Tag: Stuart Clark

07 Sep

Hull on Estates #621 – What is a Limited Grant and when should you Consider Using it?

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On today’s podcast, Stuart Clark and Rebecca Rauws discuss the limited grant under s. 29(3) of the Estates Act as a tool to consider when probate may be delayed, but there is an urgent need to deal with an estate asset. For more information, please check out Stuart’s recent blog on this topic here.

Should you have any questions, please email us at info@hullandhull.com or leave a comment on our blog.

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02 Sep

Limited grants as a stop-gap when probate is delayed

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

An unfortunate reality with the administration of estates is that probate can take a long time to be issued. It is not uncommon for it to take six to eight months, if not longer, after the application is filed before the Certificate of Appointment is issued. As many institutions such as banks require a Certificate of Appointment before they will grant access to estate funds, and the Estate Trustee is generally unable to deal with any real estate owned by the estate until the Certificate of Appointment has been issued, this delay can often result in complications with the initial administration of the estate. These complications can be particularly acute when there is an urgent need for the Estate Trustee to complete a particular task which requires probate, such as the potential urgent need to deal with certain real estate or assets on behalf of the estate.

In the past when faced with the urgent need for probate a common solution would be to bring a Motion seeking an order directing the Registrar to expedite the issuance of the Certificate of Appointment. As anyone who has recently attended an event at which an estates court judge has spoken can attest however this option generally appears no longer to be available, as the message being conveyed is the court is generally not prepared to order the Registrar to expedite the process absent extraordinary circumstances. Such a reluctance appears in part based on the court not wanting to place the Registrar in a position of being in contempt of court if they are unable to comply with the expedition order, as well as administrative issues the expedition orders were causing at the estate office.

The general inability to expedite the issuance of probate absent limited circumstances has raised a number of questions about what, if anything, an applicant Estate Trustee can do if faced with the urgent need for probate and their situation does not meet one of the limited circumstances the court has indicated they will consider expediting probate. Would the applicant Estate Trustee simply have to wait however long the probate application takes in the normal course, or are there other options absent expediting probate that may be available to them?

One potential solution is the use of a “limited grant” under section 29(3) of the Estates Act as a stop-gap, with the applicant Estate Trustee being provided with the authority to complete the particular urgent task under the limited grant until such a time as probate is issued at which time the limited grant would expire. As the limited grant should not require the active involvement of the Registrar, with the individual’s authority to complete the task being derived from the order itself, many of the concerns raised in relation to ordering the Registrar to expedite probate do not appear present with the limited grant.

The limited grant is technically a separate appointment from Estate Trustee, such that the order providing for the limited grant should likely contemplate items such as what is to happen to any assets subject to the limited grant upon the limited grant expiring (i.e. are they to be returned to the Estate Trustee), as well as whether an accounting for the limited grant and/or any compensation to the appointee is payable now or if it is to be deferred to any accounting for the main estate.

Thank you for reading.

Stuart Clark

31 Aug

Can you commence a claim against an estate that doesn’t have an Estate Trustee?

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

Generally speaking an Estate Trustee has the ability to “step into the shoes” of the deceased individual as if they were the deceased individual. I have previously blogged, for example, about the Estate Trustee’s general ability to waive any duty of confidentiality owed to the deceased individual after death. This ability to represent the deceased individual generally extends to any legal proceedings commenced against the deceased individual’s estate, with it typically falling to the Estate Trustee to represent the deceased individual or their estate in the claim. But what happens when there is no Estate Trustee? Can a legal proceeding be commenced against a deceased individual when there is no Estate Trustee, and, if so, who represents the estate in such a claim?

Rule 9.02 of the Rules of Civil Procedure provides the general framework by which a claim can be commenced against the estate a deceased individual where there is no Estate Trustee, providing for the appointment of a “litigation administrator”. Specifically, rule 9.02(1) provides:

“Where it is sought to commence or continue a proceeding against the estate of a deceased person who has no executor or administrator, the court on motion may appoint a litigation administrator to represent the estate for the purposes of the proceeding”

The “litigation administrator” is typically a neutral third party whose sole role is to represent the estate in the proceeding. The authority of the litigation administrator does not extend beyond the representation of the estate in the legal proceeding, with the litigation administrator, for example, not having the authority to make distributions to the beneficiaries or otherwise administer the estate (i.e. pay debts or liabilities). To the extent it is desired to complete such tasks someone will need to be appointed as Estate Trustee or otherwise be provided with the authority by way of court order through something like a limited grant under section 29(3) of the Estates Act.

Thank you for reading.

Stuart Clark

30 Aug

Dependants and Insolvent Estates

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We have previously blogged at length about the broad discretionary powers of the court to award support for dependants after death under Part V of the Succession Law Reform Act. Although support applications are most often commenced in circumstances where the insufficient support was caused directly by the estate planning of the deceased individual (or lack thereof), a support application can also be a useful tool where, as a result of the deceased’s debts and liabilities at the time of death, the deceased’s estate is insolvent such that the bequests in the Will may not be carried out.

Section 2(3) of Ontario’s Creditors’ Relief Act provides:

“A support or maintenance order has the following priority over other judgment debts, other than debts owing to the Crown in right of Canada, regardless of when an enforcement process is issued or served:

  1. If the maintenance or support order requires periodic payments, the order has priority to the extent of all arrears owing under the order at the time of seizure or attachment.
  2. If the support or maintenance order requires the payment of a lump sum, the order has priority to the extent of any portion of the lump sum that has not been paid.”

Simply put, the payment of a support order, including those under Part V of the Succession Law Reform Act, is paid in priority to all other judgment debts other than those owed to the “Crown in right of Canada” (i.e. taxes).

Generally speaking a deceased’s debts and liabilities are paid in priority to all distributions to beneficiaries, such that where these liabilities are significant there could be little to no funds remaining to pay the beneficiaries after the debts are paid. As a result of the priority of support orders over other judgment debts, it could be advantageous for a surviving spouse or next of kin when faced with an insolvent estate to commence an Application for support as a dependant. If the individual is confirmed as a dependant the payment of their support Order would take priority over any other judgment debts, potentially resulting in a situation where the dependant receives a benefit from the estate where such a benefit otherwise would not materialize had they waited for their bequest under the Will or intestacy.

Thank you for reading.

Stuart Clark

29 Jun

Hull on Estates #616 – Objectors Beware: Costs in Passings of Accounts

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This week on Hull on Estates, Stuart Clark and Nick Esterbauer discuss the costs decision in Toller James Montague Cranston (Estate of), 2021 ONSC 3704, and review factors that may result in an elevated costs award in passings of accounts.

Should you have any questions, please email us at info@hullandhull.com or leave a comment on our blog.

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17 Jun

Who gets to be Estate Trustee when no one is appointed?

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

When there is a Last Will and Testament the question of who is going to act as Estate Trustee is usually fairly straightforward, with the Will typically naming an individual to such a role. In the event the individual who is originally named as Estate Trustee is unable or unwilling to act, the Will often provides for an alternate individual to be appointed. But what happens when the Will does not name an Estate Trustee or an individual dies intestate? Who gets to be the Estate Trustee under such a circumstance?

The order of priority for who gets to act as Estate Trustee when there is no one appointed is governed by section 29(1) of the Estates Act, which provides:

“Subject to subsection (3), where a person dies intestate or the executor named in the will refuses to prove the will, administration of the property of the deceased may be committed by the Superior Court of Justice to,

(a)  the person to whom the deceased was married immediately before the death of the deceased or person with whom the deceased was living in a conjugal relationship outside marriage immediately before the death;

(b)  the next of kin of the deceased; or

(c)  the person mentioned in clause (a) and the next of kin,

as in the discretion of the court seems best, and, where more persons than one claim the administration as next of kin who are equal in degree of kindred to the deceased, or where only one desires the administration as next of kin where there are more persons than one of equal kindred, the administration may be committed to such one or more of such next of kin as the court thinks fit.”

Although the court retains the power to select amongst this group as it “thinks fit”, generally speaking the individual entitled to be appointed as Estate Trustee is the Deceased’s spouse followed by their next of kin (or some combination of these individuals). Section 29(3) of the Estates Act contemplates that the right of these individuals to be appointed as Estate Trustee is not absolute, with the court having the ability to select a different person if it thinks fit. The position of a majority of the beneficiaries can also be taken into account in selecting the individual under section 29(2).

Thank you for reading.

Stuart Clark

15 Jun

Vacation Wills – Can you admit a foreign Will to probate in Ontario?

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

Remember travel? Remember getting on an airplane and going somewhere (anywhere) else? Although you would be forgiven for thinking of these activities as science fiction due to recent world events, with the COVID-19 pandemic hopefully on its downward trend the idea of travel could again be creeping back into the collective consciousness.

Although the more common souvenirs to bring back from a vacation are likely a sunburn and some tacky items with the name of the destination emblazoned across it, as this is an estate blog it got me thinking of whether there may be any estate related souvenirs that you could bring back. Could you, for example, sign a new Last Will and Testament while on vacation, potentially adding a Will with an exotic destination name at the top to the list of items you bring back? Could such a Will later be admitted to probate in Ontario? Like any good legal question the answer is “maybe”.

In Ontario the potential admittance of a foreign Last Will and Testament is governed by section 37(1) of the Succession Law Reform Act, which provides:

“As regards the manner and formalities of making a will of an interest in movables or in land, a will is valid and admissible to probate if at the time of its making it complied with the internal law of the place where,

(a) the will was made;

(b) the testator was then domiciled;

(c) the testator then had his or her habitual residence; or

(d) the testator then was a national if there was in that place one body of law governing the wills of nationals.” [emphasis added]

In accordance section 37(1)(a) of the Succession Law Reform Act, a foreign Will can be admitted for probate in Ontario so long as it complied with the internal law of the place where it was made at the time it was signed. As you would presumably be presently located in the destination on which you were on vacation, so long as the Will complied with the laws of the jurisdiction where you were on vacation at the time it was signed it could theoretically later be admitted to probate in Ontario making your vacation Will a valid Will in Ontario.

In considering your potential vacation Will it would be wise to remember that just because you “can” do something doesn’t mean you “should”, with a vacation Will likely being in the same category as a vacation tattoo as something that should be very seriously considered and thought through before it is done.

Thank you for reading.

Stuart Clark

14 Jun

Zombie Deeds – Can you intentionally delay registering a deed until after death?

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

You are the owner of real property that you would like to transfer to one of your children upon your death. Although you could include the bequest of this property in your Last Will and Testament, in the hope of potentially minimizing estate administration tax you decide to sign the transfer for the property now and provide your lawyer with clear instruction that it is not to be registered until after your death. Is this transfer valid and/or an effective estate planning tool?

A transfer/deed of land for real property which is not registered until after the transferor’s death is known colloquially as a “zombie deed”, insofar as they are said to come back to life after the transferor’s death. The use and availability of zombie deeds in Ontario is highly problematic.

The potential validity and/or enforceability of “zombie deeds” was recently considered by the Ontario Superior Court of Justice in Thompson v. Elliott Estate, 2020 ONSC 1004, wherein the court confirmed that zombie deeds were generally inoperable and could not be registered by a lawyer after the transferor’s death. In coming to such a decision the court places great emphasis on the fact that the Ontario registry office is correct in refusing to allow the registration of “zombie deeds” as they require the lawyer registering the document to knowingly make false statements, namely that the individual completing the transfer is still alive.

The Ontario Court of Appeal in Re Sammon (1979), 22 O.R. (2d) 721, confirmed that in order for a transfer to be valid the transferor must have intended to be “immediately and unconditionally bound” by the transfer at the time of signing. This requirement to be “immediately and unconditionally bound” by the transfer raises obvious questions surrounding whether a transfer that was signed under the instructions not to be registered until after the transferor’s death could be a valid transfer, as by the very instruction it would appear the transferor did not intend to immediately be bound by the transfer.

The Ontario Court of Appeal in Carson v. Wilson, [1961] O.R. 113, confirmed that a transfer that was signed under direction not to be registered until after the transferor’s death could not be considered effective due to the issues surrounding the requirement to be “immediately and unconditionally bound”. As summarized by the court in Tubbs v. Tubbs, [2006] O.J. No. 4373:

The court held that the documents did not operate as present assignments or either immediate or remainder interests in the particular lands because there was no acknowledgement by the deceased, express or implied, of any intention to be immediately and unconditionally bound by them. Nor could the deeds be regarded as effective escrows. Delivery was contingent on death, and accordingly the court found that they were not effective deeds or assignments but testamentary dispositions which failed for want of compliance with the Wills Act. The Court of Appeal went on to hold that it could not be argued that the documents amounted to valid declarations of trust by the deceased.” [emphasis added]

The requirement that the individual transferring the property must have intended to be immediately and unconditionally bound by the transfer makes the potential use and availability of zombie deeds problematic, for by their very design the transferor likely intended to continue to enjoy some level of control over the property after signing the deed, whether it be the continued use and occupation of the property or otherwise. As a result any individual considering the potential use of a “zombie deed” should likely approach the topic with caution.

Thank you for reading.

Stuart Clark

20 Apr

Hull on Estates #611 – Production Orders and Drafting Solicitor’s Files

76admin Hull on Estate and Succession Planning, Hull on Estate and Succession Planning, Hull on Estates, Podcasts, Wills Tags: , , , , , 0 Comments

This week on Hull on Estates, Stuart Clark and Kira Domratchev discuss the recent decision of Grove v Simon Dirk Kenworthy-Groen as executor of the estate of William Grove [2021] WASC 70, pertaining to production of preceding Wills and a drafting solicitor’s records.

Should you have any questions, please email us at webmaster@hullandhull.com or leave a comment on our blog.

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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

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