Tag: Estate & Trust
In determining the quantum of support to be awarded under Part V of the Succession Law Reform Act, the Ontario Superior Court of Justice will take into consideration unpaid caregiving. Specifically, s. 62(1)(r)(vi) of the Act directs the Court to consider "housekeeping and domestic services" rendered by the Applicant.
Caregiving may give rise to both legal and moral obligations to provide support as espoused by the Ontario Court of Appeal in Cummings.
Unpaid caregiving may be found to create an enrichment of the recepient spouse. Corresponding deprivation to the caregiver may not demand that the spouse actually gave up work in order to provide caregiving services. For example, in Moore v. Moore (27 R.F.L. 314 (Sask. Surr. Court), a retired spouse who chose to take care of a spouse who was ill was found to have been deprived of the ability "to engage in the ordinary activities of retired people."
In Perilli v. Foley Estate (2006), 23 E.T.R. (3d) 245, the Ontario Superior Court of Justice found that a common law spouse who quit her job to act as the full-time caregiver to her spouse who was suffering from Alzheimer’s Disease was entitled to compensation that reflected these contributions.
David Morgan Smith
In a recent survey, 60% of Canadians reported that they were not confident in the capacity of our healthcare system to accommodate a tsunami of aging boomers. The Canadian Medical Association (the “CMA”) has stated that the belief that the Canadian healthcare system is ill-equipped to deal with a greater number of seniors, who are living longer, but not necessarily healthier, is “both real and well-founded”.
As the debt load carried by aging boomers continues to grow, many believe that they will be reliant upon the public healthcare system for long-term care, if and when it may be required. With the daily cost to the province of keeping one person in a long-term care facility or hospital bed of $126 and almost $1,000, respectively, and the majority of seniors, a group soon to make up one quarter of the total population, suffering from at least one chronic health condition, this presents a major funding problem.
Some doctors believe that a partial solution lies in increasing accessibility to long-term care homes and supportive homecare, which is provided at a significantly lower cost of $35 to $50 per hour of care required. It is estimated that this change could result in savings of well over two billion dollars annually. In recent years, however, Canadian spending on healthcare has increased by approximately ten billion dollars every year.
Last week, the president of the CMA said that Canada is not prepared to care for our aging population. He hopes that the federal government will implement a “national seniors health care strategy”, which would incorporate hospital, home, long-term, end-of-life, and palliative care. If the government fails to do so, the quality of the Canadian healthcare system is expected to suffer significant decline within the next two decades.
Other experts blame the already-increasing and projected increased costs of providing healthcare to Canadians on the higher costs now associated with employing physicians and using new, more expensive technology. Professor Michel Grignon of McMaster University states that, rather than the “tsunami” that it is often referred to, the greying population represents instead “at most, a modest tidal wave” to the Canadian healthcare system.
Either way, it appears that the development of a strategy to minimize the burden of an aging population, whether of the magnitude of a tsunami or not, on our healthcare system, will help protect its integrity going forward.
Thank you for reading!
Will Challenges may often be driven by emotion rather than logic. The historic approach of the courts (until relatively recently) to give a challenger to the validity of a Will his or her costs further entrenched the perception that estate litigation was firmly in the category of cases that were notoriously difficult to have dealt with by way of a motion for summary judgment.
That may be changing. The changes to Rule 20 as they relate to summary judgment make summary judgment available to a greater extent than was previously the case. "No genuine issue requiring a trial" has given rise to the "full appreciation" test. Simply put, if the matters in issue and the evidence produced on the motion satisfy a Judge that he or she would not gain a more full appreciation of the matters at issue at a trial, then summary judgment should be granted.
Of course, estate litigation entails more than will challenges. Dependant support cases may also be susceptible to summary judgment, especially in cases where the Estate takes the position that the purported "dependant" does not fit within such category. While the question of whether a person fits within the category of "spouse" under Part V of the SLRA is a notoriously triable issue, Blanchard v. Bober (89 ETR (3d) 36) was an Ontario Superior Court of Justice case where an adult child claiming support was found not to be a dependant on a motion for summary judgment because he was placed "for valuable consideration in a foster home by a person having lawful custody" and therefore no longer qualified as a "child" within the meaning of the Act.
David Morgan Smith
The mere mention of the dreaded rule against perpetuities is enough to send shivers down the spines of lawyers, law students, and estate and trust planning professionals. The rule is an arcane, complex and poorly understood doctrine which limits the duration of most trusts and requires that they not last forever.
The rule against perpetuities states that an interest must vest no later than twenty-one years after the death of some life in being when the interest was created. There is a world of convoluted rules for the determination of who or what a life in being can be. At common law, an interest was void at the outset if there was any chance at all that interest could vest outside the perpetuities period, no matter how remote that chance was.
In Ontario, the Perpetuities Act establishes a “wait-and-see” approach. Under the Act, an interest that might offend the common law rule does not fail from the outset, but rather it is presumed to be valid until actual events establish that it is incapable of vesting within the perpetuity period.
Hong Kong has recently passed the Trust Law (Amendment) Bill 2013 which, among other things, abolishes the rule against perpetuities. This means that in Hong Kong, a trust can now last forever.
A perpetual trust could be a useful planning tool for individuals that are looking to plan for their families over many generations. This could be advantageous for families with substantial assets who wish to ensure that the wealth survives for the benefit of great-grandchildren, great-great-grandchildren, and so on.
One problem with the perpetual trust is part of the original rationale for the rule against perpetuities in the first place – the principle that an individual should not be allowed to rule from beyond the grave. The abolition of the rule could result in property being bound up by trusts which were set up hundreds of years earlier. This could lead to any number of unanticipated consequences in the future.
While many trust and estates lawyers and law students would love for the rule against perpetuities to be wiped off the books, in Ontario, it appears that it will remain in effect for the foreseeable future, although that may change one day. Nothing lasts forever (except a trust in Hong Kong).
In a world where there seems to be an App for anything, there are now Apps available to craft a Will, assist with the administration of an estate and even learn about Estates Law.
Do-it-yourself Wills are not new, and neither are the problems that can be created when they are not properly done. As the availability and development of mobile Apps increases, more and more Apps are delving into complex personal and legal matters. The ease of availability of an App on a smart phone or tablet can lull a user into thinking that the easy to access template provides an easy and cost efficient solution.
The difficulty is, if not done properly, the Will may not be valid or doesn’t provide a proper accounting for estate administration. Either of these can lead to greater legal issues and costs than a professionally drafted Will or administration advice at the outset.
As with many things, Do-it-yourself can make sense if the circumstances are very simple. However, in most cases, the software is inadequate and cannot effectively deal with the different legal requirements of different jurisdictions to create a legal will or administer an estate.
Just because there is an App for that, doesn’t mean you should use it.
Section 6 of the SLRA states that “A testator may make a valid will wholly by his or her own handwriting and signature, without formality, and without the presence, attestation or signature of a witness.”
The position of a signature somewhere other than the end of a testamentary document does not, in itself, render the document invalid (s. 7(2)). The signature on a will may be “placed among the words of a testimonium clause or a clause of attestation” (s. 7(2)(c)(i)). However, such a signature does not give effect to dispositions or directions underneath the signature (s. 7(3)).
In Wood v. Smith [(1993) All ER 556 (CA)], the English Court of Appeal decided that the appearance of testator’s name in heading of a holograph qualified as a signature for the holograph will in question.
It is stressed in Papageorgiou v. Walstaff Estate (2008 CarswellOnt 3828, 42 ETR (3d) 50) that there is currently no doctrine of substantial compliance in Ontario, and the judgments of many other jurisdictions, where substantial compliance is observed, will not apply here (at paras 29-32). Papageorgiou does note, however, that in situations where a will is signed in wrong place or the name is initialed or printed instead of signed, these represent curable defects that should not stand in the way of the will being admitted to probate (para 32).
In provinces other than Ontario, the courts allowed more relaxed formal requirements for holograph wills, which did not require a signature on the document if it was clear that it represented the testamentary wishes of the testator who intended to give effect to the document as a will, were applied. [Martineau v. Manitoba (Public Trustee), 1993 CarswellMan 76, 50 ETR 87; Re Bunn Estate, 1991 CarswellSask 105, 41 ETR 100; Belser v. Felury, 1999 CarswellMan 221, 139 Man R (2d) 149]
Re Clarke 1982 CarswellOnt 816, 39 OR (2d) 392
In this case, the testator had printed his name at the top of the document, but nowhere else. The court decided that the printed name was sufficient to satisfy the requirement of the testator’s signature. Justice Scott reviewed the Re Harrison decision (1885, 30 ChD 390), which relied upon the presumption against intestacy, and encouraging documents expressing a testator’s wishes to be read as a will whenever appropriate, regardless of form (page 5).
However, Justice Scott reluctantly stated that under s. 7(3) of the SLRA, the dispositions could not be given effect because they were positioned underneath the ‘signature’, and the will was therefore invalid (para 36).
Sisson v. Park Street Baptist Church 1998 CarswellOnt 3704, 24 ETR (2d) 18.
This case seems to apply the substantial compliance doctrine to validate an Ontario will that was witnessed only by one person. Justice Murphy reviewed the case law of other jurisdictions where similar steps had been taken in order to permit wills, proved to express the intentions of the testator, being admitted to probate despite non-compliance with formal requirements. The Court was satisfied that the will reflected the actual intention of the testatrix. (at para 38) The purpose of the formalities outlined in the Wills Act and, in Ontario, the Succession Law Reform Act were considered to be safeguards against the probate of wills where it is not the case that the document reflects the testator’s intentions. Justice Murphy stated that “the absence of legislation on point should not stop the court from developing the common law where, in circumstances like this, there has been substantial compliance…” (para 40) The will was admitted to probate.
David M. Smith
With the stars currently rolling into the city for the Toronto International Film Festival, I thought a blog on celebrities would be appropriate. There are of course the eccentric requests left in various celebrities’ Wills, which are frequently publicized. But I thought I’d focus on the American concept of a “conservatorship”. The Canadian parallel is referred to as a “guardianship”.
A judge has recently granted temporary conservatorship over Amanda Bynes to her parents. The conservatorship allows her parents to make decisions about her health-care and well-being as well as the ability to manage her finances.
Many of us remember when Brittney Spears’ father won conservatorship over her affairs. She has been under conservatorship for at least 5 years.
Conservatorship is an American legal concept. The conservator may be only of the “estate” (meaning they manage the financial affairs) or of the “person” (meaning they make health care decisions and choices about living arrangements.) A conservatorship is usually obtained by court order. The concept can vary from State to State, so in some States it can be referred to as a guardianship – like in Canada – or in other States, a trustee.
In addition to Amanda Bynes and Brittney Spears, the following celebrities have either been under conservatorship or have been threatened with the possibility of court proceedings in that regard:
-There are reports that Charlie Sheens’ parents were seeking conservatorship;
-Lindsey Lohan’s father sought conservatorship, although that has not been granted;
-Amy Winehouse agreed to let her parents have conservatorship over her $21 million fortune;
-In 2009, the Court granted Kurt Cobain’s mother conservatorship over his daughter, Francis Bean, not because she was suffering from any mental illness or other incapacity, but to prevent her mother, Courtney Love, from getting her hands on her assets; and
-In 2009 Peter Falk was diagnosed with advanced dementia. His wife gained control of his affairs, but a judge place him in a conservatorship to ensure that his daughter could visit him at least once a month, as her relationship with his wife was strained.
Thanks for reading and I hope you get out and enjoy the TIFF!
A new bill, currently between readings at the House of Lords, may result in significant changes to the treatment of intestacy and the administration of English and Welsh Estates. The Inheritance and Trustees’ Powers Bill, which began its journey through British Parliament on July 30th of this year, will be subject to more thorough review during its second reading in late October.
If passed, the Bill offers greater relief to widows and widowers of spouses who did not execute a valid Will. British intestacy rules currently stipulate that any surviving parents and siblings are entitled to a share of the estate of a deceased family member without children. Under the Inheritance and Trustees’ Powers Bill, a surviving spouse of an individual who dies intestate and without children will receive the entire estate. Further, when the deceased does leave children behind, in addition to a £250,000 preferential share, the surviving spouse will be able to collect his or her half of the estate directly, rather than through a trust.
Among the other changes proposed by the tentative legislation are an extension of the rights to make a dependant support claim to family members born outside of marriage or a common law relationship. The Bill would also allow support claims by dependants living in the United Kingdom in circumstances where the deceased was residing elsewhere at the time of death. If the Bill comes into force, powers of estate trustees will be expanded to allow the use of discretion when making advancements to underage beneficiaries, and to include the ability to distribute assets other than cash to beneficiaries.
The Inheritance and Trustees’ Powers Bill is the first of two planned updates to the law of wills and estates in the United Kingdom, which has seen little change since the Inheritance (Provision for Family and Dependants) Act of 1975. If implemented, the new Bills could together significantly alter the treatment of intestacy and estate administration throughout Great Britain.
Thank you for reading!
Setting the stage for sweeping legislative reform, British Columbia’s Family Law Act, introduced on March 18th 2013, promises to provide greater access to assets previously untouched during property division disputes. The new Act was drafted to replace the outdated Family Relations Act, which was repealed upon the coming into force of the Family Law Act this year.
The new Act attempts to ‘reflect the norms of modern Canadian society’ by extending the province’s property division regime to common law spouses, and in doing so opens the doors for much controversy regarding who qualifies for support under the Act. The complexity arises as a result of the test to determine whether a ‘marriage-like’ relationship exists, which rests upon a couple’s subjective intentions and how they choose to present their relationship publicly.
For estate planners and those seeking to shelter assets through trusts, it is of paramount importance to note that, as a result of the new regime, an increase in the value of a trust during a ‘marriage-like’ relationship is also up for grabs during property division disputes. The Act even goes as far as to include the value of the trust property itself, as opposed to a spouses’ interest in the trust, as liable to attack. This change has caused upset as other discretionary beneficiaries of such a trust may find their interest eaten away by divorcing spouses seeking access to trust assets.
These extensive changes aimed at equalizing access to property for common law spouses will certainly result in a greater number of claims made on estates, which will in turn spur the more frequent use of ‘marriage-like’ prenuptial agreements. Consequently, there is an even greater need for couples to ensure that they openly discuss and ink cohabitation agreements that reflect their wishes regarding personal finances.
Whether the new Act will be successful in reflecting modern societal values remains to be seen; however, family and estate practitioners will certainly be wise to view litigation arising from the new Act closely, as it will no doubt set a precedent for other provinces hoping to draft similar legislation in the near future.
Thank you for reading!
Unfortunately, tragic news of persons who have gone missing have been in the headlines much too much recently. While any such news is heartbreaking – the sheer volume of these recent news stories has been tremendously painful for our national psyche. The loved ones of the missing persons must deal with not only their unfathomable grief, but must also eventually address the mundane financial responsibilities of these missing persons. After all, there remain bills to pay, dependants to support, and property which must be secured and managed on behalf of the missing person.
As Estate lawyers unfortunately know all too well, there is a complex Court process to grant a person with authority to manage a missing person’s property in his or her absence.
In Ontario, the Absentee Act deals with circumstances in which a person is considered to be an “Absentee,” i.e. a person "whose whereabouts are unknown and as to whom there is no knowledge as to whether he or she is alive or dead.” In such circumstances, the Court has the power to appoint a “Committee” who has the authority to manage the missing person’s property in his or her absence.
The Absentee Act provides that certain persons, including the Absentee’s spouse, child or other family member, the Attorney General, or even a creditor, can make application to the Court for a declaration that the person is an Absentee and seek appointment of a Committee to manage the person’s property. The Court may declare a person to be an Absentee if it is shown that “due and satisfactory inquiry” has been made into their disappearance. (For a further discussion regarding the test which must be met to declare a person to be an Absentee, I recommend our Probater article, “The Absentee Act: it could happen to you”.) If satisfactory inquiry has been made and the missing person is declared to be an Absentee, a Committee will be appointed. The Committee will have to submit a management plan setting out how they propose to manage the Absentee’s property. In addition to being responsible for the custody, care and management of the Absentee’s property, the Committee will have authority to expend moneys out of Absentee’s property for the purpose of endeavouring to search for the Absentee and in endeavouring to ascertain whether he or she is alive or dead.
The question that inevitably arises in any such circumstances is, what happens if the Absentee in found one day, thankfully, alive and well? If the Court is later satisfied that the person has ceased to be an Absentee, it can make a declaration to that effect and set aside the order declaring the person to be an Absentee for all purposes (except for things done in respect of the Absentee’s property while such order was in force). In such cases, the Committee will have the obligations of a fiduciary to account for the Absentee’s property.
Thanks for reading,