The death of a celebrity will sometimes cause the media to focus enquiry on estate planning. We recently blogged about the circumstances surrounding Prince’s intestacy and the possible heirs of his estate. Anton Yelchin, a 27 year old actor best known for his role in the Star Trek movies, has passed away. His death has raised a number of interesting points.
First and foremost this case raises the importance of why it is a good idea to estate plan at a younger age.While there is no target age when a will should be written, estate planning is a consideration that Millennials should take into account. Yelchin was a successful young actor who accumulated a large amount of wealth in his career. His family and friends would likely have benefitted from the crafting of an estate plan as it would give them some direction pertaining to his wishes for his money and his legacy as an actor. It would have also saved his parents the uncertainty of trying to take control of his estate while coping with his death.
As Yelchin passed away without a will, the court will ultimately decide who is appointed to distribute his assets. Yelchin’s parents are currently applying to the court in order to oversee the distribution of Yelchin’s estate. If this estate were to be in Ontario Yelchin’s parents almost certainly would be appointed as estate trustees by applying for a Certificate of Appointment of Estate Trustee Without a Will. As per the Succession Law Reform Act in Ontario, if an individual dies with no surviving spouse or children (as is the case here), his or her parents would inherit his estate.
It is important to consider the possibility of crafting a will at a younger age in order to ensure one’s wishes are fulfilled, and as a preventative measure against costly and unnecessary litigation.
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I recently came across an article published in the Toronto Star with a headline sure to catch the attention of any estates lawyer: How Ontario disinherits children in second marriages.
In the article, the author details what they believe to be the lack of awareness that many people have regarding the legal effect that a second marriage may have upon their estate plan. In outlining such concerns, the author provides the following eye-catching statement:
“Here’s a little-known fact: A second marriage invalidates your will – automatically disinheriting your children”.
While the first part of this sentence is true (subject to certain exceptions, a Will is automatically revoked upon marriage by section 16 of the Succession Law Reform Act), the second part is not necessarily true, insofar as, just because a Will is revoked upon marriage, it does not necessarily follow that the Deceased’s children would be “disinherited” by such an action. It should also be noted that the automatic revocation of a Will upon marriage by section 16 of the Succession Law Reform Act does not only apply to second marriages, but any marriage which the testator may enter into after the Will was executed.
With respect to the statement that the second marriage has the effect of “disinheriting” your children, if the Deceased should not have executed a further Last Will and Testament following their marriage, they will have died intestate. In Ontario, intestate estates are governed by Part II of the Succession Law Reform Act, which provides that, should the Deceased have died leaving a surviving married spouse and children, the first $200,000.00 of their estate is to go to the surviving spouse as a “preferential share”, with whatever remains after the payment of the preferential share being distributed to the spouse and children in accordance with specified allotments. If the Deceased should only have had one child, whatever remains after the preferential share would be distributed 50% to the spouse and 50% to the child. If the Deceased should have had two or more children, 1/3 would be distributed to the surviving spouse, with the remaining 2/3 being equally distributed to the Deceased’s children. To this effect, so long as the Deceased’s estate is valued at greater than $200,000.00, the Deceased’s children would not be “disinherited” by the marriage per se, although they could of course have stood to inherit a greater amount had the Deceased executed a new Will.
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Last month, an amendment to Minnesota’s Uniform Probate Code came into effect to limit the rights of children conceived after the death of one or more parents.
The addition under 524.2-120 of the Code states as follows (at Subdivision 10):
Notwithstanding any other provision of this section and subject to section 524.2-108, a parent-child relationship does not exist between a child of assisted reproduction and another person unless the child of assisted reproduction is in gestation prior to the death of such person.
The exception at section 524.2-108 provides that a child conceived before and born after death, who survives for a period of 120 hours, shall be treated as if living at the time of death of the deceased. However, the update in the legislation clarifies that a child conceived after death does not constitute a child and would not, therefore, be entitled to related rights to inherit on intestacy or as a member of a class of beneficiaries created under a will.
In many other jurisdictions, including Ontario, there is limited clarity with respect to the rights of individuals conceived after death of a parent. While the Succession Law Reform Act specifies (under the definition of “child” at section 1) that a child conceived before and born after death will be treated as if he or she had been living at the time of death of a parent or other family member, the same cannot be said of posthumously-conceived children with any certainty.
In certain circumstances, a surviving spouse may have the right to use genetic materials, being sperm or ova of the deceased spouse, to conceive a child in accordance with the terms of the Assisted Human Reproduction Act. However, there is no legislation in Ontario that explicitly provides or denies children conceived after death status as a child, as if conceived or born after death. Case law in other jurisdictions suggests that inheritance rights to a parent’s estate and entitlement to death-related benefits may be more likely to attach to a child conceived after death if (1) a genetic relationship between the deceased parent and child exists, (2) consent is given to the posthumous use of genetic materials for conception, and (3) the evidence available suggests that the deceased agreed to support a child conceived using the preserved genetic materials.
As rates of assisted reproduction continue to increase, it will be interesting to see how this area of estate law develops in Ontario to address the issue of rights of posthumously-conceived children.
Thank you for reading and have a great weekend!
The unexpected and shocking death of Prince last week has sent the media abuzz as they speculate about the potential cause of death. However, as the dust begins to settle, speculation has turned to the other big question: Who will inherit his vast estate valued anywhere from an estimated $150-300 million?
On Tuesday, Prince’s sister filed paperwork in Minnesota (where Prince resided and died) asking the court to appoint a special administrator to oversee his estate. This step was necessary because it appears that despite his fortune, Prince did not have a known will and therefore, may have died intestate.
Of course, it is still possible for a will to emerge after further investigations are undertaken. Some are speculating that a trust or series of trusts may have been established to avoid the public scrutiny that would have been involved in probating a will. Trusts are commonly used vehicles for celebrities who wish to maintain some semblance of privacy after death.
However, if there was no estate plan in place, Prince’s estate will be devolved in accordance with the Minnesota laws of intestacy. Prince was not married, had no children, and was predeceased by his parents. He was survived by two ex-wives, his full biological sister and five half-siblings. Under Minnesota law, ex-wives do not qualify under intestacy rules and half siblings are treated the same as full siblings. Accordingly, Prince’s six surviving siblings stand to potentially inherit a significant fortune.
As an additional concern, there are often claims made against an estate of this magnitude, some valid and some not. Unfortunately, the absence of any testamentary document to support Prince’s actual intentions may only exacerbate and encourage this effect. These types of claims can vary significantly from dependant’s support to creditors’ claims.
The laws of intestacy seldom reflect the true intentions of a testator and can lead to many potentially avoidable complications. For instance, family dynamics are becoming increasingly complex with the prevalence of common-law spouses and blended families, just to name a few examples. As a result, while intestacy rules aim to distribute an estate among those the law presumes to be closest to you and to whom you may owe support, the practical effect is that this desired result is rarely achieved.
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In Canada, polygamy is an indictable offence under the Criminal Code of Canada. Under section 293(1):
(a) practises or enters into or in any manner agrees or consents to practise or enter into
(i) any form of polygamy, or
(ii) any kind of conjugal union with more than one person at the same time,
whether or not it is by law recognized as a binding form of marriage, or
(b) celebrates, assists or is a party to a rite, ceremony, contract or consent that purports to sanction a relationship mentioned in subparagraph (a)(i) or (ii),
is guilty of an indictable offence and liable to imprisonment for a term not exceeding five years.”
According to this Canadian Department of Justice research report, polygamy can refer to “the simultaneous union of either a husband or wife to multiple spouses. As a general term, polygamy therefore includes the practices of bigamy, polyandry, and polygyny.”
Notwithstanding the prohibition against polygamy in Canada, family law and succession legislation in Ontario recognizes polygamous spouses under certain circumstances. For instance, the Succession Law Reform Act and the Family Law Act both provide at section 1(2):
“In the definition of “spouse”, a reference to marriage includes a marriage that is actually or potentially polygamous, if it was celebrated in a jurisdiction whose system of law recognizes it as valid.”
In estate matters, this means that as long as the union originated in a jurisdiction that legally recognizes polygamous marriage, multiple spouses can be found to simultaneously share in the preferential share under intestacy or be able to claim as a spouse under the provisions for dependant’s relief.
With respect to the preferential share, this is not the first or last time that the definition of spouse was broadened to provide access to other groups of spouses. In 1977, access was granted to widows with children. The inclusion of polygamous spouses (where the union originated in a jurisdiction that permits polygamy) was introduced in 1990, and 2003 saw the recognition of same-sex couples.
On a similar note, there are cases where the deceased is found to have been legally married to one spouse while carrying on a common law relationship with another. Or, in other scenarios, the deceased may have been engaged in two simultaneous common law relationships immediately prior to death. These situations raise many complex issues, the latter of which can be read about in more detail in our previous blog post here.
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One would be forgiven for believing that the determination of who is entitled to take on an intestacy is fairly settled law. In accordance with Part II of the Succession Law Reform Act (the “SLRA“), if a person were to die intestate leaving a surviving married spouse and two children, the first $200,000.00 of their estate would go to the surviving spouse as a preferential share. In the event that there were any assets in the estate after the payment of the $200,000.00 preferential share, such funds would be equally shared between the spouse and the two children, with each party receiving 1/3 of such amounts.
In Re: Estate of Richard Lewis Crane, the Ontario Superior Court of Justice was faced with the issue of whether mortgage insurance should be taken into account when calculating the “net estate” available for distribution on an intestacy. In such a case, the Deceased died intestate with a surviving wife and two children. The majority of the Deceased’s assets passed outside of his estate to his wife as the surviving joint owner. The only asset which passed through the estate was real property worth approximately $294,500.00, which was subject to a mortgage in the amount of $100,339.26. The Deceased held mortgage insurance on such a mortgage, which provided that the mortgage was to be paid off in its entirety in the event of his death.
The question which was posed to the court was whether, as a result of the fact that the mortgage in question would never be payable by the estate as a result of the mortgage insurance, if the value of the mortgage should not be deducted from the value of the property in calculating the “net value” of the estate which would be available for distribution. If the value of the mortgage insurance was included as part of the “net value”, the Deceased would have died with an estate valued at approximately $294,500.00. As such an amount is in excess of the $200,000.00 preferential share, it would result in funds being available for distribution to the two children. If the value of the mortgage insurance could not be taken into account in calculating the “net value” of the estate, the Deceased would have died with an estate valued at approximately $194,160.74. As such an amount is below the $200,000.00 preferential share, such a valuation would result in the entirety of the estate being distribution to the surviving spouse.
After reviewing the jurisprudence on point, and careful consideration of what they viewed as the intention of the statute, Justice Broad ruled that the value of the mortgage insurance was to be taken into account in calculating the “net value” of the estate available for distribution. As a result, the Deceased died with an estate valued at approximately $294,500.00. As such an amount is in excess of the $200,000.00 preferential share, it would result in funds being available for distribution to the Deceased’s children.
This week on Hull on Estates, Paul Trudelle and Stuart Clark discuss the recent decision of Re: Estate of Richard Lewis Crane, 2016 ONSC 291, and the issue of whether mortgage insurance should be taken into account when calculating the “net estate” available for distribution on an intestacy
Should you have any questions, please email us at email@example.com or leave a comment on our blog.
Doreen So recently wrote about Howard W. Jones and how the developments that he made in reproductive technologies have the potential to impact estate planning and intestacy laws. An issue encountered in recent news may give rise to further uncertainty when it comes to the estates of individuals conceiving and being conceived through assisted reproductive technologies.
An article appearing in the Hamilton Spectator tells the story of how the paternity of a child conceived in vitro in Washington recently caused considerable confusion. After their baby had been born, the couple questioned whether the wrong sperm sample had been used, as the child’s blood-type was inconsistent with those of its parents. After this discrepancy came to light, the couple arranged for a DNA test to be conducted. The testing confirmed that the sperm donor and intended father was not a biological parent of the baby. Surprisingly, the results of the DNA testing revealed that the man was (biologically, at least) the baby’s uncle.
A geneticist at Stanford University investigated the situation and determined that the cause for the unplanned degree of relatedness between the mother’s husband and their child was a what is known as a chimera, rather than an error made at the fertility clinic.
Chimerism, also known as the “vanishing twin effect”, occurs when two zygotes fuse into one, which is estimated to occur in as many as one out of eight pregnancies. The fusion of two twins results in one embryo that may consist of DNA derived from both zygotes. In this specific case in Washington, some of the sperm donor father’s germline cells, being those that have the capacity to develop into eggs or sperm, were derived from his unborn fraternal twin. As a result, 90% of the man’s sperm contains his own DNA and the other 10% contains the genetic material of his “brother”, giving rise to the ability of the man to father his own genetic nephew or niece. The article reports that the man has another child, in addition to the newborn, who is, in fact, his biological child.
The incidence of chimerism, which is believed to be increasing with prospective parents more frequently obtaining assistance from fertility clinics, further complicates the issue of entitlement to a biological parent’s estate on intestacy and qualification as a member of a class identified within testamentary documents. It will be interesting to observe how the case law may develop to address these issues.
Thank you for reading and have a great weekend.
On Tuesday, I referred to an article, “Are You Related to This Violinist? If So, You Could Be a Millionaire”, which first got me thinking about the idea of inheritances received from distant (and potentially unknown) relatives who die intestate. Thursday’s blog focused on the use of DNA evidence in establishing and disproving relatedness and how this technology may apply to the context of estate litigation and claims that a party is the next of kin of a person who has died intestate.
Further to yesterday’s post, it is worth mentioning that the Court will not always order a DNA test to establish a family relationship. Earlier this year, in Re Branson Estate, the Alberta Court of Queen’s Bench refused to order the applicant to undergo genetic testing when such an order was sought by the respondent to the proceeding. Both parties asserted that they were the biological sons of the deceased, who died intestate. The respondent raised doubts with respect to whether the applicant was actually related to the deceased. The applicant had produced his birth certificate, which identified the deceased as his father in support of this family relationship, but the respondent alleged that the applicant was the product of their mother’s affair with a man other than the deceased. The Court ruled the hearsay evidence cited by the respondent inadmissible and determined that the applicant and respondent were both entitled to a 50% share in the estate of their father. While DNA testing may be a viable way to dispute relatedness that forms the basis of a beneficiary’s claim against an estate, it cannot always be relied upon where admissible evidence does not raise uncertainty with respect to one party’s relatedness to a deceased family member.
The violinist, Eugene Bergen, whose story is featured in the article referred to in Tuesday’s blog died intestate in 2013 in New York City, at the age of ninety-six and with savings of nearly four million dollars. Bergen played violin for the New York Philharmonic Orchestra and toured Europe with Glenn Miller during the Second World War. Although he left behind an impressive life story, he does not appear to have been survived by a spouse, issue, or any other relatives. As a result, the late musician’s estate is controlled by the Manhattan Public Administrator. City officials are still trying to locate Bergen’s next of kin. Eventually, if a living relative of Bergen cannot be found, the funds will be deposited with the city’s Finance Department. In the last three and a half years, the Finance Department has received over sixty-six million dollars in unclaimed estate funds. The author of the article that appeared in DNAinfo recommends keeping up-to-date genealogical records so that, if we are related to someone like Eugene Bergen, who has left a fortune but no Last Will and Testament or close family to inherit it, we do not miss out on an inheritance.
Have a nice weekend.
On Tuesday, I introduced the idea of receiving an inheritance from a long-lost relative who dies intestate. While the law allows distantly-related next of kin to benefit from a deceased intestate, in reality, practical barriers often present themselves.
When trying to assert one’s position as a very distantly-related next of kin, the challenge may become proving (or, in some cases, disproving) the relationship. It can be difficult or impossible to establish someone who was not recognized as a close relative of the deceased as the next of kin, absent DNA evidence.
In determining the degree of relatedness of one individual to another, geneticists use math models and averages. However, when DNA analyses are done, our genetic materials do not always follow expectations based on mathematical trends. For this reason, DNA test results may be inaccurate or inconclusive, suggesting that two individuals are more or less closely related than they actually are. What makes the ability to rely on genetic testing more difficult is the fact that fourth cousins (and beyond) often share no more genetic material than that shared with any other member of the population.
Another difficulty that may present itself in determining the relatedness of one person with another who is deceased is that DNA testing requires a sample (such as hair or saliva) from both test subjects. If the deceased has been cremated, a tissue sample may not exist at the time that the purported family member seeks evidence of their relatedness.
In Ontario, genetic testing can be used to support or dispute familial relatedness within the context of estate litigation. The Court can order a DNA test to disprove genetic relatedness of a purported beneficiary on intestacy under Rule 33 of the Rules of Civil Procedure, which allows the mental or physical examination of a party whose condition is in question in a proceeding. In Kelly Estate (Trustee of) v. Kelly, Justice Coats of the Ontario Superior Court of Justice granted leave for DNA testing of one party, an alleged daughter of the deceased, stating that “DNA testing is a highly reliable method of determining parentage.”
Thank you for reading.