Category: Estate Litigation

05 Jul

Estate Planning With Drake: Money in the Grave

Paul Emile Trudelle Estate & Trust, Estate Litigation, Estate Planning, Trustees, Wills Tags: , , 0 Comments

In a recent recording, “Money in the Grave”, Drake asks that he be buried with his money. He sings:

In the next life, I’m tryna stay paid
When I die, put my money in the grave.

Several issues come to mind.

First, Drake’s wish to be buried with his money is not binding on his estate trustee unless it is in a properly executed testamentary instrument.

Second, even if the money is buried with Drake, his estate trustee may have to pay Estate Administration Tax on the buried money if the will is to be probated. Drake may want to consider multiple wills. (Well-considered primary and secondary wills might also avoid the payment of Estate Administration Tax on the value of all of his chains, and other bling.)

Third, the act of destroying money is illegal in many jurisdictions. In Canada, under the Currency Act, it is illegal to “melt down, break up or use otherwise than as currency any coin that is legal tender in Canada”. The Criminal Code creates an offence for defacing a current coin. There is no similar prohibition on defacing or destroying paper money. However, in the US, burning money or any other act that renders a note “unfit to be reissued” is illegal. Arguably, the act of burying money is not the same as destroying money.

(Read Stuart Clark’s blog, here, about a woman who cut up the equivalent of $1.4m CDN to disinherit her heirs.)

Fourth, Drake’s estate trustee might be accused of waste. He or she may want to seek the opinion, advice or direction of the court before they “Bury my [expletive] Chase Bank.”

More on point, in the US decision of Eyerman v. Mercantile Trust Co., 524 S.w.2d 210 (1975), the testator directed that her house be burned down, the lot sold, and the proceeds added to the residue of her estate. A neighbour wasn’t too crazy about the idea, and applied for an injunction.  The injunction was, at first, denied. On appeal, the court held that the direction in the will was against public policy.

The court in Eyerman cited the decision of In re Scott’s Will, 88 Minn. 386 (1903). There, the testator directed his estate trustee to destroy money belonging to the estate. The court there found that the clause was void. The court also quoted from Restatement, Second, Trusts, 124, at 267.

“Although a person may deal capriciously with his own property, his self interest ordinarily will restrain him from doing so. Where an attempt is made to confer such a power upon a person who is given no other interest in the property, there is no such restraint and it is against public policy to allow him to exercise the power if the purpose is merely capricious.”

In Restatement, an example is given of a bequest from A’s estate to B in trust to throw the money into the sea. (Query: more lyrical or less lyrical than Drake’s direction?) “B holds the money upon a resulting trust for the estate of A and is liable to the estate of A if he throws the money into the sea.”

In another, earlier Drake ditty, “Crew Love”, Drake boasted about spending $50K on a vacation, and needing restaurant reservations for twenty. “I never really been one for the preservation of money. Much rather spend it all while I’m breathing.” It seems that he now has so much money that he may not be able to spend it all while living, and he is turning his thoughts to succession planning. He may want to get some professional estate planning advice.

Thank you for reading.

Paul Trudelle

04 Jul

Watch what you do, you may be held accountable

Christina Canestraro Estate Litigation, Ethical Issues, Litigation, Passing of Accounts Tags: , , , , , 0 Comments

Noah Weisberg’s recent blog on the Court of Appeal decision in Dzelme v Dzelme, serves as a great reminder that ordering a passing of accounts remains in the discretion of the court.

Building on this idea of judicial discretion is the recent case of Dobis v Dobis recently heard and decided by the Ontario Superior Court of Justice, whereby the court ordered a passing of accounts by a party who was deemed to have misappropriated funds from an estate asset.

Elizabeth commenced an application in her role as the estate trustee of her late husband’s estate. She sought, among other things, certain orders that would allow her to gain and maintain possession and control over one of the estate assets, a four unit rental property. She also sought an order requiring her son, Mark, to pass his accounts in respect of funds she alleged were misappropriated from the rental property.

Mark resided in one of the units of the rental property with his spouse, and alleged that it was his father’s intention that he maintain a life interest in the property. During the lifetime of the deceased, Mark acted as a manager/superintendent of the rental property in exchange for reduced rent. He also collected rent from one of the tenants and deposited the funds into a bank account owned jointly by his parents. Following his father’s death, Mark began diverting rent from the rental property to himself rather than depositing it in the joint account.

Despite requests from Elizabeth, Mark failed to properly account for the rental income. The accounting that was provided to Elizabeth was not supported by vouchers, and contained no detail of the expenses incurred. Elizabeth submitted that Mark had no legal or beneficial interest in the property, that he was holding the property hostage while unlawfully benefiting personally from the funds generated by the property, and that he failed to account for those funds.

In arriving at its decision, the court relied on the 2016 Ontario Superior Court decision in Net Connect Installations Inc. v. Mobile Zone Inc., which held that a court has jurisdiction to order an accounting where a party is deemed to have misappropriated funds.

Ultimately, Mark was compelled to pass his accounts for all monies received by him in connection with his management of the property. All this to say, watch what you do, because you may be held accountable.

Thank you for reading!

Christina Canestraro

03 Jul

Sleeper trains – nostalgia for something we may never have done

Ian Hull Estate & Trust, Estate Litigation, Estate Planning, Uncategorized Tags: , , 0 Comments

When was the last time you slept (lying down) on a train? Or a better question: have you ever slept lying down on a train?

My guess is “no” , or, if you have, it was a long time ago. While overnight rail service played a role in Canada’s past, it’s no longer a preferred mode of travel. Multi-lane highways and cheap flights have replaced overnight rail service for most of us.

Still, there’s something alluring about the train. Maybe it’s the romance of exotic railway routes, like the Orient Express or the Trans-Siberian – trains that are still running today. Even if you’ve never slept on a train, you’ve likely read a book or article – or seen a movie – about these trains with their closed cabins and worlds of intrigue.

The sleeper train to Scotland

It’s this romantic nostalgia for something I’ve never done that hooked me on the news that Scotland is introducing a totally new sleeper service between London and many destinations north this summer. These totally new trains are made for the modern traveller. Some cabins have their own shower and bathroom, the mattresses are top notch, and all the mod-cons (like wifi) are onboard. You can read about it here.

The thought of leaving a world city like London at night and waking up in the morning to the Scottish Highlands whizzing by made me want to book an overnight journey. I haven’t yet, but it’s a trip that’s definitely on my list.

There’s a whole world of trains

Of course, the news of the new train in Scotland got me looking at other sleeper train journeys. There are many. Some are luxurious (there are some high-end ones in India and Africa), but many others are just interesting journeys by rail. This Lonely Planet guide to 10 amazing train journeys is worth a read.

And no matter your vehicle of choice, if you’re taking a trip this summer, happy travels!

Thanks for reading,
Ian M. Hull

28 Jun

Court Gestures: Dying Declarations

Paul Emile Trudelle Estate & Trust, Estate Litigation, Estate Planning, Uncategorized Tags: , , 0 Comments

In the Ontario Court of Appeal decision of R. v. Nurse, 2019 ONCA 260, the gestures of a dying man were relied upon to support a murder conviction.

In that case, N owed rent money to his landlord, K. Rather than pay, N lured K to his home, where K was repeatedly and viciously stabbed.

N denied that he was involved in the stabbing, and claimed that another unknown person had stabbed K.

While K was being treated by police on the scene, N approached K and the police. K, who was in obvious and extreme distress, pointed to his stomach stab wounds, and then pointed to N.

The trial judge found that the gesture fell within the “dying declaration” exception to the hearsay rule. The Court of Appeal agreed. They also agreed that evidence of the gesture was admissible under the principled approach to hearsay.

A dying declaration is usually a verbal statement or utterance. However, a gesture can also convey meaning, and may be considered to be a statement or utterance to which the dying declaration exception to the hearsay rule applies.

With respect to the dying declaration exception to the hearsay rule, the Court of Appeal said that the exception could be traced back to the 1789 decision of The King v. Woodcock. There, the court stated:

Now the general principle on which this species of evidence is admitted is, that they are declarations made in extremity, when the party is at the point of death, and when every hope of this world is gone: when every motive to falsehood is silenced, and the mind is induced by the most powerful considerations to speak the truth; a situation so solemn, and so awful, is considered by the law as creating an obligation equal to that which is imposed by a positive oath administered in a Court of Justice.

The trial judge was therefore correct in instructing the jury to consider the evidence of whether K was pointing to N, and if he was, what he meant by this.

Another ground of appeal was with respect to incriminating messages retrieved from N’s cell phone. When N was first arrested, his phone was seized. An analysis of the data on the phone revealed only limited interaction between N and his co-accused. However, about a year later, the analysis software was updated, and a further analysis of the phone revealed the plan to kill K. N argued that the second analysis was a fresh search that was not authorized by the first search warrant. This argument was rejected.

Have a great weekend.

Paul Trudelle

26 Jun

The estate sale – can it be a treasure island?

Suzana Popovic-Montag Beneficiary Designations, Estate & Trust, Estate Litigation, Estate Planning, Uncategorized Tags: , , 0 Comments

We wrote several months ago about the declining value of household furniture and other items – especially antiques that were highly desired decades ago.

The general rule if you’re selling home assets (typically in an estate or when moving into a retirement home situation) is that you won’t get as much as you think. Tastes change (grandfather clock anyone?), artists fall out of favour (or never gain much market value) and items fall into disrepair. And you usually have to pay a firm to come in and assess and sell the contents. It may not leave you with much.

Mind the small stuff

What can often get overlooked in content sales is the little stuff. We all bring our personal biases when assessing what’s junk and what could be a little treasure. If you see a figurine or small carving and don’t like it, you’ll assume that others won’t like it either. Under the weight of all the other junk you have to dispose of, the item can end up in the trash.

That can be a costly mistake. I was recently visiting an estate home being prepared for sale, and the daughter of the deceased pointed to a small ceramic cat at the end of the mantle. It was, to me, nothing much of note. It was about 2 inches high and 3 inches long and had stripes. I wouldn’t have thought twice about trashing it if I was clearing out the house.

That’s what the daughter thought too, until they had a friend over who identified the cat as an original ceramic piece by Swedish artist Lisa Larson. What was going to end up in the trash was actually a small sculpture worth hundreds of dollars. Oops …

Be mindful of the art-savvy owner

If a homeowner had a good eye for art during their lifetime, there’s a good chance that even small knick-knacks were bought with purpose and could have value. So, before you clear the little stuff off the mantle of someone’s home, it may pay to have an art-savvy friend tour the house just in case.

Thanks for reading – enjoy your day,
Suzana Popovic-Montag

25 Jun

Constructive Trusts in the Context of Mutual Wills

Christina Canestraro Disappointed Beneficiaries, Estate Litigation, Estate Planning, Mutual Wills, Wills 0 Comments

Mutual wills are a common tool used by two (or more) people who wish to preserve a will (or specific provisions thereunder) by entering into an agreement to avoid future changes. This is a particularly useful tool in blended families where partners have children from prior relationships, and both want to ensure that their children are equally provided for post-death.

The requirements for an application of the doctrine of mutual wills are three-fold: (1) there must be an agreement between the individuals who made the wills, which amounts to a contract; (2) the agreement must be proven by clear and satisfactory evidence; and (3) it must include an agreement not to revoke wills.

Once one of the parties to a mutual will agreement dies, the survivor is then bound by that agreement not to revoke his or her will. Typically, we see mutual wills cases arising after the death of both spouses, once it is discovered that the surviving spouse drafted a new will in breach of their mutual will agreement or disposed of assets contrary to their agreement.

The recent case of Nelson v Trottier grappled with a novel issue with respect to mutual wills: whether, in light of the existence of a mutual wills agreement, beneficiaries to a survivor’s estate could claim a constructive trust over her assets while she was still alive.

The applicants in this case were the deceased’s children. They were not beneficiaries under their father Bill’s will, but were beneficiaries under his wife Huguette’s will. After making a donation in Bill’s honour, the applicants sought, among other things, a declaration imposing a constructive trust over Huguette’s assets and preventing her from gifting property without further order of the court or the consent of the applicants.

After establishing that a mutual wills agreement existed between Bill and Huguette, the court then examined when a constructive trust is established. In deciding this issue, Justice Pattillo stated,

“in circumstances where one of the parties to a mutual wills agreement has died, however, and based on the nature of a mutual wills agreement and the purpose of imposing a constructive trust in respect of such agreement, it is my view that a constructive trust does not arise until either the survivor dies or earlier, in the event there has been a breach of the agreement by the survivor”

Since Huguette was still alive, the question became whether she had breached the mutual wills agreement by making the donation in Bill’s honour. Justice Pattillo ultimately found that Huguette had not breached the mutual wills agreement. His reasons included that the agreement provided that both Bill and Huguette would give the survivor all of their property absolutely and that the surviving spouse could deal with the property as absolute owner while alive (which includes the ability to make gifts).

Interestingly, Justice Pattillo acknowledged that the mutual wills agreement stipulated that the survivor could not dispose of “substantial” portions of the property received during his or her lifetime in order to defeat the agreement; however, he did not find that the donation given to be “substantial” in comparison to the size of the estate.

The application seeking, among other things, a declaration that there was a constructive trust over Huguette’s assets, was ultimately dismissed.

Thank you for reading!

Christina Canestraro

21 Jun

Dying to Golf

Paul Emile Trudelle Estate & Trust, Estate Litigation, Estate Planning, Uncategorized Tags: , , , 0 Comments

Ian’s questions and answers from Wednesday’s blog on various topics, including death and golfing, led me to consider another issue: people dying on a golf course.

One of my favourite scenes from my favourite movie, Caddy Shack, involves a Bishop playing the best round of golf of his life in a raging rainstorm. When asked if play should continue, greens keeper Carl Spackler (Bill Murray) advises: “I’d keep playing. I don’t think, the heavy stuff’s going to come down for quite a while.” The Bishop plays on, misses his final putt, and turns to curse the sky, whereupon he is struck by lightning. See the clip, here.

Although the Bishop lived (but renounced God), many others have not been as lucky.

According to Golfsupport.com, golfing (with 1.8 injuries per 1,000 people) is more dangerous than rugby (only 1.5 injuries per 1,000). In the U.S., golf carts are responsible for 15,000 injuries per year. 40,000 golfers seek treatment each year for injuries caused by errant golf balls and flying club heads.

Golf Digest has published a list of “The 10 Worst Ways To Die On a Golf Course”. These include:

  • A man who was fatally kicked in the chest when a group of golfers lost patience with the man while he was searching for a lost ball.
  • A man in Ireland who died after a rat ran up his leg, urinated and bit him while the man was searching for his ball in a ditch. The rat carried the fatal Weil’s disease.
  • A man who died after slamming his club against a bench after a poor shot. The club shattered, and a piece of the club pierced his chest.

Fore!

Paul Trudelle

19 Jun

4 things I don’t understand – and 4 shocking answers

Ian Hull Estate & Trust, Estate Litigation, Estate Planning, Uncategorized 0 Comments

Answers to every question are now online. But often, a question pops into our head only to vanish quickly from our thoughts when the triggering moment disappears. And we forget to look up the answer later.

Enough. I chose a single day and made notes of the first 4 questions that randomly popped into my head. At the end of the day, I researched the answers (okay, not all of them are shocking). Here’s what I found.

Q. What exactly is an heirloom tomato?

I went to a small, high-end grocery store and saw heirloom tomatoes for sale. My first question of the day – what are they?

Hah! Just as I expected. This is a completely unregulated designation. Real heirloom tomatoes are grown from seeds that a farmer carefully selects and passes down from season to season. No genetic modifications, no weird DNA alterations. They may be wildly coloured and shaped, but the good ones will have fabulous taste.

However, no one is monitoring this – it’s buyer beware. So, stick to heirlooms from places you trust, or buy directly from farmers at farmers markets. Bon Appetit has a great overview here.

Q. How do Mick Jagger and Paul McCartney keep great hair?

Mick delayed his 2019 tour because he needed medical treatment. That led to this second question.

But alas, still no answer. Both of these 70-something musicians are still in the public eye – a lot – but their hair has barely changed since the 1960s. Clearly work has been done. But try to find out what exactly – so frustrating! At least this 2012 article alludes to hair dye carefully applied to Jagger’s mane. McCartney won’t be far behind.

Q. Where do urban animals die?

I found a big, fat dead raccoon on our front patio. It was on its back, all four limbs in the air. The city agreed to take it away, but it got me wondering – where do these animals go to die? This was the first dead animal on my property in 20 years.

My quick research didn’t yield a lot, likely because the answer is a mix of things. They retreat to their home or other hiding place to die. They get eaten by other animals soon after death. They get picked up by the city when someone reports it. But I did learn from PBS that raccoons only have a lifespan of two to three years in the wild, so don’t let the lack of carcasses fool you. The dead are among us.

 Q. How do 150lb golfers hit the ball 300 yards?

Watching a PGA tournament on TV had me gawking at a little guy – Emiliano Grillo from Argentina. He’s 26 years old, stands 5 foot 9 and weighs 141 lbs. He was hitting his drives over 300 yards!

I’m way bigger than that and can barely hit 200 yards on a good drive. I went looking for answers. This was the best article I found. Golf pros hit millions of practice balls and know how to regularly hit the sweet spot on the club face. When you hit the sweet spot, the ball travels much further. Of course, a fluid swing that generates great clubhead speed is the other half of the equation.

The best advice in the article? Swing smoother, not harder. You’ll hit the sweet spot more often and your ball will travel further.

Thanks for reading!
Ian M. Hull 

14 Jun

Getting Whited-Out of A Will

Paul Emile Trudelle Beneficiary Designations, Estate & Trust, Estate Litigation, Estate Planning, Trustees, Uncategorized, Wills 0 Comments

After making her will, the deceased “whited-out” the name of a beneficiary using white-out or liquid paper. Was this an effective amendment to the will?

This question was answered in Levesque Estate (Re), 2019 BCSC 927 (CanLII). There, the deceased made a formal will which left the residue of her estate to 7 beneficiaries. However, at some point between the making the will and her death, the deceased obscured the name of one of her beneficiaries using white-out. The estate trustees applied to the court for the opinion of the court with respect to whether this “alteration” was effective.

Applying B.C. law, the court determined that the alteration would be effective if either the alteration made the word or provision illegible, or if the alteration was deemed by the court to represent the intention of the deceased to alter the will.

With respect to the first test, the court found that the whited out provision did NOT render the name beneath to be “impossible to read by ordinary inspection … without chemical or other analysis”. Therefore, the alteration was not valid on this basis.

(In another case out of Newfoundland, the court held that provisions were “whited out” to the extent that “no part of the previous text [was] apparent”. Apparently, the testator used a heavier hand when whiting out. In that case, the whiting out of the text was found to be an effective revocation.)

In Levesque, however, the court went on to apply the second test of substantial compliance, and found that the alteration was a “deliberate or fixed and final expression of the Deceased’s intention” to remove the beneficiary from her will. “Carefully dabbing white-out over the provision in question was undoubtedly a considered and deliberate act on the part of the Deceased. She was applying the white-out to the original Will. It was not a casual act. The only reasonable inference is that her intention was to remove the provision from the Will.” The court was able to use its curative powers to give effect to the alteration.

In giving effect to the alteration, the court applied s. 58 of B.C.’s Wills, Estates and Succession Act, which gives the court authority to give effect to the alteration of a will even if there is not strict compliance with the formal requirements of the Act. In Ontario, there is no similar “substantial compliance” provision. It is not clear that the whited-out changes would have been effective in Ontario.

For another blog on white-out and wills, see “Revocation of Wills: White Out of this World”.

Have a great weekend.

Paul Trudelle

13 Jun

Consent or contract: what governs the disposal of genetic material?

Sydney Osmar Estate Litigation, Ethical Issues Tags: , 0 Comments

In overturning a lower court decision, on May 31, 2019, the Ontario Court of Appeal held that neither contract law nor property law principles govern how to dispose of embryos, where neither party has a biological connection to the genetic material.

Instead, in S.H. v D.H, 2019 ONCA 454 the Court held that the governing legislation and regulations prevail: The Assisted Human Reproduction Act (“AHRA”) and the Assisted Human Reproductions (Section 8 Consent) Regulations (“Consent Regulations”).

In 2011, D.H. and S.H. purchased four embryos (created from anonymous donors) from a lab in the US. Two of the four embryos were viable, one of which resulted in the birth of the couple’s son. The second embryo is stored in an Ontario lab. The couple divorced shortly after the birth of their son, and a dispute arose around the fate of the second embryo.

At the time of purchasing the embryos, the couple entered into two contracts, one with the US based lab, and one with the Ontario based lab. The first contract set out that the frozen embryos would be donated, in the event that the parties are unable to make a decision as to their disposition in the future. The couple also acknowledged that in the event of a divorce, the legal ownership of any remaining stored embryos would be determined in a property settlement.

The Ontario based contract identified D.H. as the “patient” and the S.H. as the “partner”. It set out that in the event of divorce or legal separation, the lab would “respect the patient’s wishes”. When D.H. attempted to proceed with implanting the second embryo, S.H. withdrew his consent.

In the lower court decision, the court looked to the persuasive authority, M. (J.C.) v A. (A.N), 2012 BCSC 584, concluding that the embryos were to be treated as property, governed by the contracts, such that the “patients’ wishes” should be respected.

The Ontario Court of Appeal however, has concluded that Parliament has imposed a consent-based, rather than a contracts-based model through AHRA and the Consent Regulations. Under this legislative format, “donor” is defined to include a couple who are spouses at the time the in vitro embryo is created, even where neither person contributes reproductive material to the embryo. The Court also determined that separation or divorce does not change the donor status of the couple in instances where either both individuals are genetically connected to the embryo, or neither individual is genetically connected to it. Pursuant to s. 10(3) of the Consent Regulations, the donor status is only changed if there is only one genetically contributing former spouse – and it is that individual who will be deemed the sole donor.

The Court went on to consider that the principle of free and informed consent was a fundamental condition to the use of human reproductive technologies. The Consent Regulations reflects that consent is ongoing and is not frozen in time by specifically legislating that the consent of the donor may be withdrawn by either spouse. The Consent Regulations and AHRA criminalizes the use of genetic material without the written consent of the embryo’s donors.

In coming to its conclusion, the Court held that a consent-based model to reproductive technology is “fundamentally at odds with contract law”, and that an individual cannot simply contract out of criminal law, nor the protections that may be afforded to them under that law. Therefore, it was within S.H.’s right to withdraw his consent to the use of the embryo.

In the estate planning context, assisted human reproduction brings with it many considerations which should be taken by the drafting solicitor, such as whether or not the client, or their partner has any stored sperm or ova, whether there is consent to the use of the genetic material post-mortem, if there are any time limitations on its use, and whether or not there is an intention that children conceived with donated sperm/ova posthumously are to be included in the Will, among many others.

To learn more about the impact of assisted human reproduction within the estate planning context, and some practical tips for solicitors, see “Fertility Law Considerations for Estate Lawyers” by Suzana Popovic-Montag.

Thanks for reading!

Sydney Osmar

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