Category: Power of Attorney

10 Oct

The great estate – 5 ways to make it happen

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

As estate litigators, we’ve seen a lot of bad estates and bad estate situations. The good news is because we know the bad, we can advise clients on how to avoid it and make their estate a great one. No uncertainty, no delays, no conflicts, no nasty tax surprises.

If you want to make your estate a great one, here are five essential elements that can make it happen.

  1. You’ve provided a clear path to the documentation

Ideally, your executor needs the original copy of your will – as do courts to ensure a smooth probate process. So, don’t make your will (and any other estate documents) hard to locate. Whether it’s stored at your lawyer’s office, or registered with the court, or stored in a filing cabinet at home, make sure that you and your loved ones remember where your will is and know how to access it. We discuss this issue in more detail here.

  1. Your estate assets are easy to identify

Don’t assume your family and your executor know what you own. Many of us scatter our assets and accounts more than we realize. Make a list of all bank and investment accounts, insurance policies, major assets, and any virtual assets of value and keep this list with your will or ensure your named executor has a copy.

  1. Your executor is trustworthy and can access the help they need

When choosing an executor, trust is essential as the person selected must be capable of acting impartially on behalf of your estate – regardless of their personal feelings about your estate and the beneficiaries.

While your executor doesn’t need to be an accountant or lawyer or investment advisor, they do need to be able to hire the expertise that your estate might require. In other words, they need to know what they don’t know, and have the common sense to seek out the tax, accounting, and legal expertise that may be needed.

This article provides a great “quick list” of things to consider when choosing an executor.

  1. Everyone knows what’s in your will – in advance

It is dangerous to assume that your intended beneficiaries know what is in your will and have no questions or concerns. Talking today about your intentions and your family members’ expectations lets you address any contentious issues while you’re alive – and avoid potential conflicts after you’re gone.

Even the most well-intentioned gifts – a charitable bequest, the china cabinet to a niece, the vintage hockey cards to a grandson – can lead to questions, hurt feelings and potential conflicts.

Don’t let it happen. Make sure that everyone who might be touched by your will at death knows exactly what’s in it.

  1. Tax planning in place – if needed

You’re deemed to have disposed of your capital assets at their fair market value when you die. This means your estate is liable for capital gains taxes on assets that have increased in value during your lifetime. Your executors may be forced to sell estate assets to pay for the tax liability – and a forced sale may mean the assets are sold for less than their fair value.

There are many strategies available to help cover an estate’s tax liability, from the use of trusts to the purchase of life insurance. Make sure you’ve considered whether tax planning is needed for your estate, and put a strategy in place if needed.

Thanks for reading … Have a great day!
Suzana Popovic-Montag

28 Sep

Temporary Guardians of Property

Paul Emile Trudelle Estate Planning, Guardianship, Power of Attorney Tags: , , 0 Comments

The court has the authority under the Substitute Decisions Act to appoint a guardian for property. However, does the court have the authority to appoint a temporary guardian for property? According to the decision in Ballinger v. Marshall, 2018 ONSC 3020, the answer is Yes.

In Ballinger, Ms. Marshall’s son applied for a declaration that Ms. Marshall was incapable of managing property and personal care, and for an order appointing himself as her guardian for property and personal care.Capacity Assessment

In an interim order, the court ordered that Ms. Marshall be assessed. The court also ordered that counsel be appointed by the Public Guardian and Trustee to represent Ms. Marshall (“s. 3 counsel”).

Ms. Marshall refused to be assessed. A further motion was brought to compel Ms. Marshall to be assessed, which order was granted. Still, Ms. Marshall still refused to be assessed.

The court considered s. 25 of the Substitute Decisions Act, which sets out what may be contained in an order appointing a guardian. Section 25 provides that an order appointing a guardian for a person must include a finding that the person is incapable of managing property. Further, the court may make the appointment for a limited period as the court considers appropriate, and impose such conditions as the court considers appropriate.

The court held that this gives the court jurisdiction to make a temporary order. Support for this was found in the Divisional Court decision of Bennett v. Gotlibowicz, 2009 CanLII 33031 (ON SCDC).

In Bennett, a court-ordered assessment concluded that the person was incapable. In Marshall, there was no such assessment evidence: due to Ms. Marshall’s refusal to undergo an assessment. The court was, however, able to rely on the son’s observations with respect to his mother’s behavior to come to a conclusion that, on a balance of probabilities, Ms. Marshall did not have capacity to manage her property.

The son was appointed as guardian. However, the guardianship was only a temporary one, until:

  • Ms. Marshall participates in a capacity assessment and the capacity assessment is returned to the court for consideration;
  • the matter is returned to the court for further directions; or
  • November 15, 2018.

The court also gave specific direction with respect to what the guardian could do with Ms. Marshall’ property. He was to sell her house, and pay her debts. The proceeds of the sale, after the payment of debts, was to be held in a law firm’s trust account pending the further order of the court. The son had proposed that an affordable condominium be purchased for Ms. Marshal as alternative accommodation. However, the court did not allow for this, stating that “I believe that it is best that this process proceed slowly”.

Have a great weekend.

Paul Trudelle

21 Sep

Removal of an Attorney for Property

Paul Emile Trudelle Beneficiary Designations, Capacity, Estate & Trust, Estate Planning, Executors and Trustees, Power of Attorney, Trustees, Uncategorized, Wills 0 Comments

A recent Superior Court of Justice decision illustrates the test to be met where one is alleging that an attorney for property should be removed.

In Crane v. Metzger, 2018 ONSC 5382 (CanLII), Ms. Metzger was determined to be incapable of managing her property. While capable, she appointed her brother, Mr. Cason, as attorney for property. Her daughter, Ms. Crane brought an application to remove Cason as attorney, and to have Crane appointed as guardian. Crane alleged impropriety on the part of Cason.

In determining the application, the court set out the test for removal. Citing the decision of Teffer v. Schaefers, 2008 CanLII 46929 (ON SC), the court stated that the courts have generally taken the view that a written power of attorney made at the time when the donor was of sound mind is simpler to deal with and gives the donee more flexibility in dealing on behalf of the donor. Continuing with the appointment respects the wishes of the donor. Thus, in order to set aside the power of attorney, “There must be strong and compelling evidence of misconduct or neglect on the part of the donee duly appointed under an enduring power of attorney before a court should ignore the clear wishes of the donor and terminate such power of attorney.”

The court summarized the test for removal as follows:

  1. There must be strong and compelling evidence of misconduct or neglect on the part of the attorney before a court should ignore the clear wishes of the donor, and
  2. The court must be of the opinion that the best interests of an incapable person are not being served by the attorney.

In Crane, Crane submitted a “lengthy list of grievances” in her affidavit materials. These grievances, while not fully enumerated in the decision, were apparently answered by Cason in his affidavit materials.

The court concluded that Cason was doing the best he could in the circumstances. There was no evidence of financial mismanagement, and Cason’s accounts were in order.

In dismissing the Application, the court also focused on two incidents where Crane acted improperly, which were said to seriously affect her credibility: one where Crane said that she was taking her mother to Wasaga Beach, but in fact took her to Seattle (and thereby putting her and her property at risk), and another where Crane took her incapable mother to the bank to withdraw $10,000. These two events “make her position untenable. … For these reasons, where there is a conflict between the evidence of the parties, I accept Mr. Cason’s evidence and reject that of Ms. Crane.”

The test for removal of a properly appointed attorney is a difficult one to meet. Further, the alternative, being the appointment of a guardian, must be compelling. The best interests of the incapable will be an overriding consideration.

Have a great weekend.

Paul Trudelle

20 Sep

“International Inheritance” – Canada and Ukraine

James Jacuta Beneficiary Designations, Estate & Trust, Estate Planning, Power of Attorney, Uncategorized Tags: , , 0 Comments

In 2016, there were an estimated 1,359,655 persons of Ukrainian origin residing in Canada, making them one of Canada’s largest ethnic groups. Because this is a community that is now overwhelmingly born in Canada only a small percentage have knowledge of the Ukrainian language. However, many have cultural, family, and other ties to the country of origin of their grandparents. There are many aspects of international inheritance and estates that involve assets and beneficiaries in both countries as a result of these historic ties.

Ukraine is a European continental law country, with a population of 44 million, in which notaries deal with estates or “successions”. The “Certificate of Right to Inheritance” is the Ukrainian equivalent of the “Letters of Administration” or “Letters Probate”  or a “Certificate of Appointment of Estate Trustee” which are used in Canada.

It should be noted that under Ukrainian legal procedures, the right to assets of a decedent is based upon the terms of a will, if any, or in accordance with the Ukrainian law on intestate succession.  For example, if a wife dies leaving a husband and two living sons but left no will, her estate would be transferred to her heirs, namely her sons and husband pursuant to the Civil Code of Ukraine, in equal shares. In the case where one of the sons subsequently dies leaving three children, then the son’s share would be transferred to his beneficiaries, namely his wife and three children.

Also interesting, according to the Civil Code of Ukraine, a beneficiary (testamentary or legal heir) has the right to renounce their share in the Deceased’s estate in favor of another beneficiary. So, in order to minimize legal formalities and respectively notarial costs and expenses, beneficiaries can renounce their shares in an estate in favor of another beneficiary by completing a document in front of a notary.

If you are interested in further information on the topic of international inheritance we are pleased to assist, along with our lawyer colleagues in Ukraine.

Thanks for reading,
James Jacuta

27 Aug

Predatory Marriages: A Growing Concern in Ontario

Kira Domratchev Capacity, Elder Law, Estate & Trust, Estate Planning, Guardianship, Litigation, Power of Attorney, Wills Tags: , , , , , , , 0 Comments

We sometimes hear about an elderly person marrying a much younger person. What we often do not consider, however, is the possibility that such a marriage is entered into by a “predatory” spouse in order to take advantage of an elderly victim with the ultimate goal of assuming control of his or her finances.

The “predator” is often a caregiver or a family friend or neighbour. In most cases, it is a person who uses a position of trust to cause an elderly victim to change a Will, a power of attorney, an insurance policy designation or other documents. It is also not uncommon for inter vivos transfers to be made while the senior is alive.

According to Ontario law, the act of marriage grants the new spouse certain property rights, specifically with respect to the matrimonial home and spousal support. The most significant effect of a marriage, however, is the fact that the Succession Law Reform Act, revokes any Will executed prior to the marriage. To make matters worse, predatory marriages often occur in private such that the senior’s family members are not aware that he or she has married.

The evidentiary burden imposed upon the elderly victim’s adult family members to prove that a marriage should be declared void as it is a marriage of a “predatory” nature is significant.

Why is it so tough to show that a marriage is void?

Capacity is a fluid concept. It means that a person could have capacity for one task and no capacity for another, as capacity is time and situation specific. Capacity to enter into a marriage, is the lowest threshold of capacity. As such, a person can be entirely capable to enter into a marriage but may be incapable of managing his or her own financial affairs.

In addition, a person likely does not just lose capacity in a day; it is a gradual process such that there is a “grey zone” between having capacity and having no capacity at all. It is in that “grey zone” that a predator will take advantage because a person may start forgetting things but is otherwise capable for all intents and purposes.

Because of that, many are of the opinion that Ontario laws make seniors an easy target for “predatory marriages”. Will there be a change in the law coming our way, in light of the growing phenomenon of such marriages? Only time will tell.

For more information regarding this growing concern and the manner in which this issue has been treated by the courts, please see a paper by Kimberly Whaley of WEL Partners on Predatory Marriages.

Thanks for reading.

Kira Domratchev

12 Jul

International Inheritance and doing money transfers

James Jacuta Beneficiary Designations, Estate & Trust, Estate Planning, Power of Attorney, Trustees, Uncategorized, Wills Tags: , , 0 Comments

Once  you have completed  administration of all of the assets and dealt with all of the tax and other issues on an estate you then might face the problem of how to actually transfer money to a beneficiary resident outside of Canada. The wire transfer procedure will vary depending on which financial institution you use. Some will require double or multiple signatures on fax authorization documents. Others, with online cash management systems, will require duplicate approvals, often required to be on separate computers, with unique users and different passwords and logins.

Perhaps, most importantly, to transfer an international inheritance by wire you will need a SWIFT code designating the receiving bank branch. You will also need the name, address, and account number of your beneficiary and the name, address, and branch number of the receiving bank.  SWIFT Codes are also called BICs and can be either 8 or 11 characters long.

What is a SWIFT code? The acronym SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication.  This organization has been designated by the International Organization for Standardization (ISO) as the bank registration authority pursuant to ISO 9362. SWIFT codes (also called BIC or Bank/Business Identification Codes)  are used when transferring money between banks, particularly for international wire transfers. You should also be aware of the term International Bank Account Number (IBAN) pursuant to ISO 13616, as in the Eurozone, you’ll always need an IBAN and a SWIFT code. IBAN consists of up to 34 alphanumeric characters comprising: a country code; two check digits; and a number that includes the domestic bank account number, branch identifier, and potential routing information. Banks in the USA use SWIFT codes, but they don’t use IBANs. There are 35 countries in the extended Eurozone which are also within the SEPA (Single Euro Payments Area) which require IBAN numbers.

You will face other issues as well when doing an international money wire transfer, among which are what currency to transfer. Canada dollars or US dollars or Euros? What is the exchange rate and how will this be reflected in the amount received? What fee will your bank take for doing the transaction and will this fee amount be shown separately or taken off the funds transferred? What fee will be taken by the receiving bank? Is the receiving account able to receive the money in the currency sent or are there local restrictions? Are there issues with the receiving bank being sanctioned and subject to special restrictions?

One should take care with the transfer of money by wire internationally, which can be complicated and time consuming. But, the potential transfer of large sums of money into an incorrectly designated bank account is an error best avoided.

Thank you for reading this!
James Jacuta

07 Jun

Resigning as Power of Attorney for Property

Stuart Clark Power of Attorney Tags: , , , , , , , , , , 0 Comments

Being a Power of Attorney for Property can often be a difficult and thankless job. It is not unforeseeable that, after originally accepting the job, circumstances may arise which leads the Attorney for Property to want to resign. But how do you go about actually resigning as Attorney for Property? Is it enough to simply stop acting as Attorney for Property, or to loudly scream “I quit!” to those that have caused you the frustration, or are additional steps required for the resignation to become effective?

The resignation process for an Attorney for Property is governed by section 11(1) of the Substitute Decisions Act, which provides:

An attorney under a continuing power of attorney may resign but, if the attorney has acted under the power of attorney, the resignation is not effective until the attorney delivers a copy of the resignation to,
(a) the grantor;
(b) any other attorneys under the power of attorney;
(c) the person named by the power of attorney as a substitute for the attorney who is resigning, if the power of attorney provides for the substitution of another person; and
(d) unless the power of attorney provides otherwise, the grantor’s spouse or partner and the relatives of the grantor who are known to the attorney and reside in Ontario, if,
(i) the attorney is of the opinion that the grantor is incapable of managing property, and
(ii) the power of attorney does not provide for the substitution of another person or the substitute is not able and willing to act.

As a result of section 11(1) of the Substitute Decisions Act, if an Attorney for Property wishes to resign from their position they must put such resignation in writing, which must then be delivered to the certain individuals, including the grantor, any other Attorneys for Property named in the document, as well as the grantor’s spouse and next-of-kin if the grantor is incapable and the Power of Attorney does not provide for a substitute Attorney for Property or the substitute is not willing or able to act. Once the resignation has been received by all of such individuals, the resignation is effective, and the individual is no longer the grantor’s Attorney for Property.

It should of course be noted that resigning as Attorney for Property would not release the individual of any liability for their historic administration of the grantor’s property. To do so, the resigning Attorney for Property would likely have to commence an Application to Pass Accounts regarding their management of the grantor’s property, or seek a release from the grantor if the grantor was still capable. This, however, is a topic for a further blog on a different day.

Thank you for reading.

Stuart Clark

29 May

Clarifying End of Life Wishes

Noah Weisberg Power of Attorney Tags: , , , , , , , , 0 Comments

There is a great scene in the movie, The Post, where the Washington Post has to decide whether to publish the Pentagon Papers.  If the posting ‘damages national security’, they will be faced with a lawsuit.  The subjectivity of what may damage national security, and the discussion that ensued between the lawyers, board members, and journalists at the Post got me thinking about end of life wishes and the use of boilerplate clauses.

Almost all powers of attorney for personal care include language addressing end of life decisions.  Common is the boilerplate ‘no heroic measures’ clause, which often reads as follows, “…if there is no reasonable expectation of my recovery…I be allowed to die and not be kept alive by artificial or heroic measures”.

But what does ‘heroic measures’ actually mean?  For some, such as in Bonnie Grover’s 1995 article in the Journal of Law & Policy:  “heroic measures conjures up visions of brilliant and daring doctors, enormously skilled nurses and technicians, high-tech machines, masses of tubing and bottles, and perhaps even a patient lying somewhere amongst it all…”.  For others, “…medical practice recommends use of heroic measures if there is a scintilla of a chance that the patient will recover, on the assumption that the measures will be discontinued should the patient improve”.  Differing interpretations go on and on.  So what should be done about it?

To ensure that end of life wishes are carried out as intended, grantors, in addition to making a power of attorney, should consider making a living will/advance directive, and discuss their wishes with their attorney.  Clear instructions and wishes should also be conveyed to the drafting solicitor.

Drafting solicitors should review end of life clauses in detail with their client, make sure they are understood, and ensure that detailed notes are taken.

Noah Weisberg

Find this blog interesting, please consider these other related blogs:

22 May

How can you spend a donor’s money? Two core considerations

Natalia R. Angelini Power of Attorney Tags: , , , 0 Comments

For the many who take on the fiduciary role of an attorney for property, there is often little or no education received on one’s duties and obligations. The sole guidance often provided is from the language of the power of attorney document itself.  It is rare, I would expect, that an attorney seeks out independent legal advice on the issue, which may in part be why we see so many cases in our practice where attorney spending is challenged. This blog serves as a refresher on the issue.

Obligated Spending

The legislation (Section 37(1) of the Substitute Decisions Act (“SDA”)) provides that a guardian or attorney for property must make certain expenditures out of the assets of the incapable person, listed in priority as being:

  1. Expenditures reasonably necessary for the person’s support, education and care.
  2. Expenditures reasonably necessary for the support, education and care of the person’s dependants (“dependant” is defined as a person to whom the incapable person has an obligation to provide support).
  3. Expenditures that are necessary to satisfy the person’s other legal obligations.

The expenditures may only be made if the assets of the incapable person are sufficient to satisfy them.  The guiding principles are that the value of the property, the accustomed standard of living of the incapable person and his or her dependants and the nature of other legal obligations are to be taken into account.

Optional Expenditures

An attorney may make gifts or loans to the person’s friends and relatives, and may make gifts to charities (Section 37(3) of the SDA).  The policy guidelines include:

  1. Gifts or loans may be made only if there is reason to believe, based on the intentions expressed prior to becoming incapable, that he/she would have made these gifts if capable.
  2. Charitable gifts may be made only if, (i) the incapable person authorized the making of charitable gifts in the power of attorney document, or (ii) there is evidence that the person made similar expenditures when capable.
  3. The gift shall not be made if the incapable person expresses a wish to the contrary.
  4. The SDA sets limits on the quantum of charitable gifts.

With these parameters in mind, coupled with carefully documenting all expenditures and retaining supporting vouchers, an attorney for property can hope to have a smoother ride when satisfying accounting obligations in respect of the administration.

Thanks for reading and have a great day,

Natalia R. Angelini

 

Some other blog posts that might interest you are:

How Generous may an Attorney for Property Be?

Power of Attorney Disputes on the Rise?

Choosing the Wrong Attorney for Property

15 May

Alberta’s Approach to Digital Assets

Nick Esterbauer Estate Planning, Executors and Trustees, Power of Attorney, Trustees Tags: , , , , , , , , , , , , , , , , , , , 0 Comments

Our firm has previously blogged and podcasted at length about digital assets and estate planning, and the issue of fiduciary access to digital assets during incapacity and after death.

While digital assets constitute “property” in the sense appearing within provincial legislation, the rights of fiduciaries in respect of these assets are less clear than those relating to tangible assets.  For example, in Ontario, the Substitute Decisions Act, 1992, and Estates Administration Act provide that attorneys or guardians of property and estate trustees, respectively, are authorized to manage the property of an incapable person or estate, but these pieces of legislation do not explicitly refer to digital assets.

As we have previously reported, although the Uniform Law Conference of Canada introduced the Uniform Access to Digital Assets by Fiduciaries Act in August 2016, the uniform legislation has yet to be adopted by the provinces of Canada.  However, recent legislative amendment in one of Ontario’s neighbours to the west has recently enhanced the ability of estate trustees to access and administer digital assets.

In Alberta, legislation has been updated to clarify that the authority of an estate trustee extends to digital assets.  Alberta’s Estate Administration Act makes specific reference to “online accounts” within the context of an estate trustee’s duty to identify estate assets and liabilities, providing clarification that digital assets are intended to be included within the scope of estate assets that a trustee is authorized to administer.

In other Canadian provinces, fiduciaries continue to face barriers in attempting to access digital assets.  Until the law is updated to reflect the prevalence of technology and value, whether financial or sentimental, of information stored electronically, it may be prudent for drafting solicitors whose clients possess such assets to include specific provisions within Powers of Attorney for Property and Wills to clarify the authority of fiduciaries to deal with digital assets.

Thank you for reading.

Nick Esterbauer

 

Other blog posts that may be of interest:

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