Category: Estate & Trust

21 Mar

Admissibility of Medical Records

Nick Esterbauer Capacity, Estate & Trust, Health / Medical, Litigation, Wills Tags: , , , , , , , , 0 Comments

Medical records are frequently key evidence in estate disputes.  Often, a testamentary document or inter vivos transaction is challenged on the basis that the deceased lacked testamentary capacity or the mental capacity to make a valid gift.

The British Columbia Supreme Court recently reviewed the issue of admissibility of medical records within the context of a will challenge.  The parties propounding the last will asserted that the deceased’s medical records were inadmissible on the basis that (1) the parties challenging the will were attempting to admit the records for the truth of their contents, (2) the records included third party statements from family members, which was suggested to constitute double hearsay evidence, and (3) the records were entirely inadmissible because they were not relevant, none of them being within weeks of the date of execution of the challenged will.

In Re Singh Estate, 2019 BCSC 272, the estate trustees named in the deceased’s will executed in 2013 only learned of the existence of a subsequent will executed in 2016 after they provided notice to the beneficiaries of the estate that they intended to apply for probate in respect of the 2013 will.  The 2016 will disinherited two of the deceased’s eight children (including one of the two adult children named as estate trustee in the 2013 will) on the basis that they had received “their share” in their mother’s estate from the predeceasing husband’s estate.  Between the dates of execution of the 2013 and 2016 wills, the deceased had suffered a bad fall and allegedly experienced delusions and had otherwise become forgetful and confused.

At trial, medical records are typically admitted under the business records exemption of the Evidence Act (in Ontario, section 35).  Justice MacDonald acknowledged this general treatment of medical evidence, citing the Supreme Court of Canada (at para 48):

While clinical records are hearsay, they are admissible under the business records exception both at common law and under s. 42 of the Evidence Act. The requirements for the admission of medical records as business records are set out in Ares[ v Venner, [1970] SCR 608]. The Supreme Court of Canada held at 626:

Hospital records, including nurses’ notes, made contemporaneously by someone having a personal knowledge of the matters then being recorded and under a duty to make the entry or record should be received in evidence as prima facie proof of the facts stated therein.

Subsequent case law cited by the Court addressed the second objection of the parties propounding the will, which provided that the observations that a medical practitioner has a duty to record in the ordinary course of business (including those involving third parties) are generally admissible (Cambie Surgeries Corporation v British Columbia (Attorney General), 2016 BCSC 1896).  Lastly, the Court considered the issue of relevance of the medical records and found that evidence relating to the mental health before and after the making of a will can be relevant in supporting an inference of capacity at the actual time of execution of the will (Laszlo v Lawton, 2013 BCSC 305).

After finding the medical records to be admissible as evidence of the deceased’s mental capacity (and in consideration of all of the available evidence), the Court declared the 2016 will to be invalid on the basis of lack of testamentary capacity.

Thank you for reading.

Nick Esterbauer

20 Mar

Is there a Duty to Account When Requested by a Beneficiary?

Ian Hull Beneficiary Designations, Estate & Trust, Estate Planning, Power of Attorney, Trustees, Uncategorized, Wills 0 Comments

In the recent decision of Fica v Dmytryshyn, 2018 ONSC 2034, the Ontario Superior Court of Justice confirmed that an attorney for property and/or estate trustee has a duty to pass accounts in accordance with the Rules of Civil Procedure.

The facts in Fica feature a family dynamic in which the mother of two sons heavily favoured one over the other. The mother’s favouritism towards her younger son (the “Favoured Son”) was evident throughout his whole life, and manifested in him receiving generous financial support from his mother, for anything and everything that he needed. Her other son (the “Older Son”) appears to have had a fractured relationship with his mother and was somewhat estranged from his family.

In January 2012, the mother appointed her Favoured Son, and the mother’s brother, as her co-attorneys for property and personal care, and as her estate trustees. Both sons and Uncle were beneficiaries under the mother’s will, and entitled to share equally in the residue of the mother’s estate.

In August 2012, the mother became very sick with cancer, at which time the Favoured Son and Uncle began acting under the mother’s power of attorney for property. Even after the Favoured Son and the Uncle began acting in their roles as attorneys for property for the mother, the Favoured Son continued to receive generous financial support from the mother’s assets and, with the knowledge of his mother, continued to use her credit card to support his lifestyle.

After the mother died, the disgruntled Older Son demanded information about alleged misappropriated money and expenses incurred when his younger brother and Uncle were acting as co-attorneys for the mother. However, in what would prove to be a significant error, the Favoured Son and the Uncle declined to provide an accounting upon request. Steps were only taken in this regard by the Favoured Son and the Uncle after the Older Son brought an application to compel and obtained an order to pass attorney/estate accounts.

The Older Son also sought a court order requiring the Favoured Son and the Uncle to reimburse the mother’s estate for the funds that he alleged had been misappropriated by them. In light of the mother’s pattern of behaviour, of being frequently and consistently generous towards her Favoured Son throughout his life, as well as her knowledge that the payment of such expenses continued after the Favoured Son and the Uncle had begun acting as her attorneys for property, the judge dismissed the Older Son’s motion. The judge stated that it was the mother’s prerogative to decide what she wanted to do with her money. The judge concluded that the funds were accounted for and no undue influence was present.

The big takeaway from this decision is with respect to costs. Notwithstanding their success on the merits, the Favoured Son and the Uncle could not recover any of the costs incurred in passing their accounts. The rationale for this decision was that, as co-attorney/co-estate trustee, the Favoured son and the Uncle failed to comply with their obligations pursuant to the Rules of Civil Procedure.

Under the Rules, an estate trustee, attorney or guardian can pass his or her accounts voluntarily on notice to the appropriate parties, or can be compelled by an order of the court under Rule 74.15. Rule 74.15(1) provides that any person who appears to have a financial interest in an estate may move for an order requiring an estate trustee to pass accounts. Furthermore, Section 42(1) of the Substitution Decisions Act provides for the passing of accounts of an attorney or guardian of property.

 

 

Thanks for reading.

Ian M. Hull

15 Mar

Don’t Do The Crime: Forfeiture Conditions in Wills

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

In his Will, Moses Woods left his family home to his third son, David, subject to a life interest in favour of Moses’ wife, PROVIDED THAT David has not been convicted of a criminal offence before he reached 21 years of age. In the event that David was convicted, the home was to be sold and the proceeds would pass to his two other sons.

The deceased died when David was 20. Unfortunately, David was convicted of criminal offences at the age of 17. This was before the Young Offenders Act was in force. David was convicted as an adult.

Notwithstanding, David asked that the home be transferred to him. The estate trustee (one of the deceased’s two other sons) asked the court for advice and directions.

Before the lower court (Woods Estate v. Woods, 2005 CanLII 1411 (ON SC)), the court held that the condition was a “condition subsequent”, meaning that the home vested with David at the time of the deceased’s death, subject to divestment if David was to be convicted of a criminal offence before reaching the age of 21. Although he was convicted, the lower court held that the operation of the condition was postponed until David turned 18, the age of majority. The lower court held that the operation should not operate while David was a minor because, as a minor, he could not refuse or neglect to perform the condition.

The estate trustee appealed. On appeal (2005 CanLII 40134 (ON CA)), the Court of Appeal disagreed with the conclusions of the court below. First, they said that it was not clear that the condition was a “condition subsequent”, acknowledging that the application judge herself said that “the matter is not free from doubt”. In any event, they disagreed that David was not bound by the condition until the age of 18. They found that while a minor is not accountable for refusing or neglecting to comply with a condition subsequent that the minor is incapable of complying with, David’s circumstances did not fall within that category. David was capable at the age of 17, as a matter of law, of committing and being convicted of criminal offences. In the eyes of the [then] criminal law, he was an adult and responsible for his criminal misdeeds.

The Court of Appeal went on to find that relief from forfeiture was not available. None of the situations in which relief from forfeiture could granted applied here.

In sum, David was found to have breached the condition of the will, and therefore forfeited his right to the property.

Have a great weekend.

Paul Trudelle

14 Mar

How to Exercise an Option to Purchase

Rebecca Rauws Estate & Trust Tags: , , , , , , , 0 Comments

Sometimes a Will may include an “option to purchase” clause. Basically, this type of clause will provide that a particular person shall have the option to purchase a particular asset of the estate, for a particular price. Usually the option will end after a certain period of time, to allow the estate to continue being administered, depending on whether the person decides to exercise the option. Typically, options to purchase will play out in a fairly straightforward way—either the option is exercised, or it expires. However, in the recent decision in Crawford v Culbert et al, 2019 ONSC 1048, the chain of events was not quite so simple.

Hannah died in February 2018, and was survived by her four children: a son, Terry, and three daughters, Tammy, Tracey, and Tina.

At the time of Hannah’s death, the four siblings were not specifically aware of the contents of Hannah’s Will. A few days after Hannah died, they located an unexecuted document that appeared to be a Will, which Tina read out loud. The Will contained a provision that Terry would have a first option to purchase a farm property owned by Hannah’s estate, for $200,000.00, and that he had a period of 30 days “from the date that express written notice” of the option is given to him. At that time, it was unclear whether the Will had been executed.

The next day, the three sisters obtained a notarial copy of the executed Will from the law firm that had prepared it, but did not provide or show a copy to Terry. Some text messages were exchanged between Terry and Tammy about a month later, in which Terry commented that he did not intend to purchase the property. A short while after that, all four of the siblings met at the office of the lawyer who drafted the Will. It was at this time that Terry learned that Hannah’s Will was in the same form as the unexecuted document the siblings had located following her death. Twenty days later, Terry advised the lawyer that he intended to exercise the option to purchase. Both Tracey and Tammy took the position that Terry was out of time to exercise the option.

The court considered what constituted “express written notice” as required by Hannah’s Will. It easily concluded that Tina’s reading of the unexecuted Will did not constitute express written notice. The court also found that the earliest date that the 30 day period could have commenced was the day that all four siblings attended at the lawyer’s office, and Terry learned that the Will had been executed. Additionally, the court found that nothing Terry said or did prior to the date of the lawyer’s meeting could be considered an effective waiver of his entitlement to the option.

This decision may serve as a reminder to anyone who encounters an option to purchase that being crafty to try to circumvent the option is unlikely to be successful.

Thanks for reading,

Rebecca Rauws

 

Other blog posts and podcasts that you may find interesting:

13 Mar

Alexa – take a hike

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

Amazon Echo and Google Home – here’s my prediction about these smart speakers. In 25 years, we’ll look at film clips or ads that featured the “cool things” that these devices did – and we’ll laugh. We’ll laugh the same way we laugh today about news clips from the 1990s that described the wonder of the new “internet.”

This CNN clip from 1993 is a great example of futurist hype about the internet and includes a (very wrong) prediction that if the internet keeps growing, there could be a day that school children come home and spend more time on the online Encyclopedia Britannica than playing Nintendo.

It’s not that today’s smart speakers aren’t an important step forward in the personal use of artificial intelligence – they are, just as the early internet was a necessary step toward the information access we enjoy today. The issue is that their usefulness at this stage is more for novelty than for actual functionality.

Limited range of features

Yes, the Amazon Echo and Google Home can get weather reports, answer basic questions, order pizza, and play music – all with voice commands. The issue is that your smartphone can do those things too. And while TV commercials tout several other amazing features (turning on lights, locking doors, turning up the heat), you’ll need to spend some money to allow for automated lights, locks and thermostats.

And are we really that taxed – or have our arms full that often – that we can’t flick a switch or turn a dial? I don’t think so, which is why for me these devices are novelties only.

More features are being added of course. The print edition of the Sunday New York Times in early January had several sections scattered throughout the paper advertising the new ways you could connect with the paper using Alexa. But these features are less about helping us, and more about a newspaper trying to find new ways to connect to more readers/listeners.

More to come

Something of use will evolve from these early smart speakers – eventually. I just don’t think we’re close at this stage. Even for seniors – who often have more limited mobility or other disabilities – the Echo and Home are a mixed bag. It takes a reasonably sharp mind to interact with AI-driven devices, and pairing new technology with individuals who have trouble remembering the right trigger word, or the range of tasks a device can perform, can often lead to frustration and devices collecting dust in the corner.

So, by all means have fun with the technology – the price point is right. But until the features get a bit more jaw-dropping, Alexa won’t be entering my home anytime soon. (Sorry girls!)

 

 

Thanks for reading,
Suzana Popovic-Montag

08 Mar

Sleeping is the New Standing

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

Standing was the new sitting. Now, sleeping is the new standing.

Behold – the sleeping desk:

 

As we all know, focus and attentiveness are key to workplace success and efficiency. Coffee is a great aid to maintaining this focus. However, afternoon coffee consumption can interfere with nocturnal sleeping patterns, leading to drowsy, unfocused mornings, thereby exacerbating the problem.

The solution? The sleeping desk (aka the nap desk).

According to an article by theheartysoul.com, an afternoon nap can improve mental alertness. A short nap can be more beneficial than a long sleep. (As if we needed more reasons to nap, see “8 Scientific Benefits of Napping”.)

The sleeping desk, designed by Nancy Leivaditou, is a multipurpose desk that can transform into a bed. See the desk in action, here.

Happy napping.

Paul Trudelle

07 Mar

Solicitor’s Negligence Claims: are Non-Clients Owed a Duty of Care?

Sydney Osmar Disappointed Beneficiaries, Estate & Trust, Estate Planning, Litigation, Wills Tags: 0 Comments

The Ontario Superior Court of Justice recently released a decision that provides a helpful and comprehensive overview of the case law regarding solicitor’s negligence claims brought by non-clients.

Within the estate litigation context, this issue sometimes arises where a claim is brought by a disappointed beneficiary as against the drafting solicitor of a testator’s will. The generally accepted origin and definition of a “disappointed beneficiary” is White v Jones, [1995] 1 AII E.R. 691, which sets out that those who may bring a claim against a lawyer as a “disappointed beneficiary” are those individuals whom the deceased had intended to include as a beneficiary in their Last Will and Testament, but, as a result of an error or negligence on part of the drafting lawyer, such a bequest was not carried out.

The “disappointed beneficiary” is therefore an exception to the general rule that the only individual a lawyer owes a duty of care to in a retainer is the client.  However, the extension of a duty of care to a “disappointed beneficiary” applies solely as it relates to those beneficiaries that a solicitor can reasonably foresee that as a result of their negligence, the beneficiary may be deprived of his or her intended legacy, and where the testator nor the estate would have a remedy against the solicitor.

The Alberta Court of Appeal has held that a drafting solicitor does not owe a duty of care to beneficiaries named under a prior will, as to do so would create inevitable conflicts of interest for the solicitor. Furthermore, the court held that beneficiaries named under prior wills have other options available to them, such as challenging the validity of the will.

General Principles Applying to Solicitor’s Negligence Claims

In the ONSC’s recent decision, 2116656 Ontario Inc. v Grant and LLF Lawyers LLP, 2016 ONSC 114, the particular claim arose in the context of mortgage fraud, however, the general principles that are confirmed by the court are applicable generally to solicitor’s negligence claims. Some of the salient points discussed by the court are summarized below:

  • In order for a solicitor to be liable to a non-client, the solicitor must know – from placing him or herself in a position of sufficient proximity with the non-client third party – that the particular non-client is relying on his or her skill. Therefore actual knowledge is a prerequisite for a finding of care, such that it is not sufficient that the solicitor “ought to have known” of the reliance;
  • The non-client third party’s reliance must have been reasonable;
  • The existence of “red flags” or “warnings” alone will not be sufficient to give rise to a duty of care on the solicitor’s part, unless a duty of care is first established under the ordinary principles;
  • The imposition of a duty of care on a solicitor to a third party non-client raises numerous concerns, including:
    • it makes a solicitor responsible to someone who has not retained and does not pay him or her;
    • It is illogical to impose such a duty on a solicitor where the solicitor’s client themselves do not owe a duty to the third-party;
    • It is usually not possible to disclaim or limit liability to such a non-client third party; and
    • Making a solicitor assume such a duty to a non-client third party may place the solicitor in a conflict with the interests of the solicitor’s own client;
  • The court held that due to the above concerns, it will “only be under “narrow”, “exceptional”, “very limited” and “well defined circumstances” that a lawyer can be held to owe a duty of care to a non-client third party to protect his, her or its economic interests”; and
  • The court outlined the various indicia of a solicitor-client relationship, including, inter alia, a contract, retainer agreement or letter of engagement, an open file, the giving and taking of instructions, the creation of legal documents, and the rendering of bills.

This decision provides a comprehensive summary of the existing jurisprudence and reiterates the principle that: but for exceptional and rare circumstances, a solicitor will only owe a duty of care to his or her client. This may be “disappointing” news to non-client, third party claimants.

Thanks for reading!

Sydney Osmar

Please feel free to check out the below related blog:

When Might a Solicitor be Negligent in Preparing a Will?

06 Mar

Live well – just don’t buy the hype

Ian Hull Estate & Trust, Estate Planning, Health / Medical, In the News, Uncategorized 0 Comments

It’s a new year, and we all want to live well and healthy. While our bad habits can get in the way, we generally try to do the right thing.

But what’s right? In 2019, the notion of what’s “right” for our health is getting fuzzy. The reason? We live in an “always on” marketing world, and what can actually help us live well can take a back seat to the shiny new wellness tools that are being thrust upon us.

Think about it. Has there been a major “wellness” finding, backed by science, that’s emerged over the past 20 years? I’m not sure there has been.

Scottish writer, broadcast and family doctor Margaret McCartney lays out the truth we don’t want to hear in this Globe and Mail article. We don’t want to hear it because the advice is boring, obvious and “old news”.

“The truth is that well-being is simple, if not straightforward. Don’t smoke, don’t drink excessively, do exercise you enjoy, eat a Mediterranean-style diet with plenty of fruit and vegetables, interact with people, work at a job and hobbies you like, and don’t be poor.”

These are the evidence-based factors that contribute to health. And while poverty is not a choice for most people, the other factors are. Margaret McCartney’s fear is that we’re becoming so focussed on the shiny new wellness trends (cleanses, colonic irrigation, crystal-infused water, 10,000 steps, this diet, that diet) that we’re missing the bigger picture and the very basic things that can help us stay healthy.

The beginning of a new year is when wellness “hype” is at its peak. My advice? Don’t buy it. By all means, enjoy your Fitbit, your new exercise program, your life without sugar or carbs, or whatever it might be. But don’t ignore the science. None of us are perfect in our health behaviours, but let’s at least strive for what can make a proven, meaningful difference.

 

 

Thanks for reading,
Ian Hull

05 Mar

Identity Theft: Will your Online Presence Put your Estate at Risk?

Sydney Osmar Estate & Trust, Estate Planning, Executors and Trustees, General Interest Tags: 0 Comments

My colleague, Natalia Angelini, recently blogged on the unexpected death of QuadrigaCX’s founder, Gerald Cotton. Mr. Cotton was the only person who held the password to access the holdings of the company’s clients.

The QuadrigaCX case has brought the issue of digital assets and passwords within estate planning to the global stage. While this case is an extreme, most testators, if not all, will have some form of online presence requiring the use of passwords when they die.

Natalia discusses the case as a reminder that in the era of growing digital assets, we need to think about how to ensure the gifting of such assets can be effected, as well as ensuring that estate trustees know how to access such assets. I would like to examine the topic of the digital era and passwords in relation to fraud and identity theft involving estates.

Identity Theft of the Dead

Back in September, 2018, I attended the Law Society’s continuing professional development program called “Practice Gems: Probate Essentials 2018”. While there, a paper written by Craig Ross and Kyle Kuczynski of Pallett Valo LLP entitled “Protecting Estates From Identity Theft” was presented.

The paper examines the increase in identity theft of estates and sets out helpful tips on what steps can be taken by testators and estate trustees alike to protect the privacy and identity of the estate.

The paper discusses concerns regarding the vast online presence a testator may have, the full extent of which will likely be unknown to the intended estate trustee. Personally, I think of how this could easily include not only social media accounts such as Facebook, Instagram and LinkedIn, it would also include the many other applications I use in a day, including but not limited to music streaming apps, fitness apps, online banking apps, video streaming apps and transportation apps such as Uber. All of the various social media platforms and applications we utilize store important information including names, dates of birth, phone numbers, emails, credit card numbers, and in some instances the names of family members.

Tips to Protect your Estate

As the paper points out, this information “sits dormant and vulnerable after death”. Below, I summarize some of the main tips the paper discusses in relation to a testator’s online presence, and how best to protect against fraud and/or identity theft:

  1. The testator should keep and safely store a master list of accounts, subscriptions and services;
  2. The testator should keep a record of all websites that store or publish personal information. The Testator should also attempt to minimize the personal data that may be published online, such as birth dates, or city of residence;
  3. The testator should keep a list of login information and passwords for websites and services regularly used by the testator that retain or publish personal information. The list should be maintained in a secure manner;
  4. The estate trustee should cancel all memberships and known subscriptions of the deceased;
  5. The estate trustee should advise all financial institutions and credit agencies of death as soon as possible;
  6. The estate trustee should redirect mail as soon as possible;
  7. If account logins and passwords are available, social media accounts and other websites should be deleted. If no logins and passwords are available, the estate trustee should contact the website or account providers in question and request that the account be frozen or deleted; and
  8. Online service providers should also be notified of the death and instructed to freeze accounts.

In addition to providing these helpful tips, the paper discusses the difficulties an estate trustee may have in actually effecting the deleting and freezing of certain social media accounts and/or websites depending on the user agreement between the testator and the platform or website. They provide the example of Facebook which includes a term within its user agreement that prohibits the sharing of passwords and login information without its permission.

Further, Facebook’s default policy is to memorialize a user’s account upon their death, rather than delete it, and while they may delete it upon request, they are under no obligation to do so.

Out of curiosity, I conducted a quick search on Instagram to learn more about their policies regarding the death of  user and it also appears that the app will memorialize, rather than delete the account of a deceased user. Instagram also has a policy against the sharing of login and password information.

In light of the ever evolving digital era we find ourselves in, it is prudent to give consideration to what will happen to our expansive online presences after we die, and to take what steps we can now to protect our assets and identities.

Thanks for reading!

Sydney Osmar

Please feel free to check out the below blog which discusses protecting against identity theft after death more generally:

Protecting Against Identity Theft After Death

01 Mar

Put Up or Shut Up: Leading Trump When Challenging a Will

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

A recent decision of the Saskatchewan Court of Queen’s Bench highlights the importance of “going big or going home” when challenging a Will.

In the decision of Kot v. Kot, 2018 SKQB 338 (CanLII), an application to revoke probate and allow a will challenge to proceed by the spouse of the deceased was dismissed on the basis of a lack of credible evidence sufficient to raise a triable issue.

There, the deceased died on September 15, 2015. He died leaving a will dated August 4, 2014. In his will, the deceased appointed his spouse and two of his brothers as estate trustees. He gave one of his brothers a right of first refusal to purchase some of the deceased’s farm land upon his death.

Probate of the will was granted, and the three estate trustees proceeded to administer the estate.

The spouse then commenced her application to challenge the will. She said that the deceased tore up his will (actually, a copy of it: the spouse had switched the original will with a copy, and gave evidence that the deceased thought he was tearing up and therefore revoking the original). She said that she told the estate lawyer of the revocation, but the estate lawyer told her that it was better to have a will than no will, and that the estate lawyer did not tell her that if there was no will, she would inherit the entire estate. She also later alleged that the will was the result of undue influence from the brothers.

The court dismissed the spouse’s application.

The court held that the delay in seeking to challenge the validity of the will was not fatal to the application. However, while the delay did not defeat the application, it was a relevant consideration, and suggested that her claims had little credibility. Further, the evidence of the estate lawyer did not support her claim that the will was torn up by the deceased.

The court also found that there was no evidence of undue influence.

Interestingly, the court did not discuss the application of any limitation period. The court relied upon the Ontario Court of Appeal decision of Neuberger Estate v. York in concluding that mere delay did not preclude the challenge. However, in Neuberger, the will challenge was brought within the two year limitation period. In Kot, the challenge was brought 4 ½ years after the deceased’s death.

Have a great weekend.

Paul Trudelle

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