Tag: estate law blog

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

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

12 Feb

Does spousal support end on death?

James Jacuta Litigation, Support After Death Tags: , , 0 Comments

Family law has long been clear on the question of spousal support in that it is provided to satisfy the needs of the spouse during his/her lifetime and the entitlement to support does not survive the death of the recipient.

Whether this remains the status quo may have been put into question with the recent Alberta’s Court of Queen’s Bench decision in Marasse Estate. In this case, the couple’s separation agreement required the husband to pay monthly support to the wife for five years. The wife passed away after the husband had made only a few payments, and her estate trustee sought the remaining payments. The husband resisted the claim, asserting that the premise underlying the support was the wife’s need. As she no longer had need, he should not be required to make further payments.

The Court concluded that the estate was entitled to continue to receive the support payments. It reasoned that the contractual agreement of the parties created a juristic reason to continue support for the following reasons:

1.The separation agreement contained the fairly standard enurement clause, which provides that the agreement enures to the parties’ heirs, executors etc.

2. The separation agreement contained a non-reviewability clause that states: “entitlement, quantum, and duration of spousal support is non-reviewable and may not be varied on any material change of circumstances.”

3. The separation agreement was comprehensive, negotiated with give and take on both sides, and it should be considered as a whole.

4. Actual need is not expressed in the agreement to be a precondition to payment. For instance, if the converse to the husband’s argument were true, being that the wife remained in financial need and lived longer than five years, the wife would not have been able to collect any further amounts.

Notably, the parties had also turned their minds in the agreement to what would happen if the husband died before all payments were made, as he agreed to maintain life insurance to secure support in the event of his death.

The Court found that the agreement was unambiguous, and could not be set aside as the parties to it (1) intended it to be a full and final resolution, and (2) there were no new circumstances not reasonably anticipated that led to a situation that could not be condoned.

A recent article found here discusses the Court’s decision.

Thanks for reading and have a good day,

Natalia Angelini

04 Dec

Takeaways from Make-a-Will Month

Natalia R. Angelini Uncategorized Tags: , , 0 Comments

November has drawn to a close and, with it, the Ontario Bar Association (OBA) and the Toronto Public Library’s (TPL) Make-a-Will Month program, where estate professionals are connected with the community to help them understand the importance of having a will and powers of attorney.

In presenting at one of the Make-a-Will Month sessions, the need for this initiative was readily apparent. I was met with a high level of attendee participation and a myriad of questions about wills and powers of attorney. The following information seemed particularly helpful to impart:

Wills

  • The benefits of making a will, including having control over your choice of executor, tax minimization, protecting assets from creditors, providing for charitable gifts and allowing for staggered entitlement to ensure beneficiaries don’t prematurely spend their inheritance;
  • The consequences of not having a will, including the inflexible entitlement scheme under the Succession Law Reform Act and the unwanted impact this could have in situations where, for instance, you would not want to benefit relatives equally or immediately upon your death (e.g. spouses are separated, immediate family members are estranged, and intestate beneficiaries are minors); and
  • The elements of a will, how to revoke it and the grounds upon which to challenge its validity.

Powers of Attorney

  • The different types of powers of attorney a grantor may select (e.g. springing, enduring, limited and general); and
  • The difficulties that may be caused by not having a power of attorney in place, including the costly and potentially protracted process of pursuing a guardianship appointment.

I was so pleased to participate in the Make-a-Will Month program, and applaud the continuing efforts of the OBA and TPL to share vital information with the public.

Thanks for reading and have a great day,

Natalia Angelini

Some other blogs on related subjects are:

November is “Make a Will Month”

Make Estate Planning One of Your New Year’s Resolutions

When to Make a Codicil

26 Sep

Accountings and Incapable Persons – How Is Privacy Protected?

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

It is trite law that an executor administering a deceased persons’ estate has an obligation to account to the beneficiaries. The law is a bit more complex when an attorney for property is applying to the court to account for his/her administration of an incapable person’s affairs.

Rule 74.18(3) of the Rules of Civil Procedure provides that service of the application material is required on persons who have “a contingent or vested interest in the estate”. Because a will speaks as if it was made immediately prior to the death of a testator, a beneficiary has no financial interest until the testator dies, the result being that in an accounting for the administration of the assets of an incapable person, only the incapable person him/herself has a contingent or vested interest in the assets.

Although it may seem inadequate that an attorney would be required to serve the grantor and no other family members, as an incapable person will arguably not have the wherewithal to level objections in respect of the administration, keep in mind that the welfare of the grantor is already being safeguarded by the Public Guardian and Trustee (who must also be served with the court material) and a litigation guardian who may be appointed within the context of the accounting application to protect the interests of the grantor.

Couple the above with the strict duty of confidentiality and privacy owed to an incapable person by the attorney, as set out in the Substitute Decisions Act, 1992 (Regulation 100/96), and we have a protective framework when dealing with disclosure of financial affairs of living persons.

This makes total sense to me. However, it may come as an unwelcome surprise to an adult child who, for instance, learns that she does not have an automatic right to receive disclosure of her incapable parents’ finances. Feeling unfairly shut out, she may consider seeking the court’s assistance.

Although she can apply to the court for leave to compel an accounting, the prevailing view of the court is that a person’s privacy is paramount such that leave should be granted sparingly. In a prior blog on the subject, my colleague Umair Abdul Qadir cited the Groh v Steele decision, where the Court makes an important pronouncement on this point, stressing that leave should not be granted absent the applicant establishing an interest (at least indirectly) in the affairs of the grantor, and some evidence that the attorney is not properly handling the administration.

Thanks for reading and have a great day,

Natalia R. Angelini

Some other blog posts on this and related subjects that may appeal to you are:

Attorneyship Accounting with a Capable Grantor

Abuse of a power of attorney: when good people do bad things

Passings of Accounts and Serving the Public Guardian and Trustee

25 Sep

Where should you store your testamentary documents?

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

Getting a will done is step one. Step two is ensuring it is safely stored. Although many people choose to leave their will with their lawyer, store it themselves or put it in a safety deposit box, there is another option that seems to be less popular but just as secure – deposit with the court.

The Process

Rule 74.02 of the Rules of Civil Procedure governs the process, and amongst the requirements are the following:

  • The depositor is restricted to limited number of individuals, including (i) the testator or a person authorized by the testator in writing, (ii) a lawyer who held the will or codicil at the time of retirement from practice, or, if deceased, the lawyer’s estate trustee, and (iii) a person authorized by the court;
  • The court office must follow specific procedures for processing and storage of the documents; and
  • During the testator’s lifetime, his/her will or codicil can only be copied, inspected or removed by the testator in person, by his/her guardian of property or by court order.

Rule 74.02 also provides for access to and release of the documents post-death.

Regarding post-death access, any person may copy or inspect a will or codicil of the testator on deposit, on filing a written request stating the testator’s date of birth and proof of death.

Regarding post-death release, this can only be to a named estate trustee or such other person as the court may direct, and is done after the filing of (i) a request for delivery, (ii) proof of death, and (iii) if no order directing delivery of the will or codicil has been made, an authorization signed by every estate trustee named in the will specifying the estate trustee (or the estate trustee’s lawyer) to whom the will or codicil is to be delivered (if an estate trustee is not available to sign, a written explanation will need to be given satisfactory to the registrar).

Is this for you?

If it isn’t convenient or viable for you to personally and safely store your testamentary documentation, if you don’t want it kept with your lawyer (or if there was no drafting lawyer), and if you don’t mind putting your executor to the task (and additional time and expense) to secure the document from the court post-death, this may be the option for you.

However, if you expect to periodically be making changes to your estate plan the deposit process may not be something that you would like to keep repeating. Further, if you wish to revoke your will on an urgent basis, it may be more difficult to do so. In the worst case scenario, this could result in a testator not having his/her testamentary wishes executed.

Thanks for reading and have a great day,

Natalia R. Angelini

10 Aug

When are Corporate Directors Personally Liable?

Natalia R. Angelini Litigation Tags: , , 0 Comments

Estate litigation often intersects with other areas of law, and frequently with corporate law where, for instance, a testator has an ownership interest in a corporation and/or is a director of a corporation. Accordingly, we pay attention to important cases in corporate law that may impact upon our practice. One such case is Wilson v. Alharayeri, a recent Supreme Court of Canada (SCC) decision, where the SCC considered when an oppression remedy may lie against a director personally.

The facts in brief are that Mr. Alharayeri (Mr. A) was the president and CEO of a corporation. He was also a director and a significant minority shareholder of the corporation, with half of the shares being convertible into common shares if the corporation met certain financial targets. Mr. A resigned for failing to disclose a conflict of interest. The appellant, Mr. Wilson, replaced Mr. A as president and CEO. A few months later, the board of directors issued a private placement of convertible secured notes to its existing common shareholders. Prior to doing so, the board accelerated the conversion of certain convertible preferred shares, but not those held by Mr. A given the conduct leading to his resignation. Wilson played a lead role in this decision. The result was that the value of Mr. A’s portfolio was diluted.

Mr. A brought an oppression claim against four of the directors, including Wilson. The Superior Court of Quebec found oppression, and Wilson and another board member were held personally liable for the board’s failure to convert Mr. A’s shares. They were Ordered to pay Mr. A compensation. The Quebec Court of Appeal affirmed the decision, and Wilson appealed to the SCC on the question of when personal liability for oppression may be imposed on corporate directors.

The SCC dismissed the appeal, and in doing so applied a two-pronged approach. First, the oppressive conduct must be attributable to the director. Second, a personal remedy must be “fit” in all of the circumstances – four general principles should guide the court, being:

(i) whether personal liability is fair in consideration of all circumstances;

(ii) any order should go no further than needed to remedy the oppression;

(iii) any order may serve only to vindicate the reasonable expectations of a security holder, creditor, director or officer as a corporate stakeholder; and

(iv) the general principles of corporate law.

It is noteworthy that the hallmarks of conduct attracting personal liability remain, being where a director derives a personal benefit and where a director acts in bad faith, but they are not necessary conditions of the two-pronged approach.

Thanks for reading and have a great day,

Natalia R. Angelini

You may also enjoy the following blogs:

https://hullandhull.com/2016/11/beneficiaries-corporate-documentation/

https://hullandhull.com/2014/11/control-of-private-corporations-in-the-event-of-incapacity/

https://hullandhull.com/2006/09/trusteedirector-conflicts-part-ii/

 

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