Tag: incorporation by reference

25 Mar

Pour Over Clauses – Incorporation by Reference

Stuart Clark Estate Planning Tags: , , , , , , , , , , 0 Comments

I have blogged this week about the general availability of “pour over clauses” and whether you can leave a bequest in a Will to an already existing inter vivos trust. In my blog yesterday I discussed “facts of independent significance” as one of the potential arguments that has been raised to attempt to uphold “pour over clauses”, and how the concept was rejected by the British Columbia Court of Appeal in Quinn Estate v. Rydland, 2019 BCCA 91. In today’s blog I will discuss another argument that was raised in Quinn Estate to try to uphold pour over clauses; the doctrine of “incorporation by reference”.

The doctrine of incorporation by reference at its most basic allows a Will to refer to a separate document which provides for dispositive provisions, with such a separate document being “incorporated” into the Will to be carried out by the executor as part of the administration of the Will. The most common example of incorporation by reference would be a memorandum directing who is to receive various personal items from the testator, with the Will directing the executor to distribute the personal items in accordance with the terms of the separate memorandum.

The general test for whether a document can be incorporated by reference into a Will is:

  1. It must be clear that the testator in the Will referred to some document then in existence; and
  2. the document in question must be beyond doubt the document referred to.

When incorporation by reference is raised as part of an attempt to uphold a pour over clause it appears to be the argument that so long as the inter vivos trust was in existence at the time the Will was signed, and the trust is clearly identified by the Will, that it should be able to meet the test for incorporation by reference such that the “pour over clause” can be saved.

In Quinn Estate the court ultimately rejects the attempt to save the pour over clause under the doctrine of incorporation by reference, appearing to emphasize there is a fundamental flaw in the attempt to incorporate a trust by reference into a Will insofar as it does not appear to be the testator’s intention to actually incorporate the terms of the trust into the Will, but rather simply to make a distribution to the separate trust. When something is “incorporated by reference” into a Will it means exactly that, insofar as the terms of the separate document are said to be incorporated into the Will and read as a single document. This concept appears fundamentally at odds with any attempt to make a bequest to an already existing trust under a pour over clause, as the testator never likely intended to have the terms of the trust incorporated into the Will to be administered by the executor as part of the Will, but rather to have the executor make a bequest to the trust to be administered separately from the estate. In emphasizing this point the British Columbia Court of Appeal in Quinn Estate states:

“Strictly speaking, resorting to incorporation by reference to incorporate the original trust document into the will belies the essential nature of a pour-over clause: here it is perfectly clear that the will-maker had no intention of incorporating the trust into his will. He rather demonstrated the obvious intention of making a gift to the trust.”

As my blogs this week have shown, any attempt to leave a bequest in a Will to an already existing inter vivos trust using a “pour over clause” is highly problematic.

Thank you for reading.

Stuart Clark

23 Mar

Using a Holograph Will to Validate an Unsigned Will? Desperate Times Call for Desperate Measures

Ian Hull Estate Planning, In the News, Wills Tags: , , , , 0 Comments

Over the past few blogs, we discussed alternates for having Clients sign Wills when we can’t meet with them in person.

One of the options was to have client sign holograph Wills.  While that may work with more straightforward instructions, it won’t be practical where testamentary trusts are necessary.

In today’s blog, we will focus on an alternate option – “incorporation by reference” of an unsigned “Will” into a holograph Will.

The terms of one document (“the Incorporated Document”) can be included in another document without repeating all of it provisions.   This is known as “incorporation by reference”.  In order to incorporate the terms of the Incorporated Document into a Will, there are four well established requirements:

  • The Incorporated Document must be referred to in the Will;
  • The reference in the Will to the Incorporated Document must be sufficient to identify the Incorporated Document; and
  • The Incorporated Document must be in existence at the time the Will is signed. It cannot come into existence at a future date.
  • The Incorporated Document must be “entirely separate and apart” from the Will.

The most common examples of incorporation by reference in a Will are a binding memorandum regarding the disposition of Personal Effects and a trust company’s compensation agreement.

Rather than just a list of personal effects or compensation agreement, can the Client incorporate an entire unsigned Will by reference?

Where a testator in a duly executed will or codicil refers to an unattested written paper (whether of a testamentary form or character or not), as a written paper then in existence in such terms that it may be ascertained, the paper so referred to becomes part of his will, in other words, is incorporated therein; provided always that the paper referred to is actually in existence at the time of the execution of the will or codicil. Probate Practice and Re Warren (1930), 38 O.W.N. 358 (Ont. H.C.),

This concept was not disputed in Re Coate Estate, (1987) 26 E.T.R. 161, although the facts in that case did not lead to a finding of incorporation by reference.

Similarly, in Re Dixon-Marsden Estate (1985), 21 E.T.R. 216 (Ont. Surr. Ct.), the Court found that the particular handwriting did not qualify as a holograph document.  Nevertheless, Judge Misener seemed to endorse the use of a holograph document incorporating the terms of a formal, but unexecuted Will.  In that case, a typed Will on a single piece of paper was not properly signed with two witnesses.  However, at the bottom of the page the testator wrote, in his own hand, “The above-mentioned are in short those to whom my estate is left” and below that he signed his name.

“I have always understood that the doctrine of incorporation by reference contemplates the existence of a testamentary document that qualifies for probate, independent of the document sought to be incorporated. If that is so, the condition precedent to the argument that a typewritten document is incorporated is the tendering of a document wholly in the handwriting of the testator and bearing his signature that can be admitted to probate all by itself. Therefore, on the facts of this case, the handwritten words ‘the above-mentioned are in short those to whom my estate is left’ must be capable of admission to probate.”

In that case, the handwritten portion could not be separated from the typed portion and so did not satisfy the requirement that the two documents be “entirely separate”.

In Re Chamberlain Estate, the deceased enclosed two documents in an envelope:

  • A printed Will form, which the deceased signed but was not witnessed.
  • A single sheet of paper wholly in the handwriting of the deceased which listed several of the deceased’s assets. The deceased wrote his name at the bottom of the sheet.

The issue before the court was whether the documents could be read together as a valid Will.

Justice Maher emphasized that although documents referred to in a testator’s Will or codicil may not be duly executed in accordance with The Wills Act, they may nonetheless be incorporated in the Will.

Justice Maher found that the document written wholly in the handwriting of the testator was a valid holograph Will and it met the conditions outlined above. Although the documents were not completed at the same time, the incorporation by reference doctrine still applied as they were testamentary in nature and wholly in the handwriting of the deceased.

The second document being testamentary in character and wholly in the handwriting of the deceased is a valid holograph will and it has been held that the doctrine of incorporation by reference applies to holograph wills: Re Long Estate, [1936] 1 All E.R. 435.

Based on these authorities, it appears that a holograph Will could incorporate the terms of a non-executed formal Will as long as the 4 conditions were properly met.

However, there is an outlier Ontario case that is problematic- Facey v. Smith (1997), 17 E.T.R. (2d) 72 (Ont. Gen. Div.).

In Facey, the court was faced with an unseemly fact scenario.  The deceased was murdered by her husband who later, on the same day, committed suicide.   The issue was whether  certain writings made by the deceased were holograph Wills and if so, did thy properly incorporate the terms of a formal Will by reference.

The court found that a holograph documents did not qualify as a Will because it did “not show a fixed final intention as to disposition on death”.  However, in obiter, the Court said the following:

“I have no difficulty with the doctrine of incorporation by reference applying when the Will into which type written words are to be incorporated is itself a witnessed Will. When those type written words are declared incorporated, the statutory requirement of the testator’s signature duly witnessed is wholly satisfied. In the case of a holograph Will, however, incorporation of typewritten words does not meet the statutory requirement. That requirement is that the holograph Will, to be valid, must be “wholly by his own handwriting and signature” and patently the incorporated typewritten words are not in the testator’s handwriting. The doctrine of incorporation by reference was developed to relieve against the harshness of the Wills Act and to give effect to the intentions of a testator. I am not satisfied that the law in Ontario is or should be that typewritten documents can be incorporated into a holograph Will. The purpose of requiring certain formalities in the making of Wills is to prevent fraud and no fraud is here alleged. Although not formally required, my answer to question two is “no”.

If you decide to recommend this strategy, here are a few suggestions:

  1. Have the formal Will identified as “Schedule A”;
  2. Ensure that the Holograph document qualifies as a valid Will, both in terms of execution and in terms of testamentary intent.
  3. Have the Client initial each page of “Schedule A” and sign it.
  4. Properly incorporate by reference Schedule A in the Holograph Will.

Here is a link to a sample Client Instruction Sheet for your consideration. Use with caution!

Hoping you are safe and healthy,

Ian Hull and Jordy Atin

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