The recent decision of Mervyn Estate, Re, 2020 ONSC 6989 (CanLII) illustrates the types of issues that can arise on a passing of accounts, and also the underlying factors that can lead to a contested hearing.
In Mervyn, Bud died leaving a will. In his will, he appointed his second wife Anne, a long-time employee and his daughter as estate trustees. He also had two sons, who were beneficiaries. The estate trustees prepared an accounting, and his two sons raised objections.
Before getting to the specific objections, the court noted that there were a number of factors that contributed to the distrust and animosity between the trustees and the sons. Some of these pre-existed the estate administration, and several arose in the course of the estate administration. For example, the sons had a strained relationship with the second wife and their sister for some time. (Alarm bell: testators should reconsider appointing estate trustees who already have a strained relationship with the beneficiaries.) In addition, the estate trustees failed to disclose a bank account in their initial accounting. (Alarm bell: even though the judge found that this was an oversight, and that the estate trustees did not know of the account, this served to heighten the distrust.) Another factor was a “different understanding” between the parties as to whether Bud wanted a one-day open-casket visitation. (Alarm bell: this trigger point could be avoided by a testator making his or her plans clear to all.)
With respect to the specific objections to the accounts, one was that two rifles listed as estate assets in fact belonged to one of the sons. This led to the son reporting the “theft” to the police. The estate trustees countered by alleging that the son’s position that he owned the guns “effectively amounts to theft” by him. (Alarm bell: accusations of theft and the involvement of police can only intensify the animosity and distrust.)
The court ultimately accepted that the son had purchased the guns. Spouse Anne didn’t get the guns.
Which brings me back to the title of this blog. What came to mind was Squeeze’s “Annie Get Your Gun” from 1982. A great song that I will now be humming all weekend. What I wasn’t thinking about and only learned of after further digging was the 1946 musical about sharpshooter Annie Oakley, “Annie Get Your Gun” by Irving Berlin. The musical features the song “There’s No Business Like Show Business”. Think Ethel Merman. Another song that I might be belting out this weekend. Sorry family.
Have a great weekend.
Recent reports indicate that Chadwick Boseman is the latest celebrity to die without a Will. His wife is currently seeking to be appointed administrator of his Estate.
This certainly shows that many people, including those with significant assets, often procrastinate when it comes to preparing a Will. The fact is that, no matter how many assets you have, a sound estate plan can help you address any potential tax liabilities, take advantage of certain planning strategies and otherwise make life much easier for your beneficiaries, as addressing an intestate estate can often have its challenges.
The benefits of making a Will are numerous, including (but not limited to) the ability to:
- Decide who gets certain personal items after your death;
- In contrast to an intestacy, provide for your children (if any), particularly if they are minors;
- Consider whether there are any parties who can complicate the distribution of your estate and address potential strategies in response to that;
- Appreciate what assets will form a part of your estate and what assets will flow outside of your estate, as well as the benefits associated with either;
- Take care of any pets that you may have (particularly those that may be expensive to maintain); and
- Decide who will be in charge of administering your estate.
Without a Will, you essentially leave the decisions respecting your assets in the hands of others and more often than not, in the hands of the Court. In certain situations, having no estate plan may fuel disagreements between your heirs which may leave long lasting effects on family relationships.
I, for one, think these are great reasons to make an estate plan!
Incidentally, it is “Make a Will Month” with the Ontario Bar Association. Click here for more details.
Thanks for reading.
Find this blog interesting? Please consider these other related posts:
In 1972, Bill and Mary Moroz purchased a humble single-story bungalow, in Edmonton, on the banks of the North Saskatchewan River. They were the first and only occupants of the home and lived there the rest of their lives. William died in 2009 and in September of 2016, so did Mary.
Their nephew, William Smolak, was appointed personal representative of the Estate of Mary Moroz and set about preparing the house for sale. The house needed much work to clean and empty, but it was finally sold to Roger and Simone Gagne, and Christopher Short, who took possession on October 16, 2017.
Two days later, the new homeowners found $100,000 in a tin in a basement shoe cubby roughly 18” high.
Seven days after that, another $500,000 was found in more tins under the drawers in the basement kitchen. The Gagnes and Mr. Short did not contact the realtor or Mr. Smolak to tell them they had made this rare find. When Mr. Gagne attempted to deposit the $100,000, the bank notified the police, and the money was seized.
Mr. Smolak claimed the money belonged to the Estate of Mary Moroz, and he applied to the Court of Queen’s Bench of Alberta for summary judgment. The court’s decision in Moroz Estate v Gagne, 2020 was handed down this past November 4.
The Alberta Court of Appeal in Weir-Jones Technical Services Inc. set out the key considerations for an application for summary judgment, based on the test set out by the Supreme Court of Canada. In order to achieve an outcome that is “just, appropriate, and reasonable,” the court laid out four key considerations:
1) Having regard to the record and issues, is it possible to resolve the dispute on a summary basis?
2) Has the moving party met its burden to show that there is no merit or no defence and that there is no genuine issue requiring trial?
3) If the moving party has met its burden, has the resisting party put its best foot forward to demonstrate that there is a genuine issue?
4) Has the presiding judge been left with sufficient confidence to exercise their discretion and summarily resolve the dispute?
The court next turned to the law on finders:
“Orthodoxy has it that the finder of a chattel acquires a title that is good against the entire world except for the true owner […]. A recovered item may have been abandoned by a previous owner. It is self-evident that a finder of ownerless property can face no superior claim. It is not only the true owner who may assert a prior right, but anyone with a valid and subsisting entitlement, including, theoretically, some previous finder. Therefore, a more accurate general proposition is that a finder acquires a title that is good against the world, except for those with a continuing antecedent claim. This is a general statement about the relative rights of owners.” (Bruce Ziff, Principles of Property Law, 7th ed (Toronto: Thomas Reuters, 2018) at 176 [Ziff])
For Mr. Smolak, everything turned on an intent to abandon, a question of fact that relies on, among other things, the passage of time, the nature of the property, and the conduct of the owner. The burden of proving intention to abandon rests with the defendant.
Unfortunately for Mr. Smolak, he had given conflicting statements about his knowledge that gave rise to uncertainty in the court. While cleaning out the house, he had found receipts for gold wafers, and Mary’s daughter had told him about the possibility of hidden money and her parents’ distaste for banks. But Mr. Smolak also said he had no knowledge of any assets hidden in the house, and claimed he would have no intention of abandoning estate assets.
Ultimately, the court dismissed the application for summary judgment, citing its uncertainty and the need to determine Mr. Smolak’s state of mind after putting so much time and effort into cleaning and sorting the personal property and selling the house.
Unable to make a fair and just determination, the court welcomed further affidavits or a possible summary trial. In the meantime, however, it was unable to decide “keepers.”
We will keep you posted. . .
Thanks for reading!
Ian Hull and Daniel Enright
I came across an interesting report on Alberta’s succession law and what is perceived as a gap that has affected family maintenance and support in the province. The report was published by the Alberta Law Reform Institute (ALRI) and can be found here.
In accordance with the Family Law Act in Alberta, a child can apply for and may be entitled to support from a person standing in the place of a parent, when a couple separates. Under the Wills and Succession Act, however, which applies when a person dies, there is no provision addressing the distinction of a “person standing in the place of a parent”. What that means is that while a person who is characterized as a “person standing in the place of a parent” is alive, the child can apply for support under the Family Law Act but if this person dies, that same child has no ability to seek support from the Estate of this person “standing in the place of a parent”.
Consequently, the ALRI is of the view that there is a gap in the law that ought to be rectified on the basis of an equality argument, alone. This report was apparently recently sent to the province of Alberta but there has been no response, as of yet.
In comparing the provisions of the Succession Law Reform Act here in Ontario, it appears that the very issue raised by the ALRI is addressed by section 57(1) where the definition of a “child” includes a grandchild and a person whom the deceased has demonstrated a settled intention to treat as a child of his or her family, except under an arrangement where a child is placed for valuable consideration in a foster home by a person having lawful custody.” [emphasis added]
Certainly, it is important that children be able to bring a support claim against the estates of their parents, where not appropriately provided for out of the estate, even where not formally adopted but clearly treated as a child.
It will be interesting to see what happens and what the province of Alberta will do, if anything, in response to this report from the ALRI.
Thanks for reading!
Find this blog interesting? Please consider these other related posts:
In estate litigation, we often hear about Alzheimer’s and how it can affect the daily lives of so many Canadians. Unfortunately, there is no treatment for Alzheimer’s at this time, other than medication that can be taken to (hopefully) slow its effects and prolong one’s quality of life.
Interestingly, Biogen Inc. has been working on what has been labelled a “controversial” new drug called “Aducanumab”. The controversy is, first of all, the rather bumpy ride this new drug has had with the U.S. Food and Drug Administration (FDA) and the regulatory approval that this treatment needs in order to be made available to consumers.
According to Biogen, if this drug receives regulatory approval, it will become the first treatment to slow decline in people with Alzheimer’s disease.
The problem is that to date, it is not clear as to whether there is “substantial” evidence of effectiveness which is what is required in order to gain the coveted regulatory approval that allows the drug on the market.
A recent update is not positive for Biogen as an independent advisory committee to the FDA found that the clinical data does not show the drug to be effective for the treatment of Alzheimer’s disease.
I am sure this is not the outcome desired by Biogen strictly from a financial perspective but it is certainly not a positive outcome for the many people affected by Alzheimer’s today.
Here is to hoping that if this treatment does not prove to be successful, that another one becomes available soon.
To learn more about recent updates on Biogen Inc. here is an article from November 10, 2020.
Thanks for reading!
Find this blogs interesting? Please consider these other related posts:
The earning power of the estates of deceased celebrities is astounding. According to a list published by Forbes.com, the 13 top-earning dead celebrities earned over $259 million collectively.
Here are the ranked names, their earnings, and a glimpse into the reason for the massive earnings:
|Rank||Name||Date of Death||2020 Earnings*||Contributing Factors|
|13||Marilyn Monroe||August 4, 1962||$8 million||Netflix biopic, branding, including Dolce & Gabbana, Lego,|
|12||George Harrison||November 29, 2001||$8.5 million||Las Vegas’ Cirque du Soleil’s Love|
|11||Freddy Mercury||November 24, 1991||$9 million||Royalties from biopic Bohemian Rhapsody, related music and merchandise sales|
|10||Prince||April 21, 2016||$10 million||Album sales, streams, royalties|
|9||John Lennon||December 8, 1980||$13 million||Album sales, streams, royalties|
|8||Bob Marley||May 11, 1981||$14 million||Album sales, streams, royalties, merchandise|
|7||Juice WRLD||December 8, 2019||$15 million||Album sales, music streams|
|6||Kobe Bryant||January 26, 2020||$20 million||Merchandising, sale of autobiography|
|5||Elvis Presley||August 16, 1977||$23 million||Down from usual, due to reduced earnings from Elvis’ home/museum Graceland, which usually earns $10 m a year, Netflix animated series|
|4||Arnold Palmer||September 25, 2016||$25 million||(Most surprising to me). Arnold Palmer hit a hole in one with Arizona Beverages to market his eponymous iced tea/lemonade drink, merchandising|
|3||Charles Schultz||February 12, 2000||$32.5 million||Programming royalties, new deal with Apple TV+ for series Snoopy in Space|
|2||Dr. Suess||September 24, 1991||$33 million||Book sales (6 m books in 2019), series deal with Netflix, movie deal for 3 movies with Warner Brothers|
|1||Michael Jackson||June 25, 2009||$48 million||Just because he is The Prince of Pop.|
*based on pre-tax income from October 1, 2019, to October 1, 2020. Fees for agents, managers and lawyers are not deducted.
Thank you for reading.
A recent CBC article demonstrates the importance of having a testator regularly review, or at least consider, their current estate plan to ensure that it conforms to their testamentary intentions, and the potential pitfalls of failing to do so or of failing to seek legal advice.
Eleena Murray, of Vancouver, British Columbia, died leaving a Last Will and Testament dated sometime in 2003. The Will provided cash legacies to various relatives, totaling approximately $440,000, and left the residue of Eleena’s estate to a charitable organization, the SPCA.
Although it is not clear, at the time the Will was drawn, it appears as if the residue of the Estate would have largely consisted of her interest in her house, situated in the Point Grey neighbourhood of Vancouver. Presumably, although it is unclear, the total value of all of the cash legacies was likely close to the fair market value of the house, such that Eleena intended to divide her estate roughly equally between the legatees and the charity.
However, in the years since the Will was drawn, the real estate market in Vancouver saw massive growth, with property values rising significantly, and the value of the residue of Eleena’s estate along with them. In 2017, perhaps recognizing what had become a considerable discrepancy between the values of the cash legacies and the value of the house, Eleena apparently drafted a handwritten note containing, among other instructions, an intention to limit the SPCA’s interest in her estate to a flat bequest of $100,000.
It is unclear whether the note was signed by Eleena or subscribed to by attesting witnesses (although two witnesses swore affidavits attesting to the fact that the note was prepared by Eleena). Eleena died only months later, without having amended her Will to reflect her purported intentions by way of the note. Although the value of the house, and therefore the residue of the Estate, increased significantly, Eleena never formally amended her estate plan.
Litigation has since ensued, with Eleena’s family members asserting that the handwritten note is a testamentary document that accurately represents her intentions.
Were this litigation taking place in Ontario, a court might find that the handwritten note would constitute a holograph will, assuming it was signed by Eleena. A holograph will is a will that is made entirely in the handwriting of the testator and signed by them, without the need for attesting witnesses.
In British Columbia, the analysis is slightly more nuanced. There is no equivalent provision under BC legislation that specifically recognizes the validity of holograph wills, as the Succession Law Reform Act does in Ontario. That said, British Columbia’s Wills, Estates and Succession Act empowers a court to make an order that a record purporting to be a will if the court is satisfied that the document represents,
- The testamentary intentions of a deceased person;
- The intention of a deceased person to revoke, alter, or revive a will; or
- The intention of a deceased person to revoke, alter, or revive a testamentary disposition in a document other than a will.
The court is equally empowered to make an order that a will that is not made in conformity with the applicable legislation is equally as effective as if it had been.
In the case at hand, the prevailing question will likely be whether the court is satisfied that the handwritten note accurately represents Eleena’s testamentary intentions. If so, the subsequent issue to be considered is whether the balance of the Estate that is not dealt with pursuant to the note passes by way of an intestacy, but that is a topic for another day.
Thanks for reading.
Dying with Dignity (DWD) Canada, a not-for-profit organization, has noted a rise in calls from Canadians inquiring about medical assistance in dying (MAID) since the start of the pandemic.
The individuals calling DWD are largely concerned about the prospect of dying an uncomfortable death from Covid-19. Since MAID is only available to a small group of individuals who meet the rigorous conditions set out in Canada’s assisted dying law, Helen Long, CEO of DWD Canada, urges people to complete an advanced care directive to ensure their end of life wishes are met. Advanced care planning advice, and specifically how it relates to Covid-19, can be found on the Dying with Dignity website.
Other DWD callers express concerns about the difficulty of accessing the healthcare system during the Covid-19 pandemic. These callers worry about whether they will be able to in fact access MAID programs when needed. For example, in March of 2020, some MAID services were shut down in Ottawa and Hamilton to prevent the spread of Covid-19 and to preserve health-care resources. However, other regions have deemed MAID to be an essential service and have implemented safety protocols to ensure adequate protection for clinicians conducting this service.
Some long term care homes reject MAID on religious grounds and, therefore, will not allow the services to be conducted on their property. It is clear that MAID has become increasingly difficult to access for many people.
Currently, Bill C-7 is before the House of Commons. Bill C-7 contains the government’s proposal to expand eligibility for assisted death. One way that the government seeks to do so is by modifying the current stringent requirement of a “reasonably foreseeable death.” Although Bill C-7 would maintain the general notion of a reasonably foreseeable death as a precondition to accessing MAID, it would establish more lenient eligibility requirements for those who are near death. Bill C-7 seeks to make MAID more accessible by alleviating some of the more burdensome conditions that presently need to be met.
Under the current assisted dying regime, 6,465 medically assisted deaths are expected in Canada in 2021. This legislation would enable almost 1200 more medically assisted deaths. These were the numerical predictions expected prior to the pandemic. The exact number of additional requests for MAID due to Covid-19 remains to be seen.
Thanks for reading … Enjoy the rest of your day.
Suzana Popovic-Montag & Tori Joseph
In yesterday’s blog, I discussed the representation of unborn and unascertained parties in litigation in which their interests are affected. In such cases, the parties should obtain a representation order authorizing a chosen individual, or perhaps the Children’s Lawyer, to represent the interests of that unborn or unascertained person or class of persons. Today’s blog considers the opposite end of the litigation spectrum – settlement.
Rule 10 of the Rules of Civil Procedure empowers the court to appoint a representative to act on behalf of unborn and unascertained beneficiaries. Situations may arise in which such an appointment is not necessary at the outset of litigation, for example, where the unborn beneficiaries need not be named as parties, but which may become necessary to conclude a matter.
In particular, where the parties to litigation agree on terms of settlement, that settlement is subject to the approval of the court if it impacts the interests of a party under disability, such as a mi
nor. Similar principles apply to circumstances in which an unborn or unascertained beneficiary is not a party to a proceeding but is nonetheless “interested in the settlement” in accordance with Rule 10.01(3) of the Rules.
Rule 10.01(3) authorizes a party appointed by representation order to “assent to the settlement” entered into by the parties to the litigation. If the judge hearing the motion for court approval is satisfied that the settlement is “for the benefit of the interested persons who are not parties”, and the representative does, in fact, assent to that settlement, the court is empowered to approve the settlement on their behalf.
As a point of practice, although motions for court approval on behalf of parties under a disability have strict requirements as to the nature and content of the materials to be filed, there is no such strict requirement for approval motions brought pursuant to Rule 10. That said, parties bringing such motions would be well advised to comment on the benefits of settlement from the perspective of the unborn and unascertained beneficiaries in order to assist the court.
Thanks for reading.
Prudent estate planning techniques frequently lead a testator or settlor to contemplate gifts or distributions to alternative beneficiaries to whom they do not necessarily intend to convey an express interest.
Often, these gifts-over are made in contemplation of a particular condition coming to pass – for example, where the intended beneficiary predeceases the testator. Failing to account for such instances could result in a lapsed gift (subject to the applicability of the anti-lapse provisions at section 31 of the Succession Law Reform Act), a partial intestacy, or, more generally, the conveyance of an interest to a person that the testator did not intend to benefit.
Although gifts-over are generally granted in favour of individuals of the testator’s choice, to maximize their control over their estate, that need not be the case. Gifts-over may be made in favour of individuals who may not yet have been born, such as the issue or lineal descendants of a testator’s young grandchildren. When litigation that impacts the interests of these unborn or unascertained beneficiaries arises, the first questions that ought to come to a litigator’s mind are who should be appointed to act on their behalf, and how should that appointment be achieved?
One’s mind might immediately jump to the appointment of a litigation guardian. In the case of a beneficiary who is a minor, that would be correct. Pursuant to Rule 7 of the Rules of Civil Procedure, a party under disability (which would include a minor) must be represented by a litigation guardian. Furthermore, the Children’s Lawyer is the presumptive litigation guardian for all minors unless and until another individual files an affidavit following specific criteria set out at Rule 7.02.
However, where the interests of an unborn or unascertained person or class of persons is concerned, recent direction from the Children’s Lawyer suggests it is Rule 10, not Rule 7, that guides us. Rule 10.01 empowers a judge to appoint a person to represent “any person or class of persons who are unborn or unascertained” who have a present, future, contingent, or unascertained interest in the subject matter. Strictly speaking, an unborn or unascertained individual is not a person under disability or a minor as defined under the Rules, and so a litigation guardian, although filling a similar role as a representative, should not be appointed.
As a point of practice, a party seeking a representation order would be well advised to serve the Children’s Lawyer whether or not the applicant is seeking to have the Children’s Lawyer act as representative, or whether another individual is seeking that appointment. Although Rule 10 differs from Rule 7 in that the latter requires the Children’s Lawyer to have notice of any motion to appoint a litigation guardian while the former does not in the context of a representation order, it is nonetheless recommended that the Children’s Lawyer be given notice to ensure the interests of the unborn beneficiaries are appropriately represented.
Thanks for reading.