Tag: estate law blog

16 Apr

The Ties That Bind

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It was recently held that a gift in a Will given to “all my nieces and nephews”, included not only the children of the testator’s siblings, but also the 18 nieces and nephews of the testator’s late wife: Holmes Estate (Re) [2007] B.C.J. No. 45.

The Court reviewed the prior judicial interpretation of the terms “niece” and “nephew” as used in Wills. It was satisfied that the words nieces and nephews could, in their ordinary meaning, apply to the children of the testator’s late wife’s siblings, and noted that while years ago the meaning of these words were confined to children of a testator’s siblings, the New Concise Oxford English Dictionary presently defines these terms as including the children of a brother-in-law or sister-in-law.

The Court then turned to the question of what the testator meant by “nieces” and “nephews”. After considering the surrounding circumstances, it concluded that the testator intended to benefit his late wife’s nieces and nephews. Circumstances in support of this finding were that these family members were named beneficiaries in his earlier Wills and that he had ongoing relationships with several of them. One additional and unique fact was that the alleged ambiguity was brought to the testator’s attention in his lifetime, and he indicated he was satisfied with the wording of his Will.

This decision is demonstrative of the reality that as definitions of families change so may their entitlement in the estate planning context (intentionally or fortuitously), which lawyers may want to keep in mind when crafting testamentary instruments.

Have a good day.

Natalia Angelini

13 Apr

Let the Good Times Roll!

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It’s always good to end the week on a high note and once again the baby boom generation is in the news. A recent report by Decima Research says almost $1 trillion in cash and other assets will be transferred to the children of baby boomers in the years to come. The baby boomers are without a doubt the richest generation that Canada has produced to date. Even in death, the baby boomers will continue to shape our society.

In the past, the typical inheritance was likely considerably less than $100,000. However, when asked, more than 50% of the children of baby boomers expect to receive $283,000 on average. This figure represents a significant increase from the past and is indicative of the wealth that baby boomers have accumulated over the years. Half the $283,000 will be received in cash and the rest in real estate and valuables.

However, to me it is also clear that baby boomers will live longer than past generations and likely spend at a greater rate than their parents ever did as they fight the ravages of old age. Ultimately, there may not be as much to pass along as their children would like to think. The baby boomers also have an altruistic streak and may leave some of their wealth to their favourite charity.

Regardless of who gets the money, the need for proper estate planning is clear. Now is the time for boomers to get their personal affairs in order if they haven’t already. Baby boomers should let their children know now what their wishes are in order to avoid family fights in the future when their estates are being distributed. If parents are afraid that their children will react angrily if treated differently, they should nevertheless let them know and the reason why. The emotional and financial costs to the next generation is far greater than the immediate upset if a parent tells a child that he or she is being treated differently under the terms of their Will or that a charity is slated to receive the bulk of their estate. Perhaps a family conference with an outside facilitator is the way to go. Unfortunately, no matter what the baby boomers do, estate litigation is likely to increase as their children fight over their inheritance or try and prove what the “true wishes” of their parents were.

Finally, the generation which benefits from this trillion dollar transfer will have to carefully decide what to do with the windfall. Many will pay off their mortgages or other debts affording them the opportunity to accumulate their own personal fortune and pass it on to the next generation. Estate planning will always be with us… the sooner it’s done the better.

Thanks for reading and enjoy the weekend.
Justin de Vries

10 Apr

Contemplating “In Contemplation of Marriage” – Hull on Estates Podcast #54

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Listen to "Contemplation "In Contemplation of Marriage""

Read the transcribed version of "Contemplation "In Contemplation of Marriage""

During Hull on Estates Podcast #54, David Smith, Partner at Hull & Hull LLP, discusses his upcoming Probator article (check the Hull & Hull website soon) which concerns making a Will in contemplation of marriage.

David discusses the circumstances that surround this clause, Section 16 of the Succession Law Reform Act and how this issue can cause litigation. 

 

10 Apr

Insurance Planning – Hull on Estate and Succession Planning Podcast #55

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Listen to "Insurance Planning"

Read the transcribed version of "Insurance Planning"

During Hull on Estate and Succession Planning Podcast #55, Ian and Suzana discuss insurance planning in the context of wealth and estate planning strategies.

They cover the advantages of integrating insurance policies into your estate plan focusing on disability insurance, critical care insurance and life insurance.

09 Apr

The Case Against Mediating Early

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I recently attended a client meeting where the issue of mediation was hotly debated. My client expressed reluctance in participating in a process with a party that my client regarded as intransigent and obstinate. My client also thought that proposing mediation would suggest to the other side that our case was weak and we were looking for a way out. After persuading my client that mediation was at least worth considering, a more substantive debate arose as to when to mediate. This debate deserves some comment.

In many ways, mediation is all "the rage" and early mediation is especially championed in the estate setting. In general, society is reluctant to see family members fight over what is perceived as a windfall. The courts reflect and promote this view. My colleagues and I have all blogged on the merits of mediation and I won’t repeat them here. But parties can mediate too early. Often parties attend mediation without knowing the full extent of the estate assets or merely having a vague idea. Liquid assets might be readily ascertainable, but have all the liquid assets been uncovered i.e. have proper inquiries been made? Assets such as art, vintage cars, or family antiques are harder to evaluate and may require a professional appraisal, all of which takes time.

Moreover, the parties have often not exchanged relevant documents before attending mediation, something which they would be required to do if mediation took place at a later stage. Exchanging relevant documents will help a party better understand the risks they face in pursuing litigation, the weakness of their case, and the strength of their opponent’s case (and vice versa). Forewarned is forearmed.

Back to my client meeting where it was decided that it was too early to mediate. An allegation had been made that an estate trustee had stolen money from the estate. However, no one was quite sure how much was taken and whether the estate trustee acted alone or in concert with an investment advisor. Some sort of accounting was required, supported by back-up documentation before mediation could take place and ultimately be effective. A court order might even have to be obtained to get at the necessary information. Mediation would happen, but at the right time with the right information. It is imperative that a party know their case so that they know when to mediate and how best to settle.

Justin de Vries

05 Sep

Hull on Estates Podcast #24 – Disclosure to Beneficiaries

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READ THE TRANSCRIBED PODCAST HERE

During Hull on Estates Episode #24, we discussed the issue of disclosure of information by trustees to beneficiaries. We referred to the cases:

  •  O’Rourke v. Derbyshire, [1920] A.C. 581 (H.L.); Re Ballard Estate (1994), 20 O.R. (3d) 350 (O.C.G.D.); Fox v. Fox Estate (1996), 10 E.T.R. (2d) 229 (Ont. C.A.); and
  • David Steele’s article,  “Beneficiary’s Right to Know”, 4th Annual Estates and Trusts Forum, LSUC.

 

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