Tag: estates

03 Apr

Is a Crypto-Will a new frontier for estate planning and administration?

Ian Hull Estate & Trust, Estate Litigation, Estate Planning, Uncategorized, Wills Tags: , , , , 0 Comments

The popularity of cryptocurrencies has heightened the world’s attention on the versatility of blockchain technology. An interesting development is the application of a blockchain solution for estate planning of crypto assets.

Generally speaking, a blockchain is a shared, real-time ledger of any type of information that can be recorded ranging from financial transactions to ownership of real property. Blockchain technology allows for blocks of information to be stored in a chain on a distributed peer-to-peer network.

The traditional method of estate planning, as we know it, involves hiring a lawyer to prepare a will, which appoints the executor(s) and lists the beneficiaries. When the testator passes away it is the responsibility of the executor to administer the estate in accordance with the will. This traditional method has created uncertainty for testators who own Bitcoin or other cryptocurrency and intend for their beneficiaries to receive them.

It is estimated that millions of Bitcoins have been lost as a result of testators not adequately factoring this type of asset into their estate plan. For testators that have considered their crypto assets, concerns still remain as to whether the executor has the technological ability to access and distribute a cryptocurrency holding.

One possible way for the testator to address this uncertainty is to author a plan with detailed instructions and provide the private key to the executor(s).

A start-up company in the United States has fostered a novel approach to this issue. The company’s product offering uses a blockchain-registered will also known as a “crypto-will” to enable digital assets to be transferred automatically. The idea behind the product is that once a testator’s death record appears in the Death Master File, a computer database of death records made available by the United States Social Security Office, the crypto-will is then activated and executes the wishes of the testator. This potential solution eliminates the need for an executor to administer this portion of an individual’s estate.

As the crypto-will is still very much in the development stage, many questions still remain. It will be interesting to discover how the concept of a crypto-will evolves in the near future.

 

Thank you for reading,
Ian M. Hull

22 Mar

A Few of Rodgers and Hammerstein’s Favourite Things

Paul Emile Trudelle Uncategorized Tags: , , , , 0 Comments

Ariana Grande has a hit song with “7 Rings”, and the company that owns the rights to the Rodgers and Hammerstein catalogue is enjoying the sound of her music.

The song “7 Rings” is based largely on “My Favorite Things”, the 1959 song written by Rodgers and Hammerstein for the movie “The Sound of Music”. In it, Ms. Grande sings about some of her favourite things. There are no “raindrops on roses” or “whiskers on kittens”, but, rather, “breakfast at Tiffany’s and bottles of bubbles, girls with tattoos who like getting in trouble”. In the song, Ms. Grande laments (or boasts) that her receipts “be lookin’ like phone numbers”. I doubt that Julie Andrew’s character Maria in “The Sound of Music” ever observed that “Whoever said money can’t solve your problems must not have had enough money to solve ‘em”.

The video for the song had 268,264,254 views as of the time of writing.

According to a story in the New York Times, Concord,  a music company that owns the Rodgers and Hammerstein catalogue, is to receive 90% of the song writing royalties. This high percentage is thought to be because of the original song’s iconic status, and the extent to which the new song is based on the original.

Composer Richard Rodgers died in 1979, and lyricist Oscar Hammerstein died in 1960. According to The AM Law Daily, their estates sold Rodgers and Hammerstein Organization, which controlled the rights to the complete words of both artists, to Imagem Music Group in 2009 for more than $200 m US.

This is not the first time that modern artists have borrowed from Rodgers and Hammerstein. In 2006, Gwen Stefani sampled from their “Lonely Goatherd” song, also from “The Sound of Music”. There, the song writing duo’s catalogue only received 50% of the royalties.

Have a great weekend.

Paul Trudelle

21 Mar

Admissibility of Medical Records

Nick Esterbauer Capacity, Estate & Trust, Health / Medical, Litigation, Wills Tags: , , , , , , , , 0 Comments

Medical records are frequently key evidence in estate disputes.  Often, a testamentary document or inter vivos transaction is challenged on the basis that the deceased lacked testamentary capacity or the mental capacity to make a valid gift.

The British Columbia Supreme Court recently reviewed the issue of admissibility of medical records within the context of a will challenge.  The parties propounding the last will asserted that the deceased’s medical records were inadmissible on the basis that (1) the parties challenging the will were attempting to admit the records for the truth of their contents, (2) the records included third party statements from family members, which was suggested to constitute double hearsay evidence, and (3) the records were entirely inadmissible because they were not relevant, none of them being within weeks of the date of execution of the challenged will.

In Re Singh Estate, 2019 BCSC 272, the estate trustees named in the deceased’s will executed in 2013 only learned of the existence of a subsequent will executed in 2016 after they provided notice to the beneficiaries of the estate that they intended to apply for probate in respect of the 2013 will.  The 2016 will disinherited two of the deceased’s eight children (including one of the two adult children named as estate trustee in the 2013 will) on the basis that they had received “their share” in their mother’s estate from the predeceasing husband’s estate.  Between the dates of execution of the 2013 and 2016 wills, the deceased had suffered a bad fall and allegedly experienced delusions and had otherwise become forgetful and confused.

At trial, medical records are typically admitted under the business records exemption of the Evidence Act (in Ontario, section 35).  Justice MacDonald acknowledged this general treatment of medical evidence, citing the Supreme Court of Canada (at para 48):

While clinical records are hearsay, they are admissible under the business records exception both at common law and under s. 42 of the Evidence Act. The requirements for the admission of medical records as business records are set out in Ares[ v Venner, [1970] SCR 608]. The Supreme Court of Canada held at 626:

Hospital records, including nurses’ notes, made contemporaneously by someone having a personal knowledge of the matters then being recorded and under a duty to make the entry or record should be received in evidence as prima facie proof of the facts stated therein.

Subsequent case law cited by the Court addressed the second objection of the parties propounding the will, which provided that the observations that a medical practitioner has a duty to record in the ordinary course of business (including those involving third parties) are generally admissible (Cambie Surgeries Corporation v British Columbia (Attorney General), 2016 BCSC 1896).  Lastly, the Court considered the issue of relevance of the medical records and found that evidence relating to the mental health before and after the making of a will can be relevant in supporting an inference of capacity at the actual time of execution of the will (Laszlo v Lawton, 2013 BCSC 305).

After finding the medical records to be admissible as evidence of the deceased’s mental capacity (and in consideration of all of the available evidence), the Court declared the 2016 will to be invalid on the basis of lack of testamentary capacity.

Thank you for reading.

Nick Esterbauer

20 Dec

Notable Celebrity Testators

Doreen So Estate & Trust, Estate Planning, Executors and Trustees, Funerals, General Interest Tags: , , , , , 0 Comments

It is that time of the year when media outlets release their “top” or “most popular” lists, like the Time 100.

I came across a rather interesting and topical list the other day called “The Most Obnoxious Celebrity Wills” by Ranker.  This particular list features 24 celebrity Wills and I will excerpt some of the notable mentions here:

  • Napoleon Bonaparte’s Will was first on the list. Apparently, his Will included a direction for his head to be shaved and for his hair to be divided amongst his friends.

 

  • Harry Houdini asked his wife to hold an annual séance to contact his spirit.

 

  • Philip Seymour Hoffman wanted his son to be raised in three different cities: New York, Chicago, and San Francisco.

 

 

  • Charles Dickens gave directions for a particular dress code at his funeral.

 

  • Fred Baur, the person who designed the Pringles can, wanted to buried in a Pringles can.

Turns out testamentary freedom is whatever you want to make of it but the enforceability of provisions like these are another matter.

Thanks for reading and Happy Holidays!

Doreen So

29 Nov

Resealing of Foreign Orders Appointing Guardians

David M Smith Estate & Trust, Estate Planning, Trustees, Uncategorized, Wills Tags: , , , , 0 Comments

This blog was written in collaboration with, and with thanks to Yasmin Vinograd of Merovitz Potechin LLP .

In some cases, an incapable person residing outside of Canada has assets in Canada. Can a guardian appointed outside of Canada have access to the incapable’s Canadian assets? By extension, would a Guardianship Order made outside of Canada be recognized in Ontario?

In Ontario, this scenario is dealt with in the Substitute Decisions Act, 1992 (“SDA”). Section 86 of the SDA provides a mechanism by which orders made by a court outside of Ontario to appoint a guardian of property or of the person may be recognized or “resealed” in Ontario. Subsections of s. 86 specify that:

s.86(1): a foreign order is “an order made by a court outside Ontario that appoints, for a person who is sixteen years of age or older, a person having duties comparable to those of a guardian of property or guardian of the person.”

s.86(2): “Any person may apply to the court for an order resealing a foreign order that was made in a province or territory of Canada or in a prescribed jurisdiction.”

s.86(3): an applicant seeking to have the court reseal the foreign order is required to file a copy of the foreign order, along with a certificate signed by registrar, clerk or other officer of the foreign court stating that the order is unrevoked and is of full effect.

The effect of these provisions is that a guardianship order made by a foreign court will be recognized and enforceable in Ontario.

Sounds easy enough, doesn’t it? Unfortunately, it is not.

I had previously blogged about the possibility of resealing guardianship orders made in other provinces and territories. The issue arises when trying to reseal a guardianship order made outside of Canada. The problem is that Ontario has yet to prescribe any other country as a “prescribed jurisdiction” for the purpose of section 86(2). This begs the question: can the court reseal a foreign guardianship in the absence of the list of prescribed jurisdictions?

When faced with this exact issue in Cariello v Perrella, 2013 ONSC 7605, the court refused to apply section 86 to reseal a guardianship order made in Italy. Justice Mesbur stated:

It seems to me that unless and until Ontario creates a list of “prescribed jurisdictions” there is simply no legislative basis on which I can apply s. 86. This is not a case where the statute inadvertently fails to deal with an issue. Here, the province has simply failed to take the regulatory steps necessary to create a list of prescribed jurisdictions to which s.86 would apply. I have no idea of the province’s intentions in that regard. I fail to see how I can simply assume Ontario would designate Italy as a prescribed jurisdiction when it finally creates a list of prescribed jurisdictions under the SDA. I have no basis to conclude that Ontario has any intention of having s.86 apply to any jurisdiction other than another Canadian province or territory. Section 86 cannot apply.

In light of the Cariello decision, it appears that section 86 and the mechanism it provides cannot be used to reseal an order made by a jurisdiction outside of Canada. What, then, is a guardian to do if the incapable has assets in Canada that need to be accessed?

There are two ways in which this could be addressed.

The first is to bring an application to have the guardianship order recognized as a non-monetary order, pursuant to the Supreme Court of Canada’s decisions of Morguard Investments v De Savoye, [1990] 3 SCR 1077 (SCC), Beals v Saldanha, 2003 SCC 72, and Pro Swing Inc v ELTA Golf Inc, 2006 SCC 52. As of now, there is no decision that applied the SCC’s test of real and substantial connection in the context of a guardianship order. It remains to be seen whether an Ontario court would be open to recognizing a guardianship order on that basis and what the Public Guardian and Trustee’s position will be on such an application.

The second option is to commence a new guardianship application in Ontario. The evidence of incapacity in the foreign jurisdiction may be useful in such an application, but it would probably need to be updated to reflect the current status of the incapable and to demonstrate his or her incapacity. The “new” guardianship application will need to conform to Ontario’s requirements under the SDA, including the filing of a Management and/or Guardianship Plan(s), service on required persons, and naming of specific respondents in the notice of application.

Thanks for reading!
David M. Smith & Yasmin M. Vinograd

24 Oct

Spot the trends – move ahead of the curve

Suzana Popovic-Montag Estate & Trust, Estate Planning, In the News, Uncategorized Tags: , , , 0 Comments

Trends seem obvious in hindsight – but anticipating them before others has made many people very wealthy. They’re the ones who bought Apple shares for $1 in 2003 and watched the price exceed $200 in 2018. Or the ones who bought Blockbuster Video stock in the 1980s and sold it at its peak in 2002 before its 10-year decline into Netflix-induced irrelevance.

We’ve seen this firsthand, having been involved in the estates of many who “got in early”, moved ahead of the curve and capitalized.

While societal norms and consumer habits are always changing, not every change is one you can cash in on. For example, manual razor sales from stores fell by 5.1% year-over-year – their third straight year of decline. A key reason behind the decline is a simple one: people are shaving less.

Razor manufacturer Gillette says that men shaved an average of 3.2 times per week, compared to 3.7 times per week a decade ago. Stubble is now an acceptable look and more men are growing out their beards. CNN wrote about it recently.

While this is certainly a trend, razors continue to be sold and shaving product companies are adapting (with strategies such as lower prices and a move into beard grooming products). It’s likely not a game-changer.

Breakfast cereals are the same. Sales are down 11% over the past five years as people look for more natural, healthy alternatives – or the takeout convenience of breakfast sandwiches. But take one look down the grocery aisle and you’ll see that cereals are a long way from becoming the Blockbuster Video of food.

So, what change will be monumental?

Where should we be looking to find the next “big thing”, like Amazon and Uber? Like you, I don’t have a crystal ball, but here are my two picks for big changes that could disrupt our world and create opportunities.

  • Automobiles: More than 30,000 people continue to die each year in U.S. auto accidents (Canada is typically about 10% of these numbers, so about the same rate). People will look back at the 20th and 21st centuries as barbaric for the number of lives lost crashing metal into metal. We know that driverless cars (and virtually risk-free driving) are coming, but what else will change (auto insurance, in-car entertainment options, ownership models, a declining need for personal injury lawyers)? There could be many related growth trends.
  • Farming and meat: Vegetarianism and veganism are growing – along with our ability to manufacture artificial meat. That combination may be enough to turn the traditional food industry on its head. The trick is to identify the companies that could potentially dominate if the trend to less real meat continues.

There are many other possibilities of course. Have you spotted any? Are you moving ahead of the curve?

Thanks for reading!
Suzana Popovic-Montag

10 Oct

The great estate – 5 ways to make it happen

Suzana Popovic-Montag Beneficiary Designations, Estate & Trust, Estate Planning, Power of Attorney, Trustees, Wills Tags: , , , , 0 Comments

As estate litigators, we’ve seen a lot of bad estates and bad estate situations. The good news is because we know the bad, we can advise clients on how to avoid it and make their estate a great one. No uncertainty, no delays, no conflicts, no nasty tax surprises.

If you want to make your estate a great one, here are five essential elements that can make it happen.

  1. You’ve provided a clear path to the documentation

Ideally, your executor needs the original copy of your will – as do courts to ensure a smooth probate process. So, don’t make your will (and any other estate documents) hard to locate. Whether it’s stored at your lawyer’s office, or registered with the court, or stored in a filing cabinet at home, make sure that you and your loved ones remember where your will is and know how to access it. We discuss this issue in more detail here.

  1. Your estate assets are easy to identify

Don’t assume your family and your executor know what you own. Many of us scatter our assets and accounts more than we realize. Make a list of all bank and investment accounts, insurance policies, major assets, and any virtual assets of value and keep this list with your will or ensure your named executor has a copy.

  1. Your executor is trustworthy and can access the help they need

When choosing an executor, trust is essential as the person selected must be capable of acting impartially on behalf of your estate – regardless of their personal feelings about your estate and the beneficiaries.

While your executor doesn’t need to be an accountant or lawyer or investment advisor, they do need to be able to hire the expertise that your estate might require. In other words, they need to know what they don’t know, and have the common sense to seek out the tax, accounting, and legal expertise that may be needed.

This article provides a great “quick list” of things to consider when choosing an executor.

  1. Everyone knows what’s in your will – in advance

It is dangerous to assume that your intended beneficiaries know what is in your will and have no questions or concerns. Talking today about your intentions and your family members’ expectations lets you address any contentious issues while you’re alive – and avoid potential conflicts after you’re gone.

Even the most well-intentioned gifts – a charitable bequest, the china cabinet to a niece, the vintage hockey cards to a grandson – can lead to questions, hurt feelings and potential conflicts.

Don’t let it happen. Make sure that everyone who might be touched by your will at death knows exactly what’s in it.

  1. Tax planning in place – if needed

You’re deemed to have disposed of your capital assets at their fair market value when you die. This means your estate is liable for capital gains taxes on assets that have increased in value during your lifetime. Your executors may be forced to sell estate assets to pay for the tax liability – and a forced sale may mean the assets are sold for less than their fair value.

There are many strategies available to help cover an estate’s tax liability, from the use of trusts to the purchase of life insurance. Make sure you’ve considered whether tax planning is needed for your estate, and put a strategy in place if needed.

Thanks for reading … Have a great day!
Suzana Popovic-Montag

02 Oct

Full Indemnity through Blended Costs: The Estate of Irmgard Burgstaler

Doreen So Elder Law, Guardianship, Passing of Accounts, Trustees, Uncategorized Tags: , , , , , 0 Comments

The Estate of Irmgard Burgstaler (disability), 2018 ONSC 472, was a costs decision that arose from an application to pass attorney accounts.  Erwin  was named as the attorney for property for his mother, Irmgard.  Erwin was ordered to pass his accounts and his siblings, Barbara and Peter, objected.

A four-day hearing took place.  Erwin was self-represented and his accounts were not in court format pursuant to Rule 74.17 of the Rules of Civil Procedure.  Extensive written submissions were also filed by both sides.

Erwin was found to have breached his fiduciary duty to Irmgard when $82,000.00 was taken from Irmgard and applied towards the purchase of a home in Erwin’s name.  Erwin also took approximately $44,000.00 from his mother’s accounts to pay his legal fees in the proceeding at issue and the Court found that this expense was not for Irmgard’s benefit.  Certain other expenses were ordered to be repay to Irmgard as well as the repayment of $5,000.00 from the sale of Irmgard’s trailer.

Given their success, the Objectors sought full indemnity on a blended basis from Erwin (15%) and the Estate (85%).  In reviewing the jurisprudence on costs in estate matters, Justice Shaw found that this case fell within the public policy exemption for due administration of estates and allowed the Objectors’ claim for full indemnity.

That said, Justice Shaw disagreed with the Objectors’ proposed 15/85 split on the basis of the “losers pay” principle in general civil costs.  Justice Shaw ordered Erwin to pay the Objectors’ costs on a partial indemnity scale while the Estate was ordered pay the full remaining balance.  In this case, partial indemnity appears to be close to 70% of the total claimed based on the fixed amounts that were ordered.

Thanks for reading!

Doreen So

03 Aug

O Brother, Where Art Thou? Benjamin Orders

Paul Emile Trudelle Estate & Trust, Estate Planning, Trustees Tags: , , 0 Comments

A testator provided in her will that a share of the residue of her estate was to go to three of the testator’s brothers. If any one of them predeceased the testator, their share would go to two nieces of the deceased.

The testator was predeceased by two of her brothers. A third could not be located. What was the estate trustee to do?

This question was addressed in the July 27, 2018 decision of Steele v. Smith, 2018 ONSC 4601 (CanLII). There, the Public Guardian and Trustee suggested that the share payable to the missing brother be paid into court, and that further efforts be taken to locate him. The estate trustee, on the other hand, asked the court for a “Benjamin Order”, allowing him to distribute the estate as if the missing brother had predeceased the testator.

The court reviewed the history of the Benjamin Order. The Order derives from the case of Neville v. Benjamin, [1902] 1 Ch. 723. There, the deceased was survived by twelve children. A thirteenth disappeared while on vacation, and after it was suspected that he had stolen money from his employer. The court held that the burden was on the missing person’s administrator (or those claiming through him) to prove that the missing person had survived the deceased. In Benjamin, the burden was not met, and the estate was allowed to be distributed as if the missing person had predeceased.

Benjamin Orders are rare, and not easy to obtain. The court will consider the “sufficiency” of the inquiries made by the estate trustee. In considering this, the court will look for information about:

  1. How much time has elapsed since the death of the testator?
  2. What specific steps have been taken to locate the missing person, and over what period of time?
  3. Who has made the inquiries? Are they appropriately qualified?
  4. Do the inquiries take into account consideration of the possible location of the missing person?
  5. Are further inquiries likely to produce any more information?
  6. What is the amount at state?

In Steele v. Smith, the estate trustee is said to have gone to “extensive lengths” to determine the missing brother’s location in the eighteen months since the testator’s death. The court held that the estate trustee had exhausted all available avenues of inquiry, and that there was no evidence that further efforts would yield positive results. Further, there was no reason why the missing brother would choose not to be found. Unfortunately, the value of the share of the residue in issue is not disclosed in the decision.

The court ordered that the estate trustee was at liberty to distribute the estate as if the missing brother did not survive the testator.

One of the benefits of a Benjamin Order is that it gives protection to the estate trustee. If the missing brother later appeared, he would have no claim as against the estate trustee. However, he may have a claim as against the beneficiaries who benefitted from the Order.

Thank you for reading.
Paul Trudelle

26 Jul

Who is the Ontario Children’s Lawyer?

Doreen So Continuing Legal Education, Estate & Trust, General Interest, Guardianship, Litigation Tags: , , , , , , , 0 Comments

The Ontario Court of Appeal recently considered the issue of whether the litigation files of the Office of the Children’s Lawyer are subject to a freedom of information access request in Ontario (Children’s Lawyer) v. Ontario (Information and Privacy Commissioner), 2018 ONCA 599.  This appeal arose from a father’s request for the production of the Children’s Lawyers’ records.  The Children’s Lawyer acted for the father’s children in the course of a custody and access dispute.  Accordingly, a portion of the Children’s Lawyer’s records were privileged.

Justice Bennotto, in writing for a unanimous panel, found that the issue turned on whether the records are “in the custody or under the control” of the Ministry of the Attorney General for Ontario (“MAG“) for the purposes of the Freedom of Information and Protection of Privacy Act, R.S.O. 1990, c. F. 31.

The answer was no.

 

The Children’s Lawyer’s records are not in the custody or under the control of MAG because she operates separately and distinctly from MAG and,

“[68]     [she] is an independent statutory office holder appointed by Cabinet through the Lieutenant Governor. She derives her independent powers, duties and responsibilities through statute, common law and orders of the court.

[…]

[72]      To allow a disgruntled parent to obtain confidential records belonging to the child would undermine the Children’s Lawyer’s promise of confidentiality, inhibit the information she could obtain and sabotage her in the exercise of her duties. This would, in turn, impact proceedings before the court by depriving it of the child’s voice and cause damage to the child who would no longer be meaningfully represented. Finally, disclosure to a parent could cause further trauma and stress to the child, who may have divided loyalties, exposing the child to retribution and making the child the problem in the litigation.”

For those practising in the estates and trusts context, it is important to note that the role of the Children’s Lawyer is different in family law.

In civil matters that implicate a minor’s financial interest in property, the Children’s Lawyer acts as the minor’s litigation guardian and she is represented by the lawyers of her choice.  In custody and access disputes, the Children’s Lawyer acts, at the request of the court, as the minor’s lawyer.

Bonus answer: the current Children’s Lawyer is Marian Jacko.

Thanks for reading this week!

Doreen So

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