Tag: dependant support

01 Apr

Support for “Dependants”?

Natalia R. Angelini Litigation Tags: , 0 Comments

I recently blogged on a case where the British court disallowed an adult son’s plea for his wealthy parents to continue to financially support him, which litigation was brought after his parents significantly reduced their financial involvement.

A different outcome was achieved in Dove v. MacIntyre, a recent decision before the Supreme Court of Nova Scotia, Family Division, where divorced parents were dueling over the issue of support for their adult daughter. In this case, the mother applied to the court seeking an order that the father pay child support for their 25-year old daughter during her attendance at a dental hygiene program.

Amongst other issues the Court addressed was whether or not the child was a dependant for the purposes of child support, with the definition in the applicable statute including the situation where a child is over the age of majority but unable, by reason of illness, disability or other cause, to withdraw from the charge of the parents or obtain the necessaries of life. Particular attention was paid to the situation, such as in this case, where post-secondary education was being pursued, which can qualify as an “other cause” for purposes of the definition.

Various factors established by the cases were enumerated by the Court to determine whether the  child was eligible for support, including that she tried to finance her education through loans, her income was insufficient to allow her to afford to pay for all of the program costs, her education plan was reasonable and she has secured employment as a result, the mother had taken on extra work in order to help finance her daughter’s studies, her father was remarried and in a two-income household, etc.

The Court was satisfied that the daughter was a dependant child for the period in question, and compelled the father to share in a portion of the education costs equally as the mother.

Had the father been deceased and had the dependant support case been levelled against his estate, I am not certain that the daughter would have fared as well as she did in this case. Under the Succession Law Reform Act, the definition of a dependant is different than in the family law statute under consideration in the Dove case, such that to qualify as a dependant the person must be someone the deceased (i) was providing support to immediately before death, or (ii) was under a legal obligation to support immediately before death. An analysis of the latter of these qualifications would be needed to resolve the issue, and without a laundry list of clearly delineated factors to consider (unlike those applied in the family law context in Dove), the outcome seems less clear to me. Although it also remains open to an independent adult child to apply for dependant support on the moral obligation ground, in Ontario this ground appears to continue to be treated as but one factor to consider in the context of support claims.

Thanks for reading and have a great day,

Natalia Angelini

08 Feb

Dependant Support – Automatic stay on distributions from the estate

Stuart Clark Support After Death Tags: , , , , , , , , , , , , , 0 Comments

The commencement of an Application for support as a dependant under Part V of the Succession Law Reform Act (the “SLRA”) can be an extremely stressful event for the Applicant. Not only is the Applicant likely commencing court proceedings against fellow family members and/or close friends of the deceased, but there may also be a sense of urgency to the Application to ensure that steps are taken before the estate has otherwise been administered and/or distributed to those who would be entitled to the estate but for the support Application. As a result of these concerns it is not uncommon for the Applicant in the early stages of the Application to seek some form of court intervention to stop and/or stay the administration of the estate until the Application has been adjudicated, thereby ensuring that there are assets remaining in the estate to satisfy any support award should it ultimately be made. But is such court intervention actually necessary?

Under section 67 of the SLRA, once an Estate Trustee has been served with an Application for support under Part V they are automatically required to cease all distributions from the estate unless certain conditions are met. Specifically, section 67(1) provides:

Where an application is made and notice thereof is served on the personal representative of the deceased, he or she shall not, after service of the notice upon him or her, unless all persons entitled to apply consent or the court otherwise orders, proceed with the distribution of the estate until the court has disposed of the application.

Section 67(3) provides that any Estate Trustee that makes a distribution in violation of section 67(1) once they have been served with an Application under Part V of the SLRA is personally liable to pay any shortfall should a support order ultimately be made. As a result, any distribution made by the Estate Trustee once an Application for support has been commenced would be at great potential personal liability, as they could personally be required to pay any support order.

Although section 67 of the SLRA automatically stops any external distributions being made once an Application for support has been commenced, it does not stop the internal administration of the estate itself. As a result, the Estate Trustee would, for example, still be at liberty to collect and/or liquidate any estate assets, including any real estate. They just could not distribute those funds to the beneficiaries once the assets had been liquidated. In the event the Applicant should seek a particular asset as part of their support order, such as the transfer and/or use of particular real property, additional steps would need to be taken by the Applicant to ensure that the Estate Trustee did not dispose of the asset while the Application remained before the court. These additional steps would likely be in the form of an order under section 59 of the SLRA, while allows the court to issue an order “suspending” the administration of the estate either in whole or in relation to a particular asset (i.e. the real estate) for such time as the court may decide.

Thank you for reading.

Stuart Clark

26 Jun

Priority of Claims for Dependant’s Support Over Other Claims Against an Estate

Sayuri Kagami Uncategorized Tags: , , 0 Comments

Two weeks ago, I blogged about the priority of assets out of which an Order for dependant’s support might be paid. Today, I’ll look at the priority of claims for dependant’s support in relation to other claims against an estate.

Priority of Net Family Property Equalization Claims

Section 6(12) of the Family Law Act, RSO 1990, c F3, as amended, provides a statutory priority when it comes to a spouse’s entitlement to an equalization payment out of a deceased spouse’s estate. Such a payment has priority over gifts made in the deceased spouse’s will or the rights of a person to inherit on the intestacy of the deceased. Interestingly, such payments also have priority over any order for dependant’s support, except an order in favour of a child of the deceased spouse. Thus whether a dependant support claim will prevail over a claim to equalization of net family property will depend on whether or not the dependant is a child of the deceased.

Priority of Support Claims over Other Claims

In Grieco v Grieco Estate, 2013 ONSC 2465 (Grieco), the Court considered whether claims for dependant support might have priority over other claims against an estate. In that case, multiple family members, including the Deceased’s estranged wife, his common-law spouse, and his adult children claimed to be dependants of the Deceased. There were also various persons or entities with other claims and actions against the Estate (referred to as the “aviation claimants”).

The Court looked to section 4(1) of the Creditor’s Relief Act, 2010, SO 2010, c 16, Sched 4, and found that, where the estate is not bankrupt, the Creditor’s Relief Act applies such that Orders for support, including dependant’s support, prevail over other judgment debts.  Where the estate is bankrupt, the claims of unsecured creditors rank equally such that the claims for an equalization payment would rank equally with other claims against the estate (see Thibodeau v Thibodeau, 2011 ONCA 110).

Thus where an estate is not bankrupt, the following hierarchy appears to exist among unproven claims brought against an Estate:

  • Dependant support claims of children of the deceased;
  • Equalization claims of the surviving spouse of the deceased;
  • Dependant support claims of dependants who are not the children of the deceased; and
  • other claims brought against an Estate.

The Creditor’s Relief Act, 2010 also speaks to the priority of certain other claims, such as judgment debts owing to the Crown in right of Canada.

Thanks for reading!

Sayuri Kagami

12 Jun

Priority of Assets out of which a Dependant Support Claim will be Paid

Sayuri Kagami Uncategorized Tags: , , , 0 Comments

As most of our readers know, when a person dies without leaving adequate support for their dependants, the courts may intervene to ensure that such dependants receive a fair share of the estate. Furthermore, pursuant to subsections 63(2) and 68(2) of the Succession Law Reform Act (SLRA), the Court has flexibility in the form of support ordered and against what portion of the Estate such support will be charged against.

Although the SLRA provides the Court with flexibility in the types of orders it can make, case law in Ontario also provides some guidance as to the priority of assets to be used in making support orders.

Priority of Support from “Traditional Estate Assets”

In Matthews v Matthews Estate, the Superior Court considered the issue of which assets should be used in making an order for dependant’s support. The assets available were both assets falling inside the estate (being mainly a ½ interest in a matrimonial home) and assets falling outside the estate, but subject to the clawback provision of section 72 of the SLRA (being a $1,000,000.00 life insurance policy). In that case, the Court made it clear that:

where property not normally part of the Estate is brought into the Estate by virtue of the provisions of the Succession Law Reform Act to the detriment of those designated beneficiaries, care must be taken to insure that the burden of any support order in favour of the Applicant be borne by the traditional assets of the Respondent’s estate before any encroachment is made on the life insurance policy proceeds.

No Priority Among Section 72 Assets

While the Court has set out that traditional estate assets should be used to satisfy dependant support claims before section 72 assets, there is no priority among section 72 assets, or even any requirement that an applicant seek to obtain support from all section 72 assets.

In Stevens v Fisher Estate, the estate itself was insolvent due to the debts of the Deceased. The Deceased, however, had three life insurance policies: a $84,000.00 group life insurance policy naming a lifelong friend/former common law spouse as beneficiary, a $50,000.00 insurance policy naming his 32 year old daughter as beneficiary, and a $250,000.00 life insurance policy to be held in trust for his two younger (but still adult) children. The common-law spouse of the Deceased commenced a claim but sought support only from the $84,000.00 group life insurance policy. While the beneficiary of the $84,000.00 group life insurance policy argued that the Applicant should look to the other life insurance policies before resorting to the group life insurance policy, the Court found that there was no priority of estate assets for the Applicant to look to before turning to the $84,000.00 policy.

While Stevens v Fisher Estate indicates that there is no requirement that an applicant for support look to all section 72 assets, it’s important to consider the implications of seeking support from only some, as opposed to all, section 72 assets.

Thanks for reading!

Sayuri Kagami

09 Apr

The Support Claim as a Remedy for the Disappointed Spouse

Kira Domratchev Support After Death, Wills Tags: , , , , , , , 0 Comments

Occasionally, a person finds themselves in a situation in which, following their spouse’s death, they were either not adequately provided for under their spouse’s Will or were not provided for at all.

Especially in situations where the deceased fully supported his or her spouse, one viable option is for the surviving spouse to assert a claim for support under Part V of the Succession Law Reform Act, RSO 1990, c. S. 26 (the “SLRA”).

A surviving spouse, either married or common-law as defined in the SLRA fits into the definition of a “dependant” and is thus entitled to support from the deceased spouse’s estate.  The question for the Court is whether the deceased made adequate provision for his/her surviving spouse and, if not, what ought to be the quantum of support.

Under the SLRA, a “dependant” includes not just married spouses, but also either of two persons who,

  • were married to each other by a marriage that was terminated or declared a nullity; or
  • are not married to each other and have cohabited,
    • continuously for a period of not less than three years, or
    • in a relationship of some permanence, if they are the natural or adoptive parents of a child.

It is important to keep in mind that such a claim under the SLRA must be brought within six months of obtaining probate, unless the Court allows for an extension of time. Probate is another term for a Certificate of Appointment of Estate Trustee with a Will that is usually obtained by the Estate Trustee for proper administration of the Estate.

The Court may consider various factors in assessing the nature, amount and duration of support, including the eighteen factors listed under section 62(1) of the SLRA some of which are:

  • The Dependant’s current assets and means;
  • The Dependant’s capacity to contribute to their own support;
  • The Dependant’s age and physical and mental health;
  • The Dependant’s needs – with regard to accustomed standard of living;
  • Any agreement between the Dependant and the deceased spouse; and
  • The proximity and the duration of the Dependant’s relationship with the deceased spouse.

If a claim for dependant’s relief is successful, the Court has broad discretion and can make a variety of orders for support, including but not limited to:

  • A monthly or annual payment, for an indefinite or limited period of time or until the occurrence of a specific event;
  • A lump sum payment;
  • The transfer of specified property, either absolutely, for life, or a specified number of years; or
  • The possession or use of any specified property for life or for such period as the Court considers appropriate.

In any event, if a person believes that they may have a good case for a Dependant’s Support Claim under the SLRA, it is important to consult with a lawyer as soon as possible so as to file the claim within the allotted limitation period and discuss any other options.

Thanks for reading.

Kira Domratchev

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

Dependant’s Support – Do common law spouses have to live in the same residence?

Dependant Support and Pre-Retirement Death Benefits

Can Divorced Spouses No Longer Be Dependants?

 

08 Sep

Bad Romance: Dependant Support

Hull & Hull LLP Common Law Spouses, Estate Planning, Hull on Estate and Succession Planning, Trustees, Uncategorized, Wills Tags: , , , 0 Comments

“Can a romantic partner – even one in an apparently close and loving relationship for several years – make a claim for dependant relief without establishing that she actually lived together with the deceased for at least three years?”

This was the question raised in the recent decision of Stajduhar v. Kerzner Estate, 2017 ONSC 4954.

Spoiler alert: the answer is no.

As reported in the decision, the deceased died on December 31, 2016. The deceased died leaving a Will made three years after the relationship was alleged to have commenced, which did not provide for the claimant. The deceased’s estate passed to his two children from a prior marriage.

The main issue in the proceeding was whether the claimant met the definition of “spouse” set out in the Succession Law Reform Act. The definition incorporates the definition of “spouse” from the Family Law Act, s. 29. There, “spouse” is defined as including “either of two persons who are not married to each other and have cohabited … continuously for a period of not less than three years”. “Cohabit” is defined in the SLRA as meaning “to live together in a conjugal relationship, whether inside or outside marriage”.

The respondents disputed whether the claimant and the deceased lived together continuously for the required three year period. They maintained separate residences. Although this is not conclusive, and parties can have separate residences and still be found to be spouses, the case states that “living together implies something more than having conjugal relations, spending time together or doing so for a long time.”

The claimant was unable to provide sufficient corroborated evidence to support a finding that she lived together with the deceased for the requisite period.  The court concluded that “The evidence simply fails to establish the core and necessary fact that [the claimant] and [the deceased] lived together in any arrangement capable of being so described.  They needn’t have had a single residence. They needn’t have never been apart. There must however be evidence of an arrangement that, viewed as a whole, can fairly be described as “living together”. Such evidence should be capable of some objective verification and not rely almost entirely upon self-serving general statements of conclusion.”

The application was dismissed with costs. Although the estate trustee incurred costs of over $75,000, they agreed to limit costs to $25,000. The claimant unsuccessfully tried to oppose these costs on the basis of impecuniosity.

Thank you for reading.

Paul Trudelle

03 Aug

Dependant Support Claims, Limitation Periods and Life Interest Beneficiaries

Umair Estate Planning, Executors and Trustees, Litigation, Support After Death, Trustees Tags: , , , , 0 Comments

We have previously blogged about the limitation period that applies to applications for dependant’s relief under Part V of the Succession Law Reform Act, and the circumstances in which the Court will extend the limitation period.

In the recent decision of Habberfield v Sciamonte, 2017 ONSC 4332, the Court was asked to consider whether an application for support by a beneficiary with a life interest in a testamentary trust was statute-barred.

The Law Regarding Limitation Periods and Dependant Support Claims

Section 61(1) of the Succession Law Reform Act (the “SLRA”) provides that an application for dependant’s support must be made within six months from the issuance of probate.

An application may be made beyond the six-month limitation period, with leave. Section 61(2) of the SLRA provides the Court with discretion, if it considers it proper, to allow an application to be made by a dependant “at any time with respect to any portion of the estate remaining undistributed at the date of the application”.

Generally, case law has interpreted s. 61(2) to limit any claim made after six months to the remaining, undistributed portion of the estate, and to bar any claim made after the assets have been fully distributed. Paul Trudelle previously blogged on this application of s. 61(2).

The Facts

In Habberfield, the Applicant (“Joan”) claimed that she was the long-time common law spouse of the Deceased. The Deceased died on April 11, 2012. Probate was granted on October 30, 2012. Joan’s application was heard on June 30, 2017, more than five years after the Deceased’s death.

At the time of the application, the assets of the Deceased’s Estate had an approximate value of $2,000,000.00. The assets primarily consisted of the Deceased’s home and an adjacent rental property.

Under the Deceased’s Will, the home and the rental property were to be held in trust for Joan until she died, no longer desired the properties, entered into a new relationship or moved to a seniors’ or nursing home. Upon such an event, the Will directed for the properties to be sold and for $100,000.00 to be held in a discretionary trust to meet Joan’s needs. The balance of the net proceeds of sale were to be divided amongst the Deceased’s issue. Joan was responsible for the carrying and repair costs for the properties during her life tenancy.

On the application, Joan argued that she had not considered the adequacy of the support she received under the Will prior to the expiration of the limitation period. At the time of the application, Joan was 78 years old, had limited resources to continue to pay the carrying costs of the properties and was considering moving into a care home. The latter option would only provide her with an interest in a discretionary trust of $100,000.00.

The respondent Estate Trustees argued that Joan’s claim was statute-barred, and also argued that Joan’s claim for support was weak on its merits.

Justice Lofchik’s Decision

As in prior cases that have considered the Court’s discretion under s. 61(2) of the SLRA, Justice Lofchik concluded that the discretion should be “exercised judicially in a broad and liberal manner.”

Justice Lofchik noted that the bulk of the Deceased’s Estate remained undistributed, and in fact could not be distributed until Joan’s life interest was extinguished. As a result, Justice Lofchik held that there would be no prejudice to the Estate or to the residuary beneficiaries in allowing Joan’s claim to proceed.

Justice Lofchik’s decision is consistent with prior decisions that have considered s. 61(2), where the Courts have held that the discretion to allow an application to proceed can be exercised at any time as to the assets that are undistributed as of the date of the application.

However, the discretion ultimately rests with the Court. The message to take from this case is that it is generally advisable for potential dependants to consider their present and future needs for support prior to the expiry of the statutory limitation period in order to minimize the additional risk and cost of seeking the leave of the Court.

Thank you for reading,

Umair Abdul Qadir

 

23 Jun

Dependant Support Claims, Limitation Periods and the Vesting of Real Property

Umair Common Law Spouses, Estate & Trust, Executors and Trustees, In the News, Litigation, Support After Death, Trustees Tags: , , , , , 0 Comments

We have previously blogged about the limitation period that applies to claims for dependant support under Part V of the Succession Law Reform Act (“SLRA”), and the circumstances in which the Court will exercise its discretion to extend the period.

In the recent decision of MacDonald v Estate of James Pouliot, 2017 ONSC 3629, the Honourable Justice Nightingale considered whether the limitation period could be extended for a dependant’s support claim where the real property owned by the deceased had already vested in a beneficiary, by operation of section 9 of the Estates Administration Act.

Limitation period for dependant support claims

Under subsection 61(1) of the SLRA, no application for  dependant support can be made more than six months after probate has been granted.

However, subsection 61(2) provides the Court with the discretion to allow an application to be made at any time “as to any portion of the estate remaining undistributed at the date of the application.”

As we have previously blogged, the Court has generally interpreted section 61(2) to allow claims that are made more than six months after probate as against the assets that remain undistributed as of the date of the application.  In one recent decision, the Court granted leave even though the assets of the estate had been distributed due to the conduct of the estate trustee.

The issue in Pouliot

In Pouliot, the Applicant (“Mary”) was in a common-law relationship with the Deceased for 22 years. The Deceased died intestate on September 10, 2013.

The primary asset of the Estate was a house (the “Home”) that Mary and the Deceased purchased together in 1999. Although each contributed to half of the cost of the Home, title to the Home was in the name of the Deceased. The Court found that Mary and the Deceased shared the expenses of the Home during their relationship. Following the Deceased’s death, Mary continued to live at the Home and made all of the monthly mortgage payments on the Home.

As the Deceased died intestate, and given that common-law spouses do not inherit on an intestacy, the Deceased’s son was the sole beneficiary of the Deceased’s Estate. The Deceased’s son (the “Estate Trustee”) obtained probate on June 8, 2015. Mary commenced her Application on November 10, 2016, seventeen months after probate was granted.

Mary’s Application sought a declaration that she had an equal interest in the Home by way of a constructive or resulting trust. Mary also sought support as a dependant pursuant to Part V of the Succession Law Reform Act. The Estate Trustee opposed Mary’s Application, arguing that it was statute-barred due to section 61 of the SLRA and section 9 of the Estates Administration Act.

Under section 9(1) of the Estates Administration Act, real property that has not been disposed of, conveyed to, divided or distributed amongst the persons who are beneficially entitled to it within three years after the death of the deceased owner automatically vests in such persons. Mary’s Application was commenced more than three years after the Deceased’s death.

In the circumstances, although Mary was successful in her claim that she held an equal interest in the Home, Justice Nightingale held that “the applicant’s SLRA claim in this proceeding is barred as it relates to the only property of the estate that has already vested in the respondent….”

The Court concluded that there were no assets in the Estate against which an order for support could be made in Mary’s favour.

Thank you for reading,

Umair Abdul Qadir

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16 May

You Can’t Really Contract out of Dependant’s Relief

David M Smith Estate & Trust, Support After Death Tags: 0 Comments

The enactment of the Succession Law Reform Act, as its name implies, had a profound impact on the power of the Court to remedy injustice where testators fail to provide for their dependants.  Yet the true nature and extent of the power of the statute is not always fully appreciated

In Butts Estate v Butts (“Butts Estate”), the Court confirmed that “s. 63(4) gives the court a broad judicial discretion to award support to a dependant, as defined in s. 57, notwithstanding the existence of any prior agreement or waiver. The language of s. 63(4) could not be broader or clearer in its purpose and is obviously aimed at achieving justice and equity at the date of the hearing, notwithstanding what the parties might have agreed to earlier on.”

In Butts Estate, the deceased and the dependant spouse had entered into a separation agreement and later divorced. The separation agreement included a release by the spouse of the deceased’s estate, including any claims by her for dependant’s support, and also provided for the payment of $500.00 per month in personal support or maintenance by the deceased to his spouse.

The Court ultimately found that the support which was paid under the separation agreement was patently inadequate and must be corrected. The Court stated that “there is no reason why [the dependant spouse] should be denied a support order under the SLRA which would bring her out of such circumstances and enable her to live out her remaining years in some dignity and comfort.”

David Morgan Smith

16 Jan

The Case for Financial Support of Non-Conjugal Caregivers

Ian Hull Beneficiary Designations, Elder Law, Estate & Trust, Estate Planning, Executors and Trustees, General Interest, In the News, Trustees, Uncategorized, Wills Tags: , , , , , , 0 Comments

With the aging population, there are increasing numbers of individuals who may require a caregiver. And that caregiver is not always privately employed, or a direct family member or a spouse.

Currently, the socio-economic situation of such unpaid caregivers has been documented as “financial hardship” due to the void created upon the terminated relationship  A recent article published by Canadian Family Law Quarterly suggests a two-pronged statutory remedy be put in place in order to: (i) provide legal recognition of such relationships, and (ii) compensate sacrifices of the unpaid/altruistic caregiver.

Who Should Compensate Unpaid Caregivers?
An important consideration in the contemplation of providing support to unpaid caregivers is whether the state or the individual accepting care should have the onus of providing financial support. In the case of Egan v Canada, [1995] 2 SCR 513, Justice Sopinka ruled in favour of individual responsibility and stated “the government was not required to be proactive in recognizing new social relationships [and that]… it is not realistic for the court to assume that there are unlimited funds to address the needs of it all.”

On the other hand, Nicholas Bala in an article published in the Queens Law Journal states: “an adult who shares a home and provides care for another economically dependent adult should be entitled to the same level of state assistance (or tax relief) [as paid caregivers] whether the dependent is a spouse, parent, sibling, uncle or friend.”

Estate Planning
Currently, aside from equitable and statutory remedies (not available to all and not certain), the only private law safeguard put in place to protect unpaid caregivers is through wills and estate planning. To protect an unpaid caregiver through a will or estate plan would require forethought by the recipient of the care.  The plan would need to be instituted at a point when the individual had capacity, and was able to properly execute a will or testamentary document.

In the case of unpaid caregiving, the care provider who is a family member may be a beneficiary of an existing estate plan (outside of any caregiving obligations). Entitlement to an enhanced benefit would be a fair way to compensate for unpaid care to the testator.

Dependant’s Relief
Another recourse for an unpaid caregiver is to apply for dependant’s relief pursuant to section 58(1) of the Succession Law Reform Act (“SLRA”).

Section 58(1) provides that:

Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants or any of them

In the case of Cummings v Cummings, 2004 CanLII 9339 (ON CA),  the Court of Appeal acknowledged that “caregiving may give rise to both legal and moral obligations to provide support.” Therefore, if an unpaid caregiver can establish themselves as a dependant of the deceased individual who was receiving their care, it is possible they may get some recourse under the SLRA.

It nonetheless bears repeating that the case for law reform relates to the person who does not meet the definition of dependant: the non-direct family member, non-conjugal caregiver who altruistically provides caregiving at significant personal sacrifice and is not named in the Will on the termination (i.e. death) of the caregiving relationship.

Thanks for reading,

Ian M. Hull

Other Articles You Might Be Interested In

Caregivers & Fiduciary Obligations

Family Caregivers Bill passes final vote

The Sandwich Generation of Caregivers

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