Tag: In the News
We’ve blogged quite a bit recently on the various technologies and breakthroughs that are being made in Alzheimer’s, including the use of Artificial Intelligence in detecting early signs of the disease and research on new treatment methods. As anyone who has worked with affected individuals and their caregivers can attest, Alzheimer’s and dementia are extremely challenging and will increasingly affect more families. It’s no surprise then that researchers and governments are taking steps to address Alzheimer’s disease and dementia.
Last month, the Canadian Federal government announced its comprehensive dementia strategy (for news coverage, see this CBC article). The release of the strategy comes on the heels of the passage of the National Strategy for Alzheimer’s Disease and Other Dementias Act in 2017 which allowed the government to take steps to begin developing a national dementia strategy.
The strategy aims to broaden awareness of dementia and advance the following “national objectives”:
- Prevent dementia by advancing research and expanding awareness of and support in adopting lifestyle measures that can increase the prevention of Alzheimer’s disease and dementia;
- Advance therapies and find a cure by supporting and implementing research; and
- Improve the quality of life of people living with dementia and caregivers by eliminating stigma, promoting early diagnosis and care, and better supporting caregivers.
As part of the national strategy, the Federal budget (released on March 19, 2019) allocated $50 million over five years towards implementing the dementia strategy. The release of the national strategy and funding to address this issue has been welcome news to organizations in Canada dedicated to tackling Alzheimer’s and dementia.
Hopefully, the release of this strategy will promote the continued advancement of breakthroughs in Alzheimer’s and dementia research.
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A few weeks ago, I received a voicemail from a robotic sounding voice that had me chuckling. According to the robot, court proceedings had been started against me for failure to pay my taxes. If I didn’t immediately call them back, they would issue an arrest warrant to “get [me] arrested”. While I laughed at the absurdity of the message, the sad reality is that many people fall prey to scammers.
Elderly people can be especially appealing targets for scammers and abusers due to a mix of factors, including social isolation. A recent CBC news article out of Moncton highlights the type of financial abuse to which elderly people may fall prey. The CBC reported that two real estate agents entered into a listing agreement in 2013 with an elderly man. They eventually entered into a further agreement allowing the real estate agents to purchase the home for three quarters of the listing price and requiring the victim to provide an interest-free loan to the agents along with credits towards the purchase price. Overall, the victim received approximately $17,000.00 in exchange for his home.
Not only were the real estate agents able to scam the victim on the sale of his home, the victim also named the two agents as his attorneys for property and as trustees and sole beneficiaries of his estate under his Will.
Eventually, the abuse was discovered when doctors determined the man lacked capacity to make decisions and contacted New Brunswick’s public trustee office. The public trustee’s office, in turn, passed along news of what happened to New Brunswick’s regulator for real estate agents, who have now suspended the licences of the agents for at least one year.
This story showcases just one of the ways in which a person might become a victim of financial abuse. Elderly people without the social support of family members or strong community ties may be especially vulnerable to this abuse. This story also highlights, however, the important role 3rd parties can play in catching and preventing elder abuse. This can be seen by the intervention of hospital staff, the public trustee office, and the professional regulators.
While the article doesn’t explain whether the victim had his power of attorney and will drafted by a lawyer, this article will hopefully also serve as a reminder to drafting solicitors to probe these issues when retained by clients who may be vulnerable to undue influence and abuse.
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Earlier this week, the controversy surrounding the estate of American real estate developer and multi-millionaire John Chakalos dominated the headlines.
Issues Surrounding Mr. Chakalos’s Estate
Mr. Chakalos, who left a sizeable estate, was found dead at his home in 2013. Pursuant to the terms of Mr. Chakalos’s Will, his daughter Linda was one of the beneficiaries of his estate. Linda went missing and is presumed dead after a boat carrying her and her son, Nathan, sank during a fishing trip.
According to media reports, Linda’s son Nathan was also a suspect in the death of his grandfather, but was never charged. Nathan has denied the allegations regarding his involvement in his grandfather’s death and his mother’s disappearance.
According to an article by TIME, Mr. Chakalos’s three other daughters have now commenced a lawsuit in New Hampshire wherein they have accused Nathan of killing his grandfather and potentially his mother. The plaintiff daughters have asked the Court to bar Nathan from receiving his inheritance from Mr. Chakalos’s estate.
Public Policy and the Law in Ontario
It is important to note that Mr. Chakalos’s grandson has not been charged in the death of Mr. Chakalos, and the allegations against him have yet to be proven. However, there have been similar cases in Ontario where the accused beneficiary has ultimately been found to have caused the death of the testator.
Generally speaking, in Ontario, a beneficiary who is found to have caused the death of the testator is not entitled to benefit from their criminal act. This common law doctrine, often referred to as the “slayer rule,” stands for the proposition that it would be offensive to public policy for a person to benefit from the estate of a testator if the Court concludes that they have caused the death of the testator.
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Umair Abdul Qadir
It’s 8:30 am, you’ve just entered your office, and you get a call from the common-law spouse of one of your long-term clients. It’s bad news – your client is in palliative care and has a will from 2001 that he urgently needs to update. Time is of the essence.
You and your assistant can squeeze in time late in the day to see the client at the hospital. But you know it’s a tricky situation that’s fraught with potential problems. Here are a few steps to consider that could protect you and your client before you head bedside.
- Make sure you have the expertise they need: On the initial call, be sure to ask specific questions about what the client needs done. If there are trusts or other complex arrangements involved, assess whether you have the expertise to assist. If death is imminent, the last thing your client can waste is time in trying to line up another lawyer. So do your due diligence up front.
- Assess capacity: Capacity issues could be front and centre for clients who are close to death. If possible, contact an attending doctor, explain the legal test for capacity and ask them to confirm his or her opinion in writing as soon as possible, even on an interim basis by email.
Learn more about capacity issues here: https://estatelawcanada.blogspot.ca/2010/12/when-is-doctors-opinion-on-capacity.html
- Talk one-to-one: You need, and must insist on, time alone with your client, both to do your own capacity assessment and to minimize any unsubstantiated allegations of undue influence. If the situation is at all suspicious, you have a duty to inquire to satisfy yourself that the client is fully acting on their own accord. This is especially important if the client has had multiple marriages or common-law partners, or has been estranged from family members. If you are not satisfied, you may choose to decline to act.
- Take notes and/or video: Your notes could potentially be used as evidence in a will challenge or solicitor’s negligence action, so be sure to set out the basis for your opinion on issues such as capacity and undue influence, rather than simply stating a conclusion. Consider having a junior lawyer attend with you, to provide a more complete base of evidence. Videotaping the interview may also be helpful, as it can provide important evidence if the will is ever challenged.
Finally, if you have older clients who have indicated a need to revise their will, be proactive. Send them this link and encourage them to act now to avoid the potential drama and perils of a deathbed will: http://globalnews.ca/news/1105176/the-mortality-of-deathbed-wills/
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In Ontario, if two people die at the same time or in circumstances rendering it uncertain which of them survived the other, the property of each person shall be disposed of as if he or she had survived the other (see s. 55(1) of the SLRA). In short, each person’s Will is administered as if the spouse predeceased. This outcome can be particularly problematic in various circumstances, a few of which I touch upon below.
Spouses with mirror wills. Without a common disaster clause that would address circumstances where both spouses die simultaneously, there may be certain bequests that are triggered twice. For instance, mirror wills may provide that (i) the residue of the testator’s estate is to be transferred to the spouse if he/she survives the other by 30 days, and (ii) if the spouse predeceases or fails to survive the other by 30 days, a specific bequest is gifted to Child #1, with the residue going to Child #2. Since neither husband nor wife survived the other for30 days, Child #1 would get two specific bequests, one from each of the parents’ estates, reducing the entitlement of the residuary beneficiary, Child #2.
No alternate executor. Spouses often name the other as their executor. If no alternate is named and they die simultaneously, the executor appointment would go on an intestacy (see s. 29 of the Estates Act), and the testator has lost the power to control who administers the estate.
Joint assets. Where joint tenants die at the same time, unless a contrary intention appears, the joint tenants are deemed to have held the property in question as tenants in common (see s. 55(2) of the SLRA).
Insurance proceeds. If the insured and the beneficiary die at the same time, the proceeds of a policy are to be paid as if the beneficiary predeceased the insured (see SLRA s. 55(4), and Insurance Act ss. 215 and 319). If there is no alternate beneficiary, and unless the insurance contract provides otherwise, the proceeds would be payable to the estate and subject to probate fees.
These examples serve to illustrate the value in having simultaneous deaths form part of your checklist when advising estate-planning clients. For more on this topic, I encourage you to read this article and to watch/listen to my recent podcast with Rebecca Rauws.
Thanks for reading and have a great day,
Other Articles You Might Be Interested In
Last week, Ian blogged on the Retirement Homes Regulatory Authority, financial abuse of the elderly, and the competency of elderly individuals to make financial decisions. As stated last week, it is unclear what the responsibilities are of a retirement home in cases where there have been loans between a resident and the licensee.
The recent Licence Appeal Tribunal decision of 2138658 Ontario Ltd. ola Seeley’s Bay Retirement Home v. Registrar, Retirement Homes Regulatory Authority is the first case to look at financial abuse in the context of the Retirement Homes Act, 2010, S.O. 2010 Chapter 11 (the “Act”). This case involved the Retirement Homes Regulatory Authority’s revocation of Seeley’s Bay Retirement Home’s licence on the basis of the alleged financial abuse of three residents, and a former resident.
The Tribunal determined that the former resident offered to grant the licensee a second mortgage, however, the resident had independent legal advice and a proper written mortgage, and as such, no financial abuse was found.
The Tribunal found financial abuse of one out of the three residents. For the first two residents, the Tribunal did not find financial abuse as they were a couple that had a long-term 25-30 year relationship with the licensee. The couple offered a loan to the licensee but he had counted the loan toward the couple’s rent and had paid off the loan at the time of the hearing. The Tribunal found that this was a trade-off, and that people who are competent to manage their own affairs ought to be allowed to make independent financial decisions, and found the loan to be “a matter of friendship and faith”.
The Tribunal found financial abuse of the third resident. Resident three lived in the home for 6 years prior to her death, and was determined to be capable. She managed her own finances and had no close family. The licensee began approaching her for money, which he applied to her rent, yet continued to borrow money beyond the amount paid of rent. There was nothing in writing, no records of the payment, and the resident had no independent legal advice. In 2016, the resident’s health began to deteriorate and she was worried that she would not be able to cover her expenses due to the amount of money she had lent to the licensee. She approached the licensee about repayment and the licensee took no action. The loans were outstanding upon the resident’s death. The Tribunal found this amounted to financial abuse as it was found to be “misappropriation” of resident money under the Act, pursuant to Regulation 166/11 and section 67.
In considering all of the claims against the residence, the Tribunal found that the loans raised concerns about the licensee’s ability to operate the home with honesty and integrity. This was exemplified due to the third resident’s dependency on the home. Moreover, the Tribunal noted that in the third case, there was harm to the resident’s peace of mind along with a risk that she would not be able to pay for her own long-term care.
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I was fortunate to have the opportunity to participate in a panel discussion on CBC’s show “On the Money” last night. The panel discussion was prompted by an article posted by CBC news entitled “Care of aging parents costs Canadians an estimated $33B annually.”
The essence of the article was that Canada’s aging population is causing adult children to incur a significant burden, not only in terms of the outlay of money for caregiving costs but, perhaps more significantly, arising from time away from work required to care for their parents.
The Ontario Legislature has recognized the need to address this issue.
Section 49.1(2) of the Employment Standards Act, contains a section on Family Caregiver Leave, which permits employees to take an unpaid leave of absence of up to eight weeks in order to provide care or support to a sick family member.
Pursuant to the statute, an employee would be entitled to an unpaid leave of absence to provide “care or support” to the following family members/individuals who have a “serious medical condition”, including:
- The employee’s spouse.
- A parent, step-parent or foster parent of the employee.
- A child, step-child or foster child of the employee or the employee’s spouse.
- Any individual prescribed as a family member for the purpose of this section.
Although it would appear that there is some relief afforded by the Legislature when an aging parent needs assistance, the fact of the matter is that long-term needs cannot be met except by careful estate planning and consideration of financial resources. It might be worth adding that the family caregiver leave provisions appear to be more directed to short-term illnesses rather than the progressive decline associated with dementia and Alzheimer’s disease.
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On January 1, 2017, the Government of Saskatchewan implemented changes governing the release of adult adoptees birth registration, and access to birth registration information.
In Saskatchewan, prior to the adoption of the new regulations, adult adoptees required the consent of a birth parent in order to find out their birth name, the name and location of the hospital where they were born, and the name of their biological parents. The requirement of consent was very burdensome on adult adoptees who had to go through the Saskatchewan Government, specifically the Post-Adoption Services branch, in order to track down their biological parents. Locating biological parents and obtaining consent would result in average wait times of approximately three years.
Those eligible to apply for the newly implemented Post-Adoption Services regulations, if the adoption was finalized in Saskatchewan, are:
- an adult adoptee (18+ years of age);
- an adoptive parent of an adoptee who is under 18;
- a birth parent of an adoptee;
- the adult child of a deceased adult adoptee;
- the adult child of a deceased birth parent whose child was placed for adoption; or
- an extended family member of an adult adoptee or birth parent.
With the new regulation, adult adoptees no longer require consent from both parties to access birth registration information. The information is readily available to individuals who file a request. With the current regulation, the wait time for information is expected to be a few weeks.
From January 1, 2016 to January 1, 2017, both adoptees and birth parents had the option to veto the release of their birth registration information, specifically the biological names. There was no option to veto the name of the birth hospital or location. According to an article by CBC News, some 84 vetoes have so far been registered by birth parents, and “significantly fewer” by adult adoptees. Vetoes can only be placed on adoptions that occurred prior to January 1, 2017. Therefore, adoptions after January 1, 2017 must be subject to the new regulations.
The Government of Saskatchewan Post-Adoption Services website offers online forms requiring documentation such as a birth certificate, drivers licence and Order of Adoption. Further documentation will be required if the individual is an adult child of a deceased adult adoptee, or the adult child of a deceased birth parent whose child was placed for adoption. Furthermore, the application allows the searching party to specify their preferred method of contact.
From an estate planning perspective, it is interesting to consider that these revisions will, in certain circumstances, cause adoptees to be named as beneficiaries in the will of their biological parents.
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Other Articles You May be Interested In
On September 25, 2016, 60 Minutes highlighted an interesting estate planning issue involving Pablo Picasso and inter vivos gifts. An inter vivos gift is a transfer of property from a donor to a donee, during the donor’s lifetime.
This story involved the family’s long-time electrician of 15 years and family friend, Pierre Le Guennec, who claimed he was gifted a briefcase filled with the artist’s work. The briefcase contained 271 works and 2 full sketch pads, all unsigned, that dated from 1900-1932. Many years later, Le Guennec contacted the Picasso Administration in order to get the pieces valued for his own succession planning purposes, and to have the pieces authenticated. Picasso’s son, Claude, a representative from the Picasso Administration, met Le Guennec and his wife and assumed that the pieces were stolen due to inconsistencies in the story about how the pieces came into Le Guennec’s possession. The pieces were valued at around $100 million.
In February 2015, after authorities had the artwork seized and Le Guennec and his wife had been put in custody, Le Guennec went on trial. The authorities could not prove the theft but convicted Le Guennec of possessing stolen property. He was given a two year suspended sentence, along with his wife, and is appealing.
The aformentioned raises the question of how to prove an inter vivos gift. In order to perfect a gift, and to have a valid gift, there are three necessary elements:
- intention to donate;
- acceptance by the done; and
- sufficient act of delivery and transfer
As per Johnstone v Johnstone,  OJ No 58, the onus of proving that a gift is valid is on the recipient of the gift. The recipient must show a clear and unmistakable intention by the donor to have given the gift, and that the gift was given voluntarily by the donor.
In order to challenge an inter vivos gifts, the challenger must prove undue influence, fraud, coercion, mistake, or lack of capacity. We have previously blogged, and uploaded a podcast, on undue influence.
In order to properly document an inter vivos gift, it is best for the donor to show evidence of intention. Intention is the most difficult aspect of the test to prove, and without intention, the gift cannot be perfected. It is best to have witnesses who have seen the giving of the gift, or professionals such as solicitors who may have been aware of the gift. If intention is not proven, it will be assumed that the “gift” was instead a resulting trust. If an individual can show intention of both legal and beneficial title, the exchange will be seen as a gift.
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A recent story in the news featuring a fraudulent wedding officiant, raises some interesting estate planning issues. Mr. Cogan, who held himself out as an authorized wedding officiant, was charged with performing unauthorized marriages. Cogan had been licensed to perform marriages in the past, but it is reported that his license was revoked before he performed at least 48 marriages between August 2013 and July 2016.
Fortunately, pursuant to section 31 of the Marriage Act, if the couple married in good faith the marriage may be deemed valid despite the revoked licence. Indicia of good faith include: the intention to have a legally binding wedding, no disqualifications due to capacity and impairment, and proof that the couple lived together after the wedding ceremony.
Notwithstanding this statutory remedy, larger consequences for estate planning arise if the couple do not satisfy the prerequisites for the remedy provided in the Marriage Act.
Firstly, an invalid marriage may present an issue for individuals who created a will after the fact, leaving bequests to their “spouses” in their wills. Due to the fact the individuals are not “spouses” as defined pursuant to the intestacy provisions of the Succession Law Reform Act (excluding Part V) or Divorce Act, it would be interesting to see how the court would treat the inheritance should the spouse who made the will die.
Pursuant to Part V of the Succession Law Reform Act, if the couple has been cohabiting continuously for a period of not less than three years, or are in a relationship of some permanence, or if they are the natural or adoptive parents of a child, they may be considered a dependant spouse (within the meaning of Part V). This may entitle the individual a fair share of the estate in this case, but being recognized as an unmarried spouse is not always certain. In any case, it would be necessary to litigate the issue, adding an unnecessary expense to the estate.
Secondly, an invalid marriage would create issues for individuals who die intestate. Pursuant to the intestacy provisions of the Succession Law Reform Act, the spouse is first entitled to the preferential share ($200,000) of an estate. If an individual dies and their marriage was not valid, the spouse that would normally be entitled may be disinherited. The result of this is that the preferential share may go to somebody who was not meant to inherit such a large portion of the estate.
Thirdly, a will is automatically revoked upon marriage. Because he did not have the authority to perform marriages, if a person was “married” by Cogan but had a pre-existing will, that will might not be found to have actually been revoked. This uncertainty creates the potential for litigation.
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