Often, estate trustees no longer want the job, and want to be removed. This is particularly the case when they are required to deal with difficult beneficiaries. In most cases, where a Certificate of Appointment has been issued or where they have acted as estate trustee in any way, a court order is required. However, as illustrated in Pierce v. Zock, 2019 ONSC 4156, getting an order removing oneself as estate trustee is not always straightforward.
There, the deceased appointed two of his children, Gary and Norma, as estate trustees. The wills, primary and secondary, established a trust for the benefit of another child, Stephen. The relationship between Gary and Norma on the one part, and Stephen on the other broke down. Gary and Norma brought an application to remove themselves as estate trustees.
Under the trusts established by the wills, Stephen was entitled to remain in the deceased’s real property as long as he was capable of maintaining the property and managing his personal care. If these conditions were not met, the property was to be sold and the proceeds divided amongst the deceased’s four children, with Stephen’s share being held in a trust administered by the estate trustees. The estate trustees also sought directions from the court as to whether these conditions were being met, and if not, whether the real property could be sold.
The court noted that a trustee cannot be forced to continue to serve as a trustee if he or she is no longer willing or able to continue. However, in this case, the estate trustees were not able to suggest an alternate to act as estate trustee. No institutional trustee or individual was willing to act. Further , the Public Guardian and Trustee was not willing to act.
During oral argument, Gary indicated a willingness to continue to act on a short term basis, if the court allowed the sale of the real property. The court seized upon this reluctant willingness, and ordered that Norma be removed, but that Gary stay on as estate trustee. The court imposed conditions, which included that Stephen shall have no contact with Gary except through legal counsel.
On the question of the sale of the property, the court refused to allow the sale. The court found that there was insufficient evidence that Stephen was not maintaining the property or was incapable of managing his personal care.
In conclusion, Gary was kept on as estate trustee and was not permitted to resign. The property was not to be sold.
Such a possible outcome should be kept in mind when accepting an appointment as estate trustee. Further, testators should consider naming alternate estate trustees in event that the appointed estate trustees are not able or willing to continue in the role.
Have a great weekend.
In researching common errors in will drafting, we recently stumbled (as one often does through research) on the following question:
In the case of mutual wills, what happens in the event of remarriage?
Mutual wills operate as a contract. Simply put, the terms of the contract are that absent any revocation during the joint lives of the parties, the survivor will not revoke thereafter. The conundrum then becomes: If a will by its very nature is revocable, and wills are automatically revoked by marriage, what then happens to the agreement in the event of a second or third marriage?
The question at hand is best described with an example:
Jane has two children from a prior marriage, as does John. John and Jane get married and draft wills. The wills of Jane and John are identical except for some names and dates and include an agreement that says in part, that if John dies, all assets will be transferred to Jane absolutely, and when Jane dies all assets shall be divided equally among their four children. When John dies, his assets vest in Jane, and her will is now locked such that changing it would frustrate the terms of her agreement with her now deceased husband. But what if then Jane meets and marries Oscar? If all prior wills are null. . . Now what?
The courts have wrestled with the concept of mutual wills since the death of Lord Horatio Walpole in 1797. In his will of 1756, a nephew of the English author and statesman, George Earl of Walpole, demonstrated intent to enter in to a “compact” with his late uncle for the disposition of his and his uncle’s estates to the benefit of their respective families. The question that arose then, as it still does today, is upon what terms the two parties were transacting, and how should they be bound? Or, to quote a commentary from the turn, “How far in law and equity was each at liberty to repent, and to recall his share of the testamentary exchanges between them?”
204 years later, the question continued to be addressed in a seminal decision of the Ontario Superior Court of Justice. In 2001’s Edell v. Sitzer, Cullity J, was tasked with unpacking a bitter family dispute where an alleged agreement not to depart from equal division of assets was at stake. The question before the court then (in part) was, do the facts give rise to a constructive trust? Justice Cullity set out the test for mutual wills thusly:
- The mutual wills were made pursuant to a definitive agreement or contact not only to make such wills, but that the survivor shall not revoke.
- Such an agreement is found with certainty and preciseness.
- The survivor has taken advantage of the provisions in the mutual will.
If the test is satisfied, the court can impose a constructive trust. Rooted in the law of equity, an implied or constructive trust aims to remedy any unjust enrichment by one party of a contract (a surviving spouse, for example) over another.
But what consistently seems to trouble the conscience of the court, is the idea of “contracting-away” one’s testamentary freedom. There is no restriction for a will made in defiance of such an agreement, but in equity, the court is almost bound to treat mutual wills as a single testamentary instrument. This was the problem in the 2016 ONSC case of Rammage v. Estate of Roussel: Alf and Ruth Roussel had made mutual wills 13 years prior to Alf’s death in February of 2009, agreeing in part to divide their estate equally among their four children (both Ruth and Alf went into the marriage with 2 children each). One year after Alf’s death, Ruth made a new will, disinherited Alf’s children, and left everything to her own two kids. Upon the death of Ruth, the litigation began.
The court in Rammage determined that the wills of the deceased testators amounted to mutual wills, imposed a constructive trust, and divided the assets according to the terms of the first wills of Ruth and Alf. If the court is satisfied that the wills are mutual, any property disposed of in a subsequent testamentary document is subject to a constructive trust in favour of the named legatees, and the subsequent will fails.
Returning to the question of remarriage, one could expect the need for administration and ultimately judicial intervention, should all the beneficiaries not consent to the changes in subsequent wills. Like many decisions that seem like “a good one at the time,” mutual wills should be considered very carefully and with the advice of independent counsel. A decision to enter into a contract that prohibits one from ever changing their last will and testament must be considered from all sides. To quote the late Horatio Walpole, the 4th Earl of Orford: “The wisest prophets make sure of the event first.”
Thanks for reading!
David M. Smith & Daniel Enright (Summer Law Student)
In a recent recording, “Money in the Grave”, Drake asks that he be buried with his money. He sings:
In the next life, I’m tryna stay paid
When I die, put my money in the grave.
Several issues come to mind.
First, Drake’s wish to be buried with his money is not binding on his estate trustee unless it is in a properly executed testamentary instrument.
Second, even if the money is buried with Drake, his estate trustee may have to pay Estate Administration Tax on the buried money if the will is to be probated. Drake may want to consider multiple wills. (Well-considered primary and secondary wills might also avoid the payment of Estate Administration Tax on the value of all of his chains, and other bling.)
Third, the act of destroying money is illegal in many jurisdictions. In Canada, under the Currency Act, it is illegal to “melt down, break up or use otherwise than as currency any coin that is legal tender in Canada”. The Criminal Code creates an offence for defacing a current coin. There is no similar prohibition on defacing or destroying paper money. However, in the US, burning money or any other act that renders a note “unfit to be reissued” is illegal. Arguably, the act of burying money is not the same as destroying money.
(Read Stuart Clark’s blog, here, about a woman who cut up the equivalent of $1.4m CDN to disinherit her heirs.)
Fourth, Drake’s estate trustee might be accused of waste. He or she may want to seek the opinion, advice or direction of the court before they “Bury my [expletive] Chase Bank.”
More on point, in the US decision of Eyerman v. Mercantile Trust Co., 524 S.w.2d 210 (1975), the testator directed that her house be burned down, the lot sold, and the proceeds added to the residue of her estate. A neighbour wasn’t too crazy about the idea, and applied for an injunction. The injunction was, at first, denied. On appeal, the court held that the direction in the will was against public policy.
The court in Eyerman cited the decision of In re Scott’s Will, 88 Minn. 386 (1903). There, the testator directed his estate trustee to destroy money belonging to the estate. The court there found that the clause was void. The court also quoted from Restatement, Second, Trusts, 124, at 267.
“Although a person may deal capriciously with his own property, his self interest ordinarily will restrain him from doing so. Where an attempt is made to confer such a power upon a person who is given no other interest in the property, there is no such restraint and it is against public policy to allow him to exercise the power if the purpose is merely capricious.”
In Restatement, an example is given of a bequest from A’s estate to B in trust to throw the money into the sea. (Query: more lyrical or less lyrical than Drake’s direction?) “B holds the money upon a resulting trust for the estate of A and is liable to the estate of A if he throws the money into the sea.”
In another, earlier Drake ditty, “Crew Love”, Drake boasted about spending $50K on a vacation, and needing restaurant reservations for twenty. “I never really been one for the preservation of money. Much rather spend it all while I’m breathing.” It seems that he now has so much money that he may not be able to spend it all while living, and he is turning his thoughts to succession planning. He may want to get some professional estate planning advice.
Thank you for reading.
Mutual wills are a common tool used by two (or more) people who wish to preserve a will (or specific provisions thereunder) by entering into an agreement to avoid future changes. This is a particularly useful tool in blended families where partners have children from prior relationships, and both want to ensure that their children are equally provided for post-death.
The requirements for an application of the doctrine of mutual wills are three-fold: (1) there must be an agreement between the individuals who made the wills, which amounts to a contract; (2) the agreement must be proven by clear and satisfactory evidence; and (3) it must include an agreement not to revoke wills.
Once one of the parties to a mutual will agreement dies, the survivor is then bound by that agreement not to revoke his or her will. Typically, we see mutual wills cases arising after the death of both spouses, once it is discovered that the surviving spouse drafted a new will in breach of their mutual will agreement or disposed of assets contrary to their agreement.
The recent case of Nelson v Trottier grappled with a novel issue with respect to mutual wills: whether, in light of the existence of a mutual wills agreement, beneficiaries to a survivor’s estate could claim a constructive trust over her assets while she was still alive.
The applicants in this case were the deceased’s children. They were not beneficiaries under their father Bill’s will, but were beneficiaries under his wife Huguette’s will. After making a donation in Bill’s honour, the applicants sought, among other things, a declaration imposing a constructive trust over Huguette’s assets and preventing her from gifting property without further order of the court or the consent of the applicants.
After establishing that a mutual wills agreement existed between Bill and Huguette, the court then examined when a constructive trust is established. In deciding this issue, Justice Pattillo stated,
“in circumstances where one of the parties to a mutual wills agreement has died, however, and based on the nature of a mutual wills agreement and the purpose of imposing a constructive trust in respect of such agreement, it is my view that a constructive trust does not arise until either the survivor dies or earlier, in the event there has been a breach of the agreement by the survivor”
Since Huguette was still alive, the question became whether she had breached the mutual wills agreement by making the donation in Bill’s honour. Justice Pattillo ultimately found that Huguette had not breached the mutual wills agreement. His reasons included that the agreement provided that both Bill and Huguette would give the survivor all of their property absolutely and that the surviving spouse could deal with the property as absolute owner while alive (which includes the ability to make gifts).
Interestingly, Justice Pattillo acknowledged that the mutual wills agreement stipulated that the survivor could not dispose of “substantial” portions of the property received during his or her lifetime in order to defeat the agreement; however, he did not find that the donation given to be “substantial” in comparison to the size of the estate.
The application seeking, among other things, a declaration that there was a constructive trust over Huguette’s assets, was ultimately dismissed.
Thank you for reading!
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.
Thank you for reading!
Die-hard Raptors fans, band-wagon followers, and even sport-neutral citizens alike could not deny the energy in the Toronto air this past Friday, June 14. This day followed the Raptors’ historic four-point defeat of the Golden State Warriors in game six of the 2019 NBA playoffs the night prior, as well as the raucous, joyful celebrations which rang through the city until the early hours of the morning. The Raptor’s win marks the first time in their 24-season history that the Raptors will be graced with the title of NBA Champion.
In my view, one of the most interesting parts of the Raptors’ championship is the sense of community, togetherness and connectedness to Toronto which the team’s journey has inspired. On Friday morning, the CBC broadcasted clips of fans who had tuned in to cheer the Raptors to victory during game six, both in Toronto, across Canada and internationally. While some of the interviewed members of the Raptors’ diverse group of fans and followers were born in Toronto, many had since moved to reside permanently in other cities in Canada and across the world. Despite this, these fans still felt a strong patriotism to Toronto inspired by the team’s fight to the top. The diversity in the team’s fan network is also reflected in the Raptors’ own varied makeup: the team itself is comprised of players from several different countries, including Canada, the United States, England, Spain and Cameroon.
The diversity both in the team’s fans and in its members brought my mind to the legal concept of domicile. In an Estates context, there are two types of domicile: one’s “domicile of origin” is where they are born, whereas one’s “domicile of choice” connotes a new place where a party takes residence, with the definitive intention of residing there permanently. One may also abandon their domicile of choice. In Canada, domicile is determined on a province-to-province basis.
One’s domicile will determine which jurisdiction’s laws will be applicable in particular situations, such as in a dependant’s support claim circumstance, or when one seeks a grant of probate to administrate an Estate, for example. As my colleague Stuart Clark wrote about previously, however, two Canadian cases – Tyrell v Tyrell 2017 ONSC 4063 and Re: Foote Estate 2011 ABCA 1 – seem to suggest conflicting rules surrounding how domicile impacts the administration of one’s Estate. While the Alberta Court of Appeal in Re: Foote Estate stated that the domicile of the Deceased “determines the applicable law for estate administration purposes” – suggesting that it is the testator’s domicile that determines which jurisdiction’s laws are to govern the administration of an estate – the Ontario Court in Tyrell v. Tyrell stated that “for the purpose of administering the Will, the most significant connecting factor is the residence of the estate trustee.” In Tyrell, notwithstanding that the testator died domiciled in a foreign jurisdiction, the laws of Ontario governed the administration of the estate as the Estate Trustee was located in Ontario. Currently, there are no reported cases which cite Tyrell v. Tyrell has been cited to support this rationale. It will be interesting to see how the legal concept of domicile develops in this respect going forward.
In the meantime, we will see how sports, diversity, and the law intersect when the Raptors parade passes by the Hull & Hull offices this Monday.
Thanks for reading!
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.
It has been almost one year since the music industry and fans around the world lost Aretha Franklin. It was previously believed that Franklin died without a will, leaving an estate valued at approximately $80 million USD to be distributed under Michigan’s intestate succession laws.
However, recent reports indicate that three handwritten notes, which may be wills, have been located. Two are reportedly from 2010 and were found in a locked cabinet, with the third dated March 2014, found under cushions in Franklin’s living room.
The three handwritten notes have been filed, and a hearing will take place on June 12, 2019 to determine their validity.
From a cursory review of the applicable Michigan authorities, it appears that a will is a holograph Will (referred to as “holographic wills” in Michigan), whether or not it is witnessed, if it is (1) dated, and (2) the testator’s signature and the document’s material portions are in the testator’s handwriting. It appears that in Michigan, a holograph will may remain valid, even if some portions of the document are not in the testator’s handwriting, but the testator’s intent can be established by extrinsic evidence.
In contrast, pursuant to Ontario’s Succession Law Reform Act (“SLRA”), to be a valid holograph will the document must be (1) “wholly” in the testator’s own handwriting, (2) signed by the testator and (3) constitute a full and final expression of the testator’s intent regarding the disposition of his or her assets, on death. The SLRA does not require the document to be dated, as is required in Michigan, however both jurisdictions do not require the formal presence, attestation or signature of a witness for a holograph will to be found valid.
In Ontario, and Canada generally, steps are being taken within the legal community in attempts to solve ongoing issues of identifying missing or competing wills. Online will registries are being created so that lawyers and trust companies can upload basic information about the wills they are storing.
The Canada Will Registry’s website indicates that when a user is looking for a will, the site will publish a Knowledge of Will notice, and the lawyer or trust company storing the will (if it has been registered) will be automatically alerted. According to the website, the intent behind the registry is to replace the various search tools currently available with one comprehensive tool.
While such a tool would not have assisted in locating Franklin’s handwritten notes, it represents how the advance of technology can be used to simplify necessary steps regularly taken by estate practitioners, such as the process of locating missing or competing wills.
Technology aside, it will be interesting to see whether or not the Court will find any of Franklin’s handwritten notes to be valid holograph wills.
Thanks for reading!
A recent decision dealing with the estate of a French rock star highlights the potential relevance of social media evidence in estates matters.
Johnny Halliday, known as the “French Elvis”, died in 2017, leaving a Last Will and Testament that left his entire estate to his fourth wife, disinheriting his adult children from a previous marriage. The New York Times reports that French law does not permit a testator to disinherit his or her children in such a manner, and the adult children made a claim against the estate on that basis. The issue became whether the deceased singer had lived primarily in the United States or in France.
Halliday was active on Instagram, using the service to promote his albums and tours, as well as to share details of his personal life with fans. The adult children were, accordingly, able to track where their father had been located in the years leading up to his death, establishing that he had lived in France for 151 days in 2015 and 168 in 2016, before spending 7 months immediately preceding his death in France. Their position based on the social media evidence was preferred over that of Halliday’s widow and their claims against the estate were permitted.
Decisions like this raise the issue of whether parties to estate litigation can be required to produce the contents of their social media profiles as relevant evidence to the issues in dispute. Arguably, within the context of estates, social media evidence may be particularly relevant to dependant’s support applications, where the nature of an alleged dependant’s relationship with the deceased, along with the lifestyle enjoyed prior to death, may be well-documented.
The law regarding the discoverability of social media posts in estate and family law in Canada is still developing. While the prevalence of social media like Instagram, Twitter, and Facebook is undeniable, services like these have not become popular only in the last fifteen years or so and it seems that users continue to share increasingly intimate parts of their lives online.
Thank you for reading.
You’re likely familiar with the Christian burial phrase “ashes to ashes, dust to dust.” While that phrase has been recited over graves for centuries, it may need changing in Washington state. With the green light given to the composting of human remains, “dust to dirt” may be a more appropriate way of putting it.
A new path for human remains
The Washington state law allowing the composting of human remains will take effect in May of 2020. It means that, in addition to cremation or burial, a body can now be composted naturally into soil.
Like all composting, it’s a simple and natural process. The body is covered in a natural material, like straw or wood chips. Over the course of several weeks, the body breaks down into soil. Families are free to visit the complex during this process. When the composting is finished, the soil is given to the family and they can do with it as they please.
Environmental friendly – and cost effective
While composting won’t be an option for everyone, it will certainly appeal to those who want a cost-effective, environmentally-friendly option for disposing of their remains at death.
For instance, there are no air quality concerns that can come with cremation, and composting doesn’t use up valuable tracks of land the way a cemetary can. In fact, the process actually “creates” land by adding more soil to the world.
And cost-wise, the woman who spearheaded the move to allow composting – Katrina Spade, CEO of Recompose – estimates that the approximate cost of composting (US$5,500) will be just below the cost of cremation, and far less than a burial.
Are we ready Canada?
The composting of human remains makes sense on many levels, and it wouldn’t surprise me to see this practice spreading to other jurisdictions, including Canada. It may not be for everyone, but it’s hard to see a downside.
This CNN article and short video provide some more context to the adoption of human remains composting in Washington state.
Thanks for reading … Have a wonderful day,