Tag: capacity

11 Jun

Can a Death Note Ever be Considered a Will?

Kira Domratchev Capacity, Estate & Trust, Wills Tags: , , , , , , , , , 0 Comments

The general rule, one that most people are probably familiar with when they think of a Will, is that the testator has to have the requisite capacity in order to be able to execute it. But what does that mean?

Generally, it means that a person should be of sound mind and understanding and have sufficient capacity to appreciate the various dispositions of property that would be put into effect with his or her execution of the Will. In other words, the testator must:

(1) understand that they are giving their property to one or more objects of his or her regard;

(2) have the capacity to comprehend the extent of their property and the nature of the claims of others to whom they are giving nothing under the Will.

In the case of a deceased who committed suicide, a question that may arise is whether a person who is about to commit suicide has the appropriate testamentary capacity to be able to execute a Will?

In that regard, it is important to remember that the onus is on the person who is propounding the Will – in other words applying to the court for an order that the Will is valid. In the usual course, there is certainly no presumption against the testamentary capacity of a testator. Indeed, it is quite the opposite. However, in cases where a proposition is made that a death (suicide) note is the last valid will and testament of a testator, it is more likely that someone may object. That is especially the case where an expected beneficiary is disinherited under such a circumstance.

 

 

As soon as capacity is called into question, the onus lies on the party propounding the Will to affirm testamentary capacity.

Suicide, in itself, does not equate to testamentary incapacity – although it is a circumstance that may be considered. In fact, a testator may have testamentary capacity even if they are not of entirely sound mind. That means that prior to committing suicide, a person can very well have testamentary capacity. If that is the case, then a death note can be considered a Holograph Will, which in Ontario, in accordance with section 6 of the Succession Law Reform Act, has the following requirements in order to be valid:

(1) It must be entirely in the testator’s hand writing; and

(2) It must be signed by the testator.

There is no requirement for witnesses in the case of a Holograph Will and it must be that the testator intended to dispose of their property after death.

Thanks for reading.

Kira Domratchev

Find this blog interesting? Please consider these other related posts:

Testamentary Capacity and Suicide

Will Drafting and Testamentary Capacity

Age and Testamentary Capacity

03 May

When Elder Abuse Goes Undetected

Rebecca Rauws Elder Law Tags: , , , , , , , , , , 0 Comments

I recently came across several articles (one of which can be found here) regarding the elder financial abuse of a senior gentleman in Moncton, New Brunswick. Around 2013, Mr. Goguen had been living in the home that he owned, with tenants residing in part of the property. Upon deciding to sell his home, Mr. Goguen was referred to Ms. Hannah and Mr. Poirier, licensed real estate agents in New Brunswick. After the home had been listed for sale for some time, without success, Ms. Hannah apparently told Mr. Goguen that his home was in such deplorable condition that it would be impossible to sell without making certain repairs (which Ms. Hannah says Mr. Goguen could not afford) and removing the tenants (whom Ms. Hannah has claimed were using drugs and not paying rent).

As a result of the alleged difficulty in selling Mr. Goguen’s house, he, Ms. Hannah, and Mr. Poirier entered into an agreement whereby Ms. Hannah and Mr. Poirier purchased Mr. Goguen’s home. The terms of the arrangement were not favourable to Mr. Goguen, and it appears that Ms. Hannah and Mr. Poirier did not follow through on certain aspects of the agreement.

The Financial and Consumer Services Commission, which regulates real estate agents in New Brunswick, has revoked Ms. Hannah and Mr. Poirier’s real estate licenses. The Commission stated that Ms. Hannah and Mr. Poirier committed financial abuse of a senior and took “outrageous and egregious advantage” of Mr. Goguen. The Public Trustee of New Brunswick has now become involved on Mr. Goguen’s behalf, and has filed a statement of claim against Ms. Hannah and Mr. Poirier, seeking $83,320.00, characterized as the amount owing to Mr. Goguen.

We’ve blogged about elder abuse a number of times. Unfortunately, due to factors such as isolation, physical difficulties, and cognitive impairments, elderly people are often vulnerable to abuse. Given this vulnerability, and the circumstances in which abuse occurs, it can go undetected for a significant amount of time. In such situations, it may be too late to make the elderly person “whole” if the abuse is not discovered until it is too late.

Fortunately in Mr. Goguen’s case, despite the fact that it took a number of years, the Public Trustee discovered the abuse and is now taking steps to protect Mr. Goguen and recoup funds owed to him by his abusers. However, the Public Trustee is seeking the amount of approximately $83,000.00, which may not fully reimburse Mr. Goguen for the value of the house had it been sold to a normal third-party purchaser. Additionally, one of the articles also notes that Mr. Goguen had named Ms. Hannah and Mr. Poirier as his attorneys, and also executed a will naming them as executors and beneficiaries of his estate. It is unclear whether the Public Trustee has sought any relief in this regard. As such, even though the Public Trustee may be pursuing relief on Mr. Goguen’s behalf, it is an unfortunate possibility that he may continue to feel the effects of the abuse.

Thanks for reading.

Rebecca Rauws

 

Other blog posts that may be of interest:

30 Apr

When Will the Court Appoint a Guardian?

Rebecca Rauws Guardianship Tags: , , , , , , , , 0 Comments

The Substitute Decisions Act, 1992, S.O. 1992, c. 30 (the “SDA”), governs,  among other things, the appointment of guardians for incapable persons. There are two types of guardians: a guardian for property and a guardian for personal care.

Sections 22(1) and 55(1) of the SDA provide that the Court may, on any person’s application, appoint a guardian of property or of the person, for a person who is incapable of managing property or personal care if, as a result of the said incapacity, it is necessary for decisions to be made on his or her behalf.

In order to appoint a guardian for someone, the Court will need to make a finding of incapacity for that person. This is an important hurdle, and the Court will generally need to see evidence that the person in question has been assessed as incapable of managing property and/or personal care prior to making a finding that he or she is incapable.

Depending on the circumstances, a person may submit to a capacity assessment voluntarily. However, according to section 78(1) of the SDA, if a person refuses to be assessed, an assessor shall not perform the assessment. Section 79 of the SDA allows the Court to order that a person be assessed, provided that the Court is satisfied that there are reasonable grounds to believe the person is incapable. Additionally, to obtain a Court Order for an assessment, there must be a proceeding under the SDA, in which the person’s capacity is in issue. The Ontario Court of Appeal in  Neill v Pellolio, 2001 ONCA 6452 held that there is no stand-alone relief available for an Order for a capacity assessment in the absence of an application brought under the SDA. Accordingly, obtaining a finding of incapacity from the Court may not be a simple endeavour.

The SDA also has in place measures to protect an individual’s decision-making rights from undue restriction. Sections 22(3) and 55(2) state that the Court shall not appoint a guardian if it is satisfied that the need for decisions to be made will be met by an alternative course of action that does not require the Court to find the person incapable, and is less restrictive of the person’s decision-making rights than the appointment of a guardian.

Accordingly, for example, if a person has already granted a power of attorney, allowing the named attorney to act would constitute a less restrictive course of action which also does not require the Court to make a finding of incapacity in order for decisions to be made for an incapable person. Furthermore, if a person is incapable of managing their property or personal care, but remains capable of granting a power of attorney, that would likely also constitute a less restrictive course of action, and would allow that person to exercise their decision-making rights.

Thanks for reading.

Rebecca Rauws

 

Other blog posts that may be of interest:

05 Apr

Cheques and Balances: the Enforceability of Promises to Gift

Garrett Horrocks Capacity, Estate & Trust, General Interest, Public Policy Tags: , , , , 0 Comments
The delivery of “signed, blank cheques cannot amount to a complete gift”, as the drawer retains an interest in the amount of the cheque until it is cashed.

In November 2017, my colleague, Sayuri Kagami, blogged about the Ontario Court of Appeal’s decision in Teixeira v Markgraf Estate, which considered the validity of a gift in the form of a cheque cashed after the death of the payor.  Today’s blog discusses similar facts in the court’s decision in Rubner v Bistricer. That is, whether pre-signed blank cheques cashed after the payor is declared incapable of managing property constitute either an enforceable promise to gift or, in the alternative, a valid inter vivos gift.

In the late 1960s, the patriarch of the Rubner family, Karl, purchased a 10% stake in a real estate development in Oakville known as the Lower Fourth Joint Venture.  Karl kept legal title to this interest in the name of his wife, Eda, with the intention that their three children, Marvin, Joseph, and Brenda, each receive beneficial ownership of a one-third share in the Lower Fourth interest.

Brenda subsequently renounced her share in the Lower Fourth interest to avoid triggering certain tax consequences.  Accordingly, her share reverted back to Eda, who then set up an account into which the income generated by Brenda’s former share would be deposited.  Notwithstanding that she had disclaimed her share, however, Brenda nonetheless wanted to retain the income that her share generated.  In 2014, Eda agreed to sign several blank cheques for the benefit of Brenda and her husband, allowing them to collect the income from Brenda’s former share without incurring the tax liability.

In November 2016, Eda was assessed as being incapable of managing property.  Shortly thereafter, Brenda’s husband filled in and deposited two of the blank cheques previously signed by Eda in order to prevent Brenda’s brothers from using those funds to pay for Eda’s expenses.

Brenda’s brothers subsequently commenced an application seeking, amongst other relief, a declaration that the funds withdrawn by Brenda after Eda became incapable were held on a resulting or constructive trust for Eda’s benefit.  Brenda took the position that Eda had intended that these funds be considered gifts for Brenda’s benefit. She claimed that at a family meeting in 2012 or 2013, Eda had specifically agreed to gift to Brenda all future income generated by Brenda’s former share in Lower Fourth.

The court was tasked with considering whether a purported promise of future gifts could constitute valid inter vivos gifts.  In order to establish a valid inter vivos gift, the recipient must show:

  • An intention to make a gift on the part of the donor, without consideration or expectation of remuneration;
  • An acceptance of the gift by the donee, and
  • A sufficient act of delivery or transfer of the property to complete the transaction.

The court held that the first step and third steps in this analysis could not be satisfied once Eda had been declared incapable of managing her property.  Eda was deemed to have been unable to formulate the necessary intention to make a gift with respect to the blank cheques.  Moreover, the court held that the delivery of “signed, blank cheques cannot amount to a complete gift”, as the drawer retains an interest in the amount of the cheque until it is cashed.  Once Eda became incapable of managing her property, the gift could no longer be perfected.  The blank cheques that were cashed after Eda was assessed as incapable of managing her property were held to be invalid, and Brenda was ordered to repay the amounts withdrawn.

Thanks for reading.

Garrett Horrocks

02 Apr

Alberta or British Columbia? Conflicts of Law Issues in a Guardianship Case

Kira Domratchev Capacity, Guardianship, Litigation Tags: , , , , , , , , , , , , , , , , , , , 0 Comments

The Court of Appeal of British Columbia (the “BCCA”) recently dealt with an appeal from an Order of the British Columbia Supreme Court which declined to exercise jurisdiction by staying a petition for guardianship of an incapable person. This Order also included various terms relating to the person’s care and property.

This appeal dealt with the guardianship of Ms. Dingwall, the mother of both the Appellant and the Respondent.

At all material times, Ms. Dingwall and the Appellant lived in Alberta and the Respondent resided in British Columbia. Between 2010 and 2014, Ms. Dingwall resided for various periods in both Alberta and British Columbia. At the time of this appeal, Ms. Dingwall lived in a care home in British Columbia. She suffered from advanced dementia.

The Alberta Proceedings

On February 5, 2015, the Appellant sought an Order from the Alberta Court of Queen’s Bench appointing him as Ms. Dingwall’s guardian and trustee. The Respondent opposed this Order and in September, 2015 filed an Application to move the proceedings to British Columbia. This Application was never heard and the matter continued to be heard in Alberta.

On July 7, 2016, the Court granted the Order sought by the Appellant which appointed him as Ms. Dingwall’s guardian and provided him with the authority to make decisions with respect to Ms. Dingwall’s health care, the carrying on of any legal proceeding not related primarily to Ms. Dingwall’s financial matters and Ms. Dingwall’s personal and real property in Alberta.

The British Columbia Proceedings

A few weeks prior to the Alberta hearing, the Respondent filed a petition with the Supreme Court of British Columbia seeking a declaration that Ms. Dingwall was incapable of managing herself or her affairs due to mental infirmity and an Order appointing her as committee of Ms. Dingwall’s person and Estate. The Appellant opposed the Respondent’s petition by arguing that the Supreme Court of British Columbia lacked jurisdiction.

The Supreme Court of British Columbia asserted jurisdiction because Ms. Dingwall was at the time of the decision, ordinarily resident in British Columbia and because there was a “real and substantial” connection to British Columbia. The Court found that, in this case, both Alberta and British Columbia had jurisdiction.

Despite British Columbia having jurisdiction in this case, the Court found that the Alberta forum was nonetheless more appropriate and cited the following factors in favour of its decision:

  • The similarity of the proceedings;
  • Alberta having issued a final order; and
  • The Respondent having attorned to Alberta’s jurisdiction by opposing the Appellant’s petition.

As a result, the Court stayed the Respondent’s petition but also made several Orders respecting Ms. Dingwall’s care and property. The parties’ costs on a “solicitor client basis” were to be payable by Ms. Dingwall’s Estate.

The Appellant appealed the following Orders made by the Court, other than the stay of the Respondent’s proceedings:

  • issuing an Order on the matter after declining to exercise jurisdiction respecting it;
  • finding the Court had territorial competence over the matter; and
  • awarding solicitor-client costs payable from Ms. Dingwall’s Estate.

The BCCA Decision

The BCCA allowed the appeal and found that the lower Court erred in making Orders concerning the very matter over which it had declined to exercise jurisdiction. The Court noted that a decision to decline jurisdiction over a particular matter renders a judge incapable of deciding issues or making orders as to the substance of that matter.

As a result, the Court set aside the Orders respecting Ms. Dingwall’s care and property. In light of that finding, the Court of Appeal found it unnecessary to deal with the issue of whether British Columbia had territorial competence over this matter, given that the lower Court declined to exercise jurisdiction, in any event.

The Court of Appeal found that the Appellant was entitled to special costs payable by Ms. Dingwall’s Estate and that the Respondent was not entitled to costs.

The full decision can be found here: Pellerin v. Dingwall, 2018 BCCA 110

Thanks for reading.

Kira Domratchev

29 Mar

Predatory Marriages: knowing what it means to say “I do.”

Garrett Horrocks Capacity, Common Law Spouses, Elder Law, Ethical Issues, General Interest, Health / Medical, In the News, Public Policy Tags: , , , , , 0 Comments

The interplay between evolving social norms and the legal foundations that predate or accelerate these changes has seen significant development in the last decade.  Courts of law and of public opinion have made important strides in shaping  social policy in many areas, such as medically-assisted death, gender diversity and inclusion, and marriage rights, to name a few.  A recent case out of the Ontario Superior Court of Justice considered this last issue, marriage rights, with a particular focus on predatory marriages.

A person has the capacity to enter into a marriage contract only if that person has the capacity to understand the duties and obligations created

In Hunt v Worrod, 2017 ONSC 7397, the Court was tasked with assessing whether an individual who had suffered a catastrophic brain injury possessed the necessary capacity to marry.  In 2011, Kevin Hunt suffered a serious head injury following an ATV accident and spent four months recuperating in hospital.  He was eventually discharged into the care of his two sons, but three days after his release, Mr. Hunt was whisked away by his on-and-off girlfriend, Kathleen Worrod, to be ostensibly married at a secret wedding ceremony.

Mr. Hunt’s children brought an application to the Court on his behalf to void the marriage, partly to preclude Ms. Worrod from accruing spousal rights to share in Mr. Hunt’s property or assets.  Ultimately, the Court concluded that Mr. Hunt did not possess the requisite capacity to enter into the marriage.

In its reasons, the Court relied heavily on the opinions of several expert witnesses and the existing body of legal authority.  The Court began by reviewing section 7 of Ontario’s Marriage Act, which provides that an officiant shall not “solemnize the marriage” of any person that the officiant has reasonable grounds to believe “lacks mental capacity to marry.”

The expert evidence tendered by the parties suggested that Mr. Hunt had significant impairments in his ability to make decisions, to engage in routine problem-solving, and to organize and carry out simple tasks.  He was characterized as “significantly cognitively impaired”, and was assessed as being incapable of managing his property, personal care, or safety and well-being.

The Court subsequently relied on the test for capacity to enter into a marriage contract established by the British Columbia Supreme Court in Ross-Scott v Potvin in 2014.  The Court held that a person has the capacity to enter into a marriage contract only if that person has the capacity to understand the duties and obligations created by marriage and the nature of the commitment more generally.

The Court also identified the tension between balancing Mr. Hunt’s autonomy as against the possibility that he lacked the capacity to appreciate the legal and social consequences of marriage.  Ultimately, the Court was satisfied that Mr. Hunt’s children had met their burden of demonstrating that their father lacked the necessary capacity to marry Ms. Worrod.  The marriage was declared void ab initio, and the attendant spousal property rights that would have otherwise flowed to Ms. Worrod were lost.

Thanks for reading.

Garrett Horrocks

08 Mar

Harper Lee’s Will

Rebecca Rauws Estate & Trust, In the News Tags: , , , , , , , , 0 Comments

I recently read this article from the New York Times, which discusses the Will of Harper Lee, author of “To Kill a Mockingbird”, as well as some of the events that occurred several years prior to Harper Lee’s death. Harper Lee died in 2016, at the age of 89. In the years leading up to her death, there was some question as to her capacity, and possible vulnerability to coercion or undue influence.

The New York Times article states that Ms. Lee had had a stroke in 2007 and also had severe vision and hearing problems. Ms. Lee resided in an assisted living facility before her death. The article also describes the position taken by counsel for Ms. Lee as part of a copyright dispute in 2013, where counsel stated that Ms. Lee had been taken advantage of and coerced into signing away her copyright because she was “an elderly woman with physical infirmities that made it difficult for her to read and see.”

A couple of years ago, in 2015, Ms. Lee published her second novel, “Go Set a Watchman”. It turned out that this novel had been an earlier draft of her extremely popular book, “To Kill a Mockingbird”, which is purported to have been discovered by Ms. Lee’s lawyer, Tonja Carter, in 2014. There was some controversy surrounding the publication of “Go Set a Watchman” on the basis that Ms. Lee had not actually consented to the manuscript being published, and may have been manipulated into doing so. The publication of a new book was particularly remarkable given that Ms. Lee had only ever published one book prior to “Go Set a Watchman”—namely, “To Kill a Mockingbird”, which was published in 1960. However, an investigation was performed, and a determination made that there had been no elder abuse of Ms. Lee.

After Ms. Lee’s death, her Will had not been made a matter of public record, as a result of the successful efforts by Ms. Carter (named in the Will as executor) to have the Will sealed on the basis that Ms. Lee, who was a very private person, would have wanted her Will to remain private. It was only unsealed recently after litigation by the New York Times, and after Ms. Lee’s estate withdrew its opposition to the Will being unsealed.

The Will was signed only 8 days before Ms. Lee’s death, and apparently directs that the bulk of her assets be transferred into a trust formed by Ms. Lee in 2011. Ms. Carter is one of the trustees of this trust. Further documents relating to the trust are not public, and accordingly, very few details are known about it.

Given the questions surrounding Ms. Lee’s potential vulnerability in the years leading up to her death, it will be interesting to see whether anything further develops in relation to her estate, or the trust which apparently will hold most of the assets of Ms. Lee’s estate.

Thanks for reading.

Rebecca Rauws

 

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05 Mar

Who Holds the Copyright to an Obituary?

Rebecca Rauws Estate & Trust, News & Events Tags: , , , , , , , , , 0 Comments

When someone composes an obituary for a loved one who has passed away, carefully selecting the photograph to go along with it, one would suppose that the last thing on their mind is the copyright they may hold in that obituary and photograph. Of course, few people expect that an obituary could be the subject of republication or possible copyright infringement.

However, one website has been reproducing obituaries in their “database of deceased people”, leading to questions about ownership of the obituaries themselves, as well as the photographs accompanying them. The website reproduces obituaries and photographs, apparently without permission from the individuals who originally created and posted the obituaries. As reported in this Global News article, one family even states that an obituary for their loved one, which had not been written by their family and contained a number of errors, was posted on the website less than a day after their loved one passed away. The family did not know who wrote the obituary, although the website released a statement that all of the obituaries they re-post are already on the internet.

A recent article in The Lawyer’s Daily discusses an application for certification of a class action copyright claim against this obituary database website. The application claims that the website is infringing copyright and moral rights in respect of the obituaries and photographs. The moral rights claim relates to the website’s monetization of the obituaries by offering options to purchase flowers, gifts, or virtual candles, through affiliate retailers. Some funeral homes offer a similar service, but the article notes that the unsavoury nature of the website’s business model, which consists of “scraping” obituaries from elsewhere on the internet, without permission or notice, and making money by doing so through advertisements or the selling of flowers or virtual candles, could provide some support for the moral rights claim.

In relation to the copyright infringement claims, there may be some obstacles to overcome, particularly in relation to ownership of the copyright. According to The Lawyer’s Daily article, under the Copyright Act, R.S.C., 1985, c. C-42, the person claiming a copyright infringement must be the owner, assignee or exclusive licensee of the work in question. An assignment of copyright must be in writing. As mentioned in the article, this could create an issue if the photograph used in the obituary was taken, for instance, by a stranger.

Damages in the event of liability are also uncertain. In a recent case with similar facts, where the defendants were found to have infringed on the plaintiff’s copyright, the court awarded statutory damages of only $2.00 per image because the cost of capturing the images in that case was low. However, given the emotional aspect of obituaries, it is possible that the facts in this case could lead to a larger damages award.

Thanks for reading,

Rebecca Rauws

 

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19 Dec

When does a Beneficiary have a Specific Interest in Trust Assets?

Rebecca Rauws Estate & Trust Tags: , , , , , , , , , 0 Comments

A beneficiary of a trust can have either a vested or a contingent interest in the trust’s assets. For example, if a trustee holds an asset in trust for another person, with no further conditions attached, the beneficiary’s interest in that asset will be vested. However, if the trustee holds the same asset in trust for a beneficiary, subject to the condition that the beneficiary attain the age of 30, that beneficiary’s interest depends on them reaching the age of 30, and is therefore contingent. Whether a beneficiary’s interest is vested or contingent can have different consequences depending on the particular circumstances.

In Spencer v Riesberry, 2011 ONSC 3222 (affirmed in Spencer v Riesberry, 2012 ONCA 418), the Ontario Superior Court of Justice considered the nature of a beneficiary’s interest in a trust. Specifically, in the context of matrimonial litigation, the court considered whether a spouse’s beneficial interest in real property held by a trust could be considered as “property in which a person has an interest” for the purpose of s. 18(1) of the Family Law Act, R.S.O. 1990, c. F.3, such that the property in question could be considered the matrimonial home. If a property is considered to be a matrimonial home, pursuant to s. 4 of the Family Law Act, it cannot be deducted or excluded from the calculation of net family property and can contribute to increasing the owner spouse’s net family property.

In this case, a married couple, Sandra and Derek, had been residing, with their children, in their family home on Riverside Drive. In 1993, Sandra’s mother, Linda, had purchased the Riverside Drive property and settled it in a trust (the “Trust”). Sandra and Derek resided in the residence prior to their marriage in 1994, as well as during the marriage. The couple separated in 2010.

The beneficiaries of the Trust were Sandra, Linda, and Linda’s three other children. Three other properties were added, by gift, to the Trust over subsequent years, and each of these other properties were occupied by one of the other three children and their families.

The terms of the Trust provided that the trustee was to hold the trust property, subject to a life interest in favour of Linda. Upon Linda’s death, the trustee was to divide the trust property into equal parts so that there is one part for each beneficiary living at the date of Linda’s death.

The court considered the nature of Sandra’s interest in the Riverside Drive property in the context of her net family property and whether it could be characterized as a matrimonial home. Due to the terms of the Trust, the court held that Sandra did not have a specific interest in the Riverside Drive property. Although she was a beneficiary of the Trust, which owned the Riverside Drive property, it does not follow that Sandra was specifically entitled to that property in particular. Sandra’s interest in the Trust was characterized as a contingent beneficial interest, as her ultimate entitlement under the Trust depended on various factors. For instance, as the division of Trust property amongst beneficiaries would happen only upon Linda’s death, the assets to be distributed would consist of whatever is held by the Trust at that time. Additionally, the beneficiaries must be alive at the time of Linda’s death in order to receive their share.

On this basis, the Court concluded that Sandra did not have a specific interest in the Riverside Drive property such that it could be considered a matrimonial home. As Sandra was a contingent beneficiary of the Trust, the Court did find that she held an interest in the Trust’s assets generally, which was required to be valued and included as part of the equalization calculations. However, as the interest is not subject to the special treatment given to the matrimonial home, it can be deducted or excluded from net family property, as applicable. Overall, as Sandra’s interest in the Trust’s assets was contingent and not vested, it had a significant effect on the matrimonial proceedings with her spouse.

 

Thanks for reading and happy holidays!

Rebecca Rauws

 

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18 Dec

Grosseth Estate v Grosseth: Presumptions of Resulting Trust & Undue Influence

Rebecca Rauws Estate & Trust Tags: , , , , , , , , , , , 0 Comments

In the spirit of the holidays, today I thought I would write about a recent decision related to gifting. In Grosseth Estate v Grosseth, 2017 BCSC 2055, the British Columbia Supreme Court considered whether the presumptions of resulting trust and undue influence were applicable to various inter vivos gifts made by a deceased uncle to one of his nephews. Ultimately, the court concluded that both presumptions were rebutted, and the gifts were valid.

In Grosseth Estate, the deceased, Mort, left a Will providing that the residue of his estate was to be distributed equally amongst his 11 nieces and nephews. However, most of his estate had been gifted to one particular nephew, Brian, and his wife, Helen, prior to Mort’s death. This left only about $60,000.00 to be distributed in accordance with Mort’s Will. One of Mort’s other nephews, Myles, who was the executor of Mort’s estate, brought a claim against Brian and Helen following Mort’s death, seeking to have the money that had been gifted to them by Mort, returned to the estate.

About 10 years prior to Mort’s death, he moved from Alberta, where he had lived most of his life, to British Columbia, where he moved into Brian and Helen’s basement suite. Mort became a full participant in the family; he was included on family outings, attended family dinners every night, and became like a grandfather to Brian and Helen’s children.

For the first couple of years after Mort moved in, he gave Brian and Helen money each month, on an informal basis, as contribution to household costs. Around 2 years after Mort had been living with them, Brian and Helen had decided to purchase a commercial property for Helen’s chiropractic practice. Mort insisted on gifting $100,000.00 towards the purchase price, making it clear that he did not want anything in return. Following this payment, Mort did not make further contributions to the monthly household expenses. The court concluded that there was a tacit agreement amongst Mort, Brian, and Helen that Mort’s generous gift had cancelled any notion that further payments would be required. Several years later, Mort also gifted $57,000.00 to Brian and Helen to pay off the balance of their mortgage.

The court found that the nature of the relationship between Mort, Brian, and Helen gave rise to the presumption of resulting trust as well as the presumption of undue influence. However, both of these presumptions are rebuttable.

The court acknowledged that, with respect to undue influence, Mort did depend on Brian and Helen, but based on the evidence of a number of individuals, concluded that he remained independent and capable throughout. Accordingly, the presumption of undue influence was rebutted.

The presumption of resulting trust was also rebutted as the court was satisfied that Mort intended the transfers to be gifts motivated by “a natural and understandable gratitude to Brian and Helen for the happiness and comfort of his final years.”

It is not uncommon for this type of situation to come up. Where a deceased lived with one niece or nephew (or sibling), or where the niece/nephew/sibling is the primary caregiver prior to the deceased’s death, any gifting that was done in the context of this relationship may be vulnerable to challenge on the basis of resulting trust or undue influence. Unfortunately, in some instances, the relationship dynamics involved in these kinds of arrangements can result in suspect gifts or transfers. Transfers made without clear evidence of an intention to gift can also raise questions. In this case, the court did not find that there was any improper behaviour on the part of the giftees, did find evidence of an intention to gift, and the transfers were ultimately upheld.

Thanks for reading,

Rebecca Rauws

 

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