30 Apr

Incapacity Planning Considerations Specific to COVID-19

Nick Esterbauer Capacity, Elder Law, Power of Attorney Tags: , , , , 0 Comments

Earlier this week, Ian Hull and I spoke at Osgoode Professional Development’s program on Powers of Attorney and Guardianship: Non-Contentious and Contentious Matters.

During the program, in addition to discussing new execution options for wills and powers of attorney, the panel shared its thoughts on a number of considerations relevant to the preparation of powers of attorney during the pandemic, including some of the following:

  • It may now be impractical to permit for decisions regarding personal care or property to be made only jointly by two or more attorneys acting together where the attorneys selected are not members of the same household.
  • In light of ongoing travel restrictions, it may be increasingly important that the selected attorney(s) for property and/or personal care are local.
  • It may be more difficult to access multiple medical professionals (or a specified medical professional) to confirm incapacity during a healthcare crisis.  The provision regarding the circumstances in which a power of attorney is to become effective should accommodate potentially limited access to a specified physician or more medical professionals than necessary.
  • It may be more important than ever to ensure that the original power of attorney documents (and/or copies) are physically accessible to the named attorney(s).
  • The current circumstances present a unique opportunity to assist clients in updating outdated plans and ensuring that powers of attorney are put into place for those who do not have them already.

Even outside of the context of a pandemic, considering practical issues like those set out above when creating or updating an incapacity plan is a worthwhile exercise and may expose potential problems with the plan before it is finalized.

Thank you for reading.

Nick Esterbauer

 

Other blog entries that may be of interest:

29 Apr

The Threshold for Will Challenges: Joma v Jaunkalns

Ian Hull Estate & Trust, Litigation, Wills Tags: , , , 0 Comments

Under Rules 75.01 and 75.06 of the Rules of Civil Procedure, any person who has a financial interest in an estate may commence an application to have a will “proved in such manner as the court directs.” In Neuberger Estate v York, 2016 ONCA 191, the Ontario Court of Appeal clarified that the court has a discretion whether to order that a testamentary instrument be proved. The Court went on to state that Rule 75.06 requires a moving party to “adduce, or point to, some evidence which if accepted, would call into question the validity of the testamentary instrument that is being propounded.”

In Joma v Jaunkalns, 2019 ONSC 6788, the Ontario Superior Court of Justice considered the principles mentioned in Neuberger Estate v York. In doing so, the case provides a helpful review regarding the minimum evidentiary threshold to permit a will challenge.

In Joma v Jaunkalns, the deceased, Zenta Palma, died in September of 2018. She was a widow and did not have any children. Zenta’s siblings and only niece, Brigita, predeceased her.

The Deceased was survived by Brigita’s brother, Ronald. She was also survived by Brigita’s husband, Robert, and their children, Michael and Emily.

In 2012, the Deceased executed a Will naming Robert as her estate trustee and Michael and Emily as the residual beneficiaries. Robert’s brother, Viktor, was named as the alternate estate trustee and his children were named as legatees.

Ronald claimed that he was named as a residual beneficiary under an earlier Will but the Will could not be located.

Ronald asserted that, at the time the Deceased executed the 2012 Will, she lacked testamentary capacity and was unduly influenced by Robert. The question before the court was whether Ronald met the required threshold to be granted his request for the 2012 Will to be proven.

Upon considering the evidence of Ronald and Robert, Justice Dietrich found that Ronald did meet the threshold. She arrived at this conclusion based on the following:

  • The Deceased was an 84-year old widow who was reliant on her two sisters and her niece and nephew for support and assistance;
  • In 2011, the Deceased was taking prescribed medication that would “tranquilize” her;
  • The Deceased was taking anti–anxiety medication approximately one month before she executed the 2012 Will;
  • Robert’s evidence that the Deceased never had any cognitive impairment was found to be a broad conclusory statement;
  • Robert was a physician with experience assessing capacity but he did not offer any evidence of having examined the Deceased or knowing exactly what medication she was taking and in what dosage;
  • Ronald’s evidence of Robert’s involvement in the Deceased’s finances raised the spectre of Robert’s potential undue influence over the Deceased;
  • For example, Robert undertook a banking transaction on behalf of the Deceased which had upset her so she asked Robert to reverse it.

Based on the evidence above, Justice Dietrich found that Ronald’s evidence amounted to more than suspicion. If accepted, it would call the validity of the Deceased’s Will into question.

Furthermore, a review of the Deceased’s financial records, medical records and the drafting solicitor’s file would be beneficial. Quoting from Seepa v. Seepa, 2017 ONSC 5368, Justice Dietrich went on to state that Ronald “ought to be given the tools such as documentary discovery, that are ordinarily available to a litigant before he or she is subjected to a requirement to put a best foot forward on the merits.”

In summary, Joma v Jaunkalns demonstrates that the evidentiary burden on a party who wishes to challenge a will is not fairly high. Evidence that amounts to more than a suspicion should suffice.

Thanks for reading!

Ian Hull and Celine Dookie

For further reading on this topic, check out these other blogs:

Lessons from Neuberger Part 1: Does an interested person have an automatic right to proof in solemn form?

Another Will Challenge Threshold Case

Getting Over the Will Challenge Threshold: Applying Seepa v. Seepa

28 Apr

Funerals During COVID-19

Nick Esterbauer Funerals, Health / Medical, In the News Tags: , , , , 0 Comments

The COVID-19 pandemic has changed the way in which we live our lives, with strict limitations on social gatherings of any kind, including funerals.  However, deaths obviously continue to occur during this period, with death rates among certain population groups on the rise, and delaying memorials and funerals until after the current health crisis has ended, whenever that may ultimately be, may be impractical and/or prolong the grieving process.

A review of recent news articles suggests that several trends are beginning to emerge in respect of funerals as large in-person gatherings continue to be prohibited throughout Canada and much of the world:

  • Some funerals are being held using video-conferencing software such as Zoom, with enhanced ability for family members living abroad to participate, with some funeral services continuing in-person, with very limited attendance (typically limited to five individuals, including the officiant) and distance of no less than six feet between attendees who are not members of the same household;
  • Communities such as Flatrock, Newfoundland, have seen cars line up along the side of a street to blink their lights as the hearse passes by on its way to the cemetery as a way to show their respect without potential exposure to the virus;
  • In Quebec, because of concerns over transmission, embalming in respect of the remains of a victim of COVID-19 is prohibited, there are restrictions as to the timing for visitations and interment, and funeral-related service providers are relying upon protective equipment (such as N95 masks and gloves) to stay safe while handing remains of COVID-19 victims;
  • Funerals in Calgary and elsewhere are reportedly “going digital”, with funeral home directors citing the increased role of online photo gathering and live-streamed funeral services;
  • Online visitations are gaining popularity (according to funeral workers in Windsor), while some Jewish families are sitting shiva on Zoom.

It will be interesting to see whether any of these trends survive the lessening of restrictions on social gatherings.

Thank you for reading.

Nick Esterbauer

 

Other blog entries that may be of interest:

27 Apr

Encouraging Discussion About End-of-Life Wishes

Nick Esterbauer Elder Law, Estate Planning, Health / Medical, Power of Attorney Tags: , , , , , , 0 Comments

COVID-19 has prompted innovation and legislative updates in terms of the way that lawyers can assist our clients with estate and incapacity planning.  A new tool created by a professor at my alma matter, Queen’s University, has recently emerged to supplement formal planning by making it easier for clients to create end-of-life treatment plans and to discuss their end-of-life wishes with their families and health care teams.

The Plan Well Guide is a free online tool that allows users to formulate a “Dear Doctor letter”, which can be provided to a physician for discussion and can be reviewed with family members (or otherwise an attorney or guardian of personal care) to ensure an understanding of the person’s wishes during a health crisis.  The website also includes other information and resources relevant to end-of-life decision making.

I went through the process of creating an end-of-life plan using this resource and found it to be user-friendly and straightforward.  Some highlights of the Plan Well Guide include the following:

  • There are prompts that ask whether a user has a Power of Attorney for Personal Care and Will in place, which may act as a prompt to obtain a lawyer’s assistance if necessary.
  • The website illustrates the user’s wishes, with examples to confirm the accuracy of the information that the user inputs.  Where the illustration is not consistent with the user’s actual wishes, the user can go back to modify priorities to better reflect their wishes.
  • Quizzes to ensure proper understanding of terms such as ICU treatment, comfort care, and the nature of resuscitation.
  • There are prompts for both outstanding questions or issues for discussion with a healthcare provider and explanations of wishes to provide those reading the document with a better understanding of the user’s rationale behind their wishes.

Especially in the midst of the current pandemic, tools like this that make end-of-life planning more accessible, while having the potential to expose deficiencies in incapacity or estate planning and encouraging an open discussion of wishes in terms of medical treatment, can be helpful resources.

Thank you for reading.

Nick Esterbauer

 

Other blog posts that may be of interest:

24 Apr

Zombies and Severed Parts

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

“This is a case about a ‘zombie’ deed.”

So begins the decision in Thompson v. Elliott Estate, 2020 ONSC 1004, a decision of Justice MacLeod-Beliveau.

The case addresses the effect of “zombie” deeds, and whether such a deed can result in the severance of a joint tenancy.

Justice MacLeod explains that a “zombie” is a folklore reference to a person who is reanimated through magic after their death. A “zombie deed” is a transfer of an interest of land that is registered after the death of the grantor as if the grantor was alive.

In the case in question, Husband and Wife owned a home as joint tenants. Wife signed an Acknowledgement and Direction, transferring her interest in the home to herself, for the purposes of severing the joint tenancy. However, through lawyer inadvertence, the transfer was not registered with the Land Registry Office until after Wife’s death.

If the joint tenancy was severed, Wife’s half-interest in the home would pass through her estate to her children from a prior marriage. If the joint tenancy was not severed, it would pass to Husband.

Husband argued that the registration was improper, and therefore did not sever the joint tenancy.

The court agreed that the registration of the transfer after Wife’s death was improper. The lawyer should not have registered it. In many cases, the registration would be rejected by the Land Registry Office. However, the LRO is often not able to determine whether the registration is improper. In the case before the court, the lawyer registering the transfer had falsified many of the “law statements” required when registering the transfer.

Although the transfer was improperly registered, the court found that the joint tenancy was, however, actually severed. A joint tenancy can be severed by a transfer of a joint interest to oneself. Whether a joint tenancy is severed is a question of fact based on the evidence.

Of note is the holding that it is the “delivery” of the transfer and not the actual registration of the transfer that determines whether the joint tenancy is severed. The court held that there was sufficient evidence to establish that Wife clearly intended to sever the joint tenancy by signing the Acknowledgment and Direction and by giving immediate and unconditional instructions to her lawyer to register the transfer.

Zombie deeds are sometimes used to avoid probate taxes and fees. The deceased signs the Acknowledgment and Direction before death, but, on title, remains owner of the property. After death, the deed is registered to transfer title to intended beneficiaries. This practice is improper.

Thanks for reading. Have a great weekend.

Paul Trudelle

23 Apr

Witnessing Wills and POAs in Counterpart

Ian Hull Estate Planning, In the News, Wills Tags: , , , , , , 0 Comments

Thanks to the swift response of the Attorney General, Wills and Powers of  Attorney can now be witnessed in counterpart.

The new emergency Order now confirms that a Will and Power of Attorney can be signed and subscribed by witnesses on separate documents in counterpart.

By using video conferencing and counterpart, wills and powers of attorney can be fully executed remotely, giving immediate validity to the documents.  Previously, all three signatures (the testator/grantor and two witnesses) had to be on the same document.  That required the couriering of the document around for up to three separate signing ceremonies.

You can find more details, our thoughts for the process for executing in counterpart and an updated execution checklist on the Hull e-State Planner Blog (click here)

The updated checklists and resources for your consideration can also be downloaded here:

  1. WILL EXECUTION IN COUNTERPART CHECKLIST (LINK TO CHECKLIST)
  2.  POA EXECUTION IN COUNTERPART CHECKLIST (LINK TO CHECKLIST)
  3. AFFIDAVIT OF EXECUTION (LINK HERE)
  4. ATTESTATION CLAUSE (LINK HERE)

As always, we welcome your comments and suggestions.

Ian Hull and Jordan Atin

23 Apr

The Will that was Written on a McDonald’s Napkin

Doreen So Estate Planning, General Interest, In the News, Uncategorized, Wills Tags: , , , 0 Comments

The University of Saskatchewan’s College of Law proudly displays the will that was etched onto the fender of a tractor by a dying farmer.  That happened in 1948.  Decades later, the Saskatchewan Queens Bench was similarly asked to determine whether a note handwritten on a McDonald’s napkin is a valid will.

Philip Langan died in 2015.  He was a widower with eight children (Earl was predeceased and Landry died after the napkin was written but before Langan’s death).  Shortly after Langan’s death, two of his children came forward with a McDonald’s napkin that they claim to be their father’s last will and testament.  Ronald and Sharon explained that the napkin was made when their father thought he was having a heart attack at McDonald’s.  Sharon said that she was not there when her father started to write on the napkin but she was there to see him sign his name.  She said he gave the napkin to her and said “This is my will.  I want you to keep this in case something happens”.  A third child, Philip, supported the validity of the will because he was also at the McDonald’s that day.  Like Sharon, Philip did not see his father write on the napkin but he was there when the napkin was given to Sharon and he heard what his father said to Sharon.

Maryann challenged the validity of the napkin because she was skeptical of whether it was in her father’s handwriting.  She also stated that Langan told her that he would not leave a will because “he wanted us to fight like he had to”.  Yet, interestingly enough, an intestacy would still give rise to the same result as the napkin on the consent of the siblings.

The napkin itself was described as follows in Gust v. Langan, 2020 SKQB 42 (CanLII):

“written in pen on a very thin, brown-coloured, paper restaurant napkin reads as follows:

Ron Langan

Dennis Langan

Sharon Langan

Landry Langan

Philip W. Langan

Marann Langan (Gust)

Dallas Langan

Split my property evenly,

“Dad Philip Langan”

The court found that the napkin was a valid holograph will.  Justice Layh was persuaded by the propounders’ explanation that the napkin was made at a time when Langan thought he was having a heart attack “a time when one’s mind would reasonably turn to the question of estate planning, especially in the absence of an existing will. Mr. Langan’s immediate delivery of the will to his daughter, Sharon, and the comment he made to her – as evidenced by both Sharon and Philip’s statements – that she keep the document in case something happened to him, shows a clear testamentary intention.” (para. 22).

While the legal analysis in this case is based on the law in Saskatchewan (unlike Ontario, Saskatchewan has curative legislation that permits substantial compliance), Gust v. Langan is a timely reminder that, in addition to the formal requirements of a holograph will, testamentary intent is crucial in determining whether a document can be given effect as a will.  On the face of the napkin, there was nothing to indicate when Langan intended to divide his property.  The essential characteristic of a will is the intention to dispose of property after one’s death.  Here, the court had to rely on the extrinsic of evidence from Langan’s state of mind and what he said to Sharon.

Should you find yourself in a situation where an emergency holograph will is needed, you may want to refer to Ian Hull and Jordan Atin’s blog on the subject:

https://hullandhull.com/2020/03/emergency-holograph-wills-for-clients-in-isolation/

I would also suggest that regular paper be used, if you have some, for practical reasons or to simply avoid media coverage since this particular McDonald’s napkin has made the news in New York and Australia.

Thanks for reading.

Doreen So

 

22 Apr

Court Denies Request to Gift on Behalf of an Incapable Person

Suzana Popovic-Montag Estate & Trust, Litigation Tags: , , , , 0 Comments

One of the reasons people pursue wealth is to render themselves, and their loved ones, less vulnerable. Wealth can protect against unhappy contingencies and mitigate ill fortune, such as loss of employment, sickness, or the death of a provider. With COVID-19, some of the most adversely-affected Canadians are those without any economic cushion to fall back upon. Wealth, however, can also make people more vulnerable, for it can draw the jealous attention of unscrupulous have-nots, as evidenced by the abundance of greed-fuelled elder abuse and power of attorney predation. Our legal system, therefore, has developed safeguards against the improper use of an incapable person’s funds – and as a recent New Brunswick decision demonstrates, as well as checking bad actors, these safeguards also apply to the more innocent missteps of parties with apparently good intentions.

In Public Trustee v. Morley, [2020] N.B.Q.B. 18, the Public Trustee in charge of an infirm person, Norma Morley, sought the Court’s authorization to transfer Norma’s house to her adult daughter, Patricia Morley, on the pretexts that Patricia “suffer[ed] from mental issues that prevent[ed] her from leaving [Norma’s] home” and that Norma, who resided in a nursing home, “ha[d] assets that [could] provide for her maintenance other than the house”. Ostensibly, the Public Trustee’s request was reasonable, for the statute – subsection 13(1) of the Infirm Persons Act – allows for an infirm person’s representative to provide for the infirm person’s dependants, and at first glance, Patricia qualified as a dependant.

The Court denied the request, however, finding that the proposed gift was not in the best interests of Norma. In coming to this decision, the Court was guided by several considerations: (1) it was uncertain whether there were enough assets to provide for Norma following the gift; (2) the proposed gift was at odds with Norma’s Will; (3) Norma had not made similar gifts in the past, when she was capable; (4) there was no evidence tendered as to Patricia’s needs and means; and (5) Patricia’s needs are secondary to Norma’s. On this last point, other than the house, Norma had approximately $70,000 in assets – a thin and precarious economic cushion.

If this case had been adjudicated in Ontario, we could expect a similar result. Subsections 37(1) and 37(2) of Ontario’s Substitute Decisions Act, 1992 dictate that an incapable person’s property can be used to support dependants, but expenditures on behalf of dependants are conditional upon sufficient property remaining to provide for the incapable person. Subsections 37(3) and 37(4) allow for a guardian of property to make gifts to the incapable person’s relatives if, again, enough property remains and there is reason to believe the incapable person, if capable, would make such gifts. In this case, insufficient property remained to justify a gift and there was no reason to believe Norma would have gifted her house to Patricia, for her prior conduct and Will suggested otherwise.

The Public Trustee’s position was unenviable – trying to stretch limited means to cover two vulnerable people – but the cure proposed ran counter to Norma’s previously expressed wishes as well as leaving her exposed to mischance.

Thank you for reading – Have a great day!

Suzana Popovic-Montag and Devin McMurtry

21 Apr

Family Trusts and the Tort of Conspiracy in Family Law Matters

Doreen So Continuing Legal Education, Estate & Trust, Executors and Trustees, Litigation, Trustees Tags: , , , , , , 0 Comments

Further to my blog on Monday, the Court of Appeal also released another interesting decision last week with respect to the tort of conspiracy in the context of a family law proceeding.  Leitch v. Novack, 2020 ONCA 257, is an appeal from a summary judgement motion that was brought by the husband’s father, a family trust, and a family company.  Summary judgment was brought because the wife sought damages against the moving parties for an alleged conspiracy that they were intentionally withholding payments to the husband in order to reduce his family law obligations.

The motion judge, in 2019 ONSC 794, held that the conspiracy claim was appropriate for partial summary judgment.  The conspiracy claims were dismissed even though the wife could still pursue a claim to impute additional income to the husband for the purposes of determining his income at trial.  Over a million dollars in costs were later awarded to the husband and the moving parties and there was a subsequent order for security for costs that effectively froze all of the wife’s assets.

The appeal was allowed.  The Court found that there was a material risk of inconsistent results because the wife was allowed pursue her claims that additional income ought to be imputed to the husband despite the motion judge’s finding that there was no unlawful conspiracy.

As for the tort of conspiracy, Justice Hourigan confirms and clarifies the application of this doctrine in the context of family law matters.  The tort of conspiracy is part of the judicial toolbox to ensure fairness and for deterrence.  It is also there for enforcement purposes because the purpose of the conspiracy is to hide income or assets and “a judgment against a co-conspirator will often be the only means which by which a recipient will be able to satisfy judgment” (paras. 46-47).

Justice Hourigan commented that

“a transfer of funds by loan, gift, or otherwise, is not the only way that the alleged co-conspirators could have acted in furtherance of the conspiracy.  If the trial judge is satisfied that [the husband] had an entitlement to funds and that a co-conspirator withheld the transfer of funds to him as part of a conspiracy with the understanding that he would receive the money at some future date, the withholding of funds may itself be an act in furtherance of the conspiracy.  It is not necessary to establish more than an acted-upon conspiracy to conceal [the husband’s] entitlement.” (para. 51).

The costs awards and the preservation order were also set aside.

This decision is certainly important to keep in mind when advising trustees of discretionary trusts.

Thanks for reading!

Doreen So

 

 

 

 

 

 

 

 

 

 

 

 

 

20 Apr

Volk v. Volk: ONCA Refusals and Stay Motion heard April 14, 2020

Doreen So Capacity, Litigation, Power of Attorney, Recently Tags: , , , , , 0 Comments

The motions in Volk v. Volk, 2020 ONCA 256, arose from an appeal of an order to, inter alia, sell a property owned, in part, by Doris Volk, who is incapable of managing her own property, and to pay the net proceeds of sale to Doris’ husband, George.  This case is instructive for how matters are currently proceeding before the Court of Appeal and in general for the scope of examinations under SDA matters.

George is not Doris’ attorney for property.  The attorneys for property are Doris’ daughter, Darlene, and Doris’ sister, Lisa.  George brought an application under the Substitute Decisions Act, 1992 because he claimed that the property was improperly transferred by the attorneys from Doris, as the sole owner, to Doris and Darlene’s daughter, Felicia, as tenants in common.  At the time of the application, the property was registered with a 1% interest in Doris’ name and the rest was registered in Felicia’s name.  Furthermore, the property was occupied by Darlene but George claimed that the carrying costs of the property were paid from Doris’ money in further breach of trust.

George’s application was granted on January 7, 2020 on the consent of Lisa.  Darlene, Felicia, and the Public Guardian and Trustee did not appear or file opposing materials.  The house was sold with a closing date of May 16, 2020.

Darlene and Felicia appeals the order of January 7th on ground that they were not properly served or provided with adequate notice of the application.  They also brought a stay motion with a supporting affidavit from Felicia.  Felicia was cross-examined on her affidavit and she refused a number of questions on the advice of her counsel.  This led George to bring a refusals motion and an request for an adjournment of the motion for a stay pending appeal.

Both the refusals motion and the stay motion were scheduled to be heard before Justice Paciocco on April 14, 2020.  Justice Paciocco noted that the agreement for purchase and sale gave the stay motion added urgency.  The matter proceed on April 14th with counsel for Darlene and Felicia appearing by phone and counsel for George appearing by videoconference.  George’s refusals motion was allowed in part.   Justice Paciocco clarified that the proper scope of a cross-examination on an affidavit is governed by the issues that are relevant to motion.  It includes questions that are relevant to credibility so long as it within the competence of the motions judge to determine (para. 10).  He then goes on to give reasons for why certain categories of questions ought to be answered and why other categories were found to be irrelevant or unfair.  Of note, questions about Doris’ state of mind were properly refused because it was unfair for Felicia to speak for Doris (para. 19).

Since counsel for George acknowledged that further examinations were not feasible as a result of COVID-19, Justice Paciocco ordered a timetable for answers and follow up questions in writing.  The stay motion was adjourned to May 1st.

Thanks for reading and keep well.

Doreen So

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