Tag: estate law blog

14 Feb

Elder Law Litigation Needs to Increase?

Natalia R. Angelini Elder Law, Litigation Tags: , , 0 Comments

In the last couple of decades we have seen a rise in estate, capacity and trust litigation due in large part to the aging demographic.  One would think that elder law disputes – disputes involving retirement residences, nursing homes and/or long-term care facilities – would similarly be on the rise.  What was highlighted for the attendees at a recent Personal Injury and Elder Law CLE presentation, however, is that there is limited case law in the elder law area. Although the knee-jerk reaction may be to see few cases litigated through to a final hearing as a positive state of affairs, that is not so. Rather, it seems that there are an insufficient number of claims being made, and an even fewer number that are pursued all the way to trial.

The panel sees ageism as contributing to this set of circumstances. Damage awards are typically lower for the elderly, the rationale seemingly that they have already lived most of their lives and are going to die anyway. The converse “Golden Years Doctrine” was cited as a means to argue for the better protection of elderly plaintiffs, grounded in the argument that the elderly suffer more and are more severely impacted from an injury than their younger counterparts.

Taking such cases to trial and increasing awareness (e.g. media coverage) is a way to create progress and change in this area of the law. The panel advocated for this approach, as well as stressed the importance of electing to have such cases heard in front of a jury, who may be more willing to award larger sums to litigants.

If this advice is followed, we can hope to see more decisions that can build upon the few noted cases in the area (this article references some of them), and more just outcomes for the elderly, their families and/or their estates.

Thanks for reading and have a great day,

Natalia R. Angelini

12 Feb

Can Typography Expose a Sham Trust?

Natalia R. Angelini Estate & Trust, Litigation, Uncategorized Tags: , , 0 Comments

In estate litigation it is not uncommon to have reason to engage handwriting experts to attest to the authenticity of a signature on a testamentary document. However, the need to engage a typography expert to speak to the font used on such a document is a much rarer occasion. In McGoey (Re) such an expert was used to expose a sham trust.

In this case, upon Mr. McGoey’s assignment into bankruptcy, the trustee in bankruptcy sought to realize on the assets, seeking a declaration that Mr. McGoey’s interest in two properties held jointly with his wife were assets of the estate and subject to creditor claims. Mr. McGoey and his wife argued that they held title to the properties in trust for their children and, thus, outside the reach of creditors. They asserted that the trust documentation was executed in 1995 for one property and in 2004 for the other.

Upon examination by a typography expert, it was revealed that the dates of execution of the documents were not accurate, as neither Cambria (the typeface on the 1995 document), nor Calibri (the typeface on the 2004 document), were available for use by the general public until 2007. The court accepted the expert’s evidence. However, the issue was not fully resolved, since Mr. McGoey’s financial predicament was not apparent until 2010. He and his wife may have lawfully created trusts for their children between 2007 and 2010.

The court turned its scrutiny to the other circumstances of the case. Although several red flags or “badges of fraud” were found and are cited in the decision, most notable was the fact that nothing distinguished the McGoey’s use of the properties from that of an owner – they used the properties as they desired, encumbered them when they wanted and described themselves as the owners in legal papers. Accordingly, the court concluded that the trusts were shams.

Although both the expert testimony and the surrounding circumstances contributed to the court’s ruling, it seems the evidence of the typography expert would have been definitive on the question had the factual timeline been different. I expect with the ongoing creation of new fonts that we can expect to see increased use of such expert testimony in estate litigation.

Thanks for reading and have a great day,

Natalia R. Angelini

11 Feb

Getting Frozen out of Cryptocurrency?

Natalia R. Angelini Estate & Trust, Estate Planning, Executors and Trustees, General Interest, In the News, News & Events Tags: , , 0 Comments

Cryptocurrency is  aptly described in a recent post as “digital cash stored on an electronic file and traded online… like online banking but with no central bank or regulator. It also has virtual wallets which store the cryptocurrency.”

As with any online assets, access to a deceased person’s cryptocurrency is vital. Without it, heirs will not receive their intended entitlements and the cryptocurrency will remain dormant.  A stark example of such a problem can be found in the QuadrigaCX debacle.

QuadrigaCX is Canada’s biggest cryptocurrency exchange. Its’ founder, Gerald Cotton, died unexpectedly and prematurely at age 30. He was the only one who knew the password to access the holdings of the company’s clients. Once news of his death got out, thousands of clients were rushing to withdraw millions in funds. They have not yet been successful, the reason being, as one author explains, is that “…Cotten was the sole person responsible for transferring QuadrigaCX funds between the company’s “cold wallet” — secure, offline storage — and its “hot wallet” or online server…Very little cryptocurrency was stored in the hot wallet for security purposes. Cotten’s laptop was encrypted, and his widow, Jennifer Robertson, and the expert she hired have been unable to access any of its contents.”

QuadrigaCX is evidently now in financial straits. It has filed for creditor protection in the Nova Scotia Supreme Court. Further, Ms. Robertson has reportedly sought the appointment of Ernst & Young to oversee the company’s dealings while attempts to recover the lost holdings continue.

This unfortunate situation highlights the risk that may accompany cryptocurrency’s lack of regulation. It also serves as a reminder to us that with ownership of digital assets growing, we need to think about how to ensure that gifting such assets is effected, including making sure to inform our intended estate trustees of how to access the assets. Doing so is helpful because, as the above case demonstrates, it is a must in the case of cryptocurrencies to have the password relevant to the wallet where the currency is held. Further, with an asset as volatile as cryptocurrency can be, a fully informed estate trustee will be in a better position to avoid delays in the administration of an estate and/or allegations of mismanagement if he/she is able to quickly access and distribute such assets.

Thanks for reading and have a great day,

Natalia R. Angelini

06 Dec

A Way to Honour Those No Longer With Us

Natalia R. Angelini General Interest, In the News, Uncategorized Tags: , 0 Comments

The Holiday season is full of merriment and celebration. But it may be difficult for those who have lost a loved one to partake in the festivities, as the sense of loss and loneliness is often deepened at this time of year.

A recent article tells us about holiday remembrance services that can offer relief to those coping without a person who meant a great deal to them. The author speaks of the death of his mother and of his attendance at a holiday remembrance service he learned of through his local Funeral Centre, which gave him great comfort. He touchingly notes:

“Sharing tales about my mother eased my sense of loss and helped me cope with the first Christmas without her. I felt no guilt about depressing others at Christmas. Instead I was instilled with the powerful sense of relief that comes from knowing others feel the same way. Being able to share my grief freely and without feeling like a burden is an emotional and powerful way to ease the pain and to comfort others too.”

I expect, as the author points out, that the most difficult time after our nearest and dearest pass away is not in the blur of the days immediately following the death and funeral, but when the hustle and bustle of that emotional time is over and everyone returns to living their lives.  So it is nice to learn that holiday remembrance services that can help us honour loved ones and lift spirits are run by many funeral homes across the Greater Toronto Area.

 

Thanks for reading,

Natalia Angelini

04 Dec

Do you Wish to Appoint a Foreign Executor? Three Things to First Consider

Natalia R. Angelini Estate Planning, Executors and Trustees Tags: , 0 Comments

A critical decision when making your estate plan is deciding who will administer your assets after your demise.  Given the importance of appointing someone you trust, some find it to be a painstaking decision, at times complicated for those having loved ones living outside of Canada.  The attached article speaks to three things to first consider before naming a foreign executor:

  1. Bond Requirement – If the executor is a non-resident he/she will generally need to post an administration bond equal to the value of the estate when applying for probate. The process to obtain a bond is time-consuming and costly. Bringing a motion asking the court to dispense with the bond requirement also adds expense.
  2. Tax Implications – An estate may be deemed to be non-resident for tax purposes as a result of a foreign executor in control. The ensuing added cost to the estate could include losing preferential capital gains and Canadian dividend tax treatments. An estate’s reporting and tax withholding obligations are also increased. Further, even if the estate is considered Canadian, there lies a risk that it will be subject to the tax laws of the executor’s country.
  3. Practical Challenges — Among an estate trustee’s duties are the obligations to gather the assets, inventory them, preserve them and distribute them. Such administrative tasks take time and are made more challenging when the executor is in another jurisdiction. If there is no trusted local individual, one work-around is to appoint a professional trust company, which has the added bonus of eliminating the bond requirement and tax risks noted above.

It may be prudent depending upon one’s individual circumstances to get the comfort of legal advice on the issue.

Thanks for reading and have a great day,

Natalia Angelini

27 Sep

A Potential Halt to Significant Changes for ODSP Recipients

Natalia R. Angelini Estate & Trust, Estate Planning, In the News Tags: , , 0 Comments

Several newsworthy changes to the Ontario Disability Support Program Act, 1997 (the “Act”), came into force last year. For estates and trusts lawyers, the most important changes were increases in cash exemption limits, as well as increases in permissible payments to ODSP recipients.  Specifically:

  1. basic cash exemption limits were increased for a single person (from $5,000 to $40,000), and for a spouse included with the person (from $7,500  to $50,000); and
  2. permissible payments from a trust fund, segregated fund, gifts and other voluntary payments were increased from $6,000 to $10,000 over a twelve-month period.

This year, further to the Wynn’s Government’s 2018 Budget, a change was to have been made to subsection 43(1) of the general Regulation of the Act. Subsection 43(1) currently delineates several items that shall not be included in income, including the following at paragraph 13:

“Payments in addition to a payment under paragraphs 1 to 12 that are payments from a trust or life insurance policy or gifts or other voluntary payments up to a maximum of $10,000 for any 12-month period.” [emphasis added]

The contemplated amendment is a striking of the words: “up to a maximum of $10,000 for any 12-month period“.  The attached article reviews the intended change and its significance. The author cites that with these words being removed, other paragraphs relating to certain allowable gifts and voluntary payments would also be removed.  The impact would reportedly include that beneficiaries of a trust may receive unlimited monies, and that recipients of ODSP benefits could receive unlimited gifts and voluntary payments.  The $40,000 and $50,000 asset limits noted above would still apply, but RRSPs and TFSAs would no longer fall within the scope of such assets.

The modification to subsection 43(1) was to have already come into force, in part, but has not further to the Ford Government’s July 31, 2018 press release announcing that:

“Over the next 100 days, Ontario will work on a plan to reform social assistance…While work is underway, people receiving support through the Ontario Disability Support Program will receive a 1.5 per cent cost of living increase on September 1, 2018…While work is underway…Ontario will not proceed with initiatives announced in Chapter 1, Section 7 of the previous government’s 2018 Budget.”

It will be interesting to see what reform will be communicated to the public next month. We will keep you posted!

Thanks for reading and have a great day,

Natalia R. Angelini

19 Jul

Interpretation of Wills … and Trusts

Natalia R. Angelini Estate Planning, Litigation, Uncategorized, Wills Tags: , , 0 Comments

The interpretation of wills was the subject matter of my blog earlier this week.  Today I add to that a comment on the decision of Campbell v. Evert, a case where a son and daughter were disputing whether the daughter’s entitlement under a family trust supplants a bequest under the deceased mother’s will.

The will gifts the sister $145,000 (a gift of equal value was previously given to the brother) and divides the residue equally between the brother and sister.  Several years after making the will, the mother settled an inter vivos trust, which provides that the daughter is to receive $150,000 from the trust assets, with the balance divided equally between the son and daughter.

Upon the mother’s death, the trust assets were distributed.  The son asserted that the estate assets should be divided equally, in keeping with his mother’s intention that the daughter receives $150,000 from the trust instead of $145,000 under the will. The daughter argued that with both the trust and will terms being honoured the result was equal, taking into consideration that the gift to the brother made years earlier was appreciating over time.  Nonetheless, the will was clear and unambiguous such that there was no legal basis for a different outcome, and extrinsic intention evidence was not admissible.

There was no dispute that the mother generally intended to treat her children equally in the will.  The real dispute was the mother’s intention when she subsequently created the trust.

Even though the trust agreement is not a will, the Court reasoned that the trust provisions in issue relate to the distribution of the trust assets upon death, such that those provisions have testamentary effect.  In these circumstances, the Court was satisfied that the same rules of construction apply.  Applying the principles set out in Robinson Estate in the context of the trust agreement, the Court found in favour of the daughter.  In so doing, it considered the trust agreement itself and the surrounding circumstances, and found no ambiguity or indication that the mother had intended to replace the specific bequest in the will. It also took note that the will was never amended after the trust was settled. Further, the Court ignored extrinsic evidence of the mother’s intention that the son put forward, as there was no equivocation present in this case that would make such evidence admissible.

The less common arguments of ademption by advancement and presumption against double portions were also put forward unsuccessfully, but for the sake of space I refer you to the case itself for consideration of those arguments.

Thanks for reading and have a great day,

Natalia R. Angelini

16 Jul

Interpretation of Wills – The Essentials

Natalia R. Angelini General Interest, Wills Tags: , 0 Comments

In the construction of wills there is a presumption against intestacy.  When the court is endeavouring to apply this rule, consideration should be given to what type of evidence it can admit with respect to the testator’s intention.

Where there is an ambiguity in a will and the need for its interpretation arises, the analysis centers on determining the subjective intent of the testator.  This is accomplished by the court putting itself in the place of the testator at the time the will was made, considering the circumstances that then existed and that might reasonably be expected to influence the testator in the disposition of property. The court should also study the contents of the will, try to find the testator’s intention and give effect to it.

Direct evidence of a testator’s intention is not admissible, the rationale being to preserve the role of the written will as the primary evidence of intention.  An exception to this is in the case of an equivocation. The principle simply put is that there is an equivocation where the words of the will apply equally well to two or more persons or things. In such a case, extrinsic evidence of intention may be admitted to resolve the equivocation.  DiNicola v. Tingley is an instance of where an equivocation was found.  The Deceased left a will that provided for the distribution of the residue of her estate, in part, amongst three named beneficiaries. The will provided that if any of the named residuary beneficiaries “should predecease me then I shall direct his or her share designated as aforestated shall be divided and distributed among the survivors of same proportionately as between them.” The Court found that the words “survivors of same” could equally mean the surviving residuary beneficiaries or the descendants of a predeceased residuary beneficiary.  This constituted an equivocation, and the Court accepted for consideration direct extrinsic evidence.

If no intention can be garnered from the language of the will and the admissible extraneous evidence, the court must declare the will void for uncertainty.  One exception to this is where the uncertainty relates to a charitable beneficiary.  In such a case, the court may apply the cy-près doctrine and direct that the property be given to a similar charitable purpose.

Thanks for reading and have a great day,

Natalia Angelini

Other blogs on this subject that may be of interest are:

Interpretation of Wills – a recent case where direct evidence was not permitted

Interpretation of Wills

24 May

A successful case of circumstantial evidence proving undue influence

Natalia R. Angelini Litigation, Uncategorized, Wills Tags: , , 0 Comments

Notoriously tough to prove is the allegation of a testator being unduly influenced to make a will. The burden of proof lies with the objector, and corroborating evidence is required to discharge the evidentiary obligation.

Notwithstanding the difficulty one faces to establish undue influence, it is frequently a ground of attack in will challenge cases, often coupled with an allegation of lack of testamentary capacity. In Kozak Estate (Re), it was rather unusually the sole ground of attack, and it was successful.

The facts in brief are that late in life the testator met and fell in love with a much younger woman, and soon after made real property transactions and two wills favoring her, with the latter will made in contemplation of marriage (which marriage never happened). The testator’s sister and beneficiary under a prior will challenged the wills on the ground of undue influence.

The Court reviewed the law on the question, and in so doing highlighted that circumstantial evidence can be used to establish undue influence, with the types of relevant circumstances including:

  • the increasing isolation of the testator including a move from his home to a new city which increased the respondent’s control over him;
  • the testator’s dependence on the respondent;
  • substantial pre-death transfer of wealth from the testator to the respondent;
  • the testator’s expressed yet apparently unfounded concerns that he was running out of money;
  • the testator’s failure to provide a reason or an explanation for leaving his entire estate to the respondent and excluding family members who would expect to inherit; and
  • documented statements that the testator was afraid of the respondent.

The Court viewed the evidence of the propounder as having many inconsistencies, contradictions and unbelievable elements. In consequence, it did not rely on her testimony at all. No such credibility problems arose respecting the evidence of the objector’s witnesses.

The Court went on to assess and conclude that the objector had established undue influence.  Among the critical supportive findings was that the propounder used the promise of marriage to control and manipulate the testator into providing economic benefits to her.  Further essential indicia of manipulation were the isolation of the testator from friends and family and a change in the testator’s personality.

Pursuing this avenue to invalidate a will is no easy feat, particularly without direct evidence.  What does not come as a surprise to me, however, is that the outcome in this case largely hinged on the credibility findings of the witnesses.

Thanks for reading and have a great day,

Natalia R. Angelini

Some other blogs on the issue that may be of interest are:

When Does the Presumption of Undue Influence Arise?

Undue Influence Revisted

Vanier v Vanier: Power of Attorney Disputes, Undue Influence, and Losing Sight of a Donor’s Best Interests

22 May

How can you spend a donor’s money? Two core considerations

Natalia R. Angelini Power of Attorney Tags: , , , 0 Comments

For the many who take on the fiduciary role of an attorney for property, there is often little or no education received on one’s duties and obligations. The sole guidance often provided is from the language of the power of attorney document itself.  It is rare, I would expect, that an attorney seeks out independent legal advice on the issue, which may in part be why we see so many cases in our practice where attorney spending is challenged. This blog serves as a refresher on the issue.

Obligated Spending

The legislation (Section 37(1) of the Substitute Decisions Act (“SDA”)) provides that a guardian or attorney for property must make certain expenditures out of the assets of the incapable person, listed in priority as being:

  1. Expenditures reasonably necessary for the person’s support, education and care.
  2. Expenditures reasonably necessary for the support, education and care of the person’s dependants (“dependant” is defined as a person to whom the incapable person has an obligation to provide support).
  3. Expenditures that are necessary to satisfy the person’s other legal obligations.

The expenditures may only be made if the assets of the incapable person are sufficient to satisfy them.  The guiding principles are that the value of the property, the accustomed standard of living of the incapable person and his or her dependants and the nature of other legal obligations are to be taken into account.

Optional Expenditures

An attorney may make gifts or loans to the person’s friends and relatives, and may make gifts to charities (Section 37(3) of the SDA).  The policy guidelines include:

  1. Gifts or loans may be made only if there is reason to believe, based on the intentions expressed prior to becoming incapable, that he/she would have made these gifts if capable.
  2. Charitable gifts may be made only if, (i) the incapable person authorized the making of charitable gifts in the power of attorney document, or (ii) there is evidence that the person made similar expenditures when capable.
  3. The gift shall not be made if the incapable person expresses a wish to the contrary.
  4. The SDA sets limits on the quantum of charitable gifts.

With these parameters in mind, coupled with carefully documenting all expenditures and retaining supporting vouchers, an attorney for property can hope to have a smoother ride when satisfying accounting obligations in respect of the administration.

Thanks for reading and have a great day,

Natalia R. Angelini

 

Some other blog posts that might interest you are:

How Generous may an Attorney for Property Be?

Power of Attorney Disputes on the Rise?

Choosing the Wrong Attorney for Property

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