Tag: estates

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

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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07 May

The Inconvenience of Counsel is Not Grounds for a Change of Venue

Doreen So Continuing Legal Education, Estate & Trust, General Interest, In the News, Litigation, Uncategorized Tags: , , , , , , 0 Comments

 

A motion to transfer an estate matter that was commenced in the Brantford Superior Court of Justice to the Toronto Estates List was recently considered in the Estate of Byung Sun Im, 2018 ONSC 2223.

The procedure to be followed in a Rule 13.1.02 motion to transfer is set out in the Consolidated Provincial Practice Direction (at Part III, B) when the request to transfer pertains to a proceeding in the Central East, Central West, Central South and Toronto Regions.  Motions to transfer should be brought, in writing, to the court location which the moving party is seeking to transfer the matter.  Therefore, if you are seeking to transfer a matter to the Toronto Estates List, then the written motion should be filed with the Toronto Estates List.

Given that the plaintiff (or applicant) has a prima facie right to select the venue of a proceeding (subject to any applicable statutory requirements), the onus is on the party that seeks a transfer to satisfy the test set out in Rule 13.1.02(2). 

In this particular case, the action was predominately based on an estate trustee’s dealings with estate assets.  The deceased, the estate trustee, the majority of the beneficiaries, and the main estate assets were located in Toronto.  The one person in Brantford was the plaintiff.

However, various interim orders and smaller issues were dealt with in Brantford.  Prior proceedings related to this Estate were also decided and disposed of in Brantford.  Justice Firestone agreed that the location of the assets had little bearing on how the assets ought to be divided.  He also noted that there was an absence of evidence related to the convenience of the witnesses in addition to the convenience and location of the parties themselves.  The convenience of counsel is not a basis to order the transfer of a proceeding.

 

Ultimately, the moving party failed to satisfy the test set out in Rule 13.1.02(2):

“… the court may, on any party’s motion, make an order to transfer the proceeding to a county other than the one where it was commenced, if the court is satisfied,

(a) that it is likely that a fair hearing cannot be held in the county where the proceeding was commenced; or

(b) that a transfer is desirable in the interest of justice, having regard to,

(i) where a substantial part of the events or omissions that gave rise to the claim occurred,

(ii) where a substantial part of the damages were sustained,

(iii) where the subject-matter of the proceeding is or was located,

(iv) any local community’s interest in the subject-matter of the proceeding,

(v) the convenience of the parties, the witnesses and the court,

(vi) whether there are counterclaims, crossclaims, or third or subsequent party claims,

(vii) any advantages or disadvantages of a particular place with respect to securing the just, most expeditious and least expensive determination of the proceeding on its merits,

(viii) whether judges and court facilities are available at the other county, and

(ix) any other relevant matter.  O. Reg. 14/04, s. 10.”

Thanks for reading!  For those of you who are also interested in the Practice Directions for the Toronto Estates List, you may access them here.

Doreen So

 

10 Apr

The Policy of Setting Policy: Cotnam v Rousseau and Judicial Activism

Garrett Horrocks Beneficiary Designations, Estate & Trust, Estate Planning, Litigation, Pension Benefits, Public Policy, RRSPs/Insurance Policies, Support After Death Tags: , , , , 0 Comments

The practice of injecting policy considerations into court decisions has long been a tenet of the Ontario judiciary.  However, such considerations may arguably raise questions that go beyond the scope of the decision.  Cotnam v Rousseau, 2018 ONSC 216, is one such case.

In Cotnam, the Court was tasked with determining whether a pre-retirement death benefit received by a surviving spouse was available to be clawed back into an Estate pursuant to section 72 of the Succession Law Reform Act (the “SLRA”).  The Respondent took the position that section 48 of the Pension Benefits Act (the “PBA”) sheltered the death benefit from being clawed back given that she was the spouse of the Deceased.  The Court disagreed and held that such benefits ought to be available for claw back in order to prevent irrational outcomes resulting from their exclusion.

In the context of the facts at play in Cotnam, the Court reasoned in favour of equity, in particular, to ensure a dependant disabled child of the Deceased was properly provided for. However, the Court’s reasons appear to gloss over a fundamental conflict between the SLRA and the PBA, a clash about which the estates bar might have appreciated some judicial commentary.  Specifically, the Court held that the provisions of the SLRA ascribing pension death benefits as available to satisfy a claim of dependant’s relief ought to prevail over the PBA’s provisions sheltering them from claw back.

Section 114 of the PBA provides that, “[i]n the event of a conflict between this Act and any other Act […] [the PBA] prevails unless the other Act states that it is to prevail over [the PBA].”  The SLRA, in contrast, is silent as to whether its provisions are to prevail over those of the PBA.

However, the Court’s reasons make no mention of the interplay between section 114 of the PBA and the equities of ensuring the dependant daughter in Cotnam was properly provided for.  While we may opine on the fact that the outcome in Cotnam favours equity over rote statutory interpretation, the estates bar is left to grapple with the apparent inconsistency with the intention of the Ontario legislature, and whether it will affect similar decisions going forward.  As of this date, no written decisions have yet interpreted Cotnam, nor has the decision been appealed.  Accordingly, it may be some time before the impact of the decision, if any, is felt.

Thanks for reading.

Garrett Horrocks

If you enjoyed this blog, please consider these other related posts:

Dependant Support and Pre-Retirement Death Benefits

Rehel v Methot: Life Income Funds and Spousal Entitlements

13 Mar

Essential Evidence Series for Estate Litigators

Noah Weisberg Continuing Legal Education, General Interest, In the News Tags: , , , , , , , , 0 Comments

It is with great pleasure to announce that myself, Ian Hull, and Lionel Tupman will be co-chairing a professional development program on Essential Evidence for Estate Litigators through the OBA.

The program has been created specifically for estate litigators and will run over three evenings on April 5, May 17, and June 6, 2018.

Details of the program can be found by clicking here.

This program is a must for anyone who litigates in the area of estates, wills, and trusts!

Noah Weisberg

12 Mar

Should I Bring a Motion in the Estates Court Without Notice?

Noah Weisberg Estate & Trust, General Interest, Litigation, Passing of Accounts Tags: , , , , , , , , , , 0 Comments

When is it appropriate to bring a motion in the Estates Court without notice?   The answer requires consideration of both the statute and common law.

The starting point is Rule 74.15(1) of the Rules of Civil Procedure.  Here, a person who has a financial interest in an estate is permitted to seek an order for assistance.  Some of the more ‘popular’ orders for assistance include: requiring a person to accept/refuse an appointment as estate trustee; requiring an estate trustee to file with the court a statement of the nature and value of the estate assets at the date of death; and, requiring an estate trustee to pass accounts.

Subject to narrow exceptions, Rule 74.15(2) allows these motion to be made without notice (in latin, ex parte).

Notwithstanding this, the Court has not necessarily embraced ex-parte orders with open arms.

For instance, Corbett J. in Robert Half Canada Inc. v. Jeewan found that, before ordering an ex parte injunction, a party needed to demonstrate some element of ‘extraordinary urgency’.

Moreover, and specifically in relation to estates orders for assistance, Justice DM Brown in Ignagni Estate (Re), noted that orders for assistance are not mere administrative devices, and that the consequences of failing to abide by such an order is significant.  He went on to say that, “[m]embers of the Estates Bar may regard the requirement to give notice of a motion for an order for assistance unless “extraordinary urgency” exists as imposing undue costs on the administration of the estate.  Against that must be weighed the fundamental principle that a court should not issue an order against a person without affording that person an opportunity to explain the other side of the story.  Many estate disputes arise in the context of strained family relationships, or out-and-out family battles.  Courts should exercise great caution before granting an order that imposes obligations on one side in a family dispute.  Unless some extraordinary urgency exists, prudence and the principles of natural justice require a moving party to give notice of the order requested so that the respondent enjoys the opportunity of placing the rest of the story before the court.”

Given this, although permissible, parties who intend to seek orders for assistance without notice, must ensure there is ‘extraordinary urgency’ in doing so.

Noah Weisberg

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09 Mar

Invalid Will Therefore Invalid Insurance Beneficiary Designation? Not Necessarily

Hull & Hull LLP Beneficiary Designations, Estate & Trust, Estate Planning, Power of Attorney, Trustees, Wills Tags: , , , 0 Comments

An insured may designate a beneficiary of the proceeds of a policy of insurance. This can be done by a beneficiary designation that is signed by the insured. No other formality is required.

An insured may also designate a beneficiary of a policy of insurance in a will.

What happens, however, if the will is found to be invalid?

Section 192(1) of the Insurance Act provides that a designation in an instrument purporting to be a will is not ineffective by reason only of the fact that the instrument is invalid as a will.

This may be due to the different procedural requirements of due execution of a will, versus the minimal procedural requirements of the execution of a beneficiary designation. Thus, a document signed by the testator/insured but not witnessed by two witnesses may be ineffective as a will, but may be effective as a beneficiary designation.

Different considerations may apply where the will is found to be invalid on the basis of lack of testamentary capacity. If the testator/insured is found to be incapable of executing a will, it may follow that he/she is incapable of executing a beneficiary designation. However, the applicable  burden of proof may lead to a finding that one is incapable of signing a will, but capable of signing a beneficiary designation. In Fawson Estate v. Deveau, 2016 NSCA 39 (CanLII), the Court of Appeal was faced with a case where a will executed on April 23, 2004 was found to be invalid. The estate trustee then moved for summary judgment in a separate proceeding brought to declare beneficiary designations executed shortly before and after the execution of the Will invalid. The motion for summary judgment was dismissed, as the judge found that there was a genuine issue for trial. The Nova Scotia Court of Appeal agreed.

In dismissing the appeal, the Court of Appeal referred to the different burdens of proof. In the will challenge, the burden was on the will challenger to show suspicious circumstances. The burden then shifted to the propounder to show that the testator had testamentary capacity. In the challenge to the beneficiary designations, the burden was said to be on the challenger, throughout, to show that the insured did not have capacity to execute the beneficiary designations.

In a case of undue influence, a will found to be invalid due to undue influence may not necessarily mean that the insurance beneficiary designations were the result of undue influence: a separate analysis is required.

In conclusion, when considering rights and remedies in the face of a potentially invalid will, do not immediately assume that an invalid will means that insurance beneficiary designations contained in the will are invalid as well. A deeper analysis of the reason for the invalidity is necessary.

Thank you for reading.

Paul Trudelle

06 Mar

B.C.’s Wills, Estates and Succession Act: Claims May be Pursued by Beneficiaries

Rebecca Rauws Executors and Trustees, Litigation Tags: , , , , , , , , , 0 Comments

In Ontario, if there is a claim to be made or continued by a deceased person or their estate, any such claim must be brought by the executor or administrator of his or her estate. If there is no executor or administrator, under Rule 9.02 of the Rules of Civil Procedure, RRO 1990, Reg 194, the court may appoint a litigation administrator, who will represent the estate for the purpose of the proceeding. A beneficiary or other person may also represent the interests of an estate, under Rule 10.02, where it appears that an estate has an interest in a matter in question in a proceeding.

In British Columbia, section 151 of the Wills, Estates and Succession Act, SBC 2009, c. 13  (“WESA”) provides an alternative way of pursuing a claim by an estate. Section 151 states that a beneficiary of an estate may, with leave of the court, commence proceedings in the name and on  behalf of the personal representative of a deceased person, either to recover property or enforce a right, duty or obligation owed to the deceased person that could be recovered or enforced by the personal representative, or to obtain damages for breach of a right, duty or obligation owed to the deceased person. Section 151(3) outlines the circumstances in which the court may grant leave in this regard:

(3) The court may grant leave under this section if

(a) the court determines the beneficiary or intestate successor seeking leave

(i) has made reasonable efforts to cause the personal representative to commence or defend the proceeding,

(ii) has given notice of the application for leave to

(A) the personal representative,

(B) any other beneficiaries or intestate successors, and

(C) any additional person the court directs that notice is to be given, and

(iii) is acting in good faith, and

(b) it appears to the court that it is necessary or expedient for the protection of the estate or the interests of a beneficiary or an intestate successor for the proceeding to be brought or defended

In a document produced by the Government of British Columbia entitled “The Wills, Estates and Succession Act Explained” (“WESA Explained”), section 151 is described as overcoming a gap in the law. Previously, if a beneficiary wished for an action to be brought on behalf of an estate, and the personal representative refused to do so, the beneficiary’s sole recourse would be to apply for removal of the personal representative.

However, removal may not always be necessary or convenient. As described in WESA Explained, such a situation could arise in the event that the personal representative’s main concern (as is often the case with executors, generally) is to preserve and distribute the estate. The personal representative is therefore likely more risk adverse and conservative in assessing the potential success of pursuing an action. The  beneficiary may have differing views on the merits of the claim, and in his or her assessment of the risk and return.

Section 151 of WESA differs from the process for litigation administrators and representation orders in Ontario in that s. 151 allows the executor and beneficiary appointed to bring a claim on behalf of the estate to co-exist simultaneously.

The concept of s. 151 is similar to a derivative action, in which a shareholder or other person is permitted to bring an action on behalf of a corporation, where the corporation refuses to do so.

Thanks for reading.

Rebecca Rauws

 

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26 Feb

An Update on U.S. Inheritance Tax

Nick Esterbauer Estate Planning, In the News, Wills Tags: , , , , , , , , , 0 Comments

A recent article featured in the New York Times highlights the need to reconsider estate planning strategies in light of developments in the law of inheritance taxation.

As our blog has previously reported, during his presidential campaign, Donald Trump vowed to eliminate inheritance taxes, then payable on the value of American estates exceeding $5.45 million, altogether.  To the disappointment of many wealthy citizens of the United States, President Trump has not carried out his promise and, while the exemption has been increased, inheritance tax remains payable in the United States in respect of estates of a size greater than $10 million.

The New York Times reports that these changes to the exemption in respect of inheritance taxation are temporary in nature and that the measures currently in effect will expire in 2026.  At that time, Americans (and individuals who hold property of significant value in the United States) may need to amend their estate plans with a view to tax efficiency.

Gifts, including testamentary gifts, are not typically subject to taxation in Canada.  While there is no Canadian estate or inheritance tax, assets that are distributed in accordance with a Canadian Last Will and Testament or Codicil that is admitted to probate will be subject to an estate administration tax (also known as “probate fees”).  Many of our readers will already be aware of the relatively new requirement (as of 2015) that estate trustees in Ontario file an Estate Information Return with the Ontario Ministry of Finance within 90 days of the processing of a probate application.  In some circumstances, details regarding both traditional estate assets and assets typically considered to pass outside of the estate are required, notwithstanding that the latter category may nevertheless be exempt from probate fees.  Some anticipate that the law in Ontario may at some point be amended to require further details regarding assets passing outside of an estate in Estate Information Returns and/or the payment of estate administration tax or other fees in respect of these assets.  Like variations in the exemptions to American inheritance tax, changes to estate administration taxes may in the future necessitate amendments to existing estate plans with a view to limiting the taxes payable on the transfer of wealth.

Thank you for reading,

Nick Esterbauer

 

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18 Jan

Can you bequeath a house to a stranger in Ontario?

Sayuri Kagami Estate & Trust, Wills Tags: , , , , , 0 Comments

When speaking of the gifts left in a Will, people often hear the terms “legacy”, “bequest” and (less frequently) “devise” thrown around interchangeably. But what specifically do these terms refer to?

Legacies/Bequests

A “bequest”, which can be used interchangeably with “legacy”, refers to testamentary gifts of personal property. While both terms are used, the Succession Law Reform Act uses the term “bequest” in referring to these types of gifts. There are three types of bequests: general bequests, specific bequests, and demonstrative bequests.

General bequests refer to gifts that are to be provided out of the estate generally. It does not refer to any particular thing. Thus a gift of “$10,000.00 to my friend F” is a general bequest. The money is to be raised from any of the general assets of the testator.

Specific bequests refer to gifts of particular property or which are to be funded by particular assets. For example, gifts of “my car” or “the cash held in bank account X” are both specific bequests as they refer to particular property which the recipient is to receive. Where the asset is no longer in the possession of the testator at the time of death, the gift will fail.

A demonstrative bequest is a hybrid between general and specific bequests where a gift of money is left with the intention that it is to be funded primarily out of certain assets. But where the assets are insufficient to meet the gift, the gift is to then be funded out of the general estate. A gift of “$10,000.00 to be paid first from the proceeds of sale of my car” would be a demonstrative bequest.

Devises

Unlike a “bequest”, a “devise” refers to a testamentary gift of real property. Society and the law have long distinguished between real property and personal property. This can be seen, for example, in the traditional availability of specific performance as a remedy for breaches of contracts involving real property. In such situations, real property was accepted as something unique enough to require specific performance, rather than mere monetary damages.

The primacy of real property over personal property can equally be seen in estates law in situations where there are insufficient assets in the estate to satisfy all debts, bequests, and devises. In such a situation, the principles of abatement provide the following order of abatement: general bequests, demonstrative bequests, specific bequests, and finally devises.

To learn more about the principle of abatement, see this recent blog.

With the continuing distinction between real property and personal property, the difference between devises and bequests remains important. Which brings us back to the title of this blog; Can you bequeath your home to a stranger in Ontario? Nope, that would be a devise.

Thanks for reading!

Sayuri Kagami

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