Tag: Estate Litigation

18 Oct

Is There a Stigma Surrounding Elder Abuse of Women?

Rebecca Rauws Elder Law Tags: , , , , , , , , 0 Comments

Although knowledge and understanding of the issue of elder abuse is growing, I don’t think we have yet arrived at a point where it is openly discussed among different groups of people, or where victims of abuse feel completely comfortable coming forward.

In New Brunswick, the Abuse and Neglect of Older Adults Research Team (ANOART) is conducting research into abuse of older adults, and specifically looking at how abuse affects older men and women differently. This article discusses ANOART’s work and an upcoming conference on this topic.

According to the ANOART, older men more often suffer abuse from their children, but older women are more likely to experience intimate partner violence. This specific type of abuse in relation to older women is not mentioned in discussions of elder abuse as often as other types of abuse, such as financial abuse, or general physical abuse. However, ANOART has found that intimate partner violence against women earlier in life does not stop later in life, but rather evolves.

Although the aggressor of intimate partner violence may be less physically capable of physical abuse as they age, the older woman who is being abused may still feel pressure not to speak out, as to do so may create tension or conflict within their family. Older women may also be financially dependent on their partner, which can be a significant barrier to reaching out.

Services for intimate partner violence are usually focused and targeted at younger women, leaving a gap when it comes to older women. ANOART is working to break the stigma surrounding intimate partner violence against older women, to spread information, and to raise awareness. The hope is that this will assist in reaching out to those who need help more effectively, and make it easier for olden women to seek help.

Thanks for reading,

Rebecca Rauws

 

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16 Oct

The Risks of Joint Tenancy

Rebecca Rauws Estate & Trust, Joint Accounts, Uncategorized Tags: , , , , , , , , , , , , 0 Comments

Although there are certainly some benefits that may result from making ownership of a property or other asset joint with another individual (e.g. avoiding payment of estate administration tax in relation to that property upon the death of one of the joint owners), there can also be risks associated with jointly-held property.

In the recent British Columbia Supreme Court decision in Gully v Gully, 2018 BCSC 1590, a mother added her son as a joint tenant on real property that she owned (the “House”). Her decision to do so was based on estate planning advice that she had received. The mother did not tell her son that she had added him as a joint tenant, and the son did not contribute to the House in any way, either before or after it was transferred into joint tenancy. Contemporaneously with the registration of title to the House in joint tenancy, the mother also executed a last will and testament specifically setting out that in naming her son as a joint owner, she intended that the asset would belong to him upon her death.

A couple of years after the mother had added the son as a joint tenant on her House, the son and his software company consented to judgment in favour of a creditor in the amount of $800,000.00. At the time he consented to judgment, the son was still not aware that he was a joint owner of his mother’s House. The creditor subsequently registered a certificate of judgment on the son’s undivided half interest in the House.

The mother brought an application seeking a declaration that the son held his interest in the House on a resulting trust in her favour. The court stated that the proper evidence of a transferor’s intention is at the time of the transfer, because a transferor can change his or her mind subsequent to the transfer, but may not retract a gift once it has been made. In this case the court concluded that the mother did intend to gift an interest in the House to her son at the time the joint tenancy was registered on title, and that the son did not hold his interest on a resulting trust in favour of the mother.

Further, the court stated that even if it had found that the mother had not intended to gift the House to the son, the fact that the joint tenancy was registered on title to the House meant that the creditor could rely on title to enforce its judgment against the son’s interest in the House. Although the issue of whether or not a resulting trust arises in the circumstances may be relevant  as between family members or beneficiaries of an estate, it is not applicable in the case of a third party creditor claiming against a registered interest in land. As a side note, the creditor in this case did advise the court that it did not intend to execute the judgment against the House while the mother was still living there.

Before making any changes to ownership of an asset, it is crucial to obtain comprehensive advice as to all of the possible consequences of doing so—both positive and negative. Communication regarding joint tenancy is also important. This will help ensure that all parties are aware of the assets in which they may have an interest and the nature of any such interest, so they are in a position to manage their affairs accordingly.

Thanks for reading,

Rebecca Rauws

 

Other blog posts that you may find interesting:

15 Oct

New Rules for Voluntary Disclosure Program in Practice

Rebecca Rauws Estate & Trust Tags: , , , , , , , , , , , 0 Comments

Last year I blogged about some possible changes to the CRA’s Voluntary Disclosure Program (“VDP”). The new VDP rules came into effect March 1, 2018.

One of the concerns that had been raised in relation to the VDP changes in advance of them coming into effect, is that it seemed the CRA was attempting to make the VDP less accessible for taxpayers. For example, the changes created a “tiered” system for VDP applications, meaning that applications would fall under either the “general program” (for more minor non-compliance) and the “limited program” (for major non-compliance). Another example is the apparent elimination of the “No-Name” method for submitting disclosure (which allows the taxpayer to gain some understanding of how their situation may be treated by CRA in advance of officially submitting his or her application).

According to this article, in July and August 2018, the CRA responded to the first round of disclosure applications that had been filed under the new rules. The CRA’s approach in practice was troubling to the article’s authors.

In particular, the CRA appears to be taking the position that it will be rejecting VDP applications if the relevant tax returns aren’t enclosed. This seems to be contrary to the guidelines set out in CRA’s Information Circular IC00-1R6. While CRA takes the position that it will reject applications that do not enclose tax returns, the Information Circular seems to indicate that a taxpayer may submit additional information or documentation to complete the VDP application up to 90 days from the day that the CRA receives the application. The article’s authors are of the view that the language of the Information Circular in this regard would include the relevant tax returns, as these are clearly documents required to complete the disclosure. The position taken by CRA provided confirmation to the authors that CRA was seeking to make the VDP inaccessible for taxpayers.

As we previously set out in this blog, the VDP can be relevant to an Estate Trustee if the deceased was not in compliance with his or her obligations to the CRA, such as failure to file income tax returns, or reporting of inaccurate information. The VDP may allow an Estate Trustee to voluntarily disclose such non-compliance and avoid penalties. Unfortunately, with the new VDP rules in effect, and the apparent uncertainty regarding how the CRA will apply its guidelines, it may be tricky for Estate Trustees to make effective use of the VDP. It will be interesting to see how the new VDP rules develop, and any further feedback to their practical application.

Thanks for reading,

Rebecca Rauws

 

Other blog posts that may be of interest:

09 Aug

Due Execution and the Presumption of Validity: Should We be Doing More?

Rebecca Rauws Wills Tags: , , , , , , , , 0 Comments

A recent decision of the Hong Kong Court of Appeal addresses the importance of the solicitor’s role in preparing and attending to the execution of a Will, particularly in the context of a Will challenge. The decision is discussed in this article. Although the decision is from Hong Kong, the test applied in respect of testamentary capacity is, as it is in Canada, the classic criteria from Banks v Goodfellow. In this regard, I found it interesting to consider the Hong Kong Court’s decision.

In Ontario, when a Will has been duly executed, meaning that it has been executed in accordance with the requirements set out in the Succession Law Reform Act, R.S.O. 1990, c. S.26, there is a presumption that the Will is valid. However, where suspicious circumstances are shown to exist surrounding the preparation and execution of a Will, this presumption will be spent, and the propounder will be required to prove that the testator had the requisite testamentary capacity to execute the Will. We have previously blogged about which party must prove certain elements in a Will challenge.

According to the article, the same presumption arising from due execution appears to exist in Hong Kong. In the decision of Choy Po Chun & Anor v Au Wing Lun (CACV 177/2014), the Hong Kong Court of Appeal places some additional responsibility with respect to the “due execution” of Wills on solicitors preparing them. In particular, the Court of Appeal sets out that a solicitor should undertake proper groundwork and make proper enquiries, such as following a checklist from the British Medical Association regarding the assessment of mental capacity, and the “golden rule” that a Will for an elderly or ill testator should be witnessed or approved by a medical practitioner who has examined the testator.

In this decision, the Court of Appeal set aside the lower court’s decision that the Will in question was valid. As the solicitor had not taken the additional steps noted above (namely following the checklist and the “golden rule”), it could not be presumed that the Banks v Goodfellow criteria had been met, and therefore each element of the test should have been asked, and proven by the propounder of the Will.

In reviewing the guidelines set out by the Court of Appeal, as summarized in the article, it seems as though the solicitor is being asked to consider whether suspicious circumstances may appear to exist, and to take additional steps if that may be the case. In particular, the Court of Appeal suggests the following:

  • Where Will instructions are given by the children of an elderly testator who is not in good health, the lawyer should meet with the testator personally to confirm instructions;
  • In the case of an elderly or infirm testator, the solicitor should follow the checklist noted above; and
  • The solicitor should follow the “golden rule” when preparing a will for an aged or seriously ill testator.

While this decision is not binding in Canada, it nevertheless raises some interesting points, which a prudent solicitor may wish to consider and implement in their practice. For instance, it may be advisable to confirm instructions directly with the testator if initially provided by another individual, and take steps to confirm whether a testator has the requisite capacity in circumstances where he or she may be elderly and/or in poor health.

Thanks for reading,

Rebecca Rauws

 

Other blog posts that you may enjoy:

07 Aug

Estate Planning Bucket List

Rebecca Rauws Estate Planning Tags: , , , , , , , , 0 Comments

I hope that everyone had a wonderful long weekend and has been able to check a couple of items off their summer “bucket list”. If the summer has been passing you by a little too quickly, and you feel that you are missing out—don’t worry! A recent essay in the Wall Street Journal makes the case for, at the least, scaling back on bucket lists:

Nobody really needs to go falconing in Mongolia or ride on the back of a nurse shark in Alaska for their life to be complete. They need to raise kids who won’t grow up to hate them. Or take care of their aging mother and make sure she gets a nice send-off.

That being said, there are a couple of things that we at Hull & Hull would recommend adding to your “bucket list”:

  • Have a Will and Powers of Attorney: If you don’t take the time to set out what your wishes are, you risk those wishes being either unknown, or not respected.
  • Review your Will and Powers of Attorney & Know what they say: You should be confident that you not only know exactly what your Will and Powers of Attorney say, but that they continue to represent your wishes. Particularly if your estate planning documents were prepared a number of years ago, it is important to review these documents and ensure that you recall their contents, so as to avoid any unexpected outcomes. If you are familiar with the contents of your Will and Powers of Attorney, you are more likely to be triggered by changes in circumstances that may affect you, and to take steps to adjust your estate planning documents accordingly.
  • Revisit your estate plan: It is important to review your estate plan and consult with your lawyer regularly. There are a number of life events that can impact the effect of your Will, including marriage, divorce, the birth of a child, the death of an estate trustee, the death of a beneficiary, a beneficiary developing a disability, changes in the law, and the list goes on. If you aren’t revisiting and updating your Will regularly, based on changes in circumstances, the way in which your estate is ultimately distributed on your death could be vastly different than what you originally envisioned.

Thanks for reading,

Rebecca Rauws

 

You may also find these other posts to be of interest:

06 Jul

Testamentary Capacity: Considering Contextual Factors

Rebecca Rauws Capacity, Wills Tags: , , , , , , , , , , 0 Comments

A recent decision from the Court of Appeal for Ontario, ­­­­Dujardin v Dujardin, 2018 ONCA 597, considers an appeal with respect to a Will challenge on the basis that the testator lacked testamentary capacity. The testator in this situation was a frequent consumer of alcohol. Despite what the trial judge called the testator’s “chronic alcoholism”, it seemed as though he was able to function normally on a day-to-day basis, including in business dealings relating to a family farm owned by the testator and his brother. Following the testator’s death, his wife disputed his Will, under which she received no benefit.

Recently, my colleagues, Noah Weisberg and Garrett Horrocks, discussed whether the classic test for testamentary capacity as set out in Banks v Goodfellow should be updated, and a new test as proposed in an article in the Canadian Bar Review, Vol 95 No. 1 (2017), Banks v Goodfellow (1870): Time to Update the Test for Testamentary Capacity.

The article opines that the context of the testator, including, for instance, family dynamics, should be incorporated explicitly into the test for testamentary capacity. This means that we would be asking the question: “can this particular person, with his or her particular mental abilities, in this particular situation, make this particular Will, at this particular time?”, rather than “can this testator make a Will?”

I thought the suggestions in the article were interesting when considering the facts of the Dujardin decision, and the findings of the trial judge. It seems as though the lower court took into account a number of contextual factors in applying the Banks v Goodfellow test, ultimately leading to a conclusion that the testator did possess the requisite testamentary capacity, a conclusion which was upheld by the Court of Appeal.

In particular, some of the interesting contextual factors included:

  • the history of the testator and his brother’s ownership and operation of the family farm, and the brothers’ consistent desires to leave their respective shares of the farm to each other upon their death;
  • prior mirror Wills executed by the brothers 13 years before the testator’s death, which reflected the same intention as the later Will that was being challenged (the testator’s prior will was revoked in 2000 when he married his wife); and
  • the testator’s relationship dynamic with his wife, with whom it appeared he was not close, and the provision that he made for her outside of his Will.

In particular, the Court of Appeal commented that “[g]enerally, the manner in which [the testator] disposed of his property made sense in the context of his life and familial relationships.”

Had the trial judge not considered the various contextual factors, it’s possible she could have arrived at a different conclusion. Subject to the medical evidence, given that the testator suffered from alcoholism, it may have been open to the court to conclude that this condition had, in fact, affected the testator’s cognition.

In any event, it is interesting to see a practical example of the ideas put forth in the article mentioned above, and to consider how the suggestions of the authors may come into play in real-world situations.

Thanks for reading,

Rebecca Rauws

 

You may enjoy these other blog posts:

05 Jul

Interpreting Gifts of Residue

Rebecca Rauws Wills Tags: , , , , , , , , , , , 0 Comments

When making testamentary gifts in a Will, if a specific bequest fails for any reason, the assets in question will fall into the residue of the estate. However, if a gift of residue fails, the distribution of whatever assets are affected by the failure will be governed by the intestacy provisions set out in Part II of the Succession Law Reform Act, R.S.O. 1990, c. S.26.

The recent decision of Sabetti v Jimenez, 2018 ONSC 3523 in part considers the interpretation of a residue clause in order to determine whether there is a partial intestacy in respect of the estate of Ms. Valdes.

The applicant, Mr. Sabetti, was Ms. Valdes’ second husband. She had three adult children from her prior marriage. Ms. Valdes’ Will provided that the residue of her estate was to be divided into four equal shares. The first share was to be held in trust for Mr. Sabetti during his lifetime, and on his death, whatever amount was remaining was to fall into and form part of the residue. The remaining three shares were to be transferred to Ms. Valdes’ three children.

Mr. Sabetti claimed that because of the gift-over of his share of the residue, which provides that it is to form part of the residue, the beneficiaries of the first share of the residue were not named with sufficient certainty, and a partial intestacy must result. Ultimately, the Honourable Justice Dunphy concluded that Ms. Valdes’ intention was clear on the face of the will, and found that there was no partial intestacy.

In its decision, the Court goes through an interesting analysis of the residue clause, outlining the rules applicable to construction of documents. Where there are two possible interpretations, one of which creates an absurd result, and one of which is in line with the apparent intention of the maker of the document, the latter is to be preferred. It is also preferable to construe a will so as to lead to a testacy over an intestacy, if it is possible to do so without straining the language of the Will or violating the testator’s intention.

In this case, the Court found that to interpret the term of the residue according to Mr. Sabetti’s position would lead to an absurd result. In terms of Ms. Valdes’ intention, the Court was of the view that the intended beneficiaries of the remainder interest were clearly the other three shares of the residue. The Court found no difficulty in discerning the testator’s intention or in applying it, and was able to read the Will in such a way as to avoid an intestacy.

Thanks for reading,

Rebecca Rauws

 

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03 Jul

The Use of Henson Trusts in Ontario vs. Alberta

Rebecca Rauws Estate & Trust Tags: , , , , , , , 0 Comments

Alberta recently passed legislation which will allow for the use of Henson trusts in estate planning in the province. Although Henson trusts are commonly used in Ontario, prior to this new legislation, the law in Alberta provided that the value of an individual’s interest in a trust was to be included in calculating his or her assets for the purpose of determining eligibility under Alberta’s Assured Income for the Severely Handicapped (“AISH”) program, thus preventing the effective use of Henson trusts.

A Henson trust is a type of trust often used here in Ontario in situations where a beneficiary is a recipient of The Ontario Disability Support Program (“ODSP”). An individual’s eligibility for ODSP is determined based on his or her income and assets. The Henson trust has emerged as a strategy to provide for a disabled beneficiary without compromising his or her eligibility to receive ODSP benefits.

The regulations to the Ontario Disability Support Program Act, 1997, S.O. 1997, c. 25, Sched. B provide that if a person has a beneficial interest in a trust that is derived from an inheritance or proceeds of a life insurance policy, provided that it does not exceed $100,000.00, this interest will not be included in calculating his or her assets. On the other hand, a Henson trust is not restricted as to size, as it is set up to be fully discretionary, such that the beneficiary does not have a vested interest in the trust.

A Henson trust would usually be set up such that the beneficiary who is a recipient of ODSP is the subject of the trustee’s absolute discretion to make distributions to him or her. Upon the beneficiary’s death, there will typically be a gift-over to a person or entity other than the disabled beneficiary. As the disabled beneficiary is not entitled to any  assets from the trust (given the trustee’s absolute discretion), it is not considered to be an asset of his or hers. The trustee of a Henson trust should still be mindful in making discretionary distributions to the disabled beneficiary, so as not to exceed the maximum annual income receivable by them, and possibly risk disentitling the beneficiary to ODSP benefits.

As discussed in this article, Alberta recently passed An Act to Strengthen Financial Security for Persons with Disabilities (SA 2018, c 12), which provides that a person’s interest in a trust is not to be included in the calculation of that person’s assets for the purpose of AISH, and repeals the section of the regulations which previously allowed for the inclusion of a trust interest in this calculation. As noted in the article, this will now allow for the use of Henson trusts in Alberta, and provide more flexibility in estate planning where a disabled beneficiary is receiving government support.

Thanks for reading,

Rebecca Rauws

 

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28 Jun

Contextualizing Capacity: The ‘Who’, ‘What’ and ‘When’ of Decision-Making

Garrett Horrocks Capacity, Estate Planning, Guardianship Tags: , , , , 0 Comments

Capacity is a fundamental consideration in many aspects of estate, trust, and attorneyship litigation.  The capacity of an individual to take a particular legal step, for example, to effect a distribution of property or to make a valid testamentary document, will often form the basis of a claim or court application.  However, as set out in today’s blog, capacity is specific as to task, time, and situation.  Context is a key factor in assessing capacity or lack thereof.

Capacity is specific as to task, time, and situation.

Whether an individual will be found to be capable of taking a particular legal step depends on the nature of the step being taken and when this step was taken.  By way of example, the threshold for the capacity required by a testator to execute a valid Last Will and Testament differs from, and is considerably higher than, the threshold of an individual seeking to grant a power of attorney for property or personal care.

The capacity to make a valid will requires an individual to have a clear understanding of the nature and extent of their assets, and to understand the effects of the dispositions being made including any claims that might arise as a result.  The capacity to grant a power of attorney for property, while similar to testamentary capacity, is a lower threshold.  An individual will be capable of granting a power of attorney for property provided that,

  1. they have a general understanding of the nature and value of their property;
  2. are aware of the obligations owed to any of their dependants; and
  3. understand the nature of the rights being given to the attorney as well as the rights that they retain as the grantor of the power of attorney, for example, the right to revoke the power of attorney if capable.

While the capacity to grant a power of attorney for property only requires the grantor to have a general understanding of their property or their obligations, testamentary capacity requires specific knowledge and appreciation of potential legal ramifications.  Accordingly, an assessment of an individual’s capacity in each respect will impart different requirements.

Capacity is also specific as to time, particularly as an individual’s capacity may fluctuate depending on illness or circumstance.  While somewhat uncommon in practice, an individual who was previously assessed as incapable may subsequently regain the capacity to take a particular legal step.  Accordingly, when acting on behalf of an individual challenging the validity of a testamentary document or disposition of property, it is important to consider not only the grantor’s historical capacity or lack thereof, but also whether capacity may have been regained at some point prior to the disposition being challenged.

Thanks for reading.

Garrett Horrocks

12 Jun

Priority of Assets out of which a Dependant Support Claim will be Paid

Sayuri Kagami Uncategorized Tags: , , , 0 Comments

As most of our readers know, when a person dies without leaving adequate support for their dependants, the courts may intervene to ensure that such dependants receive a fair share of the estate. Furthermore, pursuant to subsections 63(2) and 68(2) of the Succession Law Reform Act (SLRA), the Court has flexibility in the form of support ordered and against what portion of the Estate such support will be charged against.

Although the SLRA provides the Court with flexibility in the types of orders it can make, case law in Ontario also provides some guidance as to the priority of assets to be used in making support orders.

Priority of Support from “Traditional Estate Assets”

In Matthews v Matthews Estate, the Superior Court considered the issue of which assets should be used in making an order for dependant’s support. The assets available were both assets falling inside the estate (being mainly a ½ interest in a matrimonial home) and assets falling outside the estate, but subject to the clawback provision of section 72 of the SLRA (being a $1,000,000.00 life insurance policy). In that case, the Court made it clear that:

where property not normally part of the Estate is brought into the Estate by virtue of the provisions of the Succession Law Reform Act to the detriment of those designated beneficiaries, care must be taken to insure that the burden of any support order in favour of the Applicant be borne by the traditional assets of the Respondent’s estate before any encroachment is made on the life insurance policy proceeds.

No Priority Among Section 72 Assets

While the Court has set out that traditional estate assets should be used to satisfy dependant support claims before section 72 assets, there is no priority among section 72 assets, or even any requirement that an applicant seek to obtain support from all section 72 assets.

In Stevens v Fisher Estate, the estate itself was insolvent due to the debts of the Deceased. The Deceased, however, had three life insurance policies: a $84,000.00 group life insurance policy naming a lifelong friend/former common law spouse as beneficiary, a $50,000.00 insurance policy naming his 32 year old daughter as beneficiary, and a $250,000.00 life insurance policy to be held in trust for his two younger (but still adult) children. The common-law spouse of the Deceased commenced a claim but sought support only from the $84,000.00 group life insurance policy. While the beneficiary of the $84,000.00 group life insurance policy argued that the Applicant should look to the other life insurance policies before resorting to the group life insurance policy, the Court found that there was no priority of estate assets for the Applicant to look to before turning to the $84,000.00 policy.

While Stevens v Fisher Estate indicates that there is no requirement that an applicant for support look to all section 72 assets, it’s important to consider the implications of seeking support from only some, as opposed to all, section 72 assets.

Thanks for reading!

Sayuri Kagami

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