Category: Estate & Trust

06 Apr

Filing probate applications during the COVID-19 pandemic

Stuart Clark Estate & Trust Tags: , , , , , , , , , 0 Comments

The reduced hours and filing capabilities of the court during the COVID-19 pandemic have raised some interesting questions surrounding the filing of probate applications. Although the court’s direction to file court materials by mail is likely of no concern for a majority of matters, as a probate application could contain the original executed copy of a Will as well as a potentially significant bank draft for any estate administration tax, you would likely be rightly hesitant to place such documents in the mail under the current circumstances for fear that they may be lost.

The potentially good news for those needing to file probate applications with the Toronto court is that it is our current understanding that the Toronto court is allowing probate applications to be filed in person at the court office daily between the hours of 10:00 am and 12:00 noon, and again from 2:00 pm to 4:00 pm. Although these filing capabilities and times are of course subject to change, at least for the time being those in Toronto appear to be able to file probate applications in person without having to concern themselves with the possibility of the application being lost in the mail. Those needing to file probate applications in jurisdictions outside of Toronto should check to see if they too are making an exception to allow probate applications to be filed in person and not by mail.

In the event that it does not appear that it will be possible to file the probate application in person, such that the probate application would likely need to be filed by mail, the individual wishing to file the probate application should seriously consider whether there is an urgent need to file the probate application or whether it could wait until the courts have fully re-opened. If you are advising a client in such a situation, you should clearly explain what would happen in the event that the original Will was lost, and that an application to prove a copy of the lost will would be necessary (together with the added time and expense). Although the presumption that the lost will was destroyed by the testator with an intention of revoking it could likely easily be overcome by the fact that the possession of the Will could be traced to after the testator’s death, there would still be added time and expense of needing to bring the lost will application.

In the event that the client does still decide to proceed with filing the probate application by mail, one way to potentially reduce some of the risk may be to have any probate fees paid by trust cheque from the law firm and not by bank draft. Although in the event that the application materials were lost in the mail the lost will application would likely still be required, at least the concern associated with losing an original bank draft (and potentially the associated funds) is lessened as a trust cheque should more easily be cancelled. Multiple notarial copies of the original Will should also likely be made prior to placing it in the mail.

Thank you for reading and stay safe and healthy.

Stuart Clark

03 Apr

Virtual Mediation

Paul Emile Trudelle Estate & Trust, In the News, Litigation Tags: , , , , , 0 Comments

Mediation, with plenary sessions, small break-out rooms for parties and their counsel, and a mediator shuttling between the rooms seem like a distant, archaic memory. The former format of mediation is the antithesis of social distancing.

(I find it hard to now watch a tv show or movie without thinking to myself, “That’s not very good social distancing.”)

However, the show, litigation and mediations, must go on.  Welcome to the age of virtual mediation.

Programs such as Zoom allow for parties to meet and discuss ideas and resolve differences without being physically in the same room. While the virtual alternative is not perfect, it is workable.

With Zoom, there are a few ways for mediations to be accommodated. One option is for the organizer to set up several online meetings: one to be used as a plenary session where everyone has access, and one for each of the parties to the litigation. In the plenary room, all of the parties and their counsel can join. In the parties’ separate room, only the party and their counsel can participate, with the mediator joining and leaving as necessary.

Another option is for the organizer to set up one meeting. The organizer would be able to admit participants into the meeting room, or put them into a virtual “waiting room” while others remain in the meeting room.

Another consideration when organizing a Zoom mediation is to ensure that the organizer has a Pro account or better. While the Basic account is free, it only allows for meetings of 40 minutes or less. The Pro account, at $20 per month per host, allows for meetings of up to 24 hours, which should probably enough for most mediations. (Some mediators are slow mediators: you know who you are.)

Some reporting services are offering virtual mediation assistance. Neesons, for example, can offer extensive technical support for mediations, examinations and arbitrations. They have also hosted a number of presentations on virtual examinations, arbitrations and mediations. Contact them if you want more information.

(Fun fact: Zoom Video was trading at $68.04 on December 31, 2019. On March 23, 2020, it was trading at $159.56. As of the time of writing this (April 2, 2020), share prices had relaxed to $118.10.)

Thank you for reading. Stay healthy. Practice safe litigation.

Paul Trudelle

27 Mar

CRA Filing Deadlines and COVID-19

Paul Emile Trudelle Estate & Trust, In the News Tags: , , , , 0 Comments

Recently, the Government announced changes to Canada Revenue Agency tax filing and payment deadlines in light of the COVID-19 crisis.

Notably, individual returns, normally due on or before April 30, 2020 are now due on or before June 1, 2020. Payments due April 30, 2020 are due on or before September 1, 2020, with no penalty or interest being payable if payments are made on or before September 1, 2020. Installment payments due on a date before September 1, 2020 can be paid up to September 1, 2020.

Things are not so clear with respect to terminal tax returns for deceased taxpayers. Normally, these are due on April 30, 2020 if the deceased died between January 1, 2019 and October 31, 2019, and six months after death if the deceased died between November 1, 2019 and December 31, 2019. What is not entirely clear is whether these deadlines are also extended. Some accountants are advising to file and remit payment in accordance with the old deadlines until further clarification is given. Hopefully, this issue will be clarified shortly.

Please note that things change daily, and further clarification may be coming soon. If these deadlines may apply to you, or an estate that you are responsible for, please consult a knowledgeable accountant and/or monitor the CRA website.

Thank you for reading. Stay safe and healthy.

Paul Trudelle

23 Mar

Changes to Toronto Region Estates List Operations in Light of COVID-19

Jenna Bontorin Estate & Trust, Litigation Tags: , , 0 Comments

Recent developments with COVID-19 mean a number of procedural changes have been put in place at the Toronto Estates List.  The following operations are effective as of March 23, 2020:

1.     All regular matters which have been scheduled and are not urgent, or time sensitive, are adjourned to after June 1, 2020 and are not currently being rescheduled, subject to any further direction from the Court (in accordance with the Notice to the Profession issued by Chief Justice Morawetz, March 15, 2020).

2.     The judges of the Toronto Estates List will continue to hear and decide urgent and time-sensitive matters. The procedure for urgent matters on the Estates List is the same as the procedure for urgent matters on the Commercial List and will be in accordance with the procedure set out in the Changes to Commercial List Operations in light of the COVID-19 March 16, 2020 advisory, with necessary changes.  For greater certainty, all urgent requests and materials on the Estates List should be sent to the Commercial List trial coordinator at Toronto.commerciallist@jus.gov.on.ca

3.    There is no change to the usual procedure for filing materials in matters that are to be considered by the Court in writing, including motions for consent orders and ex parte orders.  Materials for matters to be heard in writing may still be filed at the Estates Office, subject to any further direction of the Court.

4.     Applications for Certificates of Appointment (i.e. probate) are still be accepted and processed by the Estate Office.

5.     Notices of Application (Forms 14E, 74.44, and 75.5) will continue to be issued by the Estates Office but instead of fixing a return date the Notice of Application shall indicate that the matter will be heard: “on a date to be fixed by the Registrar.”

6.      Notices of Objections (Form 75.1) may be filed in the Estates Office as usual.

The PDF copy of the above notice can be found here.

Thanks for reading,

Jenna Bontorin

18 Mar

Wills and Estates Law in George Eliot’s Middlemarch

Suzana Popovic-Montag Estate & Trust, General Interest, Wills Tags: , , , , , , 0 Comments

The Victorians consigned themselves to more subtlety in their works of entertainment than we at present do. To all appearances, theirs was decidedly not an age capable of enjoying rap music and HBO comedies. The spiciest themes in their art, therefore, would include marriage intrigues, duels, financial scandals – or, as we see in George Eliot’s Middlemarch – controversial wills and eccentric testators.

The wills and estates subplot in Middlemarch is comprised of all the ingredients that you may see in a modern legal drama: a rich and erratic miser (Mr. Featherstone) manipulating his relatives with implied promises of future bequests; the idle protégée (Fred Vincy) who accumulates debts with the idea that the testator will bail him out; concern over the testator’s attachment to his young caregiver (Mary Garth); a train of impoverished relatives ill-concealing their greedy expectations; and much discussion on why “blood” was deserving and why “strangers” were not.

It is remarkable how little has changed in a century or so with respect to wills and estates. Then, as now, a Mr. Featherstone who promises a bequest, receives consideration, and then goes back on his word, may be found to have broken a binding contract – as occurred in Legeas v. Trusts & Guarantee Co. Likewise, a ruling of unjust enrichment (Moore v. Sweet) or specific performance (Folsetter v. Yorkshire & Canadian Trust Co.) could be made against him/his estate.

Still relevant today are the challenges of undue influence and incapacity. In the story, the scheming relatives are alarmed at Mr. Featherstone’s connection to Ms. Garth. She, all too aware of an undue influence allegation, refuses her patron’s money and ignores him when he orders her, while on his deathbed, to destroy his wills. In return, he throws his cane at her, which is perhaps evidence of incapacity.

Much as we may laugh at the relatives in Middlemarch who repeatedly visit Mr. Featherstone to remind him of his obligations to his “own flesh and blood”, our own law continues to ascribe significance to bloodlines. The Succession Law Reform Act defines “child” based upon conception, and the statute’s intestacy provisions speak of “issue” and the “nearest degree” of kindred. As many an adopted child and step-child knows, with respect to estates law, blood still matters.

There are some marked differences between Eliot’s England and modern Canada. Whereas Fred Vincy was loaned money in part because the creditors knew he was favoured by Mr. Featherstone, we now have businesses openly and explicitly offering advances to those who “have an inheritance coming”. Although we still use the Banks v. Goodfellow test for evaluating capacity, there have been some innovations, such as capacity assessments done after death and more nuanced, neuroscientific understandings of capacity. Lastly, if Mr. Featherstone had died in Ontario in 2020, he could not take as much comfort in tantalizing relatives and then crushing their hopes, for we have dependency support laws whereby testators must provide “adequate provision” for their “dependents”. Perhaps the creation of such laws was influenced, in part, by the ghoulish conduct of such Victorian literary characters.

Thank you for reading. Enjoy the rest of your day!

Suzana Popovic-Montag and Devin McMurtry.

06 Mar

Plene Administravit: Fully Administered

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

Are you an estate trustee? Is the estate being sued? Are there no, or insufficient, assets left in the estate to satisfy any judgment that may be obtained?  Then plene administravit (or plene administravit praeter) is the doctrine for you!

Plene administravit is Latin for “fully administered”. It is pleaded where there are no assets remaining in the estate to satisfy any judgment and costs award that may be obtained. Plene administravit praetor means “fully administered except”, and is pleaded when there are some but insufficient assets in the estate to satisfy any judgment and costs.

Failure to plead plene administravit could lead to personal liability on the part of the estate trustee for the claim. As stated in Commander Leasing Corp. Ltd. v. Aiyede (1983) CanLII 1649 (ON CA):

It has long been established that if an executor or administrator has no assets to satisfy the debt upon which an action is brought, in the absence of a plea of no assets or plene administravit, he will be taken to have conclusively admitted that he has assets to satisfy the judgment and will be personally liable for the debt and costs if they cannot be levied on the assets of the deceased. If the executor has some, but insufficient, assets to satisfy the judgment and costs, a plea of plene administravit praetor will render him liable only to the amount of assets proved to be in his hands as executor”.

Where the doctrine is pleaded, the burden of proof falls on the plaintiff to show that assets existed or ought to have existed in the hands of the estate trustee at the time the action was commenced.

In Commander Leasing, the estate trustee distributed the proceeds of the estate to the beneficiary (herself), with knowledge of the claim. The Court had no difficulty in finding that as the doctrine was not pleaded, the estate trustee was personally liable for the judgment.

In Commander Leasing, the Court of Appeal also discussed the companion doctrine of devistavit. Devistavit, or a wasting of assets, is defined to be “mismanagement of the estate and effects of the deceased, in squandering or misapplying the assets contrary to the duty imposed on them, for which the executors or administrators must answer out of their own pockets, as far as they had, or might have had, assets of the deceased.” In Commander Leasing, the court found that in distributing the estate the estate trustee breached her duty as estate trustee, rendering her personally liable.

However, all is not lost if the estate trustee fails to plead plene administravit. In Brummund v. Baumeister Estate, 2000 CanLii 16988 (ON CA), the Court of Appeal upheld a trial judge’s decision to allow the defendant to amend the defence at trial to plead the doctrine. The Court of Appeal held that the plaintiff was not prejudiced by the amendment, as the facts underlying the application of the doctrine were fully canvassed at trial.

Have a great, plenus weekend.

Paul Trudelle

26 Feb

Can a Charitable Gift be Revoked by an Unsatisfied Donor?

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

Once a donor has agreed to donate funds to a charitable institution, are they entitled to have any input as to how those funds are spent? Does that donor have any recourse if their funds are not being spent the way they envisioned? Faas v. CAMH, 2018 ONSC 3386, 2019 ONCA 192 provides some insight regarding these questions.

Facts

At the direction of its principal, Andrew Faas, the Faas Foundation agreed to donate $1 million to the Centre for Addiction and Mental Health and its fundraising arm (collectively “CAMH”). The funds were to establish a mental health program entitled “Well@Work”. Accordingly, Mr. Faas’ payments were to be made in installments of $333,000 each year for the next three years.

Mr. Faas signed a Donor Investment Agreement (the “DIA”) which outlined a proposal for the program. The DIA also provided that an annual status report was to be provided to Mr. Faas. Nearly one year into the development of the program, Mr. Faas informed CAMH that he was not satisfied with the program’s progress, the extent of reporting or the expenditure of the donation. The parties reached an impasse with regards to these matters and Mr. Faas refrained from making the remaining two payments. He also requested that CAMH forward any money not spent on the first installment to another Canadian agency. However, all of the money for the first year had already been spent by CAMH on the development of the program.

In response, Mr. Faas commenced an application based on section 6 of the Charities Accounting Act which provides:

(1) Any person may complain as to the manner in which a person or organization has solicited or procured funds by way of contribution or gift from the public for any purpose, or as to the manner in which any such funds have been dealt with or disposed of.

. . .

(3) Wherever the judge is of opinion that the public interest can be served by an investigation of the matter complained of, he or she may make an order directing the Public Guardian and Trustee to make such investigation as the Public Guardian and Trustee considers proper in the circumstances.

The Decision

The Ontario Superior Court of Justice found that there were no grounds on which to order the Public Guardian and Trustee (the “PGT”) to conduct an investigation because there was no identifiable public interest. Furthermore, no mischief was identified and nothing in the records indicated that CAMH had mismanaged the funds.

Justice Morgan stated that inquiries under the Charities Accounting Act should not be initiated lightly and that they should not “simply be for the sake of meddling.” They must only be invoked when real mischief to the public at large exists.

Mr. Faas’ complaint was not that CAMH had failed to use the donation for their own charitable objectives but that they did not use their donation in a manner that conformed to Mr. Faas’ personal vision. This did not go against public interest, but rather a private one.

The Ontario Court of Appeal agreed with the decision of the Ontario Superior Court of Justice and dismissed the appeal.

Concluding Thoughts

Faas v. CAMH emphasizes that while an unsatisfied donor does have a potential recourse of asking the PGT to conduct an investigation under the Charities Accounting Act as to how their funds were spent, an investigation will not be initiated without some evidence of mismanagement. As such, once a donor has agreed to make a donation, and as long as the charitable organization is not mismanaging the funds, the donor cannot retract their donation simply because the organization is not strictly adhering to the donor’s vision.

Thanks for reading!

Ian Hull and Celine Dookie

21 Feb

Policy and Estate Planning in Film

Garrett Horrocks Disappointed Beneficiaries, Estate & Trust, Estate Planning, General Interest, Hull on Estate and Succession Planning, In the News, Public Policy 0 Comments

This blog is the second and final blog in my series discussing estates-related topics in the film The Grand Budapest Hotel.  While the first part focused on the application of forfeiture rules in the context of a testator’s murder, this blog specifically discusses the policy considerations that arise as a result of the further Last Will and Testament executed by one of the film’s characters, Madame D.

As a brief refresher, late in the film, a further Last Will and Testament executed by Madame D is discovered, the operation of which is only to be given effect in the event of Madame D’s death by murder.  While the concept makes for an interesting twist in the film, in reality the purported condition precedent that the Will takes effect only upon death by murder likely means nothing in the context of Madame D’s estate planning.

Part I of Ontario’s Succession Law Reform Act specifically contemplates that a Will is revoked by, among other actions, the execution of a subsequent Will made in accordance with the provisions of that section.  It is not made clear in the film which of Madame D’s two Wills were executed last.  If the further Will was executed most recently and complied with all of the requirements of due execution, the prior Will would have been revoked and the second Will would likely prevail irrespective of the condition precedent.

Alternatively, a Will may also be revoked by a written direction of the testator to do so.  Failure to expressly revoke a prior Will can potentially create problematic administration scenarios in which a testator may have believed, albeit mistakenly, that a prior Will had been revoked when in fact it had not.

While executing a Will in accordance with the provisions at Part I of the Succession Law Reform Act is sufficient in and of itself to revoke prior Wills, it is nonetheless prudent from an estate planning perspective to include a written intention to revoke prior Wills (provided, of course, the testator intends to do so).

Separately, even if we were to disregard the provisions of the Succession Law Reform Act, there would be a number of practical policy concerns if a Will whose effects were subject to a condition precedent. Notably, a reasonable debate could arise between beneficiaries in scenarios in which the cause of death is ultimately unclear.

The film suggests Madame D’s reason for executing a further Will to take effect on her murder is to ensure her nephew could not benefit from her demise at his hand.  However, as discussed in Tuesday’s blog, that goal is accomplished by the operation of the slayer rule.  Alternatively, Madame D could have relied on a common estate planning technique by making her nephew’s interest in her estate, rather than the Will in its entirety, subject to a condition precedent.

While Ontario prohibits conditions precedent that are deemed to be contrary to public policy, such as restraining marriage or promoting discriminatory behaviour, other conditions precedent are recognized at law.  For example, Madame D could have simply made Dmitri’s interest contingent on his reaching a certain age, or reaching a certain milestone in his life, such as graduating from university.  Instead, the purported condition precedent that the further Will was to take effect on her murder likely has no effect at all, provided the evidence shows it was executed after the initial Will and in compliance with the provisions of Part I of the Succession Law Reform Act.

Thanks for reading.

Garrett Horrocks

18 Feb

Forfeiture in Film: The Slayer Rule in The Grand Budapest Hotel

Garrett Horrocks Estate & Trust, Estate Planning, General Interest, In the News, New Media Observations, Public Policy Tags: 0 Comments

Recently, I experienced a series of coincidences involving American filmmaker Wes Anderson.  In the span of a handful of days, I came across the newly-released trailer of his upcoming film, The French Dispatch, and had the opportunity to revisit his 2014 hit, The Grand Budapest Hotel.

Not having seen the latter in several years, I had entirely forgotten a key plot point involving a handful of curious estate planning decisions.  Although the film was released six years ago, I nonetheless attach a mild spoiler warning.

The plot of the film revolves around a specific bequest of a work of art made by one of the characters in the film, Madame D.  The painting, Boy with Apple, is left to Ralph Fiennes’ character, Gustave H, the proprietor of the film’s namesake hotel, per Madame D’s (purported) Last Will and Testament.

Her decision to leave the painting to Gustave, rather than her nephew, Dmitri, creates a firestorm of controversy, not least of all because Dmitri accuses Gustave of murdering his aunt in order to secure

his entitlement to Boy with Apple.  In reality, it is strongly hinted in the film that Dmitri is responsible for her murder.  As an additional twist, a further Last Will and Testament executed by Madame D is discovered later, which appears to leave the entire residue of her estate, rather than just Boy with Apple, to Gustave.  However, it is stated in the film that this further Last Will is only to be given effect in the event that Madame D is murdered.

This single plot point raises a number of points of discussion and policy concerns as to what would transpire if the film were set in Ontario.  This blog will explore the nature of Dmitri’s and Gustave’s potential entitlements in the Estate.

Prior blogs have explored the concept of common law forfeiture rules in Canada, which preclude an individual from deriving a benefit from their own morally culpable conduct.  Colloquially known as the “slayer rule” in the context of a testator-beneficiary relationship, a beneficiary who is found to have caused the unlawful death of a testator will be deemed at common law to have predeceased the testator, thereby extinguishing any interest in the testator’s estate.

In the film, Dmitri accuses Gustave of the murder of Madame D.  In the ordinary course, a conviction proper is not a necessary precondition to the applicability of the slayer rule.  Rather, common law suggests that the rule applies strictly in the event that the beneficiary’s deliberate act caused the death of the testator.  In theory, Gustave’s interest in the estate of Madame D could be in jeopardy despite the lack of culpability.  In practice, despite his efforts to frame Gustave, the evidence would likely show that Dmitri was the culprit, thereby extinguishing any interest in Madame D’s estate.

Of course, the further Last Will purportedly being given effect only in the event a murder adds a further layer of discussion, and will be explored in greater detail in part 2 of this blog.

Thanks for reading.

Garrett Horrocks

13 Feb

A  Notable Legacy

James Jacuta Estate & Trust, General Interest, In the News Tags: , , , , , 0 Comments

This Sunday February 16, 2020 the NBA All-Star game will be played in Chicago. It is estimated that seven million people will watch that one game, and that about 450 million people are involved with basketball around the world annually.  Forbes magazine has estimated the value of the 30 NBA teams at over 50 billion dollars with the Toronto Raptors valued at 1.7 billion.

On December 21, 1891 the game of basketball was invented by Canadian James Naismith. He was born on November 6, 1861 in Almonte Ontario about 50 kilometers west of Ottawa. Yet, the inventor of the game, James Naismith, never profited from any of this. In fact, he was generally in favour of advancing good values through sport and not profit. His estate did not profit either. However, his original two-page rules of the game of “Basket Ball” from 1891 were passed down to his family.

On December 10, 2010 the rules were purchased at Sotheby’s auction for a record 4.3 million dollars by David and Suzanne Booth.  The couple then donated the original rules of the game of “Basket Ball” to the University of Kansas, where James Naismith had been director of athletics until retiring in 1937 at the age of 76. He died on November 28, 1939 at his home in Lawrence Kansas. The family heirs of James Naismith took the proceeds from the sale of the original rules and donated the money to the Naismith International Basketball Foundation charitable organization.

A notable legacy in a succession of events. The game of life played well, starting with James Naismith, then David and Suzanne Booth, and then the family and heirs of James Naismith!

Enjoy the game!

James Jacuta

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