Tag: ontario

03 Jun

Dependant’s Support: Was the Deceased Providing Support Before Death?

Rebecca Rauws Support After Death Tags: , , , , , , , , , 0 Comments

I recently came across an article discussing a court’s decision in respect of what appears to be a claim for dependant’s support in Tasmania. In the decision of Booth v Brooks [2018] TASSC 35, the deceased died with a Will that did not leave anything to his estranged daughter. The deceased was also survived by a long-term partner  and two adult sons, who were mentioned in his Will.

The daughter made a claim under a Tasmanian statute, the Testator’s Family Maintenance Act 1912 (the “TFMA”). Section 3(1) of the TFMA states as follows:

3 (1)  If a person dies, whether testate or intestate, and in terms of his will or as a result of his intestacy any person by whom or on whose behalf application for provision out of his estate may be made under this Act is left without adequate provision for his proper maintenance and support thereafter, the Court or a judge may, in its or his discretion, on application made by or on behalf of the last-mentioned person, order that such provision as the Court or judge, having regard to all the circumstances of the case, thinks proper shall be made out of the estate of the deceased person for all or any of the persons by whom or on whose behalf such an application may be made, and may make such other order in the matter, including an order as to costs, as the Court or judge thinks fit.

By comparison, section 58(1) of Ontario’s Succession Law Reform Act, (the “SLRA”) seems to have quite similar language. Section 58(1) provides:

58 (1) Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants or any of them.

Under the SLRA, in order to qualify as a “dependant”, one must be a spouse, parent, child, or brother or sister of the deceased, to whom the deceased was providing support or was under a legal obligation to provide support immediately before his death. The TFMA, on the other hand, provides in section 3A that the persons who may make an application pursuant to section 3(1) are the:

  • spouse;
  • children;
  • parents (if the deceased person dies without a spouse or children); and
  • person who had a certain relationship with the deceased, and who was entitled to receive maintenance from the deceased at the time of his or her death.

In Booth v Brooks, the court concluded that the daughter had been left without adequate provision. One of the factors that lead to this conclusion was that the deceased had not had a good relationship with the daughter throughout her life and had not provided her with any direct financial support. In particular, the court stated that the deceased’s “abnegation of parental responsibility during childhood increases the moral obligation of the testator to the child”.

It seems that the key difference in the law in Tasmania versus Ontario that came into play in the Booth v Brooks decision, which would likely have resulted in a different outcome had the scenario arisen in Ontario, is that the TFMA does not require that a spouse, child, or parent be receiving or entitled to support or “maintenance” at the time of the deceased’s death. Interestingly, the Tasmanian law seems to lean the other way—if the deceased has not provided adequate support during his or her lifetime, it may increase the ability of a child or spouse to obtain support from the deceased’s estate.

Thanks for reading,

Rebecca Rauws

 

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28 May

Legal Aid Funding and Access to Justice

Nick Esterbauer Elder Law, Estate & Trust, General Interest, In the News, Litigation, Support After Death Tags: , , , , , , , , 0 Comments

Sydney Osmar‘s blog from yesterday covered the issue of the recent cuts to legal aid funding, which can only be expected to result in increased barriers to Ontario residents in accessing the court system.

Within the context of estates, high legal fees may contribute to the inability of (would-be) litigants to obtain able assistance in accessing the court system.  Some meritorious estate and capacity-related litigation may not be commenced simply because of a lack of funds required to hire a lawyer to assist in doing so.

While successful parties may be awarded some portion of the legal fees that they have incurred, payable by the unsuccessful party to the litigation (or out of the assets of the estate), recovery of all legal fees incurred in pursuing litigation is rare.  The balance of legal fees that a party can be expected to pay out of whatever benefit they may ultimately receive dependent on the outcome of the litigation may eliminate some or all of the financial benefit of the funds that they may stand to receive.

For example, a dependant’s support application brought by a surviving spouse who lacks the financial means to support him or herself may result in protracted litigation.  Even if the application for dependant’s support is successful, the court may not always make an order that adequately reflects the entitlements of the dependant and the total fees that he or she has incurred to bring the application, limiting the funds available for the dependant’s expenses going forward.  While interim support orders or orders directing payments toward professional fees related to bringing the application may be available during litigation in some circumstances, the related motions will serve to further increase the legal fees incurred by the applicant if such relief is not obtained on consent.  In the absence of contribution from the assets of the estate to fund the litigation or an alternative arrangement for the payment of legal fees, it may not be possible for a surviving spouse in need to make a dependant’s support claim in the first place or he or she may need to do so without a lawyer’s assistance.

In 2016, it was reported that the numbers of self-represented litigants in Canada have increased over the last two decades and more significantly in recent years.  The inability to afford a lawyer and ineligibility for legal aid assistance were cited as the primary reasons why a party is self-represented.  Research suggests that parties who are self-represented are less likely to be successful in litigation (with success rates of only 4% in responding to motions for summary judgment, 12.5% for motions and applications, and 14% at trial) than represented parties.

While assistance with estate-related matters may be available to some from the Advocacy Centre for the Elderly, the Queen’s University Elder Law Clinic, or other clinics (which are funded by Legal Aid Ontario and will be impacted by the recent budget cuts) in some circumstances, many individuals simply do not qualify for assistance or require assistance that is not provided by these clinics.

Our colleague, The Honourable R. Roy McMurtry, is a strong advocate for access to justice and has expressed the following sentiment: “[O]ur freedoms are at best fragile…they depend on the ability of every citizen to assert in a court or tribunal their rights under law as well as receiving sound legal advice as to their obligations.  Indeed, our laws and freedoms will only be as strong as the protection that they afford to the most vulnerable members of society.”

Unfortunately, greater numbers of individuals than previously may struggle to access just resolutions of estates and other matters as a result of the recent changes to legal aid funding in Ontario.

Thank you for reading.

Nick Esterbauer

11 Apr

Should the drafting lawyer represent the estate in a will challenge?

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

It is not uncommon for the lawyer who drafted a testator’s will or codicil to subsequently be retained by the Estate Trustees after the testator’s death to assist with the administration of the estate. The rationale behind the drafting lawyer being retained to assist with the administration of the estate appears fairly self-evident, for as the drafting lawyer likely has an intimate knowledge of the testator’s estate plan and assets they may be in a better position than most to assist with the administration of the estate.

While retaining the drafting lawyer to assist with the administration of the estate is fairly uncontroversial in most situations, circumstances could become more complicated if there has been a challenge to the validity of the testamentary document prepared by the drafting lawyer. If a proceeding has been commenced challenging the validity of the testamentary document, there is an extremely high likelihood that the drafting lawyer’s notes and records will be produced as evidence, and that the drafting lawyer will be called as a non-party witness as part of the discovery process. If the matter should proceed all the way to trial, there is also an extremely high likelihood that the drafting lawyer would be called as a witness at trial. As the drafting lawyer would personally have a role to play in any court process challenging the validity of the will, questions emerge regarding whether it would be proper for the drafting lawyer to continue to represent any party in the will challenge, or would doing so place the drafting lawyer in a conflict of interest?

Rule 3.4-1 of the Law Society of Ontario’s Rules of Professional Conduct provides that a lawyer shall not act or continue to act where there is a conflict of interest. In the case of a drafting lawyer representing a party in a will challenge for a will that they prepared, an argument could be raised that the drafting lawyer is in an inherent position of conflict, as the drafting lawyer may be unable to look out for the best interests of their client while at the same time looking out for their own interests when being called as a witness or producing their file. There is also the potentially awkward situation of the drafting lawyer having to call themselves as a witness, and the associated logistical quagmire of how the lawyer would put questions to themselves.

The issue of whether a drafting lawyer would be in a conflict of interest in representing a party in a will challenge was dealt with in Dale v. Prentice, 2015 ONSC 1611. In such a decision, the party challenging the validity of the will brought a motion to remove the drafting lawyer as the lawyer of record for the propounder of the will, alleging they were in a conflict of interest. The court ultimately agreed that the drafting lawyer was in a conflict of interest, and ordered that the drafting lawyer be removed as the lawyer of record. In coming to such a conclusion, the court states:

There is a significant likelihood of a real conflict arising.  Counsel for the estate is propounding a Will prepared by his office.  The preparation and execution of Wills are legal services, reserved to those who are properly licensed to practise law.  Counsel’s ability to objectively and independently assess the evidence will necessarily be affected by his interest in having his firm’s legal services found to have been properly provided.” [emphasis added]

Decisions such as Dale v. Prentice suggest that a lawyer may be unable to represent any party in a will challenge for a will that was prepared by their office as they may be in a conflict of interest. Should the circumstance arise where the drafting lawyer is retained to assist with the administration of the estate, and subsequent to being retained someone challenges the validity of the Will, it may be in the best interest of all parties for the drafting lawyer to indicate that they are no longer able to act in the matter due to the potential conflict, and suggest to their clients that they retain a new lawyer to represent them in the will challenge.

Thank you for reading.

Stuart Clark

09 Apr

Can you bind non-signatories to a settlement?

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

Estate litigation can be costly both financially and emotionally. As a result, there is often a strong incentive for parties to try to reach a negotiated settlement. Although entering into a settlement which resolves the estate litigation may appear straightforward from the outside, it may become more complicated if all potential financially interested parties are not signatories to the settlement. It is not uncommon in estate litigation for all beneficiaries of the estate to not actively participate in the litigation, leaving it to people such as the Estate Trustee or the other beneficiaries to defend a claim. As a settlement is in effect a contract between parties, if a settlement is reached which affects the interests of a non-signatory to the settlement can such a settlement bind the interests of the non-signatory?

I have previously blogged about section 48(2) of the Trustee Act, and an Estate Trustee’s ability to settle claims on behalf of the estate which can bind the interests of the beneficiaries. While section 48(2) would allow the Estate Trustee to bind the interests of all beneficiaries to the settlement, the Estate Trustee does so at their own potential liability, as it is possible that one or more of the beneficiaries may later challenge the decision of the Estate Trustee to enter into the settlement, potentially seeking damages against the Estate Trustee if they are of the position that the settlement was not reasonable or in the best interest of the estate. As a result of such a risk, it is not uncommon for an Estate Trustee to be hesitant to enter into a settlement on behalf of the estate in contentious situations, not wanting to potentially expose themselves to personal liability if one or more of the beneficiaries should later object to the terms of the settlement. If an Estate Trustee is hesitant to enter into a settlement on behalf of all beneficiaries, but all actively participating parties are otherwise in agreement with the settlement, is there a way to bind the interests of non-participating parties to the settlement?

The Rules of Civil Procedure provide the court with the ability to “approve” a settlement on behalf of parties who are not signatories under certain limited circumstances. This is done in accordance with rule 7.08 of the Rules of Civil Procedure, which allows the court to approve a settlement on behalf of a party who themselves cannot consent to the settlement on account of being under a legal disability (i.e. a minor). Perhaps importantly however, the court only has the authority under rule 7.08 to “approve” a settlement on behalf of a party under a legal disability, and rule 7.08 is not available in circumstances where the non-signatory is fully capable.

The Rules of Civil Procedure do not otherwise appear to provide any mechanism by which a settlement can be approved on behalf of a party who is not under a legal disability. As a result, if the non-signatory who you are you attempting to bind to the settlement is not under a legal disability, the court likely does not have the authority to “approve” the settlement on their behalf under the Rules of Civil Procedure.

Although the court likely does not have the ability to “approve” a settlement on behalf of an individual who is not under a legal disability in accordance with the Rules of Civil Procedure, this does not necessarily mean that there are no other ways to potentially bind the individual to a settlement. One potential solution may be to seek an Order “in accordance” with the terms of the settlement on notice to all interested parties. Should the court issue such an Order, which in effect repeats the terms of the settlement but as an Order of the court, the non-signatories would arguably then be bound to the terms of the settlement as it would now be in the form of an Order of the court.

Thank you for reading.

Stuart Clark

08 Apr

Can an Attorney for Property sever a joint-tenancy in real property?

Stuart Clark Power of Attorney Tags: , , , , , , , , , , , , , , , , , 0 Comments

It is often said that an Attorney for Property can do anything on behalf of the grantor’s behalf except make a will. This is on account of section 7(2) of the Substitute Decisions Act (the “SDA“), which provides:

The continuing power of attorney may authorize the person named as attorney to do on the grantor’s behalf anything in respect of property that the grantor could do if capable, except make a will.” [emphasis added]

Although at first glance it would appear that the potential tasks that an Attorney for Property could complete on behalf of a grantor are almost absolute, with the Attorney for Property being able to do anything on behalf of the grantor except sign a new will, in reality the tasks that an Attorney for Property may complete relative to the grantor’s estate planning is more restrictive than this would suggest at first glance. This is because the definition of “will” in the SDA is defined as being the same as that contained in the Succession Law Reform Act (the “SLRA“), with the SLRA in turn defining “will” as including not only typical testamentary documents such as a Last Will and Testament or Codicil, but also “any other testamentary disposition“. As a result, the stipulation that an Attorney for Property can do anything on behalf of the grantor “except make a will” would include not only a restriction on the Attorney for Property’s ability to sign a new Last Will and Testament or Codicil on behalf of the grantor, but also a restriction on the Attorney for Property’s ability to make “any other testamentary disposition” on behalf of the grantor.

It is fairly common for individuals such as spouses to own real property as joint-tenants with the right of survivorship. When one joint-owner dies ownership of the property automatically passes to the surviving joint-owner by right of survivorship, with no portion of the property forming part of the deceased joint-owner’s estate. Although such an ownership structure may make sense when the property is originally purchased, it is not uncommon for circumstances to arise after the property was registered (i.e. a divorce or separation) which may make one of the joint-owners no longer want the property to carry the right of survivorship. Should such circumstances arise, one of the joint-owners will often “sever” title to the property so that the property is now held as tenants-in-common without the right of survivorship, making efforts to attempt to ensure that at least 50% of the property would form part of their estate should they predecease the other joint-owner.

Although severing title to a property is fairly straight forward while the owner is still capable, circumstances could become more complicated should the owner become incapable as questions may emerge regarding whether their Attorney for Property has the authority to sever title to the property on behalf of the grantor, or whether such an action is a “testamentary disposition” and therefor barred by section 7(2) of the SDA.

The issue of whether an Attorney for Property severing title to a property is a “testamentary disposition” was in part dealt with by the Ontario Court of Appeal in Champion v. Guibord, 2007 ONCA 161, where the court states:

The appellants argue that the severing of the joint tenancies here constituted a change in testamentary designation or disposition and is therefore prohibited by s. 31(1) of the Substitute Decisions Act because it is the making of a will.

While we are inclined to the view that the severance of a joint tenancy is not a testamentary disposition, we need not decide that question in this case. Even if it were, we see no error in the disposition made by the application judge, because of s. 35.1(3)(a) of the Substitute Decisions Act.” [emphasis added]

Although the Court of Appeal does not conclusively settle the issue in Champion v. Guibord, the court appears to strongly suggest that they are of the position that an Attorney for Property severing a joint-tenancy is not a “testamentary disposition” within the confines of the SDA.

Thank you for reading.

Stuart Clark

14 Mar

How to Exercise an Option to Purchase

Rebecca Rauws Estate & Trust Tags: , , , , , , , 0 Comments

Sometimes a Will may include an “option to purchase” clause. Basically, this type of clause will provide that a particular person shall have the option to purchase a particular asset of the estate, for a particular price. Usually the option will end after a certain period of time, to allow the estate to continue being administered, depending on whether the person decides to exercise the option. Typically, options to purchase will play out in a fairly straightforward way—either the option is exercised, or it expires. However, in the recent decision in Crawford v Culbert et al, 2019 ONSC 1048, the chain of events was not quite so simple.

Hannah died in February 2018, and was survived by her four children: a son, Terry, and three daughters, Tammy, Tracey, and Tina.

At the time of Hannah’s death, the four siblings were not specifically aware of the contents of Hannah’s Will. A few days after Hannah died, they located an unexecuted document that appeared to be a Will, which Tina read out loud. The Will contained a provision that Terry would have a first option to purchase a farm property owned by Hannah’s estate, for $200,000.00, and that he had a period of 30 days “from the date that express written notice” of the option is given to him. At that time, it was unclear whether the Will had been executed.

The next day, the three sisters obtained a notarial copy of the executed Will from the law firm that had prepared it, but did not provide or show a copy to Terry. Some text messages were exchanged between Terry and Tammy about a month later, in which Terry commented that he did not intend to purchase the property. A short while after that, all four of the siblings met at the office of the lawyer who drafted the Will. It was at this time that Terry learned that Hannah’s Will was in the same form as the unexecuted document the siblings had located following her death. Twenty days later, Terry advised the lawyer that he intended to exercise the option to purchase. Both Tracey and Tammy took the position that Terry was out of time to exercise the option.

The court considered what constituted “express written notice” as required by Hannah’s Will. It easily concluded that Tina’s reading of the unexecuted Will did not constitute express written notice. The court also found that the earliest date that the 30 day period could have commenced was the day that all four siblings attended at the lawyer’s office, and Terry learned that the Will had been executed. Additionally, the court found that nothing Terry said or did prior to the date of the lawyer’s meeting could be considered an effective waiver of his entitlement to the option.

This decision may serve as a reminder to anyone who encounters an option to purchase that being crafty to try to circumvent the option is unlikely to be successful.

Thanks for reading,

Rebecca Rauws

 

Other blog posts and podcasts that you may find interesting:

12 Mar

How Important are Powers of Attorney?

Rebecca Rauws Power of Attorney Tags: , , , , , , , , , , 0 Comments

In Ontario, we are fortunate to have the ability to execute powers of attorney in respect of our property and our health care. I recently learned that Jersey, in the Channel Islands, has only lately gained the ability to execute a “Lasting Power of Attorney” to record their decisions and intentions in respect of their assets and care. On that note, I thought I would take the opportunity to provide a quick reminder of the importance of executing powers of attorney, and the possible consequences of not doing so.

Powers of attorney in Ontario are governed mainly by the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (the “SDA”). The SDA sets out, among other things, the requirements for powers of attorney, the requisite capacity to grant a power of attorney, and the powers and duties of attorneys. There are two types of powers of attorney: powers of attorney for personal care (dealing with your health, medical care, and other matters related to your well-being) and powers of attorney for property (dealing with your property and financial matters). Generally, powers of attorney will come into play if you become incapable of managing your property or personal care, respectively, but it is also possible to grant a power of attorney for property that is effective immediately (that is, not conditional upon later incapacity).

What Happens if I Don’t Execute Powers of Attorney?

If you do not execute powers of attorney, and you never lose capacity, you may never realize how important they are. However, as we have blogged about previously, as our population begins to live longer, there has been an increase in dementia and other aging-related conditions associated with cognitive decline, meaning that the use and activation of powers of attorney is increasing.

Taking the step of executing powers of attorney means that you have the chance to make your own decision regarding who will handle your affairs in the event that you are no longer capable. If you become incapable, and have not named an attorney for property or personal care, it is open (and may become necessary, depending on your circumstances) for an individual to bring an application seeking to be appointed as your guardian for property or personal care, thus allowing them to act as your substitute decision-maker. The application process requires that notice be given to certain people (including certain family members), and if someone disagrees with the appointment of the proposed guardian, they may contest the guardianship—but the key detail to remember is that the ability to make the decision is taken away from you.

A guardianship application can also be brought if a person has executed a power of attorney, but the existence of a power of attorney will be an important factor for the court’s consideration: pursuant to the SDA, if the court is satisfied that there is an alternative course of action that is less restrictive of the person’s decision-making rights, the court shall not appoint a guardian.

Naming someone to act on your behalf with respect to your property and personal care is a big decision. It is almost certain that you are in the best position to make a determination as to who you want acting for you in this regard. We should all take the opportunity to exercise our own decision-making rights, to choose the person that we want to play the important role of attorney, and not leave it up to others to make this decision for us.

Thanks for reading,

Rebecca Rauws

 

Other blog posts that you may enjoy:

11 Mar

The Risk of Personal Costs Awards in Estate Litigation

Rebecca Rauws Litigation Tags: , , , , , , , , , , 0 Comments

In the past, in estate litigation matters, it was often the case that some or all of the litigating parties’ costs would be paid out of estate assets. However, in more recent years, the courts have been moving away from this general practice, and increasingly making costs awards providing for the payment of costs by one of the parties, personally. In particular, if the court views a party, including an estate trustee, to have behaved improperly or unreasonably, it may decide that such a party must pay the other party’s costs, personally. We have blogged about instances of such an outcome before.

A recent decision of the Ontario Superior Court of Justice has reaffirmed this general trend. The decision in Ford v Mazman, 2019 ONSC 542, involved a motion to pass over the named estate trustee, and appoint the two sole beneficiaries of the estate in question, as estate trustees. Although the named estate trustee and the beneficiaries were initially on good terms, within several months of the testator’s passing, the relationships began to break down, with the estate trustee beginning to make accusations towards the beneficiaries, in relation to the testator. The court found that it was “not a case of mere friction—this is a case of outright hostility from [the estate trustee] to the beneficiaries”, also commenting that it was difficult to fathom why the estate trustee acted as she did, and that her accusations were unwarranted. Ultimately, the court made an order passing over the estate trustee.

After the parties were unable to reach an agreement as to costs, the court made an endorsement in this regard in Ford v Mazman, 2019 ONSC 1297. After a discussion of the costs principles applicable to estate litigation, the court stated as follows:

“I am mindful that an estate trustee should be fully compensated for any reasonable costs incurred in the administration of the estate. However, the actions of the [estate trustee] are far from reasonable. I was not provided any rationale as to why her animus became necessary in the administration of her good friend’s estate.”

Ultimately, the court made a costs award in favour of the beneficiaries, payable by the estate trustee, personally.

This costs decision serves as an important reminder that parties entering into estate litigation proceedings should not count on their costs being paid out of the estate. Additionally, even though the estate trustee’s conduct in this case appears to be extreme, litigants should still keep in mind the importance of acting reasonably.

Thanks for reading,

Rebecca Rauws

 

Other blog posts that you may enjoy:

10 Jan

Home DNA Tests – What’s an Estate Trustee to do when there is an unexpected result?

Stuart Clark Executors and Trustees Tags: , , , , , , , , , , , , , , , , , , , , , 0 Comments

I recently blogged about the growing use of home DNA tests and what impact an unexpected result could have upon your rights as a beneficiary of an estate. While such a blog was from the perspective of an individual who discovered through a home DNA test that their biological father was not in fact the individual they previously believed it to be, and the potential impact such a finding could have upon their status as a beneficiary of their “father’s” estate if their interest was based on their status as a “child”, questions would also emerge in such a scenario if you were the Estate Trustee of such an estate regarding what you should do.

If you are the Estate Trustee of an estate in which a bequest is based on parentage (i.e. an intestacy or a bequest to a testator’s “issue” or “children”), and you discover that one of the beneficiaries has voluntarily taken a home DNA test which revealed that they were not in fact related to the deceased, could you still make a distribution to such a beneficiary? If you have already made a distribution to such a beneficiary, is there a risk that the other beneficiaries could now make a claim against you as Estate Trustee, alleging that you distributed the estate to the incorrect individuals and that they have suffered damages as a result?

In response to whether an Estate Trustee could potentially be liable to the other beneficiaries for historically paying out amounts to a beneficiary who it is later discovered was not actually related to the deceased, it would appear that the Estate Trustee likely would not be liable under such a scenario. In my previous blog I discussed the provisions of the Children’s Law Reform Act (the “CLRA“) which establish a person’s legal parentage in Ontario, and the various presumptions establishing an individual’s father. While sections 13(1) and 14(1) of the CLRA allow the court to make a subsequent different declaration as to a person’s parentage, section 14(2) of the CLRA provides that such an Order “does not affect rights and duties that were exercised or performed, or interests in property that were distributed, before the order was set aside“. As a result, it would appear, arguably, that if an Estate Trustee historically made a payment to an individual based off of parentage, and a subsequent declaration is made by the court that the individual in question was not actually the parent of the beneficiary, the historic payment to the beneficiary could not be put in issue or reclaimed provided that at the time the payment was made the beneficiary was still presumed and/or declared to be the child of the deceased.

The issue of what an Estate Trustee is to do if a payment has not yet been made and they discover that an individual who they previously believed to be a beneficiary is not in fact related to the deceased could be more complicated. In the event that the other beneficiaries who could be affected by the distribution do not unanimously consent to continue to allow the distribution to the individual notwithstanding the results of the DNA test, it is possible that one or all of the other beneficiaries may later bring a claim against the Estate Trustee for negligence, alleging that the Estate Trustee knew about the results of the DNA test before making the distribution and that they have suffered damages as a result of the distribution. To offset such a risk, it may be wise for the Estate Trustee in such a scenario to bring an Application for the opinion, advice and direction of the court pursuant to section 60(1) of the Trustee Act and/or rule 14.05, asking the court to determine whether the distribution may still be made to the potential beneficiary in light of the results of the home DNA test.

Thank you for reading.

Stuart Clark

08 Jan

Home DNA Tests – Could you be disinherited by an unexpected result?

Stuart Clark General Interest Tags: , , , , , , , , , , , , , , , , , , , , , , , , , 0 Comments

One of the most gifted items this past holiday season were apparently the home DNA tests which can reveal your genetic ancestry or even if you are predisposed to certain health conditions. As anyone who has taken one of these tests (myself included) can tell you, the test results also contain a long list of other individuals who have also taken the test who you are related to, allowing you to reconnect with long lost relatives.

While my own test results did not reveal any family secrets, the same cannot be said for other individuals who have taken the test, as there have been a growing number of articles recently about how home DNA tests have revealed family secrets which otherwise may never have come to light. Although not all of these secrets are necessarily negative, such as finding a long-lost sibling, others, such as finding out that the individual who you believed to be your father was not in fact your biological father, could be life changing. For the latter, the phenomena is apparently common enough that the Atlantic has reported that self-help groups have formed around the issue, such as the Facebook group “DNA NPE Friends”, with “NPE” standing for “Not Parent Expected”.

In reading through these stories I couldn’t help but wonder if having such a result could impact your potential entitlements as a beneficiary of an estate. What happens if, for example, the individual who you previously believed to be your biological father but the test reveals was not in fact your father should die intestate, or should leave a class gift to his “children” in his Will without specifically naming the children. Could finding out that you were not actually biologically related to your “father” result in you no longer being entitled to receive a benefit as a beneficiary? Could you potentially be disinherited as a beneficiary of an estate by voluntarily taking a home DNA test if your right to the gift is founded upon you being related to the deceased individual?

Who is legally considered an individual’s “parent” in Ontario is established by the Children’s Law Reform Act (the “CLRA“). Section 7(1) of the CLRA provides that, subject to certain exceptions, the person “whose sperm resulted in the conception of a child” is the parent of a child. Section 7(2) of the CLRA further provides for a series of presumptions regarding the identity of the individual’s “whose sperm resulted in the conception of a child“, including, for example, that there is a presumption that such an individual is the birth parent’s spouse at the time the child is born, or the individual in question certified the child’s birth as a parent of the child in accordance with the Vital Statistics Act (i.e. signed the birth certificate). To the extent that there are any questions about parentage, section 13(1) of the CLRA provides that any interested individual may apply to the court at any time after a child is born for a declaration that a person is or is not the legal parent of the child.

In applying these presumptions to our previous questions about the home DNA test, if, for example, the individual who you previously believed was your biological father was your birth mother’s “spouse” at the time you were born, or signed the birth certificate, it would appear that, subject to there being a declaration under section 13(1) of the CLRA to the contrary, there would continue to be a presumption at law that the individual who you previously believed to be your biological father would continue to be your legal “parent” in accordance with the CLRA. To this respect, in the absence of a formal declaration under section 13(1) of the CLRA that the individual was no longer your legal “parent”, there would appear to be an argument in favour of the position that the individual who you previously believed to be your biological father would continue to be your legal “parent”, and that you should continue to receive any benefits which may come to you as a “child” on the death of your “father”, whether on an intestacy or a class bequest to his “children” in his Will.

This presumption, of course, is subject to the ability of any interested person (i.e. the Estate Trustee or one of the other beneficiaries) to seek a formal declaration under section 13(1) of the CLRA that you were not in fact a “child” of the individual you believed to be your biological father. If such a formal declaration is ultimately made by the court, you would cease to be the legal “child” of the individual who you previously believed to be your biological father, and would likely lose any corresponding bequests which may have been made to you on an intestacy or as a member of the class “children” in the Will.

The use of DNA tests to establish the potential beneficiaries of an estate is not a new phenomenon (see: Proulx v. Kelly). What is new, however, are people voluntarily taking such tests en masse in a public forum, potentially voluntarily raising questions about their rights to receive an interest in an estate when such questions would not have existed otherwise.

Thank you for reading.

Stuart Clark

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