Tag: news and events
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.
Thank you for reading,
Umair Abdul Qadir
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.
Thanks for reading,
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.
Thank you for reading,