The city of Toronto was abuzz this past weekend as we kicked off summer 2019 with wall-to-wall sunshine. There were so many wonderful things to celebrate this weekend. For some, celebrations continued over the Toronto Raptor’s historic NBA Championship win. Some were tapping their feet to the beat for the first weekend of Toronto’s Jazz festival. Others, like myself, were flooding the streets to celebrate one of the city’s largest, loudest, and most colourful parades of the year – the Toronto Pride Parade.
Pride festivities provide a great opportunity to come together with others to celebrate and promote the equal rights of all persons regardless of gender or sexual orientation. While there, I reflected on some key considerations for LGBTQ+ individuals to consider in the context of estate planning in Ontario.
1. The value of a will
A will is an invaluable tool to assist people in planning for the future. The Succession Law Reform Act, RSO 1990, c. 26 (“SLRA”) gives individuals the power to dispose of property post-death.
Provided that your will meets the statutory requirements to be valid (which are prescribed in Part I of the SLRA) testators are free to dispose of their property as they wish. This a right regardless of sexual orientation or gender and includes couples that are in common-law relationships and same-sex marriages.
Importantly, the will provides a testator with a level of control over how children are provided for post-death. This is especially important in scenarios where parents rely on assisted reproduction as a method of conceiving a child. Having a will allows a testator to specifically name children and outline how that child is to take under the will. For more information about this, click here.
2. Rules of Intestacy
If you die without leaving a will, your estate will be subject to the rules of intestacy which are governed by Part II of the SLRA. Under these rules, married couples are entitled to take their spouses property absolutely if the deceased is not survived by issue. On July 20, 2005 the Parliament of Canada enacted the Civil Marriage Act, which legalizes same-sex marriage and provides in section 2, that, “Marriage, for civil purposes, is the lawful union of two persons to the exclusion of all others”. This definition replaced the former definition which described marriage as the lawful union between a man and a woman. As a result, same-sex spouses are entitled to take from their spouses estate on an intestacy.
In contrast, common-law relationships do not share this privilege, regardless of whether it is a heterosexual or homosexual common-law relationship.
3. Incapacity During Lifetime
An important consideration for LGBTQ+ individuals is also what would happen in the event that they become incapable of making decisions regarding their health care and property. Although laws vary by jurisdiction, legal and biological family, such as spouses (sometimes including common-law partners), children and parents, will generally be favoured over other persons who may have a close but legally unrecognized, relationship with the incapable person. This could have a negative impact on an individual whose non-accepting family members step into a decision-making role for them.
4. Dependant Support Claim
If you fall under the definition of a “dependant” under Part V of the SLRA, which could apply to same-sex common-law relationships and spouses alike, you may be entitled to make a dependant’s support claim against your partner’s estate.
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After making her will, the deceased “whited-out” the name of a beneficiary using white-out or liquid paper. Was this an effective amendment to the will?
This question was answered in Levesque Estate (Re), 2019 BCSC 927 (CanLII). There, the deceased made a formal will which left the residue of her estate to 7 beneficiaries. However, at some point between the making the will and her death, the deceased obscured the name of one of her beneficiaries using white-out. The estate trustees applied to the court for the opinion of the court with respect to whether this “alteration” was effective.
Applying B.C. law, the court determined that the alteration would be effective if either the alteration made the word or provision illegible, or if the alteration was deemed by the court to represent the intention of the deceased to alter the will.
With respect to the first test, the court found that the whited out provision did NOT render the name beneath to be “impossible to read by ordinary inspection … without chemical or other analysis”. Therefore, the alteration was not valid on this basis.
(In another case out of Newfoundland, the court held that provisions were “whited out” to the extent that “no part of the previous text [was] apparent”. Apparently, the testator used a heavier hand when whiting out. In that case, the whiting out of the text was found to be an effective revocation.)
In Levesque, however, the court went on to apply the second test of substantial compliance, and found that the alteration was a “deliberate or fixed and final expression of the Deceased’s intention” to remove the beneficiary from her will. “Carefully dabbing white-out over the provision in question was undoubtedly a considered and deliberate act on the part of the Deceased. She was applying the white-out to the original Will. It was not a casual act. The only reasonable inference is that her intention was to remove the provision from the Will.” The court was able to use its curative powers to give effect to the alteration.
In giving effect to the alteration, the court applied s. 58 of B.C.’s Wills, Estates and Succession Act, which gives the court authority to give effect to the alteration of a will even if there is not strict compliance with the formal requirements of the Act. In Ontario, there is no similar “substantial compliance” provision. It is not clear that the whited-out changes would have been effective in Ontario.
For another blog on white-out and wills, see “Revocation of Wills: White Out of this World”.
Have a great weekend.
An estate trustee has several responsibilities, including paying tax liabilities arising from the deceased’s death. There are multiple deadlines to remember, including:
- Prior Year’s T1 Return – If the death is between January and April, the return for the prior year must be filed within six months after the date of death.
- Terminal T1 Return – If the death is between January and October, the return for the year of death is due April 30th of the next year. If the death is in November or December, the return must be filed within six months.
- T3 Tax Return – If there is income received by the estate after the date of death, the T3 tax return must be filed within 90 days after the end of the calendar year or the estate year (365 days post-death), whichever period the estate trustee elects.
In addition to the above income tax-related deadlines, should the executor apply for a Certificate of Appointment (probate), Estate Administration Tax (“EAT”) will be owed upon filing the application. EAT is calculated on the value of the assets of an estate:
- $5 per $1,000.00, or part thereof, is owed on the first $50,000.00; and
- $15 per $1,000.00, or part thereof, is owed on the value of the estate over $50,000.00.
Once probate is granted, an Estate Information Return (“EIR”) must be filed with the Ministry of Finance. An EIR requires the executor to provide an inventory and particulars of each type of asset of the estate, including fair market values at the date of death. The deadline to file the initial EIR is within 90 days after probate is granted. If the executor discovers incorrect or incomplete information, an amended EIR must be filed within 30 days of the discovery.
The 2019 Budget of Ford’s Ontario government proposes certain changes that would impact both the EAT and EIR.
EAT – The 2019 Budget proposes to eliminate the payment of EAT on the first $50,000.00 of the estate value. This change would spare modest estates from having to pay EAT, which may be particularly impactful in circumstances with limited available monies. It will also result in a savings of $250.00 for larger estates, as no EAT will be payable on the first $50,000.00.
EIR – The 2019 Budget proposes to extend the EIR initial filing deadline from 90 days to 180 days, and the amended filing deadline from 30 days to 60 days. The change to the initial filing deadline may be especially helpful for executors, as it can be a challenge to obtain particulars and date of death valuations of all estate assets within just three months of death.
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In Daniel Estate (Re), 2019 ONSC 2790 (CanLII), the applicants applied to have their estate trustee and attorneyship accounts passed. As stated by the judge hearing the application, “Unlike many applications to pass accounts, this is a “good news” story.”
The applicants were the friends and former neighbours of a high net worth, elderly couple, Isabel and Wayne. For over 20 years, the applicants provided extensive personal assistance to the elderly couple. “In many ways, [the applicants] acted like loyal and dutiful family members.” In addition to completing simple neighbourly tasks, the applicants helped the couple in many other ways. They eventually became the attorneys for property and personal care for the couple. When Wayne died, the applicants took on the role of acting as his Estate Trustee.
The application to pass accounts was supported by an affidavit from Isabel, who indicated that she was content with the claim for compensation being made by the applicants. The application materials also included an accounting analysis prepared by a Chartered Accountant, who reviewed the accounts in detail, and also an analysis by a Certified Case Manager and Certified Canadian Life Care Planner, who assessed the value of the personal services provided by the applicants.
In the end, the court awarded the applicants compensation for administering Wayne’s estate of $129,775; compensation for acting as attorneys for property of $435,772.36 and compensation for acting as attorneys for personal care, for a total of $757,659.
With respect to costs, the court awarded the applicants their costs of $125,021 for the unopposed passing of accounts. According the judge, “While this amount seems at first blush high, I note the accounting report alone was worth $45,000. In my view of the detailed, thorough and helpful material filed and in view of the hours it took to assemble, digest and present the financial information provided, I find that the fees and disbursements claimed are reasonable.”
The court appears to have been impressed by the extent and quality of the assistance provided by the applicants to Isabel and Wayne. Further, the court appears to have been impressed with the detailed and extensive materials put before the court in order to justify the claims on the passing.
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There is a well-known case that students read while in law school that has to do with requirements for making a will in your own handwriting. It involves a will by farmer Cecil Harris who was farming near Rosetown, Saskatchewan when on June 8, 1948 while out working alone in his field, he suffered a misfortune and was pinned under his tractor for ten hours. With his pen knife he scrawled on the tractor’s fender: “In case I die in this mess, I leave all to wife” and added his signature. The Saskatchewan court admitted the tractor fender into probate as a will. It had met the legal requirements of being in his own handwriting and signed by him, and the fender is now on display at the University of Saskatchewan Law School.
Making a will is a serious and often complex endeavour that one should not casually undertake without professional advice. Having said that, the law in many countries recognizes a “holographic” or handwritten will, when properly completed. In Ontario the relevant legislation is in the Succession Law Reform Act, which states, “A testator may make a valid will wholly by his or her own handwriting and signature, without formality, and without the presence, attestation or signature of a witness. R.S.O. 1990, c. S.26, s. 6.”
Forty years ago when I first read the “tractor” case in law school in 1979, the most modern piece of equipment in many law offices was the electric typewriter. Since then, changes include the introduction of the fax machine, the word processor and then the computer, the internet and email, and smart phones. Law students today are of a generation that grew up with smart phones in their hands starting at about the same time they learned to walk.
Perhaps it will soon be time to recognize a “handwritten” electronic holograph will. In Ontario there have been none so far. Nevertheless, it seems to be an interesting question. For example, if I take my ipad and handwrite on the device “All to my wife” and sign it as my holographic will so it is available in electronic form, it will not be recognized as valid in Ontario. However, if I take the same ipad and damage the surface of the screen by scratching on it, “All to my wife” with my signature, then this will be recognized as a valid will. This seems to me to be an incongruous result. In a time when everyone has a smart phone the matter might yet be resolved by new legislation or perhaps even by an activist court and a modern version of the tractor case.
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On October 3, 1942 the Calgary Herald reported that the shortest will was four words, “Jake everything is yours”, handwritten on a piece of paper by his cousin Reinhard Z. Nice and recorded at Norristown Pennsylvania by Registrar of Wills, John H. Hoffman. The estate was valued at $16,000 (which would have bought a house in those days).
On November 29, 1965 the Windsor Star reported that the shortest will in England was from a case in 1906 where the will admitted to probate was the three words: “All for mother”. It involved the case of Thorn versus Dickens which was a dispute between the deceased’s mother and the deceased’s widow.
On July 9, 1979 the Vancouver Sun reported that – According to Guinness – the shortest will in the world was the two words: “Vse Zene” the Czech for “All to wife” dated January 19, 1967 by Herr Karl Tausch of Langen, Hesse, Germany.
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The Guardian newspaper of London England reported on November 9, 1925 that the last will and testament of Frederica Evelyn Stilwell Cook, who died January 9, 1925, age 68, is thought to be the longest will ever filed for probate. The will was 1066 pages. It was 95,940 words long. It was entered into probate at Somerset House, the then home of the Principal Probate Registry in London, on November 2, 1925. Probate of the will was granted to Cook’s brother and to her son, both of them Londoners. Practically all of her bequests were to her children. The will soon became a topic of international interest.
The Windsor Star newspaper reported on the matter on December 11, 1925 and added that, “Most of the will is in the testatrix’s own handwriting. Four large books, heavily bound, were needed for the voluminous treatment”.
The Saskatoon Star-Phoenix newspaper reported further details on March 18, 1926 that the will was dated October 17, 1919 and that there was a codicil dated March 2, 1924. The deceased had provided a priced inventory of “laces, jewellery, furs, and objects of art” and disposed of property valued at approximately $102,915; a large fortune in those days. She also provided specific instructions that her executors were directed to, “burn her diaries, to bury her wedding ring with her, and to see that her age was not inscribed on her tombstone”.
This blog has only 218 words. Thanks for reading!
Were you recently appointed as Estate Trustee and needed to obtain a Certificate of Appointment of Estate Trustee (otherwise known as “probate”)? In that case, you need to know that an Estate Information Return must be filed with the Ministry of Finance within 90 days of the date of the appointment, setting out the assets in the Estate and their corresponding date of death values.
Typically when an Application for Certificate of Appointment is filed with the Court, a trustee may not have access to every asset of the Estate such that that the value of the Estate may not necessarily be accurate.
As a result, when an Estate Information Return is filed following the Certificate of Appointment being granted, all of the assets of the Estate must be listed. Depending on the values of the assets as confirmed by the trustee following the Certificate of Appointment being granted, a refund may be issued in the event that Estate Administration Tax was overpaid or additional tax may be payable in the event that the value of the assets as listed on the Application is lower than what was listed on the Estate Information Return.
The Estate Information Return may be audited by the Ministry of Finance for up to four years after it is filed. As such, it is important to retain all relevant records in the event of such an eventuality. Another important consideration is that the Ministry of Finance will not typically provide confirmation of receipt of an Estate Information Return so it is prudent to send it via means that would provide you with confirmation of delivery such as fax.
Finally, if a trustee finds out any additional information regarding the value of the assets of the Estate that has any bearing on the Estate Administration Tax payable, an amended Estate Information Return must be filed within 30 days of the new information being uncovered.
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In estate litigation, medical records are key sources of evidence with respect to the capacity of the deceased. In most cases, the parties seek and obtain an order for their disclosure at an early stage. The order serves to waive any doctor-patient privilege that would otherwise attach to the records.
Litigants and their lawyers must, in most cases, be careful to ensure that such an order is in place prior to seeking such medical records. Doctors, too, must ensure that such an order has been obtained and that they are therefore authorized to release the medical records.
A recent decision, Smith v. Muir, illustrates the possible perils of improperly seeking medical records. That case involved a motor vehicle accident. Trial was approaching and defence counsel wrote to two of the Plaintiff’s doctors. Defence counsel served them with a summons to attend at trial, and also the following request: “We will require an entire copy of your file for preparation of this matter for trial. Would you please forward to us a complete copy of the entire contents of your file, including … . Should you be unable to provide us with this documentation, please ensure that you bring your original complete records with you upon your scheduled attendance at trial.”
The Plaintiff learned of this, and then moved to have defence counsel removed as lawyer of record. While the court did not remove counsel, it was highly critical of the defence lawyer’s conduct. The court stated that the request for medical records directly from the Plaintiff’s doctors, rather than through the Plaintiff’s lawyer or through the court, was inappropriate. The court noted that the letters did not indicate that defence counsel did not have the Plaintiff’s consent to disclosure, or that the doctor may wish to seek advice before disclosing. The letter, said the court, “invites the unwitting health practitioner to breach his or her duty of confidentiality and the privacy of the patient”.
The court referred extensively to the decision of Burgess v. Wu, which sets out the appropriate protocol to follow for obtaining medical records. The appropriate routes are either through the discovery provisions of the Rules, or through a disclosure order from the court. Otherwise, “A plaintiff’s health care professional has a duty to refuse to disclose information about his or her patient unless required to do so by law”.
Although the Plaintiff’s motion was unsuccessful, the court awarded the Plaintiff her costs.
In estates litigation, matters are complicated due to the fact that the patient is no longer able to consent to disclosure, and there often isn’t an estate trustee who can consent. In those cases, an order is almost always required.
Have a great weekend.
Nova Scotia is proposing legislation that will make it the first jurisdiction in North America to adopt “presumed consent” around organ donation.
Under the Human Organ and Tissue Donation Act, all people in Nova Scotia will be presumed to agree to organ donation upon their death, unless they opt out. The Act does not apply to those under 19, or those without decision-making capacity. In those cases, a parent, guardian or alternate decision maker may consent on their behalf.
The Act will not be proclaimed immediately: it is to take effect in 12 to 18 months, so as to allow for public education and support for health care workers.
Under previous Nova Scotia legislation, the right of a family member to veto an organ donation decision made by a deceased was removed. See our blog on the topic, here.
Several European countries already have presumed consent laws for organ donation.
In Ontario, the current system is an “opt-in” system, rather than an “opt-out” system. Under the Trillium Gift of Life Act, consent must be given prior to the removal of organs after death. The person must be at least 16 years of age. In addition to the person, other persons are entitled to consent on the person’s behalf. These include,
- a spouse, either married or common-law;
- if there is no spouse or the spouse is not readily available, the person’s children;
- if there are no children, or if none are readily available, either of the person’s parents;
- if there are no parents, or none are readily available, any of the person’s siblings;
- if there are no siblings, or none are readily available, any of the person’s next of kin;
- if there are no next of kin, or none are readily available, the person lawfully in possession of the body, other than the administrative head of the hospital, where the person dies in a hospital. Further, the coroner, Public Guardian and Trustee, embalmer or funeral director are not authorized to consent.
Consent cannot be given if the person has reason to believe that the person who died or whose death is imminent would have objected.
Organ donation has helped so many. Please consider opting in to Ontario’s organ donation program.
Have a great weekend.