Tag: estate law

21 May

Hull on Estates #572 – Will Challenges and Mistake of Fact

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This week on Hull on Estates, Paul Trudelle and Christina Canestraro discuss Cavanagh et al. v Sutherland et al., in which the Ontario Superior Court of Justice addresses questions of fact and law related to motions for summary judgment and mistake of fact.

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07 May

Hull on Estates #571 – Can you bind non-signatories to a settlement?

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Today on Hull on Estates, Stuart Clark and Charlotte McGee discuss settlement agreements and non-signatories – specifically, if a settlement agreement affects the interests of a non-signatory to the settlement, can such a settlement bind the interests of the non-signatory?

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25 Mar

Calling All Philanthropists: Thinking of Donating Your Art?

Christina Canestraro Uncategorized Tags: , , , , 0 Comments

Whether art, history, science, or fashion is your thing, a trip to the museum is a sure-fire way to  marvel at the ingenuity of humankind, spark new inspiration, or escape to a different time and place. It’s no wonder one of the world’s most popular museums, the Louvre, welcomed 10.2 million visitors in 2018 from all over the world.

Whether motivated by the desire to preserve heritage and culture, or a passion for education, according to this New York Times article, philanthropists have been instrumental in the exponential growth in museums that we have observed, particularly in the last 50 years.

Some donors gift their collectibles to an institution while alive, with conditional terms to the acceptance of their donation. Take, for example, philanthropist Wendy Reves who donated more than 1,400 works from the collection of her late husband to the Dallas Museum of Art, with the stipulation that they recreate five rooms from the couple’s villa in the South of France, including furnishings from the villa’s original owner, Coco Chanel. 

Other donors gift their collections from beyond the grave. In other words, they include specific provisions in their will donating their works to a particular institution, also known as a bequest. In 1967, the late Adelaide Milton de Groot, bequeathed her entire art collection (which contained more than 200 paintings) to the Metropolitan Museum of Art in New York City.

While American museums are beholden to important donors, they are also running out of space to properly store and preserve items not on display. In fact, many American museums only showcase approximately 4% of their inventory, with the balance held in climate-controlled storage spaces. To address this issue, many American museums have taken to formally disposing of part of their inventory, a term also known as deaccessioning.

 

Institutions such as the Canadian Museums Association are hopeful that the new changes will mean more tax incentives for donors and more artwork being donated.

Conversely, Canadian museums are facing challenges on the acquisition side. For the last 30 or so years, the Cultural Property Export and Import Act (CPEIA) earned Canadian donors tax credits for the market value of their donated art as long as it fell within the scope of “national importance”. This incentivized Canadian donors to bequeath their art to Canadian museums, which ensured that important cultural property remained in Canada for the benefit of Canadians.

Recently, the federal court decision in Heffel Gallery Limited v Canada (AG) narrowed the definition of national importance in the CPEIA, meaning millions of dollars in artwork donations to museums and art galleries were halted. As explained in this article, the newly proposed Budget 2019, “proposes to amend the Income Tax Act and the Cultural Property Export and Import Act to remove the requirement that property be of ‘national importance’ in order to qualify for the enhanced tax incentives for donations of cultural property.” This is good news for both donors and museums.

It is still too early to know how these changes will manifest in practice, given that Heffel Gallery Limited v Canada (AG) is still under appeal, and Budget 2019 has not yet passed. Institutions such as the Canadian Museums Association are hopeful that the new changes will mean more tax incentives for donors and more artwork being donated.

All this to say, if you have a Basquiat or Degas yearning to be seen by the masses, it may just have its chance to shine, with significant tax breaks to your estate!

Thanks for reading!

Christina Canestraro

02 Oct

Hull on Estates #556 – Steele v Smith: Missing Beneficiaries and Remedies for the Estate Trustee

76admin Estate & Trust, Estate Planning, Hull on Estates, Litigation, Podcasts Tags: , , , , , , 0 Comments

This week on Hull on Estates, Noah Weisberg and Garrett Horrocks review the decision in Steele v Smith, 2018 ONSC 4601, and discuss Benjamin Orders as a remedy for the estate trustee in the event that a beneficiary cannot be located.

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04 Sep

Hull on Estates #554 – Golden Rule for Assessing Testamentary Capacity

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This week on Hull on Estates, Noah Weisberg and Doreen So discuss the UK and Hong Kong Golden Rule for assessing testamentary capacity.

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29 May

Hull on Estates #547 – Test for Mutual Wills

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This week on Hull on Estates, Paul Trudelle and Doreen So discuss the test for mutual wills in the decision of Rammage v. Estate of Roussel.

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22 Mar

A new kind of marriage – Family law and estate claims heard together

Stuart Clark Litigation Tags: , , , , , , , , , , 0 Comments

It is not uncommon for dependant’s support claims to be commenced contemporaneously with family law claims after death, with the dependant’s support claim often forming a sort of safety net should the family law claim not be successful. This is likely in part on account of section 63(4) of the Succession Law Reform Act providing that an Order providing for the support of the deceased’s dependants can be made “despite any agreement or waiver to the contrary“, such that the court in certain circumstances can make an Order for dependant’s support notwithstanding that agreements such as marriage contracts may have been entered into prior to death which may otherwise have severely restricted the surviving spouse’s entitlements.

While it is not uncommon for family law and estates claims to be brought contemporaneously, this can sometimes result in an in issue in the form of a multiplicity of proceedings, with multiple proceedings being before the court at the same time, often on different court lists. In Toronto, the family law claims would likely proceed before the Family Court, which is governed by its own “Family Law Rules“, while the estate law claims would proceed before the Estates List of the Ontario Superior Court of Justice, with such a process being governed by the more standard Rules of Civil Procedure. Different courts, different rules, different timelines.

It appears that such a multiplicity of proceedings became an issue in the recent Cohen v. Cohen decision, with the Applicant’s counsel eventually moving to have the family law and estate law proceedings consolidated and heard together before the Family Court. Opposing counsel objected, taking the position that a dependant’s support Application under Part V of the Succession Law Reform Act could not be heard before the Family Court, and that such a proceeding must proceed before the standard Ontario Superior Court of Justice.

In ultimately rejecting the position of opposing counsel, and ordering the family law claims and the estate law claims to be heard together before the Family Court, Justice Maranger provides the following commentary:

Counsel representing the estate argued that a strict reading of section 57 (1) of the Succession Law Reform Act (“court” means the Superior Court of Justice) statutorily precludes consolidating a dependant’s relief application with a family law act application, because the SLRA does not specify Superior Court Family Branch. I reject that argument, clearly a reference to the Superior Court of Justice can in certain circumstances allow for the reading in of the Superior Court Family Branch. A family branch judge is a Superior Court judge for all purposes including hearing cases under the Succession Law Reform Act.”

Cohen v. Cohen suggests that estates law cases and family law cases can be consolidated and heard together by the same court notwithstanding that such courts may be specialized for a different purpose. What impact, if any, the use of the Family Law Rules would have upon adjudication of an Application for support under Part V of the Succession Law Reform Act remains to be seen.

Thank you for reading.

Stuart Clark

12 Dec

Hull on Estates #535 – Limitations on the Obligation to Account

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In today’s podcast, Natalia Angelini and Garrett Horrocks discuss the court’s reasons for declining to order a formal passing of accounts in the McLoughlin Estate decision.

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23 May

Hull on Estates #520 – Role of The Estate Trustee During Litigation

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This week on Hull on Estates, Ian Hull discusses the role of the Estate Trustee During Litigation and the impact of case law over the last 50 years.

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20 Apr

When There Just Isn’t Enough to Go Around: Abatement and Ademption

Hull & Hull LLP Estate & Trust, Estate Planning Tags: , , , , , , , , , , , 0 Comments

In a perfect situation, a deceased person’s estate would correspond exactly with the gifts as set out in his or her last will and testament. However, it is sometimes the case that the assets of an estate are insufficient to pay all of a testator’s debts, as well as all gifts set out in his or her will, or where the object of a specific bequest no longer exists at the time of the testator’s death.

In the former situation, the principle of abatement would apply to the distribution of the estate to beneficiaries, meaning that the gifts set out in the testator’s will are reduced rateably and in order depending on the type of bequest. If the estate has insufficient assets to pay the testator’s debts, it would be insolvent and the legacies described in the testator’s will would be unable to be paid. If there are assets leftover after payment of debts, but they are not sufficient to fully satisfy all gifts, then some or all of the gifts will abate.

If the testator’s will does not specifically provide for the order in which gifts are to abate, the order of abatement of bequests is as follows:

  1. Residuary personalty.
  2. Residuary real property.
  3. General legacies, including pecuniary bequests from the residue.
  4. Demonstrative legacies, meaning bequests from the proceeds of a specific asset or fund not forming part of the residue.
  5. Specific bequests of personalty.
  6. Specific devises of real property.

The abatement of gifts in each category will occur in equal proportions so that no single beneficiary will be made to bear the full burden of the abatement.

Ademption occurs when a specific legacy in a testator’s will cannot be satisfied due to the lack of existence of the property that was the subject of the bequest. When a specific gift adeems, it fails, and the beneficiary will not receive the gift.

In Ontario, there are a number of statutory provisions that affect the doctrine of ademption, including ss. 20 and 22 of the Succession Law Reform Act, R.S.O. 1990, c. S.26 that permits a will to operate on substituted property, and s. 36 of the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (the “SDA”) which provides that ademption does not apply to property disposed of by a guardian under the SDA.

Thanks for reading,

Rebecca Rauws

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