Category: Estate Planning
On October 1, 2021, the Law Commission of Ontario released its Final Report focusing on legal issues related to palliative care, end-of-life care and medical assistance in dying (collectively described as “last stages of life”).
One of the major areas for reform identified in the Report is dispute resolution for persons who are dying and those who support them. On this point, the Report notes:
Death, dying, and bereavement are highly emotional and important experiences for everyone involved – patients, family, friends and health care providers. Conflicts in the last stages of life may revolve around health care decision-making, a preference for treatment, or concerns about the quality of care being provided. Disagreements can take place in multiple care settings about many different matters. Disputes may involve patients, SDAs [substitute decision-makers], family members, health care facility and providers.
Current mechanisms in place for resolving disputes during the last stages of life include accessing the Consent and Capacity Board (a tribunal created under the Health Care Consent Act that adjudicates disputes related to capacity and decision-making), or the Superior Court of Ontario. For people in care, the Final Report also notes that some health care facilities have a “step up” dispute resolution process that can be accessed, for example, when communications between substitute decision-makers and treatment teams become polarized, which brings in bioethicists, risk managers, social workers or spiritual chaplains to provide information and guidance.
However, these measures can also fall short when dealing with conflicts arising during end-of-life care. The Final Report points out:
- Not all facilities have a “step up” dispute resolution process, meaning not all patients and substitute decision-makers have access to an early dispute resolution process before applying to the Consent and Capacity Board.
- The Consent and Capacity Board may not hear all disputes that deal with end-of-life care and may decline jurisdiction if:
- there is a dispute as to the validity of a Power of Attorney for Personal Care or a dispute over who is authorized to act as an individual’s substitute decision-maker;
- a patient or substitute decision-maker applies for directions because their wishes are not being followed by the patient’s treatment team; or
- a physician withholds or withdraws treatment and declares a patient dead or brain dead, and thus no longer a patient.
- Some patients also die before their applications are heard by the Consent and Capacity Board.
- It can take months to appeal a decision from the Consent and Capacity Board to the Superior Court. Currently, the Health Care Consent Act provides that appeals from Board decisions are to be scheduled “at the earliest possible date compatible with a just disposition”, but does not specify any actual timelines.
- Proceedings in the Superior Court, such as an appeal or an application for an emergency injunction, tend to be more complex and expensive than proceeding before the Consent and Capacity Board, and are often delayed, making them less suitable for end-of-life disputes where time is often of the essence.
After consulting with the public, focus groups and experts, and commissioning multiple expert research papers on topics salient to the last stages of life, the Law Commission has made a number of recommendations, including:
- The introduction of province-wide informal mediation services for end-of-life care, which would serve as an early dispute resolution mechanism and could be accessed by patients, substitute decision-makers (such as powers of attorneys), health care providers, and health care facilities.
- A review of the mandate and jurisdiction of the Consent and Capacity Board, including updating the Board’s powers to be more responsive to end-of-life cases.
- Amending the Health Care Consent Act to expedite appeals from the Consent and Capacity Board to the Superior Court of Justice that involve the last stages of life.
At this time, it is unknown whether the recommendations of the Law Commission will be implemented. However, in the meantime, a step that individuals can take to reduce potential conflicts and disputes from arising during the last stages of life is engaging in advanced health care planning. The Final Report notes:
Not enough people are planning for the last stages of life … Planning has been shown to improve patient outcomes; ensure alignment between a person’s values and treatment; lessen family distress; decrease hospitalizations and admissions to critical care; and decrease unwanted investigations, interventions, and treatments. Yet fewer than 1 in 5 Canadians have engaged in advance care planning.
Steps that you can take today include:
- appointing a substitute decision-maker, such as a Power of Attorney for Personal Care, to make decisions on your behalf;
- discussing your wishes, values, and beliefs with your substitute decision-maker. The Final Report points out that “[t]he law is clear that [substitute decision-makers] must consider the patient’s prior capable wishes, values, and beliefs, if known and applicable.”
- completing an advance directive or “living will,” which sets out your wishes in terms of future care.
Thanks for reading, and have a great day!
For further reading on advance care planning, see the following blog posts:
Blended families – a family where some or all of the children in the family are not the natural or adopted children of both spouses – are becoming increasingly common. While most individuals are attuned to the emotional difficulties that could arise when blending two families, many might not consider the estate implications that arise upon blending. It is prudent to revise an estate plan upon blending families in order to ensure any children from a previous marriage are not inadvertently disinherited.
While many married individuals might hold assets jointly with their partner so as to minimize tax consequences upon death, this might not be wise when estate planning for a blended family. Additionally, implementing a “standard” Will, whereby upon death of the first spouse, all assets are left to the surviving spouse, could result in an unintended disinheritance of children from a previous marriage. For example, if the surviving spouse dies intestate, then their assets would pass to only their children, not their step-children.
One way to avoid the aforementioned situation would be to create a testamentary spousal trust. Under a testamentary spousal trust, a testator can provide for a spouse during their lifetime, while ensuring that the capital of the assets are preserved for children from a prior marriage or any other beneficiary the testator chooses to benefit.
Consider the following scenario:
Jack and Jane, two divorcees, are planning to get married. Both have children from their previous marriages. Jack wants to ensure that, in the case he dies first, Jane will benefit from the income generated from his assets, but that the capital will ultimately go to his children from his first marriage. Jane wants to ensure a similar outcome if she dies first.
In order to ensure that Jane is financially supported during the remainder of her life, Jack could set up a testamentary spousal trust in which Jane is paid all income from his capital assets. Generally, the trustee is given discretion to encroach on capital should he or she feel it is necessary. On Jane’s passing, the trustee would distribute Jack’s assets in accordance with the trust provisions (likely to his children from his first marriage).
Testamentary spousal trusts are not appropriate in all situations, so it is important that spouses in blended families carefully consider their estate planning options with an experienced lawyer and financial advisor.
Thanks for reading!
A recently released report by Johan David Michels, Sharon Hartung and Christopher Millard entitled “Digital Assets: A Call to Action” identifies significant difficulties faced by estates, estate trustees, planners, beneficiaries and their solicitors in dealing with digital assets.
The authors surveyed over 500 members of the Society of Trust and Estate Practitioners (“STEP”) around the world.
The key findings of the report are:
- Digital assets have become a common part of modern estate planning and estate administration, with demand for advice expected to increase significantly in the future.
- Clients seeking digital asset advice in relation to both estate planning and estate administration, with social media and email accounts topping the list of most-asked-about assets.
- Clients frequently experience difficulty accessing digital assets on death or incapacity of a family member, causing distress and frustration.
- Third-party service providers can present practical, procedural and legal obstructions to both estate planning and estate administration.
- There is wide variation in policies, practices and tools for dealing with clients’ digital assets, highlighting the need for more education for practitioners on best practices.
- Law reform is needed to enable effective estate planning and estate administration for digital assets.
The report concludes with a call to action. “Accessing digital assets after a loved one’s death can pose a challenge. As digital assets become more prevalent and our lives become increasingly entwined with digital technologies, the need for effective solutions becomes ever more critical. These solutions require a joint response. Bodies such as STEP and its members need to engage with governments and service providers globally in order to produce industry solutions and best practices that will help families plan for their futures with certainty and clarity.
The report also contains links to useful resources for practitioners dealing with digital asset issues.
Thank you for reading.
For those animal lovers amongst us, the recent decision of the Supreme Court of British Columbia in Henderson v Myler may have caught your eye.
Setting out a plan in your estate for beloved pets is not uncommon and a reasonable step to take for your furry friend. At times, in the midst of the enthusiasm to ensure pets are looked after, one can get carried away, and the courts may step in to impose a modicum of reasonableness.
In the present case, the testatrix, Eleena Murray (“Mrs. Murray”), died in late 2017, leaving a will dated January, 2013 (the “2013 Will”), providing a few named relatives small specific bequests, and the residue in its entirety, totalling approximately $1.8 million, to the BC Society for the Prevention of Cruelty to Animals (the “SPCA”).
The dispute arose from an unsigned note from 2017 (the “Note”), found in Mrs. Murray’s safety deposit box. The Note, if valid, indicated that she intended to increase the amount of some of the specific bequests, delete others, and reduce the gift to the SPCA to the specific amount of $100,000.00. However, following Mrs. Murray’s death, her home was sold, and the value of the estate was found to be significantly larger than initially thought. If the estate was distributed under the terms of the Note, there would be $1.4 million passing under a partial intestacy.
In her decision, Madam Justice MacNaughton stated: “Ms. Murray had no immediate family. It is entirely possible that she chose to benefit a charity that reflected her love of animals as opposed to extended family members … The question is what Ms. Murray subjectively intended, not what an average person would choose to do with their estate.”
While the size of the gift to the SPCA in the 2013 Will was unusually generous, the Court emphasized that a divergence from “the average testamentary gift” was not a determinative factor. The Court looked to Mrs. Murray’s personality and lifestyle, and found that, while the gift to the SPCA in the 2013 Will was unusual in a normative sense, it was consistent with her character and actions in life.
Further, considering the inconsistencies in the handwriting of the Note, and the lack of a residuary clause, the Court found that the Note was not effective as a codicil or alteration to the 2013 Will.
In Ontario, handwritten wills and alterations are governed by the Succession Law Reform Act, R.S.O. 1990, c. S.26 (the “SLRA”), and more specifically for the latter, section 18. The requirements can seem relatively straightforward – the document must be signed by the testator and be entirely in their handwriting. However, as witnesses are not required, the circumstances around the execution can often be uncertain, opening the door to potential litigation.
If you are planning on writing a holographic will, and have doubts or questions, it may be wise to consult with a lawyer.
Thank you for reading and have a great day!
Suzana Popovic-Montag & Raphael Leitz
Cryptocurrencies, such as Bitcoin and Ethereum, have been surging in popularity. As our colleagues have written here and here, they have raised a variety of unique considerations in the context of estate planning. However, the underlying technology in cryptocurrencies, blockchain, has given rise to a variety of digital tools beyond cryptocurrency. “Smart contracts” are one of these.
Broadly speaking, blockchain allows blocks of information about transactions to be recorded and stored on a distributed ledger. This article provides a more detailed overview of blockchain for those interested. Smart contracts are an extension of blockchain. They are programs stored on blockchain that run when certain pre-determined conditions are met, thus automating the execution of an agreement. Since the steps in a smart contract are hard coded, failure to fulfill conditions as agreed upon, prevents any progression. When conditions are fulfilled, the blockchain is updated and the agreement proceeds.
Two of the main attractions of these smart contracts is that they can serve to accelerate the transaction by removing middle-men and add a high degree of certainty to the performance of an agreement based upon the pre-established terms.
These benefits, however, should be approached with caution. The basis for the certainty arising from smart contracts is that they are hard coded, and the blockchains on which they are built rely on encryption to prevent fraud. The same certainty which is a strength can be a weakness though, as it makes changing the terms of an agreement difficult, if not impossible, in some circumstances.
Businesses advertising smart contracts in the context of estate planning are becoming more common. Potentially removing the need for executors, lawyers and other intermediaries in the administration of an estate can sound very appealing from a cost perspective.
Having said that, one should bear in mind that the law and factual matrix of an estate can and often does vary over time. Certainty can become fatal inflexibility in the face of change. A change in the law or conditions around an estate may prevent the performance of a smart contract where the coded preconditions require an impossible or illegal action.
New technologies are often exciting, and no doubt can bring positive change, but they also bring unknown risks. An abundance of caution would be well advised when using novel tools like smart contracts.
Thank you for reading and have a great day!
Suzana Popovic-Montag & Raphael Leitz
Our blog has been following Britney Spears’ conservatorship proceeding closely in the recent months. So far, the #FreeBritney movement has seen significant progress through the appointment of a new lawyer for Britney, and very recently through Jamie Spears’ petition to end the conservatorship. Even though Britney is still under a conservatorship of property and of person, the iconic popstar surprised the world with her engagement to long-time boyfriend, Sam Asghari.
This fantastic news follows Britney’s stunning court testimony back in June that she wanted to be able to get married and have a baby but that she was told that she could not do so because of the conservatorship.
To celebrate Britney’s engagement, I wanted to share Justice Benotto’s words in Calvert (Litigation Guardian of) v. Calvert, 1997 CanLii 12096, as affirmed by the Court of Appeal in 1998 CanLii 3001, with leave to the Supreme Court of Canada dismissed:
“A person’s right of self-determination is an important philosophical and legal principle. A person can be capable of making a basic decision and not capable of making a complex decision. Dr. Molloy, the director of the Geriatric Research Group and Memory Centre and associate professor of geriatrics at McMaster University, said:
Different aspects of daily living and decision-making are now viewed separately. The ability to manage finances, consent to treatment, stand trial, manage personal care, make personal care or health decisions, all require separate decision- making capabilities and assessments.
The contract of marriage has been described as the essence of simplicity, not requiring a high degree of intelligence to comprehend: Park, supra, at p. 1427.”
While the foregoing passage may not sound particularly romantic, the notion that marriage is the essence of simplicity seems rather befitting to the intimate decision that was made between Britney and Sam.
Britney is not yet a “freed” woman, but as her song goes,
”All I need is time (is all I need)
A moment that is mine
While I’m in between”.
Thanks for sharing your engagement moment with us Britney! Click here for the video of “I’m Not a Girl, Not Yet a Woman”.
The executor of an estate takes on many roles. For instance, they may be called on to handle funeral and burial arrangements. They may also submit the will to probate, requiring them to complete and file a number of forms with the court to prove that the will is valid and that they are the lawful executor. The executor must track down all the testator’s assets and liabilities, ensuring that all outstanding tax bills and estate expenses have been paid. They must also deal with multiple federal and provincial government officers for administrative tasks, such as cancelling the deceased’s driver’s licence, government benefits and other entitlements, along with preparing and filing the final income tax return. Once the estate’s finances are finalized, they have to turn their attention to the beneficiaries, dispersing money and property as the testator desired.
In short, there are significant responsibilities that can take up to a year, or more, to complete.
Because of this, many people name multiple executors when preparing their last Will and Testament. While there are some advantages to this approach, there are also serious drawbacks that must be considered.
To start, co-executors must agree on everything as they work together, so naming multiple executors can lead to delays and inconvenience. This is especially true if any of the co-executors live out of town or out of the province.
Let’s say a couple has three adult children. Mom and dad don’t want to play favourites, so they name all three children as executors. If the children work together harmoniously, they will have the estate wrapped up in a timely and efficient manner. However, this is often not the case.
Siblings grow apart as they get older, as different values and approaches to life develop. One might be great with numbers and dealing with officials, while another may be difficult when it comes to reaching a consensus and may not want to put in the time and effort required of an executor.
They could also be too busy with their job or family to devote the time to the myriad of tasks the position presents. Maybe they have moved away and cannot physically get to the bank and other offices to sign the required papers.
In these situations, it would be best for that person to renounce their appointment as co-executor by signing a renunciation form that can be included with the Will when applying for probate.
In cases of extreme disagreement amongst executors, one of them can ask the court to remove one or more of the other executors, allowing the estate to be settled without unwarranted delay.
Returning to our family with three children, it may be better for the parents to name just one as the executor, with the others listed as alternates. The executor doesn’t have to be the eldest of the siblings. A group conversation with all family members might lead to a consensus about who is best able to take on the role.
In some cases, it makes sense to name a family member and a financial professional as co-executors. The family member can look after the testator’s personal matters, while the financial professional turns their attention to more complex legal and financial tasks. This is an especially wise option if the deceased had significant business interests that must be managed, such as winding-up a corporation.
Every estate is different, presenting different drawbacks and benefits when considering if having co-executors makes sense. As a general rule of thumb, the main advantage of such an arrangement is that the workload and responsibilities are split up, creating a checks-and-balances mechanism since they have to jointly approve everything. Bringing in an outsider as an expert co-executor works well with complex estates.
The main drawback of co-executors is that they could delay the settling of the estate since they have to agree. It can also amplify resentment between family members, who already may be suspicious of the other’s motives. There is also joint liability – whether a decision was made together or not – which can create risks for both parties.
A better option in some cases is to name an alternate executor, who can step in if the testator’s first choice dies or is unable to fulfill their duties.
Thanks for reading – and have a great day,
In the recent decision of BMO Trust Company v. Cosgrove, 2021 ONSC 5681, a holograph Codicil was the subject of dispute. The handwritten document includes the following language:
“End of page 3 of the Codicil for the Last Will and Testament of me, Nola Louise Bogie
Signed, Published and Declared by the said Testatrix, Nola Louise Bogie, at the City of Toronto, in the Municipality of Toronto, in the Province of Ontario,
As and for her Codicil as an attachment amending her Last Will and Testament.
Dated on: [left blank]”
The Court was tasked with considering whether the testator handwriting her name in the attestation clause constituted a signature in accordance with the formalities for executing a Will in sections 6 and 7 of the Succession Law Reform Act (SLRA).
The applicant, BMO Trust Company, agent for the estate trustee, was advocating for the validity of the Codicil, on the grounds that the testator’s signature appears twice in the attestation clause, and this placement of the signature does not render the Codicil invalid in accordance with s. 7(2)(c) of the SLRA.
The respondent, one of the beneficiaries in the underlying Will, contested the validity of the Codicil, arguing that although the testator’s handwriting of her name occurs in the attestation clause, she had no intention to sign, or give effect to, the Codicil.
In the analysis of the case, the Honourable Justice Dietrich noted that Ontario is currently a “strict compliance” jurisdiction, such that the SLRA formalities must be complied with. She reviewed the statutory requirements of section 6 of the SLRA, which states that “A testator may make a valid will wholly by his or her own handwriting and signature, without formality, and without the presence, attestation or signature of a witness.” Her Honour also reviewed section 7’s requirements regarding the signature, which must appear “at, after, following, under or beside or opposite to the end of the will so that it is apparent on the face of the will that the testator intended to give effect by the signature to the writing signed as his or her will.”
Further, Her Honour considered subsection 7(c) of the SLRA, which makes it clear that a will is not rendered invalid “by the circumstance that the signature is placed among the words …of a clause of attestation”, and subsection 7(e), which states that a will is not rendered invalid if there is sufficient space “on or at the bottom of the preceding side, page or other portion of the same paper on which the will is written to contain the signature.”
What distinguishes a “signature” from writing out one’s name in long hand was delineated, with Dietrich J. stating that “it must be apparent that what is alleged to be the act of signature was specifically intended by the testator to give legal effect to the document, per s. 7(1) of the SLRA.”
The evidence in this case was also assessed. It notably included that: (i) the holograph Codicil was an unfinished document, with certain blanks, including next to the space where the testator would have likely placed her signature, (ii) though not required, the testator intended to sign the document in the presence of specific witnesses, (iii) the testator understood that the Codicil needed to be signed to be valid, and (iv) after the Codicil was prepared the testator advised the Law Society of Ontario in writing that she had “handwritten a codicil (not yet signed).”
Justice Dietrich concluded upon the evidence proffered that the testator, in writing her name when drafting the holograph Codicil, did not intend to give legal effect to the document.
With legislative changes coming in the new year, we can expect to see similar cases cropping up with increasing frequency.
Thanks for reading and have a good day,
When you think of the assets to be distributed upon an individual’s death, the common ones are bank accounts, investments, real estate, and any heirlooms or valuable items that have been accumulated during one’s lifetime. But we can’t forget digital assets as well.
Digital assets are any type of content stored digitally on a computer, website or on the cloud. Most of us are online every day for work and personal reasons, generating documents, sending texts and sharing images. These are all digital assets. So are frequent flyer or store reward programs that allow people to accumulate points that could grow to have substantial worth.
If you think your digital assets won’t amount to much, think again. A 2013 study by McAfee, an American-based global computer security software company, found that the average American had more than $35,000 of assets stored on their devices. Our digital profiles have certainly increased since then, and so has the need to protect those assets when we die.
Millennials, generally defined as those born between 1981 to 1996, know the value of digital assets. They grew up in the digital world and place great value on the movies, music and apps on their various devices.
As they age, they are starting to think about estate planning, sometimes in ways that older generations may not be familiar with. For example, their estates may include Bitcoin or other cryptocurrencies. Their financial profile will not only encompass traditional bank and investing assets, but perhaps PayPal or other financial apps.
Social media accounts are another important form of digital asset. We probably all know someone who has died but their Facebook page lives on. This occurs because when a social media account is opened, the person is asked to approve a user agreement that often prohibits sharing passwords. On death, these agreements can force the executor into long battles to gain access to the account, often in a foreign jurisdiction where the online firm is based.
By listing your digital assets in your will and by designating someone, perhaps your executor, to manage those accounts after your death, you can ensure your online profile does not outlast your time here on Earth. Of course, you have to provide that person with your login information for each of their social media and crypto-currency accounts. Some people rely on a digital vault – which is really an online safety deposit box – to store this information, with the password for the vault shared with their executor.
Digital assets are crucial for those operating online businesses, as they include their website and all its content, plus the firm’s social media and email accounts. Financial information about clients is also part of that, contained in online accounting programs that perhaps only one person can access.
There have been limited legislative reforms to address digital assets. In 2016, the Uniform Access to Digital Assets by Fiduciaries Act was introduced, based on the American Revised Uniform Fiduciary Access to Digital Assets Act. It would provide, by default, access to fiduciaries (including executors) to digital assets, though this Act has yet to be adopted by most provinces and may not be binding on firms based outside of Canada.
In Ontario, the Estates Administration Act does not explicitly refer to any assets of a digital nature. Nor does the Substitute Decisions Act, which governs what happens when someone is not capable of making certain decisions about their property.
Alberta’s Estate Administration Act is the only Canadian succession-related statute to make reference to online accounts within the context of the executor’s duty to identify estate assets and liabilities, which includes online accounts.
Given the amount of digital information that is recorded about each of us, our digital assets reflect the lives we lived. Since Canadians are online more than ever, our electronic footprint is increasing, and so is the need to address digital assets in our wills.
Thanks for reading and have a great day.
Planning one’s estate raises the question of what you want your legacy to be. It is a highly personal decision that does not have a correct answer. For some individuals, this can mean ensuring causes that are close and dear to their heart receive support from their estate. To this end, donations and charitable gifting are a common practice in wills.
In planning such gifts, it is important to ensure that the gifts are valid and enforceable. The testator’s best intentions can be undermined by the failure to comply with legal technicalities.
Testators may make gifts bearing certain conditions, such as having something named after them. Where these conditions are important to the testator, they should: (i) be communicated to the recipient of the gift to ensure they are willing and able to comply with the conditions, and (ii) set them out explicitly in the will.
The case of Brantford General Hospital Foundation v. Marquis Estate is an excellent example where a gift, with good intentions, ran afoul of contract law.
The testatrix and her deceased husband had been long time and generous donors to the Brantford General Hospital Foundation.
The testatrix had pledged, prior to her death, to donate $1,000,000.00 over a five year period. As part of this pledge, a facility was to be named after her family. However, she passed away shortly after the first instalment was paid, leaving $800,000.00 of the pledge unpaid. Her estate refused to pay out the remainder of the pledged funds and the Hospital initiated litigation.
Justice Milanetti ruled against the plaintiff, stating that a promise to subscribe to a charity is not enforceable in the absence of consideration. The promise to name a facility after the family was considered ancillary to the donation of $1,000,000.00 and not of vital importance, and as such, invalid as consideration.
Central to this determination, was that the idea for naming the facility originated from the Plaintiff and was subject to board approval. The pledge was deemed unenforceable.
Where a testator has ongoing chartable intentions that they wish honored by their estate, it would be wise to review the enforceability of these plans after their passing.
Thank you for reading and have a great day!
David M. Smith and Raphael Leitz