Tag: fiduciary

29 Oct

Continued Inaccessibility of Digital Assets

Nick Esterbauer Estate & Trust, In the News Tags: , , , , , , , , 0 Comments

We have previously blogged extensively on the issue of inaccessibility of digital assets and the absence of legislation in Canadian provinces, including Ontario, to clarify the rights of a fiduciary to access and administer digital assets on behalf of a deceased or incapable rights holder.

While the Substitute Decisions Act, 1992, and Estates Administration Act provide that attorneys or guardians of properties and estate trustees, respectively, are authorized to manage the property of an incapable person or an estate, Ontario does not currently have any legislation that clarifies these rights by explicit reference to digital assets.  While continuing powers of attorney for property and wills can be crafted to explicitly refer to digital assets and the authority of an attorney for property or estate trustee to access accounts and information in the same manner in which the user him or herself was able, access issues can still arise during incapacity or after death.

A recent CBC article highlights the inadequacy of legislation facilitating access to digital assets.  A surviving wife of over forty years was the estate trustee and sole residuary beneficiary of her late husband’s estate.  In seeking access to an Apple account that she shared with her husband, she was told that she would require a court order, even after providing Apple with a copy of her husband’s death certificate and will.  Apple cited the United States’ Electronic Communications Privacy Act, which predates the prominence of computers and the internet in our daily lives, as prohibiting them from distributing personal electronic information.  Four years after her husband’s death in 2016, the Ontario woman is now obtaining pro bono assistance in seeking a court order granting access to the shared account in the absence of any other options.

It is anticipated that the adoption of the Uniform Law Conference of Canada’s Uniform Access to Digital Assets by Fiduciaries Act would resolve some or all of the issues currently faced by Ontario residents in accessing and administering digital assets.  However, now over four years since its release, only Saskatchewan has implemented provincial legislation mirroring the language of the uniform act.

It will be interesting to see in coming years whether legislative updates will address continued barriers to the access and administration of digital assets and the corresponding access to justice issue.

Thank you for reading,

Nick Esterbauer

 

Other blog entries that may be of interest:

15 May

Alberta’s Approach to Digital Assets

Nick Esterbauer Estate Planning, Executors and Trustees, Power of Attorney, Trustees Tags: , , , , , , , , , , , , , , , , , , , 0 Comments

Our firm has previously blogged and podcasted at length about digital assets and estate planning, and the issue of fiduciary access to digital assets during incapacity and after death.

While digital assets constitute “property” in the sense appearing within provincial legislation, the rights of fiduciaries in respect of these assets are less clear than those relating to tangible assets.  For example, in Ontario, the Substitute Decisions Act, 1992, and Estates Administration Act provide that attorneys or guardians of property and estate trustees, respectively, are authorized to manage the property of an incapable person or estate, but these pieces of legislation do not explicitly refer to digital assets.

As we have previously reported, although the Uniform Law Conference of Canada introduced the Uniform Access to Digital Assets by Fiduciaries Act in August 2016, the uniform legislation has yet to be adopted by the provinces of Canada.  However, recent legislative amendment in one of Ontario’s neighbours to the west has recently enhanced the ability of estate trustees to access and administer digital assets.

In Alberta, legislation has been updated to clarify that the authority of an estate trustee extends to digital assets.  Alberta’s Estate Administration Act makes specific reference to “online accounts” within the context of an estate trustee’s duty to identify estate assets and liabilities, providing clarification that digital assets are intended to be included within the scope of estate assets that a trustee is authorized to administer.

In other Canadian provinces, fiduciaries continue to face barriers in attempting to access digital assets.  Until the law is updated to reflect the prevalence of technology and value, whether financial or sentimental, of information stored electronically, it may be prudent for drafting solicitors whose clients possess such assets to include specific provisions within Powers of Attorney for Property and Wills to clarify the authority of fiduciaries to deal with digital assets.

Thank you for reading.

Nick Esterbauer

 

Other blog posts that may be of interest:

27 Nov

Are personal support workers and caregivers fiduciaries?

Doreen So Elder Law, Estate & Trust, Ethical Issues, Executors and Trustees, General Interest, In the News, Litigation Tags: , , , , , , , , 0 Comments

In a recent decision of the Superior Court, Justice Mew found that,

“In appropriate circumstances, I conclude that the relationship between an elderly resident of a retirement home and a personal support worker can also be a fiduciary one”.

Hoyle (Estate) v. Gibson-Heath, 2017 ONSC 4481, is a civil proceeding that was commenced after Ms. Gibson-Heath, a personal support worker, was criminally convicted of stealing $229,000.00 from Clifford Hoyle, an elderly resident of the retirement home where Ms. Gibson-Heath worked.  Ms. Gibson-Heath was sentenced to 18 months of imprisonment and a restitution order was made for her to pay the shortfall between the full amount stolen and any amounts recovered by the Crown.

At the time of the proceeding before Justice Mew, Ms. Gibson-Heath was a discharged bankrupt and the Estate Trustees of the Estate of Clifford Hoyle were seeking an order that the restitution order survives Ms. Gibson-Heath’s bankruptcy and a civil judgment in the amount of the shortfall amongst other relief.  Justice Mew determined that the restitution order survives Ms. Gibson-Heath’s bankruptcy pursuant to section 178(1)(a) of the Bankruptcy and Insolvency Act but he also went further to consider whether section 178(1)(d) would also apply as it relates to  “any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity or, in the Province of Quebec, as a trustee or administrator of the property of others”.

Justice Mew’s analysis can be found at paragraphs 16 to 19 of his reasons.  Of note, his Honour commented as follows,

“Ms. Gibson-Heath’s role was to look after Mr. Hoyle.  To act in his best interests.  As an elderly gentleman, who was already in the early stages of dementia when he started to reside at Fairfield Manor East at the end of 2006, Mr. Hoyle was undoubtedly vulnerable to any abuse of the trust that he placed in those who cared for him.”

Ms. Gibson-Heath did not respond to this proceeding and Justice Mew also found that this was an appropriate case for substantial indemnity costs due to Ms. Gibson-Heath’s fraudulent conduct (click here for the costs decision).

Thanks for reading!

Doreen So

#1429918

 

29 Aug

Can a Fiduciary Overcome Poor Record-Keeping?

David M Smith Estate & Trust, General Interest, Guardianship, Passing of Accounts, Uncategorized Tags: , 0 Comments

The duties of a fiduciary must be performed diligently, with honesty and integrity and in good faith, for the benefit of the recipient.  Whether a fiduciary can prove that he or she has complied with these duties will depend to a great extent on the ability of the fiduciary to account.  While the duty to account is not debatable, the Court may consider the specific circumstances of the fiduciary when evaluating whether their actions are appropriate.

In Christmas Estate v Tuck [1995] OJ No 3836, the executor disputed numerous cheques for the benefit of the attorney for property and other cash gifts that she was unable to substantiate with receipts or vouchers. The Court held that it would be inappropriate to impose strict accounting requirements where the parties had a “close family relationship”, in this case, mother and daughter.

The Court further declined to draw a negative inference when the attorney was unable to produce records to account for all transactions: the grantee had helped the grantor “in a multitude of ways” and, accordingly, the burden of strict accounting practices was inappropriate.

In Laird v Mulholland [1998] OJ No 855, the Court noted that the overall credibility of an attorney for property is an important factor in determining whether that attorney’s informal accounts are satisfactory. The Court was unable to conclude that the attorney had acted dishonestly with a view to misappropriating the grantor’s assets, notwithstanding that his “record-keeping practices [left] much to be desired.

The Court pointed to the “abundant evidence” that the Attorney had performed “a multitude of services” which were entirely for the benefit of the grantor. The Court held that the fiduciary had acted “honestly and reasonably in all the circumstances” and should therefore be “relieved from personal liability.”

Thanks for reading,

David Morgan Smith

 

07 Apr

Why should we care about fiduciary access to digital assets?

Nick Esterbauer Estate & Trust, General Interest, Power of Attorney, Wills Tags: , , , , , , , 0 Comments

My other two blog posts this week have focused on the utility of model legislation that has been introduced in Canada and the United States to address the issue of fiduciary access to digital assets, and some of the primary differences between the uniform acts of these two jurisdictions.

Today, I take the opportunity to highlight the prevalence of digital assets through the use of some interesting (and somewhat surprising) statistics:

  • 99% of North Americans use at least one personal online tool;
  • A 2013 study by McAfee suggests that Canadians value their digital assets at an average of more than $32,000.00.  Since 2013, the prevalence of digital assets has increased significantly;
  • Worldwide, Bitcoins are valued at almost $22 billion, with over $2 million in Bitcoins exchanged every day;
  • As many of our readers already know, many Canadians (estimated to be more than 60%) do not have a Last Will and Testament.  Of those who do have a Will, 57% of North Americans aged 45 and older have not included provisions that address access to digital assets as part of their formal estate plan.  Such provisions may be required in order for an estate trustee to gain access to digital assets, absent the enactment of legislation permitting same or a court order granting access.

Our blog has previously covered some of the common issues resulting from the inattention to digital estate planning, which can arise regardless of the financial value of the assets in dispute.

Have a great weekend,

Nick Esterbauer

 

Other blog posts that you may enjoy reading:

04 Apr

What are other jurisdictions doing to facilitate access to digital assets?

Nick Esterbauer Uncategorized Tags: , , , , , , , , , , , , 0 Comments

Later this week, House Bill 432 will come into effect in Ohio to update state estate and trust administration law.  One of the most notable updates is the adoption of the Revised Uniform Fiduciary Access to Digital Assets Act, along with corresponding updates to Ohio’s Power of Attorney Act.

The American Revised Uniform Fiduciary Access to Digital Assets Act is intended to formalize the authority of attorneys for property and estate trustees to obtain access to digital assets for deceased or incapable users.  Prior to its implementation in American states (and in other jurisdictions in which comparable legislation has not yet been introduced), the intervention of the courts has often been required to grant fiduciaries with access to information and assets stored electronically.  There continues to be some debate as to whether an attorney for property or estate trustee, authorized to administer tangible property, also has the authority to manage digital assets without legislation and/or terms of the Power of Attorney or Will explicitly extending this authority.

Interestingly, the Revised Uniform Act has been endorsed by Google and by Facebook, both platforms on which a great deal of the world’s digital assets are stored.  In 2016, 13 states introduced the Revised Uniform Fiduciary Access to Digital Assets Act.  With the introduction or enactment of the Revised Act in another 24 states since the beginning of 2017 alone, it is clear that state legislatures and online service providers alike agree that amendments to the law in recognition of the growth of technology is required to clarify the state of the law of digital assets and fiduciaries.

The Uniform Law Conference of Canada introduced the Uniform Access to Digital Assets by Fiduciaries Act (2016) this past summer.  While the uniform acts of Canada and the United States share a number of similarities, there are several important distinctions, which will be highlighted in Thursday’s blog post.

Thank you for reading,

Nick Esterbauer

Other blog posts that may be of interest:

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