as the legal process unfolds.

If you feel you have been unfairly denied an inheritance, you should speak to a wills and estates lawyer. While every case is fact-dependent, they can provide you with an informed opinion about your chances of success.

Thanks for reading, and have a great day.

Ian Hull

20 Jul

Finding Unclaimed Estates

James Jacuta General Interest Tags: , , , , 0 Comments

The use of technology is permeating the practice of law at a faster pace as a result of the pandemic, as with every other aspect of our lives. However, some areas of law remain unchanged.

Other than in British Columbia, there is still no system that provides the public with easily accessible information about unclaimed property in Canada. For example, it is difficult to locate accounts in provincially regulated financial institutions like credit unions left by a deceased individual if you do not know where the deceased left the account. This is in contrast with the federally regulated Bank of Canada searchable website for banks.

In England and Wales, the list of unclaimed estates with missing heirs is now posted daily on a searchable website. Probate genealogists and individuals can search the list on the bona vacantia page of gove.uk.

In Scotland, the list provides additional information like the value of the estate, or the status of the administration of the estate, which can be found on the website: Queen’s & Lord Treasurer’s Remembrancer.

Beneficiaries and heirs in the United Kingdom have the ability to search online for inheritance assets that they are legally entitled to receive and which are being held in trust for them.

Thanks for reading.

James Jacuta

 

For more information on this topic  please see some of our other blogs:

Reuniting forgotten dollars with their rightful owners!

Lost and Found – $5 Billion

“Bono Vacantia” – Latin for Ownerless Goods or Unclaimed Property

SUBSCRIBE TO OUR BLOG

Enter your email address to subscribe to this blog and receive notifications of new posts by email.
 

CONNECT WITH US

TRY HULL E-STATE PLANNER SOFTWARE

Hull e-State Planner is a comprehensive estate planning software designed to make the estate planning process simple, efficient and client friendly.

Try it here!

CATEGORIES

ARCHIVES

TWITTER WIDGET