Another will challenge was before the Court of Appeal this month on February 5, 2019. Reasons for the panel, comprised of Pepall, Trotter, and Harvison Young JJ.A., were released in writing on February 13th. Quaggiotto v. Quaggiotto, 2019 ONCA 107, can be found here.
The issue of validity was solely focused on a codicil that was executed by Maria Quaggiotto when she was 87 years old. The codicil left the residue of her estate to one son, Livio, while her will had previously left an equal division of the residue to both of her sons, Livio and Franco.
After a 10 day trial, Justice Rogin found that the codicil was valid.
On appeal, the challenger Franco sought to overturn various findings of fact and findings of mixed fact and law.
Ultimately, the panel upheld the decision of Justice Rogin.
The panel reaffirmed the Court of Appeal’s decision in the Orfus Estate with respect to the notion that testators are not required to have “an encyclopedic knowledge” of their assets in order to satisfy the test for testamentary capacity.
Interestingly enough, the Court of Appeal found that the trial judge was sufficiently alive to corroboration requirements of section 13 of the Ontario Evidence Act even though Justice Rogin’s decision would appear to have erroneously cited section 13 of the Ontario Estates Act for this important statutory requirement. The adage “form over substance” did not hold water in this appeal given that the actual legal requirement was adequately considered by Justice Rogin.
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A recent study published by the Department of Radiology and Biomedical Imaging at the University of California at San Francisco represents a promising breakthrough in research relating to early detection of Alzheimer’s disease. At the core of the study, however, is a familiar yet unlikely trend: artificial intelligence.
The research team developed an algorithm to read and interpret PET scan images with a particular emphasis on monitoring and detecting changes in glucose uptake over extended periods of time. Glucose monitoring has historically been an important predictive factor in formulating a diagnosis of Alzheimer’s. Healthy cells generally display high levels of glucose uptake, indicative of robust cell activity. Conversely, lower glucose uptake suggests cell inactivity or death, for example, as a result of Alzheimer’s.
The slow, progressive nature of Alzheimer’s has historically rendered it difficult for radiologists to observe the subtle changes in glucose levels until symptoms had reached a stage at which they were no longer meaningfully reversible. The team at UCSF tailored the algorithm to detect subtle features that were imperceptible to the human eye.
To achieve this, the algorithm was fed thousands of PET scan images from thousands of patients at all stages of cognitive impairment, from no impairment through to late-stage Alzheimer’s. Over time, the algorithm learned to discern between the particular features of a given scan which were of assistance in predicting the eventual onset of Alzheimer’s and those which were not. At the conclusion of the study, the algorithm had correctly predicted the onset of Alzheimer’s in more than 92% of cases. Importantly, the algorithm was able to predict the onset of Alzheimer’s, on average, more than six years before the symptoms constituting a typical diagnosis had manifested.
Leaving aside the obvious benefits relating to treatment and reversibility, early detection of Alzheimer’s could stand to have numerous applications in the context of succession and estate planning. For example, a predictive diagnosis could spur a testator to take steps to implement a proper estate plan well before his or her capacity to do so could become a concern. In turn, the testator would have the security that their plan of succession would be carried out according to his or her instructions, reducing the risk of contentious post-death litigation.
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One of the major facets underpinning the principles of fundamental justice in Canada is ensuring all parties to a litigation have a voice. The ability of the judicial system to satisfy this burden is often rendered more challenging when the capacity of one of the parties is a central issue in a given proceeding. The recent decision of the Ontario Superior Court of Justice in Sylvester v Britton, 2018 ONSC 6620, provides clarity in respect of the duties and obligations of counsel who are appointed to navigate these issues.
In Sylvester, the Applicant brought an application seeking to be appointed as guardian of property and personal care for her mother, Marjorie. Marjorie had previously appointed two of her sons as her attorneys for property and personal care pursuant to validly-executed powers of attorney.
On consent of all parties, the Public Guardian and Trustee arranged to have a lawyer, Clarke Melville, act for Marjorie on the application in accordance with section 3 of Ontario’s Substitute Decisions Act. Section 3 of the SDA provides that, where the capacity of a person is at issue in a proceeding, that person will be deemed to have the capacity to instruct counsel for the purposes of that proceeding. Accordingly, the Court deemed Marjorie to have the capacity to give instructions to Mr. Melville on the application.
The Applicant disputed this presumption of capacity. She brought a motion seeking, amongst other relief, Mr. Melville’s removal as Marjorie’s section 3 counsel and a declaration that Marjorie was not capable of instructing counsel.
The Applicant’s position on the motion was largely premised on earlier findings of Marjorie’s incapacity. Capacity assessments performed several years earlier had revealed that Marjorie was not capable of managing her property or her personal care. At common law, the test for capacity to manage property and personal care is generally more onerous than the test for capacity to instruct counsel. The Applicant took the position that a finding of incapacity to manage property and personal care was sufficient to establish a lack of capacity to instruct counsel.
The Court disagreed and, in its reasons, highlighted several key points that clarify the role of section 3 counsel in the court process. The purpose of the SDA and of section 3 in particular is to protect vulnerable individuals and to allow them to provide input, to the extent possible, on matters that impact their interests.
However, the Court also stressed that the Rules of Professional Conduct govern all solicitor-client relationships, including relations arising under section 3. Section 3 counsel must carry out all of the duties and obligations to the Court and to the client that other counsel must observe, regardless of the particular vulnerabilities of their client. All counsel have an obligation to canvas the wishes or instructions of their client and to advance the client’s interests. The role of section 3 counsel differs only insofar as it is potentially more likely that he or she will be required to advise the Court if, at any point, counsel no longer believes the client has the capacity to give instructions.
This final point is the salient point that governed the Court’s decision to deny the Applicant’s motion. The Court ultimately held that significant deference ought to be granted to section 3 counsel in assessing a client’s capacity to give instructions. The Rules of Professional Conduct properly govern a lawyer’s duty to all clients and to the Court. As such, no individual will be better positioned to judge an incapable person’s capacity to give instructions than the person to whom the instructions would ordinarily be given.
Accordingly, the Court will only interfere if it is apparent that the client is not able to give instructions and where it is clear that counsel has “strayed from his or her obligations to the client and to the Court.” In all other circumstances, the Court will presume that counsel is acting with the integrity of the court process in mind.
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Does an attorney, or guardian, have the power to change a grantor’s estate plan?
According to section 31(1) of the Substitute Decisions Act, a guardian of property (or attorney for property) has the power to do on the incapable person’s behalf anything in respect of property that the person could do if capable, except make a will.
The statute, however, is deceptively simple. Can a guardian transfer property into joint tenancy? Can a guardian sever a joint tenancy? Can a guardian change a beneficiary designation on a RRSP, RRIF or insurance policy? Can an inter vivos trust be established or an estate freeze undertaken to save taxes? There are numerous cases which have tested these issues.
For instance, in Banton v Banton, Justice Cullity found that although the grantor’s attorneys had the authority to create an irrevocable inter vivos trust, they nonetheless breached their fiduciary obligations owing to the grantor, in creating the trust.
The irrevocable trust provided for income and capital at the trustee’s discretion for the grantor’s benefit during his lifetime and a gift over of capital to the grantor’s children, who were also the attorneys. The scheme of distribution of the irrevocable trust was the same as provided for in the grantor’s will. However, the court found that the fact that the remainder interest passed automatically to the grantor’s issue defeated the grantor’s power to revoke his will by marriage and would deprive his common law spouse of potential rights under Parts II and V of the Succession Law Reform Act and Part I of the Family Law Act. The court found that the gift of the remainder of the interest went beyond what was required to protect the grantor’s assets.
Justice Cullity stated:
“I do not share the view that there is an inviolable rule that it is improper for attorneys under a continuing power of attorney to take title to the donor‘s assets either by themselves or jointly with the donor . This must depend upon whether it is reasonable in the circumstances to do so to protect or advance the interest, or otherwise benefit, the donor.”
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A recent Superior Court of Justice decision illustrates the test to be met where one is alleging that an attorney for property should be removed.
In Crane v. Metzger, 2018 ONSC 5382 (CanLII), Ms. Metzger was determined to be incapable of managing her property. While capable, she appointed her brother, Mr. Cason, as attorney for property. Her daughter, Ms. Crane brought an application to remove Cason as attorney, and to have Crane appointed as guardian. Crane alleged impropriety on the part of Cason.
In determining the application, the court set out the test for removal. Citing the decision of Teffer v. Schaefers, 2008 CanLII 46929 (ON SC), the court stated that the courts have generally taken the view that a written power of attorney made at the time when the donor was of sound mind is simpler to deal with and gives the donee more flexibility in dealing on behalf of the donor. Continuing with the appointment respects the wishes of the donor. Thus, in order to set aside the power of attorney, “There must be strong and compelling evidence of misconduct or neglect on the part of the donee duly appointed under an enduring power of attorney before a court should ignore the clear wishes of the donor and terminate such power of attorney.”
The court summarized the test for removal as follows:
- There must be strong and compelling evidence of misconduct or neglect on the part of the attorney before a court should ignore the clear wishes of the donor, and
- The court must be of the opinion that the best interests of an incapable person are not being served by the attorney.
In Crane, Crane submitted a “lengthy list of grievances” in her affidavit materials. These grievances, while not fully enumerated in the decision, were apparently answered by Cason in his affidavit materials.
The court concluded that Cason was doing the best he could in the circumstances. There was no evidence of financial mismanagement, and Cason’s accounts were in order.
In dismissing the Application, the court also focused on two incidents where Crane acted improperly, which were said to seriously affect her credibility: one where Crane said that she was taking her mother to Wasaga Beach, but in fact took her to Seattle (and thereby putting her and her property at risk), and another where Crane took her incapable mother to the bank to withdraw $10,000. These two events “make her position untenable. … For these reasons, where there is a conflict between the evidence of the parties, I accept Mr. Cason’s evidence and reject that of Ms. Crane.”
The test for removal of a properly appointed attorney is a difficult one to meet. Further, the alternative, being the appointment of a guardian, must be compelling. The best interests of the incapable will be an overriding consideration.
Have a great weekend.
Many of us are familiar with the concept of “elder abuse” or “elder neglect”, however, it is not always clear what that entails. WEL Partners consulted with the Toronto Police Services in developing an information guide for officers, on this very topic. It is now a guide that has been distributed to officers in the field.
Elder abuse/neglect “is any action or inaction, by a person in a position of trust, which causes harm to an older person”, as the guide indicates. As Toronto Police Services officers are often the only point of contact for older adults with the “outside world”, they are also often their only real chance of getting the help they need.
The guide lists various reasons as to why elder abuse/neglect is often under reported by the older adults that are the victims of such treatment:
- dependence on abuser/family member
- rationalization/minimization of the abuse
- denial of the abuse
- lack of recognition of abuse
- physical inability to report abuse
- feelings that they will not be believed
In the absence of victim/witness statements that are often relied on as evidence, the officers investigating these situations should be able to recognize some subtle warning signs of potential abuse of older individuals.
Some common types of abuse are noted as follows:
- Financial abuse
- Physical abuse
- Psychological abuse
The report describes various red flags for each of the categories listed of the common types of abuse. It further describes some additional considerations such as the mental capacity of the senior adult and the following questions to consider in assessing whether capacity is present:
- ability to understand the information needed to make a decision; and
- ability to appreciate the consequences of making, or not making, a decision.
For more information on this valuable resource in assessing whether the circumstances at hand show signs of elder abuse/neglect, see the Elder Abuse & Neglect: A Guide for Police Officers.
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We sometimes hear about an elderly person marrying a much younger person. What we often do not consider, however, is the possibility that such a marriage is entered into by a “predatory” spouse in order to take advantage of an elderly victim with the ultimate goal of assuming control of his or her finances.
The “predator” is often a caregiver or a family friend or neighbour. In most cases, it is a person who uses a position of trust to cause an elderly victim to change a Will, a power of attorney, an insurance policy designation or other documents. It is also not uncommon for inter vivos transfers to be made while the senior is alive.
According to Ontario law, the act of marriage grants the new spouse certain property rights, specifically with respect to the matrimonial home and spousal support. The most significant effect of a marriage, however, is the fact that the Succession Law Reform Act, revokes any Will executed prior to the marriage. To make matters worse, predatory marriages often occur in private such that the senior’s family members are not aware that he or she has married.
The evidentiary burden imposed upon the elderly victim’s adult family members to prove that a marriage should be declared void as it is a marriage of a “predatory” nature is significant.
Why is it so tough to show that a marriage is void?
Capacity is a fluid concept. It means that a person could have capacity for one task and no capacity for another, as capacity is time and situation specific. Capacity to enter into a marriage, is the lowest threshold of capacity. As such, a person can be entirely capable to enter into a marriage but may be incapable of managing his or her own financial affairs.
In addition, a person likely does not just lose capacity in a day; it is a gradual process such that there is a “grey zone” between having capacity and having no capacity at all. It is in that “grey zone” that a predator will take advantage because a person may start forgetting things but is otherwise capable for all intents and purposes.
Because of that, many are of the opinion that Ontario laws make seniors an easy target for “predatory marriages”. Will there be a change in the law coming our way, in light of the growing phenomenon of such marriages? Only time will tell.
For more information regarding this growing concern and the manner in which this issue has been treated by the courts, please see a paper by Kimberly Whaley of WEL Partners on Predatory Marriages.
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Solicitors preparing Wills need to be mindful of the obligations they owe to a testator. The seminal Court of Appeal decision in Hall v Bennett Estate provides a helpful refresher of the steps a solicitor should consider to ensure best practices are followed.
According to the Court, it is well established that a “solicitor who undertakes to prepare a will has the duty to use reasonable skill, care and competence in carrying out the testator’s intentions. This duty includes the obligation to inquire into and substantiate the testator’s capacity to make a will”.
Testing for capacity is fundamental – a solicitor has a duty to make inquiries into the testamentary capacity of the testator.
Should the solicitor have any doubt as to capacity, Justice Cullity in Scott v Cousins, famously states that “…careful solicitors who are in doubt on the question of capacity, will not play God – or even judge – and will supervise the execution of the will while taking, and retaining, comprehensive notes of their observations on the question”.
The Court of Appeal proceeds to summarize an article written by M.M. Litman & G.B. Robertson outlining errors made by solicitors in the preparation of a Will, leading to negligence claims, including failing to:
- obtain a mental status examination;
- interview the testator in sufficient depth;
- properly record or maintain notes; and
- test for capacity.
As such, notes from a drafting solicitor should ensure that all of these are addressed.
In certain instances, although narrow, a duty of care might also be owed to a disappointed beneficiary. A two part test is applied as set out by the Supreme Court of Canada in Cooper v. Hobart.
While claims for negligence by testators and disappointed beneficiaries cannot be stopped, a file with detailed notes can go a long way in defending such a claim.
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In Foisey v. Green, 2017 ONSC 7140, the estate trustee of the estate was required to pass her accounts as estate trustee, even though the beneficiary signed a full and final release.
There, the deceased died intestate, and was survived by two sisters. One sister, Joyce, was appointed as estate trustee. She distributed what she said was half of the estate to her sister, Darlene, who signed a release as against the estate and the estate trustee.
Darlene was later found incapable of managing her property, and the Public Guardian and Trustee was appointed as her statutory guardian. They looked into the estate, and had concerns about whether Darlene received her full entitlement from the estate. The estate was said to have a gross value of $830,000, but Darlene only received $291,000. The PGT sought an accounting from Joyce. Joyce resisted, relying on the release signed by Darlene.
The court held that Joyce had to pass her accounts, notwithstanding the release. The court referred to the presumption of capacity in the Substitute Decisions Act, and the fact that a person is entitled to rely on the presumption of capacity unless the person has reasonable grounds to believe that the other person is incapable. However, the court noted s. 2(4) of the SDA, which provides that where a contract was entered into within one year of the creation of a guardianship, “the onus of proof that the other person who entered into the contract …did not have reasonable grounds to believe the person incapable is on that other person.”
In the Foisey case, the court found that there were “red flags” that precluded the court from finding that Joyce satisfied the court that she did not have reasonable grounds to believe that Darlene was incapable. These included:
- Darlene was living in an assisted living facility; and
- Darlene was participating in a trusteeship program.
To Joyce’s credit, however, her lawyer met with Darlene, in the presence of Darlene’s apparent lawyer, a childhood friend, and the administrator of the facility of the lodge where Darlene resided. Apparently no one objected to Darlene signing the release, or advised that Darlene did not have capacity.
In ordering the passing of accounts, the judge noted Joyce’s evidence that after the signing of the release, she did not keep any of the estate accounting.
One takeaway is to take steps to ensure that beneficiaries are capable of signing a release if there is anything to suggest that capacity may be in issue. A second takeaway, as noted by the judge, is to always keep records. “Although unfortunate, this case underscores the importance of keeping adequate records notwithstanding the execution of an estate release.”
As a postscript, an appeal to the Court of Appeal was dismissed, as the Court of Appeal determined that because the order directing the passing of accounts was interlocutory, the appeal would lie to the Divisional Court, with leave.
Have a great weekend.
A recent decision from the Court of Appeal for Ontario, Dujardin v Dujardin, 2018 ONCA 597, considers an appeal with respect to a Will challenge on the basis that the testator lacked testamentary capacity. The testator in this situation was a frequent consumer of alcohol. Despite what the trial judge called the testator’s “chronic alcoholism”, it seemed as though he was able to function normally on a day-to-day basis, including in business dealings relating to a family farm owned by the testator and his brother. Following the testator’s death, his wife disputed his Will, under which she received no benefit.
Recently, my colleagues, Noah Weisberg and Garrett Horrocks, discussed whether the classic test for testamentary capacity as set out in Banks v Goodfellow should be updated, and a new test as proposed in an article in the Canadian Bar Review, Vol 95 No. 1 (2017), Banks v Goodfellow (1870): Time to Update the Test for Testamentary Capacity.
The article opines that the context of the testator, including, for instance, family dynamics, should be incorporated explicitly into the test for testamentary capacity. This means that we would be asking the question: “can this particular person, with his or her particular mental abilities, in this particular situation, make this particular Will, at this particular time?”, rather than “can this testator make a Will?”
I thought the suggestions in the article were interesting when considering the facts of the Dujardin decision, and the findings of the trial judge. It seems as though the lower court took into account a number of contextual factors in applying the Banks v Goodfellow test, ultimately leading to a conclusion that the testator did possess the requisite testamentary capacity, a conclusion which was upheld by the Court of Appeal.
In particular, some of the interesting contextual factors included:
- the history of the testator and his brother’s ownership and operation of the family farm, and the brothers’ consistent desires to leave their respective shares of the farm to each other upon their death;
- prior mirror Wills executed by the brothers 13 years before the testator’s death, which reflected the same intention as the later Will that was being challenged (the testator’s prior will was revoked in 2000 when he married his wife); and
- the testator’s relationship dynamic with his wife, with whom it appeared he was not close, and the provision that he made for her outside of his Will.
In particular, the Court of Appeal commented that “[g]enerally, the manner in which [the testator] disposed of his property made sense in the context of his life and familial relationships.”
Had the trial judge not considered the various contextual factors, it’s possible she could have arrived at a different conclusion. Subject to the medical evidence, given that the testator suffered from alcoholism, it may have been open to the court to conclude that this condition had, in fact, affected the testator’s cognition.
In any event, it is interesting to see a practical example of the ideas put forth in the article mentioned above, and to consider how the suggestions of the authors may come into play in real-world situations.
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