In W. (W.) v Y. (Y.), the testator’s holograph will gifted the entire estate to his second wife, excluding his daughter and son from his first marriage. The daughter commenced a will challenge and brought a motion for directions pursuant to Rule 75.06 of the Rules of Civil Procedure. The respondent second spouse opposed the motion. She sought to have the will challenge dismissed on the grounds that insufficient evidence had been presented to support an inference that the claim should be heard.
A. Gilmore J. heard the motion, examined the issues and made two key rulings:
- Financial Interest – Rule 75.06 allows any person who “appears to have a financial interest in an estate” to apply for directions as to the procedure for bringing a matter before the court. Justice Gilmore concluded that it would be inappropriate at this early stage to determine that the applicant has no financial interest. The threshold is a low one, such that an objector need not prove that she has a financial interest. In any event, the possibility of an intestacy should the will challenge be successful was sufficient to warrant the court’s involvement.
- Suspicious Circumstances – The deceased suffered an aggressive form of brain cancer that his daughter alleged caused cognitive impairments. The evidence adduced raised questions as to (i) the issue of capacity (echoed by Dr. Kenneth Shulman), and (ii) the prospect that certain portions of the will may offend public policy. Given the wording of the offending provisions, notably described as “disconcerting”, this issue was also linked to that of capacity. Gilmore J. ruled that it was not for the court to decide at the directions’ stage as to whether there are suspicious circumstances, but rather whether there is some evidence that would support a trial judge’s finding of suspicious circumstances in order to shift the burden to the propounder to prove capacity. The evidence in this case satisfied this requirement.
This decision reminds us that a motion for directions is often a preliminary procedural step in estate litigation. The court does not require conclusive evidence but only sufficient evidence to support an inference that the claims raise a genuine issue. Opposing such a motion in an attempt to terminate the proceeding as a whole will not often be successful.
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On January 1, 2017, the Government of Saskatchewan implemented changes governing the release of adult adoptees birth registration, and access to birth registration information.
In Saskatchewan, prior to the adoption of the new regulations, adult adoptees required the consent of a birth parent in order to find out their birth name, the name and location of the hospital where they were born, and the name of their biological parents. The requirement of consent was very burdensome on adult adoptees who had to go through the Saskatchewan Government, specifically the Post-Adoption Services branch, in order to track down their biological parents. Locating biological parents and obtaining consent would result in average wait times of approximately three years.
Those eligible to apply for the newly implemented Post-Adoption Services regulations, if the adoption was finalized in Saskatchewan, are:
- an adult adoptee (18+ years of age);
- an adoptive parent of an adoptee who is under 18;
- a birth parent of an adoptee;
- the adult child of a deceased adult adoptee;
- the adult child of a deceased birth parent whose child was placed for adoption; or
- an extended family member of an adult adoptee or birth parent.
With the new regulation, adult adoptees no longer require consent from both parties to access birth registration information. The information is readily available to individuals who file a request. With the current regulation, the wait time for information is expected to be a few weeks.
From January 1, 2016 to January 1, 2017, both adoptees and birth parents had the option to veto the release of their birth registration information, specifically the biological names. There was no option to veto the name of the birth hospital or location. According to an article by CBC News, some 84 vetoes have so far been registered by birth parents, and “significantly fewer” by adult adoptees. Vetoes can only be placed on adoptions that occurred prior to January 1, 2017. Therefore, adoptions after January 1, 2017 must be subject to the new regulations.
The Government of Saskatchewan Post-Adoption Services website offers online forms requiring documentation such as a birth certificate, drivers licence and Order of Adoption. Further documentation will be required if the individual is an adult child of a deceased adult adoptee, or the adult child of a deceased birth parent whose child was placed for adoption. Furthermore, the application allows the searching party to specify their preferred method of contact.
From an estate planning perspective, it is interesting to consider that these revisions will, in certain circumstances, cause adoptees to be named as beneficiaries in the will of their biological parents.
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The power of the Court to rectify any sort of legal instrument is a potent remedy; Canada (Attorney General) v. Fairmont Hotels Inc., 2016 SCC 56 at paras. 12-15 and 57 (S.C.C.). Ultimately, whether the context is a contract or a Will, the rationale is very much an equitable one – it is unfair to take advantage of an innocent mistake. In the context of rectification of drafting error in Wills, the
re are three requirements:
(1) where there is an accidental slip or omission because of a typographical or clerical error;
(2) where the testator’s instructions have been misunderstood; or
(3) where the testator’s instructions have not been carried out.
A recent example is The Bank of Nova Scotia Trust Company v Haugrud, 2016 ONSC 8150 (Ont. S.C.J.). Here an innocent mistake was manifested on the face of the Will in that there was a mistaken reference to the wrong class of shares in a certain corporation owned by the deceased. The Hon. Justice Mesbur held:
 Here, the lawyer who drafted the will unequivocally admits his mistakes. The context for the mistakes is confirmed by the accountant, who sets out the background of how the mistakes occurred. Essentially, the confusion around the class of shares arose because the accountant was referring to the initial reorganization plan for Davwel, instead of the slightly different plan that was ultimately put in place. Although the deceased clearly and accurately set out the shareholdings in his letter to the accountant, neither the accountant nor the lawyer used the correct information, and instead maintained their reference to the earlier plan regarding the class of shares. I conclude it was an accidental slip or omission that resulted in the mistake regarding the class of shares.
 I also conclude the drafting solicitor misunderstood or failed to carry out the testator’s instructions, in that he failed to refer to either the correct class of Davwel shares or to the correct number of shares that would have to be redeemed in order to carry out the testator’s instructions.
 All three criteria in Robinson have been met…
Here the power to rectify allowed the situation to be corrected. One might note that this equitable power is especially useful in that it provides the Court with a greater power than merely correcting a false description. In such cases the maxim demonstratio non nocet, cum de corpore constat (‘a false or mistaken description does not vitiate’) operates such that non-essential or surplus words which are inaccurate may be ignored provided that the remaining true descriptive words are sufficiently certain; Re Beauchamp (1975), 8 OR (2d) 2 (H.C.J.). It does not, however, allow for the addition of of the words that were in fact intended by the deceased.
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As a professional, one is never pleased to hear of a colleague being found liable in negligence. However, there are always lessons to be learned.
Ozerdinc Family Trust v. Gowling Lafleur Henderson LLP is unfortunately an example of a case where, apparently, a simple failure to account for the deemed disposition date of trust assets resulted in an avoidable tax liability. While the defendant solicitors admitted acting below the standard of care in failing to inform the plaintiffs respecting the date and consequences of the deemed disposition of the capital assets of the trust, liability was resisted on the theory that the mistake didn’t cause the loss as the plaintiffs/trustees had retained accountants who, the plaintiffs pleaded, should have been tracking and reporting on the deemed disposition date. The point was determined in a motion for summary judgment which was decided in favour of the plaintiffs; the mistake was sufficiently causative on its own.
What can one learn? It seems reasonable that the culprit here is faulty communication given that the firm and lawyers involved were of adequate experience and expertise to meet the applicable standard of care. As LawPro reminds us, mistakes are easy to make and standardized reporting systems help to avoid such errors.
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Happy new year everyone!
I’m sure that we’re all a bit sluggish coming back from the holidays, but hopefully we’ll find the transition not too bad. By the way, did you know that Disney had a $67M life insurance policy on the life of Carrie Fisher?
I was reading through a bunch of recent cases on the weekend to catch up with recent developments, with the usual types of issues being raised (good news: nothing too major happened in the last couple of weeks). I enjoyed reading the Hon. Mr. Justice Bale’s short judgment in Mowry v Groome, 2016 ONSC 7850 (Ont. S.C.J). This was a contested passing of accounts but one in which the beneficiaries succeeded against the trustee for partial compensation for investment losses of about $165,000. Here there was a failure to diversify the estate’s portfolio in favour of retaining and renovating the deceased’s residence. It is a well-reasoned judgment that points out the need for a sensible investment plan – “[t]he whole purpose of diversification is to avoid the losses which can occur in the event of such unanticipated market events” as Justice Bale explained – rather than something more speculative.
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This week, in the 500th episode of Hull on Estates, Paul Trudelle and Nick Esterbauer discuss the recent Court of Appeal decision of Granger v Granger and the law of unjust enrichment.
Should you have any questions, please email us at email@example.com or leave a comment on our blog.
On January 1, 2017, new rules for taxation of personal life insurance policies came into effect. In 2014, Bill C-43, received royal assent but its new rules on life insurance took effect this week. This marks the first change to taxation of life insurance since the 1980s.
Key changes include:
- Lower tax-sheltered savings limit
- Changes to the “250% Rule” that may allow lump sum deposits in the later years of a policy
- Less tax free income from annuities
- Lower tax free withdrawal room for business owners
- Changes to the rules on multi-life policies, which may affect the tax advantages of such plans
Plans issued prior to December 31, 2016 are grandfathered to the old rules, but any plans issued in the future will be subject to the new rules. A policy might lose its grandfathered status if it is converted from one kind of life insurance to another or if additional coverage is added to the policy. Changes that will not affect the grandfathered status of a plan include changing the beneficiary designation of the plan, transferring ownership, or switching from smoker to non-smoker status.
Life insurance is commonly used in estate planning to supplement the assets of an estate and to avoid certain tax liabilities. It is important that lawyers practising estate law are aware of these changes. For those whose life insurance policy is a central or significant piece of an estate plan, it may be prudent to seek tax advice to understand how these new rules might affect their plans.
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