Category: News & Events
Earlier this week, the controversy surrounding the estate of American real estate developer and multi-millionaire John Chakalos dominated the headlines.
Issues Surrounding Mr. Chakalos’s Estate
Mr. Chakalos, who left a sizeable estate, was found dead at his home in 2013. Pursuant to the terms of Mr. Chakalos’s Will, his daughter Linda was one of the beneficiaries of his estate. Linda went missing and is presumed dead after a boat carrying her and her son, Nathan, sank during a fishing trip.
According to media reports, Linda’s son Nathan was also a suspect in the death of his grandfather, but was never charged. Nathan has denied the allegations regarding his involvement in his grandfather’s death and his mother’s disappearance.
According to an article by TIME, Mr. Chakalos’s three other daughters have now commenced a lawsuit in New Hampshire wherein they have accused Nathan of killing his grandfather and potentially his mother. The plaintiff daughters have asked the Court to bar Nathan from receiving his inheritance from Mr. Chakalos’s estate.
Public Policy and the Law in Ontario
It is important to note that Mr. Chakalos’s grandson has not been charged in the death of Mr. Chakalos, and the allegations against him have yet to be proven. However, there have been similar cases in Ontario where the accused beneficiary has ultimately been found to have caused the death of the testator.
Generally speaking, in Ontario, a beneficiary who is found to have caused the death of the testator is not entitled to benefit from their criminal act. This common law doctrine, often referred to as the “slayer rule,” stands for the proposition that it would be offensive to public policy for a person to benefit from the estate of a testator if the Court concludes that they have caused the death of the testator.
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Umair Abdul Qadir
A recent blog by Hull & Hull LLP, found here, highlights the methods that Estate Trustees may use in advertising for creditors. Such options included advertising in local newspapers, the Ontario Gazette, and online services. A recent Judgment by the Ontario Superior Court of Justice considers the appropriateness of advertising for creditors through the online service of NoticeConnect.
The unreported decision by the Honourable Madam Justice Conway dated July 7, 2017 (Court File No.: 05-118/17), declared that the Notice to Creditors published by the Estate Trustee on NoticeConnect, “was an appropriate notice to creditors and the [Estate Trustee] is therefore entitled to the liability protection provided by s. 53(1) of the Trustee Act“.
Therefore, Estate Trustees who properly advertise through NoticeConnect may proceed to distribute assets of an estate with the peace of mind that they will not be held personally liable should a claim against an estate later arise.
Hull & Hull LLP has closely followed the development of NoticeConnect having written numerous blogs about it. It will be interesting to continue to follow NoticeConnect and other technological advances in the estates and trust community, such as Hull e-state Planner, which will certainly assist lawyers in providing quality and efficient service to their clients.
Find this topic interesting? Please consider these other related blogs:
An Order excluding all the parties from each other’s examinations for discovery was made in an estate matter before the Hon. Justice Myers. In Boodhoo v. Persaud, the Plaintiff is one of the Deceased’s surviving daughters, while the Defendants are the Deceased’s brother and sister-in-law. During the initial stages of litigation, the Defendant Uncle was removed as the Estate Trustee of the Boodhoo Estate in 2012 and he was ordered to account for the duration of his administration. By the time of the present hearing before Justice Myers, the accounting was still deficient. At the same time, the Plaintiff was also pursuing allegations against her uncle’s wife for her involvement in the administration of the Estate.
In applying the test for the exclusion of witnesses in Lazar v. TD General Insurance Company, 2017 ONSC 1242, Justice Myers found that “all of the parties have cause to be worried that others will tailor their evidence based upon what they hear at examinations for discovery”. Where the credibility of the parties appears to be crucial, especially in the absence of documentary records, his Honour ordered that:
“Counsel for the parties and anyone who attends discoveries with them shall not disclose any evidence given by a party on examination for discovery to any other party in advance of the completion of all of their respective examinations by answering all undertakings and refusals (if any). Nor shall any counsel or their staff provide any transcripts or summaries of transcripts of any of the examinations for discovery to any of the parties prior to the completion of all of their respective examinations by answering all undertakings and refusals (if any).”
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I have blogged about assisted suicide in the past with reference to the Canadian television show Mary Kills People. The availability of assisted suicide continues to be a subject of public interest as each province deals with the implementation of the outcome of Supreme Court of Canada decision in Carter v. Canada (Attorney General).
As reported by The Globe and Mail, one particular doctor has removed himself from a roster of doctors who will administer assisted deaths because of changes to the physician fee schedule in British Columbia. Notwithstanding his support for assisted death, Dr. Jesse Pewarchuk of Vancouver Island wrote a letter to his colleagues to explain that the new fee schedule made “medical assistance in dying” economically untenable for his practice.
According to Kelly Grant of the Globe and Mail,
“Under the new fee schedule, B.C. physicians will now be paid $40 for every 15 minutes, up to a maximum of 90 minutes, to conduct the first of two eligibility assessments required by law. Each of the assessments has to be provided by a different clinician. That works out to $240, a significant increase from the $100.25 interim assessment fee that has been in place in B.C. since shortly after assisted death became legal.
For second assessments, the time is capped at 75 minutes.
In the case of providing an assisted death, the province has set a flat fee of $200, plus a home-visit fee of $113.15.”
Within the same article, it was reported that Ontario does not have specific billing codes for this type of medical service at this present time.
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The applicability of limitation periods to estates, trusts, and capacity matters is crucial for litigators to consider. In a recent decision of the Superior Court of Justice, the Court was asked to consider the application of the limitation period in Part V of the Succession Law Reform Act (“SLRA”) to a claim that was advanced by the Public Guardian and Trustee (the “PGT”) as the litigation guardian of an incapable support claimant.
Shaw v. Barber, 2017 ONSC 2155, is an important precedent for the proposition that limitation periods do not run against the incapable person from the day that the PGT becomes his/her statutory guardian of property. By operation of section 16(5) of the Substitute Decisions Act, 1992, the PGT automatically becomes an incapable person’s statutory guardian of property the moment they receive a certificate of incapacity from the assessor. In Shaw v. Barber, the dependant support claimant, Lois Shaw, was assessed and found to be incapable of managing property on February 16, 2015 and a copy of the certificate was sent to the PGT on or about February 25, 2015.
Prior to the assessment, Ms. Shaw lived with Frank Cyril Barber on the date of his death, although they were not married. Mr. Barber died in August, 2014, leaving a Will which named his son as the sole Estate Trustee and beneficiary of his Estate. A Certificate of Appointment of Estate Trustee with a Will was issued to Mr. Barber’s son on February 5, 2015. Pursuant to section 61(1) of the SLRA, an application for dependant support may not be made six months after the grant of probate, subject to the Court’s discretion in section 61(2) to allow claims against the undistributed portion of an estate. Without considering the Court’s discretion in section 61(2) of the Act, Justice McNamara found that Ms. Shaw’s claim for dependant support was not statute barred despite the fact that it was issued, one year after six months from probate, on August 5, 2016.
In his reasoning, Justice McNamara considered the tolling provision applicable to incapable persons while he/she is not represented by a litigation guardian in section 7 of the Limitations Act, 2002 (which applies to the section 61 of the SLRA). The turning point then becomes whether a guardian of property is automatically a litigation guardian in relation to the claim at issue since a guardian has the power to do anything the incapable person may do except make a will. In this case, there was an affidavit from PGT counsel which explained the time consuming investigations involved when the PGT becomes a statutory guardian of property because of the lack of first-hand information from the incapable individual. Justice McNamara determined that a guardian of property shall act as litigation guardian when he/she has determined that there is a basis for exercising their authority in that role, and that imposing a limitation period from the date in which the PGT becomes statutory guardian is contrary to the Limitations Act and it would create impossible timelines and potential injustice for this vulnerable group. Furthermore, Justice McNamara was also persuaded by the fact that the Estate Trustee in this case will not be prejudiced by the delay, given that he is also the sole beneficiary, and that he was aware all along that the PGT was considering a claim against the Estate.
This case is also an example of the latitude that Courts may accord to large-scale claimants as seen in 407 ETR Concession Company Limited v. Day, 2016 ONCA 709.
Please do not hesitate to contact our firm for a copy of Justice McNamara’s reasons in Shaw v. Barber and click here for comments from Russel Molot, counsel for the PGT in this matter, as reported in the Law Times.
The topic of home ownership, and, particularly, the ability of young adults to buy their first home is a trending topic lately. According to a Globe and Mail article on whether millennials are being pushed “into a financial abyss of home ownership”, Manulife Bank has conducted a survey which revealed that 45% of millennial home buyers received a gift of money or loan from family, and that one-third of these lucky youngsters received more than $25,000.00.
Regardless of whether prospective first time home buyers are wasting money on delicious, but expensive, avocado toast as Tim Gurner may have controversially implied, home buyers with mortgages should give consideration to how they would want the mortgages on their properties to be satisfied upon their death.
Pursuant to section 32 of the Succession Law Reform Act, a mortgage on an estate property shall be proportionately satisfied through the interest of the beneficiaries of that property, if the deceased has not, by will, deed, or other document, signified a contrary or other intention. For each beneficiary of a property, “every part of the interest, according to its value, bears a proportionate part of the mortgage debt on the whole interest”. The Act is also clear that a general direction for the payment of all debts from the residue of the Estate does not suffice to rebut the application of section 32 unless “he or she further signifies that intention by words expressly or by necessary implication referring to all or some part of the mortgage debt”.
Regardless of the foregoing, nothing in section 32 of the Act shall affect the mortgagee’s right “to obtain payment or satisfaction either out of the other assets of the deceased or otherwise”.
Just for fun, here is a link to a CNBC article on some statistics related to millennials, their spending habits, and the average price of a single avocado.
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Tax planning and estate planning often go hand-in-hand, so when changes to either are pending, it’s wise to keep an ear to the ground.
Here’s the good news: in its recent 2017 budget, the federal government announced relatively few tax changes that had a significant impact on the tax lives of Canadians.
Now the bad news – and it’s really what the government “said but didn’t do” that has wealthy Canadians worried. The government confirmed again its intentions to target tax rules and planning strategies that benefit the wealthy. This goes back to the 2016 budget when the government stated that it was looking to identify opportunities to reduce tax benefits that unfairly help the wealthiest Canadians.
But in 2017, it’s clear that change is getting closer, and a key target is tax planning strategies involving private corporations that “inappropriately reduce personal taxes of high-income earners.” Specifically, the government intends to review three strategies:
- Holding an investment portfolio inside a private corporation to accumulate lower-taxed investing earnings;
- Sprinkling income to family members using private corporations; and
- Using strategies to convert a private corporation’s regular income into capital gains.
The budget document stated the following about next steps:
The Government intends to release a paper in the coming months setting out the nature of these issues in more detail as well as proposed policy responses. In addressing these issues, the Government will ensure that corporations that contribute to job creation and economic growth by actively investing in their business continue to benefit from a highly competitive tax regime.”
Read the government’s full statement in Chapter 4 of the budget document that starts at page 197: http://www.budget.gc.ca/2017/docs/plan/budget-2017-en.pdf
Ensure any changes are reflected in the estate plan
One fact seems clear – tax changes are coming. And lawyers and advisors to wealthy Canadians may be changing structures and strategies in response. When they do, it’s critical to ensure that the estate planning portion is aligned with these changes.
Revisiting a will? The Hull e-State Planner can ensure nothing is missed
The Hull e-State Planner is an interactive Will Planning App designed specifically for Canadian lawyers. It takes a visual approach to will planning, one that’s easy for you to use and easy for your client to understand and verify that their wishes have been properly captured.
You can find out more about it here: https://e-stateplanner.com/about/
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As an estates litigator for the past 25 years, there isn’t much I haven’t seen when it comes to will drafting issues and errors. I’ve made a living out of picking up the pieces and sorting out the conflicts that result from errors and ambiguities in the estate documentation process.
While it’s great for my business, clients pay a high price for those errors and ambiguities in the form of legal fees, bequests lost, and family harmony dashed to bits among other things.
A will may be one of the most common documents in our legal world, but there is nothing off-the-shelf about it, and complexities abound. You’ve likely experienced it your own practice – drafting a will “right” isn’t always easy.
Is there a better way to draft one – so that the proper checks are made, the proper questions asked, and the proper wording applied?
You bet. The Hull e-State Planner is an interactive Will Planning App designed specifically for Canadian lawyers. It takes a visual approach to will planning, one that’s easy for you to use and easy for your client to understand and verify that their wishes have been properly captured.
You can find out more about it here. https://e-stateplanner.com/about/
Or, to see the Hull e-State Planner in action, take a few minutes to watch how the App takes you through the drafting process. https://www.youtube.com/watch?v=wyZWyM9gktQ
Even better, try it yourself, with a 30-day, 100% money back guarantee. You’ll find it a small price to pay for a better way to draft your clients’ wills.
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April 21, 2017 marked one year since the death of the beloved recording artist, Prince. We have previously blogged about the legal issues surrounding Prince’s Estate that have emerged since his death. Although more than a year has now passed, the Estate continues to be engaged in litigation.
According to media reports, producer George Ian Boxill tried to release an EP containing previously unreleased songs by Prince to coincide with the first anniversary of his death. Boxill asserted that he had the right to release the music. In a lawsuit commenced by Paisley Park Enterprises, Prince’s Estate disagreed and alleged that Boxill was in breach of the recording agreement that he had signed with Prince.
The Estate was initially successful in blocking Boxill’s attempts to release the EP of new music. However, according to a new report in TMZ, Boxill has now filed additional legal documents that state that the unreleased music was not the subject of a nondisclosure agreement.
Separately, as we have previously blogged, Prince died without a Will and any known children, resulting in claims from a number of possible heirs.
According to a recent news report, the Minnesota judge presiding over the proceedings had indicated that he would not make a declaration regarding the heirs of Prince’s Estate until appeals by other potential heirs whose claims had been rejected were allowed to run their course. Lawyers for Prince’s sister and half-siblings have now argued that this delay will unnecessarily increase costs and hinder the proper administration of the Estate.
We have previously blogged about the importance of carefully addressing issues regarding intellectual property and any possible rights the estate may have after the testator’s death in a testator’s estate plan. Deceased writers, musicians and other artists may be parties to agreements that bind their estates and affect the rights and control over their intellectual property.
It is generally advisable for drafting solicitors to ensure that such legal documents are reviewed as part of a creative professional’s estate planning. It may also be prudent to obtain the advice of a lawyer who specializes in intellectual property law, to ensure that the estate plan adequately addresses any possible rights the estate may have after the testator’s death. Disputes over the beneficial ownership and control of a testator’s intellectual property can result in protracted and expensive litigation.
The legal issues surrounding Prince’s Estate reiterate the importance of careful estate planning while the testator is still alive. Lack of certainty regarding the beneficiaries of the estate, the deceased’s intentions and the property/rights of the estate can significantly increase the risk that the estate will become embroiled in protracted litigation.
Other Articles You Might Be Interested In
Last week, Ian blogged on the Retirement Homes Regulatory Authority, financial abuse of the elderly, and the competency of elderly individuals to make financial decisions. As stated last week, it is unclear what the responsibilities are of a retirement home in cases where there have been loans between a resident and the licensee.
The recent Licence Appeal Tribunal decision of 2138658 Ontario Ltd. ola Seeley’s Bay Retirement Home v. Registrar, Retirement Homes Regulatory Authority is the first case to look at financial abuse in the context of the Retirement Homes Act, 2010, S.O. 2010 Chapter 11 (the “Act”). This case involved the Retirement Homes Regulatory Authority’s revocation of Seeley’s Bay Retirement Home’s licence on the basis of the alleged financial abuse of three residents, and a former resident.
The Tribunal determined that the former resident offered to grant the licensee a second mortgage, however, the resident had independent legal advice and a proper written mortgage, and as such, no financial abuse was found.
The Tribunal found financial abuse of one out of the three residents. For the first two residents, the Tribunal did not find financial abuse as they were a couple that had a long-term 25-30 year relationship with the licensee. The couple offered a loan to the licensee but he had counted the loan toward the couple’s rent and had paid off the loan at the time of the hearing. The Tribunal found that this was a trade-off, and that people who are competent to manage their own affairs ought to be allowed to make independent financial decisions, and found the loan to be “a matter of friendship and faith”.
The Tribunal found financial abuse of the third resident. Resident three lived in the home for 6 years prior to her death, and was determined to be capable. She managed her own finances and had no close family. The licensee began approaching her for money, which he applied to her rent, yet continued to borrow money beyond the amount paid of rent. There was nothing in writing, no records of the payment, and the resident had no independent legal advice. In 2016, the resident’s health began to deteriorate and she was worried that she would not be able to cover her expenses due to the amount of money she had lent to the licensee. She approached the licensee about repayment and the licensee took no action. The loans were outstanding upon the resident’s death. The Tribunal found this amounted to financial abuse as it was found to be “misappropriation” of resident money under the Act, pursuant to Regulation 166/11 and section 67.
In considering all of the claims against the residence, the Tribunal found that the loans raised concerns about the licensee’s ability to operate the home with honesty and integrity. This was exemplified due to the third resident’s dependency on the home. Moreover, the Tribunal noted that in the third case, there was harm to the resident’s peace of mind along with a risk that she would not be able to pay for her own long-term care.
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