After being embroiled in a lengthy legal dispute, Audrey Hepburn’s sons appear to have settled the division of their late mother’s personal property.
By way of background, Audrey Hepburn left her estate in equal shares to her two sons. Her will, however, did not provide any directions as to how her personal belongings were to be distributed. Many of the items in dispute are famous memorabilia acquired throughout her lengthy acting career.
In Ontario, all property belonging to a deceased person who dies with a will immediately vests in his or her estate trustee. However, it is not entirely clear as to whether an estate trustee has the authority, absent specific direction from the testator, to distribute the personal effects of the deceased.
In Re Bucovetsky Estate,  O.J. No. 303 it was held that in specie distributions are not permitted in the absence of a specific direction in the will or unanimous consent of all beneficiaries. Accordingly, without specific authority or unanimous consent of all beneficiaries, an estate trustee should take care to avoid distributing personal items.
Some options that may be available to an estate trustee who is confronted with the difficulty of determining how to deal with the distribution of personal effects of a deceased person include:
- seeking directions from the court pursuant to section 60 of the Trustee Act, R.S.O. 1990 c T. 23; or
- selling and converting the personal items into cash in accordance with the testator’s will or by section 17 of the Estate Administration Act, S.O. 1990, c. E.22
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Section 61(1) of the Succession Law Reform Act (the “SLRA”) provides that an application for dependant’s support must be made within 6 months from the issuance of the Certificate of Appointment of Estate Trustee (also known as “Probate”).
An application may be made beyond the six-month limitation period, with leave as, s. 61(2) of the SLRA provides the Court with discretion 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 recent decision of the Ontario Superior Court of Justice in Weigand v. Weigand Estate, 2016 ONSC 6201, deviates from this prior case law, in that it grants leave for an application for support, despite the fact that the assets of the estate had already been distributed.
In that case, the Deceased died on May 5, 2013. He was survived by his common law spouse and three children from a prior marriage. The Deceased left a Will, in which he named his common law spouse the Estate Trustee and sole beneficiary of his Estate. The Estate consisted of the matrimonial home, two promissory notes and the Deceased’s bank accounts.
The common law spouse obtained probate on November 5, 2013 and took steps to administer the Estate. Eleven months after the Estate had been fully administered, two of the Deceased’s three children brought an Application for leave to advance their respective claims for dependant support. They alleged to have been misled by the common law spouse and provided Affidavit evidence, which was corroborated by evidence from their grandfather. Specifically, they alleged that the common law spouse had told them she intended to sell the house and distribute the proceeds equally among the Deceased’s children. They relied on her promise, to their detriment, as the home was subsequently transferred into the common law spouse’s name after the limitation period had expired.
In deciding to grant leave, George J, stated that the discretion to extend (or refuse) is a question of what is equitable between the parties, in all the circumstances (para. 32). He stated that it would be wrong to allow the respondent to rely on the fact that she has distributed the Estate as a basis to not grant an extension and that it would be unconscionable to allow her to defeat a claim by virtue of a passed limitation period (para 34). He also reasoned that it was inconceivable that the language used in s. 61(2) was intended to shield administrators who engage in such behaviour (para 34).
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This week on Hull on Estates, Paul Trudelle and Stuart Clark discuss the recent decision of Re: Estate of Richard Lewis Crane, 2016 ONSC 291, and the issue of whether mortgage insurance should be taken into account when calculating the “net estate” available for distribution on an intestacy
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Applications for support under Part V of the Succession Law Reform Act (the “SLRA“) can often be a highly emotional affair. While you would hope that an Estate Trustee would not do anything to jeopardize assets against which a claim has been made while the Application remains ongoing, often when the Estate Trustee in question is a beneficiary of the estate, or has taken a strong adversarial position against the Applicant, the Applicant may begin to have concerns that the Estate Trustee may do something to jeopardize estate assets while the Application remains ongoing. Should such concerns arise, the provisions of the SLRA may be able to provide some safeguards to the Applicant.
In accordance with section 67(1) of the SLRA, once an Application for dependants support has been served upon the Estate Trustee, the Estate Trustee may not make any distribution from the estate unless the court orders otherwise, or all parties consent. 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.”
While section 67(1) should ensure that the estate will not be distributed to the beneficiaries until the Application has been resolved, it does not necessarily mean that the Estate Trustee may not sell a specific asset in the estate while the Application is ongoing. In the event that as part of their Application, the Applicant has sought the transfer of a specific asset into their name (whether under section 63(2)(c) of the SLRA or otherwise), more action may be required by the Applicant to safeguard such an asset while the Application is ongoing. Should such a situation arise, an Order suspending the administration of the estate in accordance with section 59 of the SLRA may be required. Section 59 provides:
“On an application by or on behalf of the dependants or any of them, the court may make an order suspending in whole or in part the administration of the deceased’s estate, for such time and to such an extent as the court may decide.”
Unlike section 67(1), section 59 is not automatic, such that in the event that it appears that the suspension of the estate will be necessary as it relates to a certain asset, and the Estate Trustee will not voluntarily agree to such an Order, it is likely that the Applicant will be required to bring a Motion for an Order suspending the administration of the estate in accordance with section 59 of the SLRA.
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