Category: Power of Attorney

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

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

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

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

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

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