Category: Power of Attorney

07 Feb

“Hierarchy of Needs or Which Power Of Attorney do I Need?

James Jacuta Estate & Trust, Estate Planning, Power of Attorney, Trustees, Uncategorized 0 Comments

Abraham Harold Maslow ( April 1, 1908 – June 8, 1970) was a psychologist best known for creating Maslow’s “Hierarchy of Needs” theory on fulfilling human needs in priority, culminating in self-actualization. But, he is also known for the “Law of the Instrument” or the over-reliance on the familiar. He is quoted as saying, “I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.” (The Psychology of Science 1966).

When thinking of a Power of Attorney, the temptation for an estate lawyer may be to first think of the Substitute Decisions Act.  However, there are times when the Powers of Attorney Act might be more appropriate for part of an estate plan or administration. For example, dealing with a beneficiary resident in a foreign jurisdiction can be made much more manageable with a Power of Attorney. This type of Power of Attorney does not, however, qualify as a Continuing Power of Attorney.

Another consideration is the differences in the form and wording of the Power of Attorney and the formalities of execution. As noted on page 8 of Kimberly Whaley’s  “Powers of Attorney” (2016) in a chapter by Andrea McEwan:

“The Powers of Attorney Act does not impose any formal requirements for the power of attorney document. This is in contrast to the Substitute Decisions Act which is formalistic, with a prescribed form, and validity and execution requirements.”

The Continuing Power of Attorney has strict requirements for two independent witness signatures, whereas the Power of Attorney Act does not state any witness requirements or formalities of signing.  Consideration should therefore be given to those occasions when you could rely on the Powers of Attorney Act instead of the Substitute Decisions Act.

 

 

Thanks for reading!
James Jacuta

21 Dec

Santa Claus is Comin’ to Town, and He Has Lawyered Up!

Paul Emile Trudelle Estate & Trust, Estate Planning, Power of Attorney, Trustees, Uncategorized, Wills 0 Comments

In 1934, Fred Coots co-wrote “Santa Claus is Comin’ to Town” with lyricist Haven Gillespie. The song went on to be one of the highest money-making songs of all time (so far). It has been performed by over 200 artists, including, most notably, Bruce Springsteen. The song is the basis for the 1970’s classic Christmas special of the same name.

Fred Coots died on April 8, 1985. Haven Gillespie died in 1975.

In 2015, after an eight year battle, the U.S. Second Circuit Court of Appeals held that the music rights should revert to the heirs of the Coots estate. They were previously sold to a musical publishing company. However, under U.S. copyright laws, songwriters have the right to terminate publishing contracts in certain circumstances. The Court of Appeal found that Coots had effectively given notice of the termination of the copyright, and that the copyright therefore would revert to the Coots heirs in 2016.

A similar lawsuit was commenced by the Gillespie family in 2017. The family sued the music publisher Memory Lane Music for royalties claimed to be owing to the Gillespie estate.

 

 

Happy Holidays.

Paul Trudelle

14 Dec

Interim Support and Equalization Claims

Paul Emile Trudelle Estate & Trust, Estate Planning, Power of Attorney, Trustees, Wills Tags: 0 Comments

In the recent decision of Charles v. Charles Estate, 2018 ONSC 7327, the court discussed the interplay between a claim for interim support, and claims for equalization.

There, the Applicant was the deceased’s spouse of 22 years. There was some evidence that the Applicant and the deceased may have been separated prior to the deceased’s death.

Fifteen days before the deceased died, the deceased severed the joint tenancy on the matrimonial home and other properties, transferred certain properties to his son, liquidated various RRSPs, and drew money on a line of credit secured by the matrimonial home. He also changed his will to significantly reduce the bequests to the Applicant.

The Applicant commenced proceedings for an equalization under the Family Law Act, and to set aside various transactions entered into by the deceased just prior to his death. She also commenced a claim for dependant support.

In the court decision, the court addressed the Applicant’s claim for interim support.

In deciding whether to award interim support, the court considered whether the Applicant was in need of and entitled to support. Relying on the decision of Perkovic v. Marion Estate, 2008 CanLII 52315, the court stated that the test was:

  1. whether the claimant falls within a “qualifying relationship” under the Succession Law Reform Act;
  2. whether the deceased was providing support or was under a legal obligation to provide support immediately before his death;
  3. whether the deceased did not make adequate provision for the claimant’s support.

The burden is on the Applicant to satisfy each of the three elements necessary to obtain an order for interim support on an arguable or prima facie basis.

In Charles, the court found that the Applicant was not in need of support. She earned more income than the deceased, and was the primary provider for the household. There was no evidence that the economic circumstances of the Applicant had worsened to any significant extent since the date of death.

The court did, however, order that the estate pay the interest on the line of credit incurred by the deceased.

In concluding, the court stated that the Applicant’s claim for interim support was “conflated with her property based claims”. Those claims would continue. However, they did not entitle the Applicant to claim interim support. The court did not comment on the merits of such claims.

Thank you for reading.

Paul Trudelle

12 Dec

Afraid of dying? Take your mushroom

Ian Hull Estate & Trust, Estate Planning, Power of Attorney, Trustees, Uncategorized, Wills Tags: , , , 0 Comments

Estate law is centred on asset planning for an end-of-life experience. So not surprisingly, we’ve seen just about every end-of-life situation you can imagine. I can tell you first-hand, many of these situations are painful, fearful, and depressing.

Does it have to be this way? The answer, in many cases, is “no.” We’re beginning to learn about new treatments that can help – and one of the most promising is the use of psilocybin, the active compound in hallucinogenic mushrooms.

Thank you legal cannabis

The legalization of cannabis in Canada and many U.S. states is breaking down barriers for research that was previously taboo, illegal, or underfunded. This is especially so in areas of mental health.

The treatment of physical pain with restricted drugs like morphine has long been accepted. But the use of mind-altering drugs for mental health? Not so much.

That stigma is changing. We’re on the edge of a new frontier in the treatment of “mental pain” – anxiety, depression, and fear of death – and psilocybin is front and centre.,

Research has shown that one of the most promising uses for psilocybin is in end-of-life situations. For those with a terminal illness, psychedelics not only provide relief from the terror of dying during the actual psychedelic sessions, but for weeks and months after.

According to researchers, psilocybin can create a deeper meaning and understanding of terminal situations – and is helpful in relieving the agony of the inevitability of death. Patients could reassure themselves and their loved ones that from a mental standpoint, they truly were okay. Many reported that using psilocybin was one of the most important experiences of their life. You can read more about the studies here.

Change is coming

There are calls for psilocybin to be reclassified for medical use, paving the way for the drug to be used to treat a number of mental health conditions – from fear of death, to depression, to addiction. The New York Times discussed this movement in a recent article.

This new attitude embracing research into the possible use of psychedelics for mental health is a welcome change. I look forward to the findings.

 

Thank you for reading,
Ian Hull

22 Nov

The Limits of Limitation Periods: Passings of Accounts in Wall v Shaw

Garrett Horrocks Executors and Trustees, Litigation, Passing of Accounts, Power of Attorney, Trustees Tags: , , , 0 Comments

Applications to pass accounts are unique as civil proceedings go.  The nature of the inquiries being made by the Court, the relief that a judge is empowered to grant, and the procedural considerations that apply are all features that distinguish applications to pass accounts from other civil applications.  Procedural considerations in particular have garnered some notoriety recently as a result of several notable decisions released in the past few years.  The recent decision of the Court of Appeal for Ontario (then sitting as the Divisional Court) in Wall v Shaw, 2018 ONCA 929, provides some clarity to a few of the loose ends.

In Wall, the Deceased died leaving a Will naming the appellant as estate trustee and which created two testamentary trusts for the benefit of her two children.  The Deceased’s nieces and nephews were also named as contingent beneficiaries in the event that both children died before vesting in the trust property.

The estate trustee acted for more than 10 years, but never formally passed his accounts.  Instead, the estate trustee held frequent informal meetings with the Deceased’s children to review the administration of the estate and to discuss the estate trustee’s compensation.

A dispute between the Deceased’s daughter and the estate trustee relating to the latter’s compensation eventually led the daughter to bring an application seeking an order compelling the estate trustee to pass his accounts.

The estate trustee subsequently commenced an application to pass accounts in March 2015.  In June 2015, the Deceased’s daughter filed a notice of objection to the accounts, followed in January 2016 by a notice of objection delivered by two of the Deceased’s nieces.

In response, the estate trustee brought a motion seeking to strike out the objections of the daughter on several grounds.  Notably, the estate trustee took the position that the daughter’s approval of the accounts at the informal meetings constituted acquiescence of the estate trustee’s conduct.  In the alternative, the estate trustee argued that the daughter’s objections were now statute-barred pursuant to sections 4 and 5 of Ontario’s Limitations Act or barred by the doctrine of laches.

The estate trustee was unsuccessful at first instance on all three grounds, but only chose to appeal the first ground.  Specifically, the estate trustee argued on appeal that the judge at first instance had erred in refusing to apply the two-year limitation period under section 4 of the Limitations Act.  The appeal was dismissed, and the reasons on appeal provide some procedural clarity in respect of the interplay between limitation periods and passings of accounts.

Section 4 of the Limitations Act generally provides that a “proceeding” cannot be commenced in respect of a “claim” if more than two years have elapsed since the date the claim was discovered.  The Court of Appeal took issue with each of the quoted terms.

Notably, the held that a notice of objection does not commence a “proceeding” for the purposes of section 4 of the Limitations Act.  Rather, a notice of objection ought to be viewed as a response to a proceeding that has already been commenced, being the application to pass accounts.  The Court also pointed to its prior ruling in Armitage v The Salvation Army, in which it was held that an application to pass accounts was not a “claim” pursuant to section 4 of the Limitations Act.  Accordingly, it followed that a responding objection raised in that application could also not constitute a claim.

Finally, the Court highlighted an important distinction between applications to pass accounts and other civil applications.  Unlike a traditional civil claim, the Court in an application to pass accounts is not tasked with awarding judgment in favour of one party or the other.  The purpose of an application to pass accounts to is initiate a “judicial inquiry” into the management of an estate and, if appropriate, provide redress to the estate, rather than to the beneficiaries personally.

Thanks for reading.

Garrett Horrocks

Please feel free to check our other blogs on related topics:

When Does an Attorney for Property Lose the Right to Claim Compensation?

Who Can Compel a Passing of Accounts From an Attorney for Property?

15 Nov

Section 3 Counsel: Duties to the Client and the Court in Sylvester v Britton

Garrett Horrocks Capacity, Elder Law, Ethical Issues, Health / Medical, Power of Attorney 0 Comments

One of the major facets underpinning the principles of fundamental justice in Canada is ensuring all parties to a litigation have a voice.  The ability of the judicial system to satisfy this burden is often rendered more challenging when the capacity of one of the parties is a central issue in a given proceeding.  The recent decision of the Ontario Superior Court of Justice in Sylvester v Britton, 2018 ONSC 6620, provides clarity in respect of the duties and obligations of counsel who are appointed to navigate these issues.

In Sylvester, the Applicant brought an application seeking to be appointed as guardian of property and personal care for her mother, Marjorie.  Marjorie had previously appointed two of her sons as her attorneys for property and personal care pursuant to validly-executed powers of attorney.

On consent of all parties, the Public Guardian and Trustee arranged to have a lawyer, Clarke Melville, act for Marjorie on the application in accordance with section 3 of Ontario’s Substitute Decisions Act.  Section 3 of the SDA provides that, where the capacity of a person is at issue in a proceeding, that person will be deemed to have the capacity to instruct counsel for the purposes of that proceeding.  Accordingly, the Court deemed Marjorie to have the capacity to give instructions to Mr. Melville on the application.

The Applicant disputed this presumption of capacity.  She brought a motion seeking, amongst other relief, Mr. Melville’s removal as Marjorie’s section 3 counsel and a declaration that Marjorie was not capable of instructing counsel.

The Applicant’s position on the motion was largely premised on earlier findings of Marjorie’s incapacity.  Capacity assessments performed several years earlier had revealed that Marjorie was not capable of managing her property or her personal care.  At common law, the test for capacity to manage property and personal care is generally more onerous than the test for capacity to instruct counsel.  The Applicant took the position that a finding of incapacity to manage property and personal care was sufficient to establish a lack of capacity to instruct counsel.

The Court disagreed and, in its reasons, highlighted several key points that clarify the role of section 3 counsel in the court process.  The purpose of the SDA and of section 3 in particular is to protect vulnerable individuals and to allow them to provide input, to the extent possible, on matters that impact their interests.

However, the Court also stressed that the Rules of Professional Conduct govern all solicitor-client relationships, including relations arising under section 3.  Section 3 counsel must carry out all of the duties and obligations to the Court and to the client that other counsel must observe, regardless of the particular vulnerabilities of their client.  All counsel have an obligation to canvas the wishes or instructions of their client and to advance the client’s interests.  The role of section 3 counsel differs only insofar as it is potentially more likely that he or she will be required to advise the Court if, at any point, counsel no longer believes the client has the capacity to give instructions.

This final point is the salient point that governed the Court’s decision to deny the Applicant’s motion.  The Court ultimately held that significant deference ought to be granted to section 3 counsel in assessing a client’s capacity to give instructions.  The Rules of Professional Conduct properly govern a lawyer’s duty to all clients and to the Court.  As such, no individual will be better positioned to judge an incapable person’s capacity to give instructions than the person to whom the instructions would ordinarily be given.

Accordingly, the Court will only interfere if it is apparent that the client is not able to give instructions and where it is clear that counsel has “strayed from his or her obligations to the client and to the Court.”  In all other circumstances, the Court will presume that counsel is acting with the integrity of the court process in mind.

Thanks for reading.

Garrett Horrocks

09 Nov

Wills That Don’t Say Much

Paul Emile Trudelle Beneficiary Designations, Estate & Trust, Estate Planning, Power of Attorney, Trustees, Uncategorized, Wills Tags: , , 0 Comments

In Milne Estate (Re), 2018 ONSC 4174 (CanLII), the court refused to grant probate to a will where there was uncertainty as to the subject matter governed by the will. We blogged and podcasted on this case here and here.

Historically, probate has been granted to wills that have not disposed of property. For example:

  • In Brownrigg v. Pike (1882), 7 P.D. 61 (Eng. P.D.A.), the court probated a Will that did no more than appoint an executor;
  • In Jordan, Re (1868), L.R. 1 P.& D. 555 (P.D.), the court probated a will that only appointed an executor, even though the executor had renounced;
  • In Re Blow, 1977 CanLII 1274 (ON SC), the court stated that “In my view, it is not an essential element of a testamentary instrument that it have dispositive effect (although the fact that an instrument does not purport to dispose of property may be a factor to be taken into account in determining whether it was intended to have testamentary effect”. There, however, a precatory memorandum of advice to executors was not admitted to probate;
  • In Tatnall v. Hankey (1838), 2 Moo. P.C. 342, 12 E.R. 1036, a will that merely executed a power of appointment was entitled to probate;
  • In Barnes v. Vincent (1846) 5. Moo. P.C. 201, 13 E.R. 468, the Privy Council held that a grant of probate could be made without an inquiry into the validity of an exercise of the power of appointment, or even whether the alleged power of appointment in fact existed;
  • Section 12 of the Estates Act allows for probate to be granted even if the will does not purport to dispose of any property in Ontario.

For a further and more extensive commentary on the Milne decision, see Professor Oosterhoff’s article, “What is a Will and What is the Role of a Court of Probate?”.

Thank you for reading.
Paul Trudelle

07 Nov

Warning signs – will your family fight over your estate?

Suzana Popovic-Montag Beneficiary Designations, Estate & Trust, Estate Planning, Power of Attorney, Trustees, Uncategorized, Wills 0 Comments

No one can predict the future with 100% certainty – but we all have the ability to “read some signs” to make educated guesses about what’s likely to happen.

When it comes to increasing your chances for a smooth, conflict-free estate settlement process, there are some warnings that are worth reading. Here are four to watch out for, and plan for, accordingly.

  1. Your kids don’t get along: It’s not rocket science – if your kids don’t get along while you’re alive, things are unlikely to get any better once you’re gone. Two or more of your children may not be talking to each other, but you can still talk to each. Make your estate plans crystal clear to all family members, and work to resolve potential issues now to avoid estate litigation later.
  2. There’s economic disparity between your kids: You may love your children equally, but chances are your kids aren’t equal, at least not economically. If there’s a large economic disparity, it can lead to problems. For example, let’s say you leave the family cottage to your children. The one child desperately needs money and wants to sell while the others want to keep it in the family. That’s a conflict and a potential fight. This is something that should be addressed in your estate plan after a conversation with your kids about their wishes and needs.
  3. Second marriage: You haven’t seen a fight until you’ve seen children rise up to keep a parent’s estate out of the hands of a second spouse. It can get ugly. Yes, you may need to provide for a second spouse after you die, but don’t unintentionally disinherit your kids in the process. Careful planning and good communication is all it takes.
  4. You’ve given one child a benefit during your lifetime, but not the others: Let’s say you want to help all three of your adult children with a down payment on a home. You give $100,000 to your eldest but then die unexpectedly before the other two are ready to enter the housing market. While your kids might figure out a way to equalize things, don’t count on it. If you intend to treat your kids equally, make sure any substantial gift already made is reflected in your planning.

The solution? Plan now, talk now

Planning and communication are the key. This article has some great tips on how to make it happen.

Thanks for reading!
Suzana Popovic-Montag

23 Oct

Can a Guardian Settle a Trust?

Noah Weisberg Capacity, Estate Planning, Ethical Issues, Guardianship, Power of Attorney Tags: , , , , , , , , , , , 0 Comments

Does an attorney, or guardian, have the power to change a grantor’s estate plan?

According to section 31(1) of the Substitute Decisions Act, a guardian of property (or attorney for property) has the power to do on the incapable person’s behalf anything in respect of property that the person could do if capable, except make a will.

The statute, however, is deceptively simple.  Can a guardian transfer property into joint tenancy?  Can a guardian sever a joint tenancy?  Can a guardian change a beneficiary designation on a RRSP, RRIF or insurance policy?  Can an inter vivos trust be established or an estate freeze undertaken to save taxes?  There are numerous cases which have tested these issues.

For instance, in Banton v Banton, Justice Cullity found that although the grantor’s attorneys had the authority to create an irrevocable inter vivos trust, they nonetheless breached their fiduciary obligations owing to the grantor, in creating the trust.

The irrevocable trust provided for income and capital at the trustee’s discretion for the grantor’s benefit during his lifetime and a gift over of capital to the grantor’s children, who were also the attorneys.  The scheme of distribution of the irrevocable trust was the same as provided for in the grantor’s will.   However, the court found that the fact that the remainder interest passed automatically to the grantor’s issue defeated the grantor’s power to revoke his will by marriage and would deprive his common law spouse of potential rights under Parts II and V of the Succession Law Reform Act and Part I of the Family Law Act.  The court found that the gift of the remainder of the interest went beyond what was required to protect the grantor’s assets.

Justice Cullity stated:

“I do not share the view that there is an inviolable rule that it is improper for attorneys under a continuing power of attorney to take title to the donor‘s assets either by themselves or jointly with the donor .  This must depend upon whether it is reasonable in the circumstances to do so to protect or advance the interest, or otherwise benefit, the donor.”

Noah Weisberg

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22 Oct

Fiduciary Accounts – Yes, Form Matters

Noah Weisberg Executors and Trustees, Guardianship, Passing of Accounts, Power of Attorney Tags: , , , , , , , , 0 Comments

In the Estate of Divina Damm the Court answers the following question – what form of accounts must a guardian of property use when filing an application to pass accounts?

The facts in Re Damm Estate are not remarkable.  A guardian of property commenced an application to pass accounts in accordance with Rule 74.18 of the Rules of Civil Procedure seeking court approval of her accounts.  No objections arose with respect to the accounts, such that the guardian proceeded to file the application ‘over the counter’ as an unopposed application to pass accounts.

Notwithstanding that there were no objections, the Court refused to approve the accounts.  The Court was concerned with the lack of detail and itemization in the entries, as well as the failure to comply with Rule 74.17.  The judge tried to “…link all numbers listed in the draft judgment with information presented in the accounts but [was] unable to do so – because the accounts are not in proper form”.

Interestingly, the judge considered whether smaller estates should be permitted to file accounts in a simple format, but noted that it was for the Legislature and the Rules Committee to consider.

Accordingly, the Court directed the guardian to re-serve and re-file the accounts prepared in compliance with Rule 74.17.

Noah Weisberg

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