One of the first considerations that must be carefully reviewed when considering a support claim is the question of "Who is a dependant?" Section 57 of the Succession Law Reform Act defines a "dependant" as:
(a) the spouse of the deceased,
(b) a parent of the deceased,
(c) a child of the deceased, or
(d) a brother or sister of the deceased,
to whom the deceased was providing support or was under a legal obligation to provide support immediately before his or her death.
Each of the terms "child", "parent" and "spouse" is further defined by section 57 as follows:
- "child" means a child as defined in subsection 1(1) and includes a grandchild and a person whom the deceased has demonstrated a settled intention to treat as a child of his or her family, except under an arrangement where the child is placed for valuable consideration in a foster home by a person having lawful custody;
- "parent" includes a grandparent and a person who has demonstrated a settled intention to treat the deceased as a child of his or her family, except under an arrangement where the deceased was placed for valuable consideration in a foster home by a person having lawful custody;
- "spouse" means a spouse as defined in subsection 1(1) and in addition includes either of two persons who,
- (a) were married to each other by a marriage that was terminated or declared a nullity, or
- (b) are not married to each other and have cohabited,
(i) continuously for a period of not less than three years, or
(ii) in a relationship of some permanence, if they are the natural or adoptive parents of a child.
The definitions provided allow for some scope with respect to a class of dependants.
There are also questions as to the meaning of the requirement that the deceased was "providing support" and the meaning of the phrase "immediately before his or her death".
We will look into these legal questions in the context of the definitions and the case law in future blogs.
All the best, Suzana and Ian. ——–
Some of those persons that may make dependant’s relief claims include:
(a) the deceased’s wife or husband;
(b) a brother or sister of the deceased;
(c) a former wife or husband of the deceased;
(d) a child or grandchild of the deceased; and
(e) a person treated by the deceased as a child of the family in relation to any marriage of the deceased.
The limits set out by the legislators on testamentary power are not firmly entrenched; however, there is still a struggle between the choice of providing a reasonable level of support for dependants and the enforcement of a moral duty of a deceased to divide his or her estate amongst his or her dependants. As for the powers of the Court to make an order for support, section 58(1) of the Succession Law Reform Act provides as follows:
- 58. (1) Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the Court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants or any of them.
Some preliminary considerations include:
(a) support claims are paid out of testate or intestate estates;
(b) "proper support" is truly a term of art and we will explore it in future blogs;
(c) the "Court" means the Superior Court of Justice;
(d) the claim must be made on Application;
(e) much like "proper support", "adequate provision" is a term of art that needs careful consideration; and
(f) the claim may be paid out of the assets of the estate, meaning estate assets in the usual sense plus any "clawed back" assets referred to in section 72.
Ian has just returned back from spending some time at the Podcasters Across Borders Conference. The Conference was a chance for Podcasters all over the world to get together and talk about their Podcasting experience. There were Podcasters from as far a way as the U.K. and throughout Canada and the U.S.
Friday night was a real highlight as the attendees were treated to a speech from none other than Shelagh Rogers of CBC’s Sounds Like Canada. Shelagh was just back from Edmonton where she had her hair cut off in support of her friend who is suffering from cancer. Shelagh did this to raise money for the local Edmonton cancer research centre.
Shelagh is a supportive Podcaster and has her own Podcast. She told the audience about her Podcasting experience and she offered some important advice.
She reminded us to always use a sentence beginning with a subject followed by a verb and an object. She suggested that we use direct and active verbs when we speak and NEVER use terms like "everyone". She indicated that we should talk to the listeners as though they are right in the room with you and not to address an audience generally.
In an effort to discuss claims against an estate that relate to dependant support and to claims of the surviving spouse, we thought it would be interesting to embark on a mini-series on the topic.
Family Law Act Claims
Subject to a contract to the contrary, section 6(1) of the Family Law Act provides for the right of the surviving spouse to make an equalization claim against the assets of the estate.
Since the 1970s, a general statutory proposition prevails that the value of "family property" should be split up equally when the marriage ends, regardless of which spouse holds to the property.
With the coming into force of the Family Law Reform Act, 1986 (R.S.O. 1980, c.152 (repealed and replaced by the Family Law Act 1986, S.O. 1986, c.4)), Ontario established a deferred community of property regime, which added a new dimension in relation to its impact upon surviving spouses and estates of deceased spouses and other persons who have an interest in their estates.
At page 43 of the book Naked Conversations, the authors use a classic quote from a great blogger who describes it as follows: "Blogging is word of mouth on steroids".
A well-known legal blogger, Lawrence Lessig, also comes highly recommended in the book. T
he authors point out (at page 87) that they were a bit surprised by the number of lawyers collaborating on blogs, as they perceive the profession as being the most competitive. They illustrated the point by taking the readers to three seeming competitors in the area of patent law.
Attorneys Stephen M. Nipper, Douglas Sorocco and J. Matthew Buchanan are all patent lawyers with an interest in blogging. Each of them started blogs within three weeks of each other and then discovered each other through the blogosphere. In a short time, they found themselves to be trusted colleagues, exchanging email, talking on the phone and they even started collaborative forms of writing by using software that allows groups to collaborate by editing each other’s words on an Internet site. The result of working together produced the creation known as Rethink(ip), a collaborative blog addressing how lawyers and clients should work together on IP issues.
The blogosphere is something that needs to be transparent, open and honest. The authors point out (at page 94) that consultants/lawyers need to get over an inclination to hold their cards close to their chests. They point out that if you are afraid to share ideas, you shouldn’t blog.
The authors also point to a classic quote from Walt Disney when someone asked him if he wasn’t worried about telling so many people about his ideas. In response, Disney said, "Those were last years ideas".
A classic question that arises when considering the whole concept of blogging is whether or not blogging is in fact marketing? In essence, the authors answer this question by saying that if blogging is your only marketing element, then you are entirely missing the boat. Blogging needs to be part of a marketing plan and not a sole entity. The advantage to blogging is that (page 94-95) blogs help organizations get closer to customers and customers closer to brands. Blogs are a powerful tool that few can afford to ignore. According to the authors, the bottom line is if your target audience wants a blog, you had better blog.
Finally, if you are ready to start to blog, then the authors (at page 172) suggest that you read a bunch of blogs. An easy starting point is to use the blog category in Goggle as a key word search engine. Based on our experience, the keyword searches are all that you need to be able to properly start a searching process.
Best of luck, Suzana and Ian! ——–
In Chapter 2 of the book Naked Conversations, the authors ask the question, "What is a blog and who cares?" They describe a blog as nothing more than a personal website, with content displayed in reverse chronological order, where new posts are placed at the top of the page instead of the bottom making it easy to see what has changed. In most cases, site visitors can identify the author and can leave comments for others to see. The blogs themselves are generally linked between each other by way of hyperlinks and, once you link to a blog, you are taken to other blogs in the global network called "blogosphere".
As the authors describe (at page 27), the most important aspect of the blog is that it is conversational, and while face-to-face meetings are a preferred route to go in communications, the reality is that it is impossible to make such meetings with every customer. The authors indicate that businesses essentially pursue the conversations because they build trust within their own organizations and with clients, customers and suppliers. The authors describe six key differences between blogging and other communication channels. These differences are as follows (page 28):
- 1. Publishable. Anyone can publish a blog. You can do it cheaply and post often. Each posting is instantly available worldwide.
- 2. Findable. Through search engines, people will find blogs by subject, by author, or both. The more you post, the more findable you become.
- 3.Social. The blogosphere is one big conversation. Interesting topical conversations move from site to site, linking to each other. Through blogs, people with shared interests build friendships unrestricted by geographic borders.
- 4. Viral. Information often spreads faster through blogs than via a news service. No form of viral marketing matches the speed and efficiency of a blog.
- 5. Syndicatable. By clicking on an icon, you can get free "home delivery" of RSS-enabled blogs. RSS lets you know when a blog you subscribe to is updated, saving you search time. This process is considerably more efficient than the last-generation method of visiting one page of one website at a time looking for changes.
- 6. Linkable. Because each blog can link to all others, every blogger has access to millions of other bloggers.
The authors note that you can find each of these elements elsewhere. None, however, in itself is all that remarkable, but the combination of them, plus the two-way Internet communication, is phenomenal. More to come on a later blog …
All the best, Suzana and Ian. ——–
In general terms, the form of the accounts should provide all essential information to all persons interested or entitled to an accounting in the Estate or Trust. Generally speaking, the accounts should be prepared in a manner that is capable of being understood by a person of average intelligence, literate in English, and familiar with basic financial terms, who has read it with care and attention. Accordingly, Executors and Trustees preparing their accounts should be careful to avoid technical terms such as "debit" and "credit", which are generally not known to persons who are not familiar with bookkeeping and accounting practices.
One of the main problems encountered by Executors and Trustees in answering requests for information or providing explanations to beneficiaries is that the beneficiaries frequently do not read the accounts with the required care and attention which is essential if the accounts are to be understood.
On the cover of the accounts, a short statement of the purpose of the accounting, such as "The Trustees present these accounts for the approval of the Judge and to acquaint interested parties with the administration of the Estate and its proposed distribution", might well be added.
In Ontario, Rule 74.17 of the Rules of Civil Procedure sets out the specific expectations of this relatively precise art of accounting. It can be seen, therefore, that any accounting by Executors and Trustees has both a broad and a narrow aspect to it.
In the broad sense, it is an obligation whereby the Executor or the Trustee furnishes information to interested parties on an ongoing basis concerning the administration of the Estate or Trust.
In the narrow sense, the Trustee’s accounting relates to the accounts prepared by him or her at the close of his or her administration (or some appropriate intermediate stage) so as to reflect the transactions that have occurred, with a view to discharging the trustee from liability for his or her stewardship.
Usually, a Trustee informs the beneficiaries of the results of his or her administration on an interim basis. This statement usually sets out the income or revenue received, the expenses incurred and the net result of investments, together with a list of assets.
Interim reporting statements vary widely in the manner of their presentation and the detail of the information they contain. To a greater or lesser degree they are designed to demonstrate the performance of the trust and frequently resemble the form of corporate financial statements.
Some of the duties and obligations of an Executor or Trustee in relation to accounting to beneficiaries are as follows:
- 1. To keep proper accounts of the trust or estate, which should be clear and accurate and rendered at appropriate intervals to the beneficiaries;
- 2. The accounts must be kept distinct from other accounts;
- 3. Receipts or cancelled cheques and vouchers must be preserved to support entries on both the credit and debit side of the account;
- 4. To produce to any beneficiary the accounts when reasonably requested. In the case of income or revenue beneficiaries, accounts must be rendered at reasonable intervals without being requested by the beneficiaries entitled to such income or revenue. In the case of residuary beneficiaries, accounts should be presented when the interest falls into possession. These beneficiaries are entitled to inspect and investigate the accounts, vouchers and other documents of the trust or estate, including the will or trust deed. They are also entitled to such full and accurate information regarding the state of the trust property and the administration generally as is or ought to be within the knowledge of the Trustee. Thus, the accounts must be kept in such a manner that they will clearly show how all the monies or assets received have been disbursed or otherwise disposed of, and the ultimate distribution among the beneficiaries of the available Estate.
- It goes without saying, of course, that beneficiaries who are given general or specific bequests or devises and who have received these bequests in full are not entitled to any further accounting. If, for any reason, the Trustee cannot keep the accounts herself, she is under a duty to employ a competent person to do so, and these costs will generally be chargeable out of her compensation, as it is her duty to keep the accounts.
- 5. To make all beneficiaries fully acquainted with their rights;
- 6. To disclose any and all breaches of trust;
- 7. To allow all beneficiaries sufficient time to investigate the accounts;
- 8. To ensure that all beneficiaries have competent and independent advice in their investigation of the accounts; and
- 9. To notify all beneficiaries interested of any Court audit.
Our social media leads for today’s blog are, as usual, just suggestions:
Open-Source Podcast Players: amarok
Search Engines and Directories for Podcasts:
podcast 411 (reflects numerous directories)
vodstock (listing video podcasts and "vlog" directories as of Nov.10, 2005)
All the best, Suzana and Ian. ——–
INDEMNITIES AND RELEASES FOR TRUSTEES – Acknowledgment, Release, Discharge, Receipt, and Indemnity – Part IV
Ultimately, where a trustee administers the assets of a trust, the two most effective and important releases that are available to be obtained are (1) a Clearance Certificate from Revenue Canada; and (2) an Order of the Court in a Passing of Accounts.
Having said that, while a Clearance Certificate is of course sought in most circumstances, a formal Passing of Accounts is not always obtained by a trustee.
From a practical standpoint, where all of the beneficiaries of a trust are sui juris, the trustee has the opportunity to obtain a Clearance Certificate and then merely circulate a release to all persons with an interest in the trust. In so doing, some consideration must be given to the question of independent legal advice and whether or not it is necessary to insist that a beneficiary obtain such prior to signing the release. Without the benefit of independent legal advice, there is the question as to the strength and enforceability of any release.
None the less, in practical terms, many estates and many trusts are wound up on the basis of an execution of the appropriate release by the beneficiaries.
From a practical standpoint, when seeking a final release from a beneficiary, a copy of the accounts should be provided, and these accounts may be in an informal format or in Court format, depending on the circumstances.
A condition contained in a will to execute a release is enforceable and, upon refusal to do so, the legatee may forfeit the gift: see Williams on Wills (7th Ed.) Butterworths 1995 at p. 374. Furthermore, it has been held that, where there is a requirement in a release that it be executed within a stated time, this must be complied with: see Simpson v. Vickers (1807) 14 Ves. 341.
The form of a release or receipt depends on the nature of the gift itself. For example, when a beneficiary receives a specific bequest, he or she should only need to provide the person who presented the gift with an acknowledgement of receipt of the particular bequest received.
On the other hand, a residuary beneficiary has a right to consider pursuing a formal Court audit or should be expected to sign an acknowledgement, release and indemnity.
In conclusion, the substantive issues relating to the whole question of release, indemnity and receipt are important to keep in mind when you are dealing with the form of a receipt, acknowledgement or indemnity.
Best wishes, Suzana and Ian. ——–