This month marks the beginning of the Will Power campaign, led by the CAGP Foundation and the Canadian Association of Gift Planners.
Will Power is designed to show Canadians the power they have to make a difference with their Wills by leaving charitable gifts.
Many Canadians feel that if they leave a charitable gift in their Will, it will take away from gifts and support for their loved ones, who they also wish to benefit as part of their estate plan. But according to CAGP and the CAGP Foundation, leaving even 1% of one’s estate to charity can still “have an enormous impact on your cause, while still leaving 99% of your estate to your family…You don’t have to choose between your loved ones and the causes you care about when planning your Will.” The Will Power website has a helpful legacy calculator, which can help with visualizing what it means to leave a gift to charity, and still be in a position to benefit your loved ones.
Some people may think that they need to have a very large estate to be able to make a meaningful gift to charity. But regardless of the size of the gift, it can still make a difference. Will Power estimates that if only 3.5% more ordinary Canadians included a gift in their Will in the coming decade, the result would be $40 billion in gifts to charitable causes.
Another aspect of charitable giving to consider is the tax benefit of doing so. Depending on the nature of your assets at the time of your passing, and any estate planning steps, there could be significant taxes payable on death. Making a testamentary gift to a cause that is important to you could result in a reduction of the amount of taxes to be paid.
For more information, and helpful links, you can check out this press release from Will Power.
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In the recent decision of Bishop Estate v. Sheardown, 2021 BCSC 1571, pursuant to the court’s curative powers under section 58 of the Wills, Estates and Succession Act, SBC 2009, c 13, (the “WESA”) the court found an unexecuted Will to be fully effective.
In this case, Marilyn Bishop (the “Deceased” or “Ms. Bishop“) had given instructions, reviewed the draft and made a few minor clarifications in respect of her new will (the “2020 Will”). The Deceased had scheduled an appointment with her lawyer to sign the Will in March 2020 but subsequently cancelled the appointment. The Deceased died four months later, at the age of 76.
James Thrower was the executor of the Deceased’s previous will (the “2014 Will”), which named her husband (now deceased) as the sole beneficiary and the respondent Kelowna General Hospital Foundation (the “Foundation”) as the beneficiary in the event that her husband predeceased her. The respondents Robert Sheardown and Deborah Sheardown (the “Sheardowns”) are Ms. Bishop’s nephew and niece-in-law, who she named as executors and beneficiaries of her unexecuted 2020 Will. It should be noted that the Deceased and her husband had prepared mirror wills in 2014.
Mr. Thrower was seeking clarification from the court as to “whether Ms. Bishop’s unexecuted 2020 Will represents her testamentary intention and should be ordered to be effective under s. 58 of the Wills, Estates and Succession Act.”
The Foundation submitted that section 58 of the WESA ““cannot be used to validate a will that is substantially invalid” [emphasis added], citing Hadley Estate(Re), 2017 BCCA 311”. The court noted that in fact, Hadley Estate states that “[a]lthough s. 58 cannot be used to uphold a will that is substantively invalid, it permits the court to cure issues of formal invalidity…” [emphasis added].” Moreover, the court clarified that section 58 of the WESA “does not specify a minimal level of execution or other formal requirement for a testamentary document to be found fully effective” and therefore, ““substantial invalidity” is not a bar to an order under s. 58.”
In order to determine if the unexecuted 2020 Will is valid, the court considered whether (i) the 2020 Will was authentic, and (ii) it represented the Deceased’s fixed and final intentions testamentary intentions.
The authenticity of the 2020 Will was not in question. The Deceased made an appointment with her lawyer (“Mr. Livingston“) and specifically instructed him to prepare a new will naming the new executor and alternate executor, removing the gift to the Foundation, including a possibility of a gift to local charities and to the Sheardowns’ daughter, and giving the remainder of the residue of her estate to the Sheardowns equally with a gift over to their children.
Mr. Livingston prepared a draft pursuant to these instructions. The draft was reviewed by Ms. Bishop and she provided clarifications via a note. Mr. Livingston prepared the final draft on the basis of these instructions and the appointment to sign the 2020 Will was scheduled for March 20, 2020.
Fixed and Final Testamentary Intention
The court inferred “that Ms. Bishop could not attend the appointment because she was not able to leave the care home” as there was evidence to prove that at that time in March 2020 (during the COVID-19 pandemic), “Ms. Bishop’s care home prohibited residents to leave other than for medical appointments”.
In order to determine whether the unexecuted 2020 Will represents the Deceased’s “fixed and final intention”, the court analyzed “whether its departure from the formal testamentary requirements considering the context and contents of the alleged substantial invalidity make it impossible to establish testamentary intention” and also “whether the failure to execute the unexecuted 2020 will from when it was ready for execution until Ms. Bishop’s death nullifies any intention Ms. Bishop may have had when she made her appointment to execute it in March 2020.”
Among other things, the court considered the following:
- The 2020 Will departs from testamentary requirements in that it is not signed by the will-maker and that the will-maker’s signature was not witnessed.
- After the death of the Deceased’s husband, the Sheardowns moved to Kamloops, BC and became a regular part of her life.
- The Deceased’s health had declined and so she had sold her home and mobile home and recently moved into a care home.
- The Deceased went to the same law firm that prepared her 2014 Will and met with Mr. Livingston to specifically discuss her plans for her estate.
- Mr. Livingston’s evidence was that the Deceased gave him specific instructions regarding the 2020 Will, including the fact that she did not want to include the Foundation as a beneficiary because she did not have a connection to the Foundation and that it was her husband’s idea to include them in their previous wills because he was either from Kelowna or spent a considerable amount of time there.
- Mr. Livingston was satisfied that the Deceased had the capacity to make a new will and was not under any undue influence.
- After reviewing the draft, the Deceased did not suggest any new changes but rather answered the questions of Mr. Livingston in her note to him.
- Although the Foundation argued the Deceased’s note to Mr. Livingston which stated “No charities at this time” [emphasis added] indicated that the Deceased’s “intentions lacked finality”, the court referenced Estate of Young, 2015 BCSC 182 noting that “a fixed and final intention cannot mean that the intention is irrevocable, since wills are, by their nature, revocable until the testator’s death” and “the intention need only “be fixed and final at the material time”.”
The court concluded that the Deceased’s fixed and final intention as of March 17, 2020 was to execute the 2020 Will. The court then considered “whether the failure to execute the unexecuted 2020 will over the following four months indicates a change in Ms. Bishop’s intentions.”
The Foundation noted that the Deceased did not execute the 2020 Will despite the remote execution procedures coming into effect on May 19, 2020. However, the court found that there was no evidence that the Deceased was aware of this option and as a result, “her failure to execute the will either remotely pursuant to the May 19, 2020 order or on her own [did] not undermine her testamentary intentions.”
The Foundation further noted that the Deceased did not order the destruction of her 2014 Will. The court was not persuaded that the Deceased’s lack of instruction to destroy her 2014 Will was evidence that she intended for it to be valid “in the absence of any evidence that she was advised to destroy her 2014 will and informed of the consequences of not doing so”.
The court was “satisfied that the unexecuted 2020 will represents Ms. Bishop’s fixed and final intentions for the disposal of her assets” and concluded as follows:
“Ms. Bishop provided simple, clear instructions as to what she wanted in her will and then responded with minor clarifications after reviewing the draft. It was clear that Ms. Bishop wanted to remove Kelowna General Hospital Foundation as a beneficiary of her will. The four-month period between her appointment to execute the unexecuted 2020 will and her death does not undermine her fixed and final intention to distribute her assets according to the unexecuted 2020 will.”
Accordingly, the court ordered the unexecuted 2020 Will to be fully effective, pursuant to the court’s curative power under s 58 of the WESA.
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.
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George Floyd died tragically during an arrest by Minneapolis Police officers on May 25, 2020. Mr. Floyd’s highly publicized death ignited demonstrations and protests across the United States and Canada against police brutality and in support of anti-racism. Many individuals are also showing their support to this cause with donations to community groups, non-profit organizations, and other fundraising campaigns with a related mission or purpose.
One of the more successful fundraising campaigns has been the George Floyd Memorial Fund established by Mr. Floyd’s brother, Philonise Floyd, on GoFundMe, an online crowdfunding platform. This campaign has raised just over $14 million to date, far surpassing its original target of $1.5 million. The overwhelming success of this GoFundMe campaign invites the question – what happens if more funds are donated to a fundraising campaign than originally requested?
Crowdfunding campaigns are often created in order to raise money for a specific purpose or project. If more money is raised than is needed to fulfill the campaign’s intended purpose, then there will be surplus funds. A common example is a GoFundMe campaign created to defray funeral expenses and the campaign ends up raising funds over and above the actual costs incurred for the funeral. What is the campaign promoter entitled, or perhaps required, to do with the leftover funds?
In general, if money is donated for a specific purpose and not all of the funds raised can be applied to that specific purpose, the surplus funds may be returned to the donors via a resulting trust. Returning donated monies can be burdensome where there have been a significant number of donors and/or anonymous donors who cannot be easily identified. To help avoid this situation, a campaign promoter can include alternative purposes for which funds can be used. These additional purposes must be set out at the time the funds are solicited.
In the case of the George Floyd Memorial Fund, the GoFundMe page states:
“This fund is established to cover funeral and burial expenses, mental and grief counseling, lodging and travel for all court proceedings, and to assist our family in the days to come as we continue to seek justice for George. A portion of these funds will also go to the Estate of George Floyd for the benefit and care of his children and their educational fund.”
The above description includes multiple purposes for the collected funds. Some of these purposes likely have been or will be fulfilled, such as the payment of funeral expenses. However, other purposes are seemingly unbounded, such as supporting the care and education of Mr. Floyd’s children. Thus, although the George Floyd Memorial Fund garnered millions of dollars in excess of its original goal, it is likely that all of these funds can properly be applied to the campaign’s defined purposes. If this is the case, then no portion of the collected funds will be considered to be surplus and all of the money should remain available for the benefit of the Floyd family.
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With giving season upon us, the philanthropic impulse is stronger than ever. As prospective donors craft their charitable giving plan, they will endeavour to make their charitable contributions as impactful and rewarding as possible. Achieving this philanthropic goal requires careful consideration of the multitude of charitable giving options available to donors.
With more than 85,000 registered charities in Canada, there is no shortage of organizations to whom a prospective donor can donate. In addition, there are a variety of ways in which individuals can donate to their charity of choice, as discussed by Suzana Popovic-Montag in her blog, “Giving money to charity? Know your options to maximize your impact”.
An important consideration that can influence how and to whom a person chooses to donate is what restrictions, if any, they wish to place on their gift. Accordingly, as one evaluates the charitable giving options available to them, they should think about whether they want to make a restricted or unrestricted gift.
Unrestricted and restricted gifts
An “unrestricted” charitable gift refers to a gift made towards a charitable purpose that is free from any restrictions or limitations imposed by the donor. Unrestricted funds can be used by the donee charity in any way so long as the use of the funds supports the general charitable purposes of the organization.
On the other hand, donors may opt to restrict how their donations are used by the donee charity. These types of gifts are referred to as “restricted” or “donor-restricted” charitable gifts. As the name suggests, a donor places restrictions, conditions, directions or other limitations on their gift which constrains the use of the funds to a particular purpose, program, or project. In essence, a restricted gift can only be used for the specific charitable purpose to which it is devoted. Thus, restricted gifts have the effect of fettering the charity’s discretion in deciding where the donated funds will be allocated.
This article provides a more detailed comparison of unrestricted and restricted gifts: http://www.carters.ca/pub/article/charity/2006/tsc0421.pdf.
Charities have tended to prefer unrestricted gifts since their flexibility allows the charity to apply the funds wherever they are most needed. However, charitable organizations are increasingly recognizing that prospective donors may want a greater say in their charitable giving and might be inclined to give more if they have some certainty as to exactly how their gift will be spent. Restricted gifts can therefore be a useful tool to achieve one’s personal philanthropic goals, as well as to increase overall charitable giving.
Making a restricted gift
There are many ways in which a donor-restricted charitable gift can go awry, such as where:
- the precise restrictions imposed on the gift are ambiguous and the charity consequently administers the funds in a way the donor did not actually intend;
- the donor has given money to a very specific program or project within a charity which is not in need of funding or has been discontinued, and the surplus funds cannot be used for any other purpose; and
- the charity amalgamates with another organization, or dissolves altogether, and transfers its remaining assets (including the restricted funds) to another charity that has a sufficiently different charitable purpose such that the organization can no longer give effect to the gift’s designated purpose.
In light of the above, there are certain precautions that a prospective donor should consider taking to ensure optimum impact of their restricted charitable gift.
A donor should refer to a charity’s gift acceptance policy for guidance on what types of restricted gifts a donor can give to the charity. In particular, a gift acceptance policy will usually prescribe what purposes or uses a donor can restrict their funds to. Gift acceptance policies may also specify what language will be accepted to confirm the donor’s charitable intent and what procedure will be followed when the donor’s charitable intent is unclear or cannot be carried out. For larger gifts, it is also advisable to meet with a representative from the potential donee charity to determine whether the organization’s gift acceptance policy coincides with the donor’s specific philanthropic goals.
Donation agreements and testamentary documents can also be drafted to contemplate scenarios in which the designated purpose of a restricted gift cannot be brought to fruition. Specifically, donors may want to consider adding to these documents a contingency that permits their gift to be used for alternate charitable purposes, or permits the donee charity to vary the restriction to a use that most closely corresponds with the donor’s original charitable intent.
Thanks for reading and happy holidays!
We are a society of “stuff.” Furniture, electronics, collectibles and other memorabilia. You name it; chances are, something along those lines is gathering dust in your home or that of a close family member. This poses an inevitable question for those inching towards retirement age and who are considering downsizing their living arrangements – what are they to do with all of their “stuff”?
A recent article in Forbes magazine suggests that, despite the ostensibly good intentions of prospective retirees, their children will only tolerate so many personal effects being pawned off on them. For many millennials, the reality is that living space is a premium, especially for condo dwellers in the city. Absorbing an enormous credenza or an old television into already cramped quarters is simply not feasible for most. Those looking to downsize in advance of retirement may therefore have to look outside their immediate family for relief.
Prospective retirees have several options at their disposal to alleviate the stress and anxiety that accompany the moving process. A number of well-known charitable organizations, including the Salvation Army and Habitat for Humanity, among a slew of others, assist in receiving and repurposing donated furniture, electronics, and other personal effects. Contributing to these organizations ensures that less fortunate individuals and families will be able to enjoy these effects for years to come, while simultaneously providing a solution to the retiree’s downsizing conundrum.
Junk removal services are another alternative that have exploded in popularity in the last decade or so. These companies will typically provide the labour to arrive at your doorstep with a truck in tow, removing unwanted personal items for a small fee. Many of these companies will, in turn, donate collected items to charitable organizations or other entities to reduce waste and ensure peace of mind the prospective retiree.
If downsizing is on your mind in the near future, consider these options to ensure your household items are given a second life. Your children will be most appreciative!
Thanks for reading.
Ask anyone who has cleared out the home of a loved one who has passed away or moved to a care facility, it can be a tough task.
On top of the emotional burden of sorting through family items, and determining what should be kept or discarded, there is the physical burden of simply dealing with so much stuff. It can overwhelm just about anyone. This article provides some good ideas on how to tackle the project – one that can often take a year or more depending on the circumstances.
But here’s a more important question: have you done anything to lessen the burden for others when your home is eventually cleared out? The sad truth is that most of us are surrounded by stuff that will end up in dumpsters when it’s our turn to move. The article noted above even outlines “skip” or dumpster strategies. Why do we continue to hold on to things that have no day-to-day use or role in our lives and will have no use to others when we die?
Ditch your junk
The answer to that question is simple: other than those who have a hoarding disorder, most of us accumulate and keep stuff simply because it’s easier to let the status quo prevail rather than undertake the work of clearing things out. And if we do clear things out, it’s often related to an event that forces our hand, such as downsizing from a large home to a condo or apartment.
Let me throw out a challenge: if you’re at that post-kids-at-home stage of life, act now to clear out your stuff so that others won’t have to when it’s your time to move on. If your adult children cherish certain items and kick up a fuss about throwing things out, have them take the items to their homes. And take a hard, honest look at what items you and your family will likely never use again – and get rid of these items today.
It doesn’t have to go into dumpsters. Charities will take a wide range of items, including clothes, bedding, toys, games, small appliances, sporting goods, books, electronics, housewares and furniture. For example, both the Ontario Federation for Cerebral Palsy and Diabetes Canada have home collection programs.
Yes, it takes some work, but there are important benefits to you as well as your family in clearing out your junk. You not only gain peace of mind in knowing you haven’t left the hard lifting to others, you can enjoy your decluttered home for many years to come.
Thank you for reading,
This recent article in the Globe and Mail by Rob Carrick caught my eye, since charitable giving is often a component of estate planning.
The article highlights some statistics on charitable giving in Canada, based on a recent study and data from Statistics Canada. Some notables: while 70% of Canadians feel a sense of personal responsibility for helping achieve positive change in the world, just four in 10 donate money on a regular basis, and just 21.4% of tax filers in 2014 claimed the charitable donation tax credit.
It’s clear that wrapping an organization in the blanket of a great cause is not enough to gain people’s trust when it comes to charities. Only half of study participants agreed that charities can be trusted with the money people donate to them.
Choosing a trustworthy charity (one that’s well-run, with a high percentage of donated dollars going to further the cause rather than to administrative and fundraising expenses) is always important – but why is that importance magnified when it comes to estates and charitable giving? There are a couple of reasons:
- First, even if someone doesn’t leave anything to charity in their will, their family may well suggest a donation to a charitable cause in their memory. This could result in dozens (if not hundreds) of donations to a specific charity. The family will want the chosen charity to be both reflective of the values of the deceased family member and a good charity to donate to in terms of deeds done for dollars received. The family is really directing other people’s money, and they will want to ensure that money goes to a good and trustworthy organization.
- Second, estate gifts are often much larger than gifts given during a lifetime. So, to put it simply, the stakes are higher. If you leave a substantial gift to a charity in your will, you want the satisfaction of knowing that your money will be put to good use.
In this digital age, the information you need about charities is at your fingertips. Organizations such as CHIMP provide information on how charities spend their budgets. The information is drawn from the annual filings that charities must make to the Canada Revenue Agency. You can even donate directly to charities from the CHIMP site.
There are hundreds of great charities out there – and that are deserving of your support. If you want to make charitable giving one of your priorities, make sure it’s a well-considered choice.
Thanks for reading … Have a wonderful day,
The Global Private Wealth Guide includes a chapter for nineteen different countries and features practical information regarding tax issues, succession law, the status of trusts, business and charitable planning, and the role of fiduciaries in each jurisdiction. The Guide also features a profile page for each country, in which general information related to relevant business practices is summarized.
The Private Wealth Guide is a helpful tool for lawyers assisting clients who may hold property or business interests in multiple jurisdictions. Among the interesting features of the website for the Guide is the option of comparing the treatment of each issue between two or more jurisdictions. For example, it offers the opportunity to obtain quick and reliable information regarding any differences between the treatment of marital property in Canada and the United States.
A complete electronic copy of the guide is available here. A link has also recently been added to the resources section of our website.
Thank you for reading and have a great weekend.
With the Stanley Cup Finals in full swing, I thought it would be interesting to re-visit the history surrounding the trust that holds the Stanley Cup.
According to this article, upon Lord Stanley of Preston being appointed Governor General of Canada by Queen Victoria in 1888, both him and his family became enamoured with hockey. So much so, that he created the ‘Dominion Hockey Challenge Cup’ to be held year to year by the championship hockey team in the Dominion of Canada.
To ensure the Cup remained true to Lord Stanley’s intention, he settled a charitable trust, with the Cup being the trust property. He appointed two trustees to administer the trust, and set out these initial trust terms:
- The winners shall return the Cup in good order when required by the trustees so that it may be passed to future winning teams;
- Each winning team, at its own expense, may have the club’s name and year engraved on a silver ring fitted on the Cup;
- The Cup shall remain a challenge cup, and should not become the property of one team, even if won more than once;
- The trustees shall maintain absolute authority in all situations or disputes over the winner of the Cup; and,
- If one of the existing trustees resigns or drops out, the remaining trustee shall nominate a substitute.
So, to answer the question – the NHL does not own the Cup. Nevertheless, the NHL was able to reach an agreement with the trustees in 1947 where, amongst other things, it obtained exclusive rights to award the Cup.
However, as a result of legal proceedings commenced by a recreational league hockey team during the last NHL lockout, the agreement was varied to allow the trustees to award the cup to a non-NHL team should the NHL fail to organize a competition.
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