Category: Hull on Estates

05 Jan

No Take Backs: Gifting and Changes of Heart

Hull & Hull LLP Beneficiary Designations, Estate & Trust, Estate Planning, Hull on Estate and Succession Planning, Hull on Estates, Trustees, Wills Tags: 0 Comments

“This is one of too many cases that appear in our courts demonstrating family disputes over what the preceding generation has left behind. In coming to court for resolution, the parties risk any potential for a continuing, friendly or at least cordial relationship amongst siblings; the present generation. At times the problem is over the failure of the children to acknowledge the intention of their parent as expressed in a will. Here, unhappily, the problem arises from the actions and apparent change of heart by the father … .”

This lament comes from the opening paragraphs of 1268223 Ontario Limited v. Fung Estate, 2016 ONSC 8020 (CanLII). There, the father incorporated a company, being the plaintiff. His daughter was sole officer, director and shareholder of the company. The company then purchased a building in Toronto with funds provided by the father. Years later, the property was sold. The father said that he needed money in order to cover other debts, and received a cheque from the company for $1,070,000.

The father never repaid the money. The daughter then sued the father for repayment. The father defended, alleging that the property and the sale proceeds were held in trust for him. After he died, his estate continued the defence.

At trial, the judge found that the father gifted the company and the purchase money for the property to the daughter. There was extensive evidence to support this, including the fact that the father had made similar gifts to his other two children, the fact that the father had told the daughter that “I am going to buy you a property.”, the fact that the mother referred to the property as being the daughter’s property or the daughter’s mall; the fact that none of the documentation surrounding the purchase of the property suggested that it was a purchase in trust for the father, and the fact that, although the father remained involved in the operation of the property, it was the daughter who determined that the property should be sold. Perhaps most tellingly, in an alleged exchange between the father and one of his sons, the son said “you gave it to her…you can’t take it back”, to which the father said “so what…I want it back”.

The trial judge concluded that “There is no basis upon which [the father or the father’s estate] can claim the ownership of the money taken. There is no evidence that there was any intention that the company or the property it purchased, operated and sold, was for the benefit of anyone other than [the daughter].”

It is not clear if the presumption of resulting trust was argued. The presumption is not addressed in the reasons for decision. However, it is likely that the daughter’s evidence could have rebutted the presumption.

The decision was upheld on appeal. The Court of Appeal found that the evidence supported the three criteria for a gift set out in McNamee v. McNamee, 2011 ONCA 533 (CanLII), being an intention to make a gift, an acceptance of the gift by the done, and a sufficient act of delivery or transfer.

Thank you for reading.

Paul Trudelle

03 Jan

Consider a second will if you own foreign property

Suzana Popovic-Montag Estate & Trust, Estate Planning, Hull on Estates, Trustees, Uncategorized, Wills 0 Comments

If you own property in the U.S. or another foreign jurisdiction, having a valid and up-to-date will that complies with the laws in your province may not be enough to protect your estate. The reason? Your Canadian will may not be recognized if it doesn’t comply with the laws of the foreign jurisdiction.

In some cases, you may need to prepare a second will covering only the assets located in the foreign jurisdiction. Your foreign will can also address foreign tax laws that may differ from Canadian tax laws. For example, some countries, unlike Canada, impose death or inheritance taxes, and your foreign will may help you minimize the impact of those taxes.

In other cases, your Canadian will may be all you need, but you may need a resident of the foreign country to act as executor for your foreign property. In that situation, your Canadian will can appoint two executors – one for your Canadian property and one for your foreign property.

Get professional advice

If you own foreign assets, play it safe. Consult a professional in the foreign jurisdiction to make sure your will distributes your foreign assets the way you intend.

If you do need two wills, it’s important that they be professionally drafted so that the provisions of the wills are coordinated with each other. In addition, the wills should provide that neither revokes the other.

Although there may be additional costs in preparing a second will, it will make settling your estate easier and faster, and will ensure that your assets are distributed according to your wishes. This article provides an excellent case study showing why a separate will for foreign assets can be so important.

Other reasons for multiple wills

Owning foreign assets isn’t the only reason that one or more additional wills may be advantageous. From a need for privacy to a desire to save on probate fees, we explore many of these other reasons here.

Thank you for reading … Have a wonderful day.
Suzana Popovic-Montag

29 Dec

Looking Forward to 2018

Hull & Hull LLP Hull on Estates, New Years Resolutions, Trustees, Uncategorized, Wills 0 Comments

As the year ends, it is hard to get through the day without seeing some sort of “year in review” feature.  I will leave it to you to reflect and determine whether 2017 was a great year, a good year, or an annus horribilis.

As the book closes on 2017, let’s look forward with optimism to the new year. Some things to look forward to (or not) in 2018 include:

  • The Law Society of Upper Canada becomes the Law Society of Ontario
  • The 2018 Winter Olympics in PyeongChang
  • The FIFA World Cup (sadly, senza Italia) in Russia
  • The real possibility of a (hopefully long) Toronto Maple Leafs post-season
  • The royal wedding of Prince Harry and Meghan Markle
  • A royal baby for Prince William and Duchess Catherine
  • The legalization of marijuana
  • A probable spike in the price of snack food
  • The 100th anniversary of the end of World War I
  • The 50th anniversary of the US Civil Rights Act of 1968 (Fair Housing Act)
  • An Ontario provincial election
  • A Toronto municipal election
  • US midterm elections
  • The filming of the last (and Kevin Spacey-less) season of House of Cards
  • 252 more Hull and Hull blogs!

We live in interesting times.  Cheers to a great new year.

Paul Trudelle

21 Dec

The SCC Pronounces on Proprietary Estoppel

Hull & Hull LLP Estate & Trust, Estate Planning, Hull on Estate and Succession Planning, Hull on Estates, Power of Attorney, Uncategorized Tags: , 0 Comments

A recent decision of the Supreme Court of Canada deals with the issue of proprietary estoppel.

In Cowper-Smith v Morgan, the court dealt with an arrangement between two siblings to provide care for their mother. Gloria assured her brother Max that if he moved back into the family home, he would acquire Gloria’s share of that property after their mother’s death.

At trial, the judge concluded that all the elements of proprietary estoppel were established:

(1) The sister promised the brother that he would be able to purchase her eventual interest in their mother’s property;

(2) The brother relied on the expectation that he would be able to do so; and

(3) Because of the detriment the brother suffered as a result of his reliance, it would be unfair and unjust in the circumstances to permit the sister to resile from her promise.

Gloria appealed the trial judge’s decision to the British Columbia Court of Appeal which, in a split decision found that, since Gloria owned no interest in the property at the time of the promise, proprietary estoppel could not arise.

On appeal, the majority of the Supreme Court of Canada found that the trial judge did not err in concluding that proprietary estoppel operates to enforce Gloria’s promise. Ownership at the time the representation or assurance was relied upon is not a  requirement of a proprietary estoppel claim:

[35]                          …With respect, the conclusion reached by the Court of Appeal majority conflates proprietary estoppel with the equity to which it gives effect. That Gloria did not own an interest in her mother’s property at the time of Max’s reliance is not dispositive in itself: see MacDougall, at p. 456; see also Thorner, at para. 61, per Lord Walker; Re Basham (deceased), [1987] 1 All E.R. 405 (Ch.), at p. 415. An equity arises when the claimant reasonably relies to his detriment on the expectation that he will enjoy a right or benefit over property, whether or not the party responsible for that expectation owns an interest in the property at the time of the claimant’s reliance. Proprietary estoppel may not protect that equity immediately. It may not protect the equity until considerable time has passed. If the party responsible for the expectation never acquires a sufficient interest in the property, proprietary estoppel may not arise at all; where there is proprietary estoppel, there must be an equity, but not vice versa. When the party responsible for the expectation has or acquires a sufficient interest in the property, however, proprietary estoppel attaches to that interest and protects the equity: see MacDougall, at p. 458; Wilken and Ghaly, at pp. 265-66; see also Watson v. Goldsbrough, [1986] 1 E.G.L.R. 265 (C.A.), at p. 267. Ownership at the time the representation or assurance was relied on is not a requirement of a proprietary estoppel claim.

[36]                           An equity arose in Max’s favour when he reasonably relied to his detriment on the expectation that he would be able to acquire Gloria’s one-third interest in their mother’s house. That equity could not have been protected by proprietary estoppel at the time it arose, because Gloria did not then own an interest in the property. But that does not mean that proprietary estoppel cannot attach to Gloria’s share of the house once she receives it. I conclude that it can.

Thanks for reading,

David Morgan Smith

Find this blog interesting? Please consider these other related posts:

Will the SCC Expand the Scope of Proprietary Estoppel? 

A Primer on Proprietary Estoppel 

Proprietary Estoppel Revisited: Cowderoy v Sorkos Estate 

12 Dec

Jointly-Held Property and Conflicts of Interest

Hull & Hull LLP Estate & Trust, Estate Planning, Hull on Estates, Joint Accounts, Trustees, Uncategorized, Wills Tags: 0 Comments

Attorneys and guardians of property are fiduciaries who are required to put the interests of an incapable person before their own.  But what happens when the nature of ownership of the incapable’s property puts those interests at odds with one another?

The case of B (ME) v E (O) (Trustees & Guardians of), 2007 ABQB 259, explores the position of conflict created when a fiduciary holds property jointly with an incapable person and the potential for the conflict to cause the fiduciary to breach the duties that he or she owes to the incapable.  The facts of the case relevant to this issue can be summarized as follows:

  • E.B. had been the equivalent of a guardian of property for his mother, O.B.;
  • B. suffered from ailments affecting both her physical and mental health;
  • E.B. transferred real property into joint ownership with his mother; and
  • E.B. subsequently predeceased O.B., raising the issues of:
    • (1) whether it was intended that M.E.B.’s interest in the property transfer to O.B. by right of survivorship,
    • (2) whether M.E.B. had breached the fiduciary duty owed to O.B. by placing the property into joint ownership and, if so,
      • (3) whether the breach of fiduciary duty precluded M.E.B.’s estate from asserting an equitable claim in respect of the property against O.B.

On the issue of M.E.B. having transferred the property into joint tenancy with O.B., the Court made the following statements:

…[I]t would have been a clear conflict of interest for M.E.B., as O.B.’s trustee, to have intended that he and his mother hold the beneficial interest in the home as joint tenants. (para 134)

There is no evidence that [the lawyer attending to the transfer] advised M.E.B. he might be in a position of conflict or in breach of his fiduciary duty to O.B. in placing title to the Millwoods property in their joint names. (para 153)

The litigation at bar has resulted from O.B.’s acquisition of sole legal title through survivorship and it epitomizes the conflict that can arise when placing property into joint title between a dependent adult and her trustee. (para 169)

I find that M.E.B. was in breach of his fiduciary duty to O.B. in placing legal title to the property in their joint names without court approval. (para 170)

While this is a case from Alberta, it may nevertheless be the case that the same conclusion would be reached by an Ontario Court – that property jointly-held by a fiduciary and incapable person whose property he or she administers puts the fiduciary in a position of conflict with the potential to impact the suitability of the person to act as fiduciary and/or their ability to claim an interest in the joint property.

Thank you for reading.
David M. Smith

Other blog posts that you may enjoy:

Does Jointly Owned Property Pass to the Surviving Spouse?

Joint Tenancy, Survivorship, and Adverse Possession

08 Dec

The Twelve Days of Estate Planning

Hull & Hull LLP Estate & Trust, Estate Planning, Hull on Estates, Power of Attorney, Trustees, Uncategorized, Wills 0 Comments

The Twelve Days of Christmas, or Twelvetide, is a festive Christian celebration of the Nativity of Jesus Christ. The first day is December 25, and the celebration extends until January 5. (Fun fact: Shakespeare’s Twelfth Night is set on the last day of the Twelve Days of Christmas.)

Borrowing on the popular carol, I submit for your consideration the following list of estate planning considerations to assist in bringing your estate plan up to date. Please consider these steps, whatever your religious affiliation.

Also, feel free to sing along.

On the first day of Christmas: Locate your will.  You should know where it is. Further, your estate trustee(s) should know where it is.  Ensure that your will is immediately accessible when needed.

On the second day of Christmas: If you don’t have a will, make a will!

On the third day of Christmas: If you have a will, review your will to make sure that it remains relevant and appropriate.  Has the makeup of your family changed?  Have the nature or worth of your assets changed?  Should you consider making a primary and secondary will? Have you appropriately provided for minors or disabled beneficiaries?

On the fourth day of Christmas: Review what assets may pass outside of your estate, either by right of survivorship or by beneficiary designation. Are these consistent with your plan?  Are these assets to pass as a gift, or are they held in this manner only as a matter of convenience or tax planning, with the intention that they are to be distributed in accordance with your will?  If a gift is intended, is their sufficient evidence to overcome any presumption of resulting trust?

On the fifth day of Christmas: Make a list of your assets, with particulars of where they are held, and account numbers. Make an inventory of your golden rings. This will simplify the job of your estate trustee.

On the sixth day of Christmas: Consider your digital assets.  Make a list of all of your online accounts and passwords. Make sure that these are accessible by your estate trustee when necessary.

On the seventh day of Christmas: Consider charitable donations, either testamentary or otherwise.  Non-testamentary charitable donations should be made before year end for maximum tax benefits.

On the eight day of Christmas: Consider making powers of attorney for personal care and for property. If you already have them, review them to make sure they remain appropriate. Consider who your proposed attorneys may be.  Speak to your attorney(s) for personal care with respect to end of life decisions.

On the ninth day of Christmas: Discuss your funeral plans with your estate trustee and your family.  Make your wishes known. This will make your estate trustee’s job easier, and may help to avoid conflict amongst your family, who may have different notions of what you would have wanted. Consider preplanning and prepaying for your funeral arrangements.

On the tenth day of Christmas: Consider sharing time with loved ones now.  See Five Things your clients should do before they die.

On the eleventh day of Christmas: Review your insurance coverage. Do you have enough?  Are your beneficiary designations in keeping with your estate plan?  If the beneficiaries are minors, have you established an appropriate insurance trust for them?

On the twelfth day of Christmas: Sit back and relax. Look back over the past year and count your blessings. And take comfort in the peace of mind that comes from knowing that your estate plan is in better order than ever.

Happy Holidays,
Paul Trudelle

07 Dec

An Update on Medical Assistance in Dying

Hull & Hull LLP Estate & Trust, Estate Planning, Hull on Estates, Uncategorized Tags: 0 Comments

The Government of Canada is developing regulations to establish a monitoring system in respect of medical assistance in dying (MAID), and it recognizes the importance of timely public reporting on the matter.  To that end, its 2nd Interim Report on Medical Assistance in Dying in Canada provides information on requests for MAID made between January 1 and June 30, 2017, and includes some notable findings.

To summarize a few statistics gathered from participating jurisdictions, during the first half of 2017 there were reportedly more than 1000 medically assisted deaths, which represents an almost 50% increase since the first six months of the legislation being in place.  However, taking all deaths in Canada into account this still represent less than 5% of overall deaths.  There has also been an increase in the number of deaths administered outside of a hospital setting, although it is not yet known if this is a signal of improved facilitation for home-based assisted deaths or other factors (e.g. lack of services in institutions in smaller communities).  In looking at demographics, the average age of the patient was 73.  Although deaths spanned a vast population of persons aged 18+, most were between ages 56 and 85.  The most common underlying medical condition associated with MAID was cancer, which made up more than 60% of all deaths.

Although the legislation is in its infancy, various jurisdictions have worked to implement legislation or policies related to the oversight and delivery of MAID.  In Ontario, the Medical Assistance in Dying Statute Law Amendment Act came into force this year to provide greater clarity and legal protection for health care providers and patients. Further, Ontario launched a provincial care coordination service to help patients and their loved ones with access to additional information and services related to MAID and other end-of-life options.

It will be interesting to see the progression stemming from the MAID legislation, both from the perspective of growing services for providers, patients and caregivers, and from the standpoint of developing case law on the subject.  With approximately one-third of applicants denied their requests, no doubt the court’s interpretation of the legislation will be moving at a clip.

Thanks for reading and have a good day,
Natalia Angelini

Some other blogs you may enjoy on the subject:

https://hullandhull.com/2017/08/assisted-dying-follow-rules-youll-fine/

https://hullandhull.com/2016/06/assisted-dying-beginning/

 

06 Dec

How would you grow $800 million?

Suzana Popovic-Montag Estate & Trust, Estate Planning, Hull on Estates, Uncategorized 0 Comments

As estate litigators, we’ve been involved in thousands of estate matters, and seen the many ways that individuals and families have built their wealth. From my experience, there’s no magic formula: the different paths to wealth are both varied and countless.

But, if I had to name one common ingredient for wealth building it would be long hours and hard work. Even the best ideas in the world don’t allow for a free ride, where money pours in with little effort. At least that’s what I thought.

The story of Canadian entrepreneur Markus Frind is a fascinating exception to that rule. He started the dating website Plenty of Fish in 2003. He designed the site himself and launched it in two weeks. He ran it from his laptop, and by the end of that year he had revenues of over $3,000 each month.

That number changed quickly. It was only a couple of years before the $3,000 each month became $10,000 each day. By 2009, the website had revenues of $10 million a year, and he had only hired three employees. Even more fascinating was his lifestyle: he worked just one hour a day, living a life of fun and leisure with his girlfriend in Vancouver the rest of the time.

This 2009 profile of Frind provides a great overview of how Frind started his business and the lifestyle he came to enjoy just six years later.

Of course, the story doesn’t end in 2009. His company continued to grow and, in 2015, Frind sold Plenty of Fish to Match.com for CDN $800 million. In this recent interview in the Globe and Mail, Frind provides a first-person account of his journey.

Not surprisingly, this most unusual of business owners has some unusual advice for young entrepreneurs just starting out:

My best advice for entrepreneurs, especially the younger ones, is to spend time with your spouse. If you’re working 80 hours a week, the world outside the business doesn’t exist, which is why divorce rates are so high.

Thank you for reading … Have a wonderful day,
Suzana Popovic-Montag

01 Dec

The Gift of An Irrevocable Right of Survivorship: What Everyone Wants Under the Tree

Hull & Hull LLP Estate & Trust, Estate Planning, Hull on Estates, Joint Accounts, Trustees, Uncategorized, Wills 0 Comments

“When a parent gives an adult child a joint interest in real property during his or her lifetime, can that gift include an irrevocable right of survivorship that has the effect of preventing the parent from later severing the joint tenancy?”

That was the question that was asked and answered in Pohl v. Midtal, 2017 ABQB 711 (CanLII).

Boiled down, the fact pattern raised in that case is quite common: parents transfer real property into joint tenancy with a child. Later, the relationship sours, and the parents want their property back.

In a prior decision, the parents relied on the Supreme Court of Canada decision of Pecore v. Pecore, and alleged that the property was held in trust for them. The court disagreed, finding that the presumption of resulting trust was rebutted on the evidence, and that a gift was intended.

Subsequently, the parents purported to sever the joint tenancy. The child objected, and commenced a claim for a declaration that the parents were not entitled to exercise their right to sever the joint tenancy.

The court concluded that in the circumstances, the gift of the joint tenancy included an irrevocable right of survivorship. While typically a joint tenant has the right to sever the joint tenancy, in making the transfer the grantor can gift an irrevocable right of survivorship.  The court will review the evidence in order to determine the intention of the grantors at the time of the gift.

In determining that the transfer of joint tenancy included an irrevocable right of survivorship, the court noted that the parents, at the time of the transfer, clearly intended that the child would get the real property upon their deaths. In support of this, the court referred to the fact that on the same day as the transfer, one of the parents made a will that did not provide for the recipient (as she was to receive the jointly held property).  Later, the other parent made a similar will that did not provide for the child, and stated in his will that “I have provided for [her] during my lifetime.”

The question is not without uncertainty, as there is competing case law to the effect that notwithstanding a gift of joint tenancy, both the grantor and the recipient maintain the right to convert the joint tenancy into a tenancy in common.

Have a great weekend.
Paul Trudelle

24 Nov

Truth or Myth: Hair and Nails Continue to Grow After Death

Hull & Hull LLP Estate & Trust, Estate Planning, Hull on Estates, In the News Tags: , , , 0 Comments

A common belief is that fingernails (and hair) continue to grow after death. Popular culture emphasizes this belief by depicting zombies with long nails and long, dishevelled hair. However, this common perception is a misconception.

In fact, according to Snopes and Science Focus, the Online home of BBC Focus Magazine, fingernails (and hair) do not continue to grow after death. Bodies being to dehydrate immediately upon death. As the skin dries, it shrinks away from the nails and hair, giving the appearance of longer fingernails and hair by making them appear more prominent.

Charles Wilkins’ book, In The Land of Long Fingernails: A Gravedigger in the Age of Aquarius, borrows its title from this myth. The story, set in a cemetery in Toronto in the late 60s, recounts Wilken’s experiences as a young cemetery worker.

The darkly funny non-fiction looks at various, often eyebrow raising practices at the fictionally named cemetery, and a diverse, often misfit cast of characters that work there. A good read for those looking for something far off the beaten path.

Thank you for reading. Have a great weekend.
Paul Trudelle

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