Tag: Stuart Clark
People change their mind all of the time. When someone changes their mind about the terms of their Will however, things can become more complicated. Going to a lawyer to formally make a change to the Will may seem daunting. If the change to the Will is relatively minor, an individual may be tempted to forgo meeting with a lawyer to draw up a new Will or Codicil, and simply make the change to the Will themselves by crossing out or inserting new language by hand on the face of the old Will. But would such handwritten changes be valid?
Although the advice to any individual thinking of changing their Will would always be to speak with a lawyer about the matter, people do not always adhere to such advice. If someone has made handwritten changes to their Will after the document was originally signed, such changes can under certain circumstances alter the terms of the Will.
Section 18(1) of the Succession Law Reform Act (the “SLRA“) provides that unless any alteration to a Will is made in accordance with the requirements of section 18(2) of the SLRA, such alterations have no effect upon the provisions of the Will itself unless such an alteration has had the effect that you can no longer read the original wording of the Will. Section 18(2) of the SLRA further provides:
“An alteration that is made in a will after the will has been made is validly made when the signature of the testator and subscription of witnesses to the signature of the testator to the alteration, or, in the case of a will that was made under section 5 or 6, the signature of the testator, are or is made,
(a) in the margin or in some other part of the will opposite or near to the alteration; or
(b) at the end of or opposite to a memorandum referring to the alteration and written in some part of the will.”
As a result of section 18(1) and 18(2) of the SLRA, any handwritten change to a Will does not validly alter the terms of the Will unless the testator and two witnesses sign in the margins of the Will near the alteration (subject to certain exceptions listed). If the handwritten change is not accompanied by such signatures it is not a valid alteration and has no impact upon the original terms of the Will, unless the handwritten change has had the effect of “obliterating” the original language of the Will by making it no longer readable.
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The Henson Trust has become fairly common estate planning tool for those looking to provide a bequest to someone who may be receiving government benefits such as ODSP without such an individual losing their qualification to the government benefits. At the core of the Henson Trust is the concept that the trust is wholly discretionary, with the assets that are placed in the trust not “vesting” in the beneficiary who is receiving the government benefits until the trustee has decided to make a distribution in their favour. This allows the trustee to ensure that the beneficiary does not receive a greater amount from the trust in a given time period than allowed under the government benefits, such that the beneficiary can continue to receive their government benefits as well as receive funds from the trust.
But what happens to any funds that may be left in the trust upon the death of the beneficiary for whom the Henson Trust was primarily established? Typically, the terms of the trust will provide for a “gift-over” of any residue to an alternate beneficiary. If the trust fails to provide for such a “gift-over” however, it could have significant repercussions to the primary beneficiary for whom the Henson Trust was established, and could result in the Henson Trust being declared void.
For a trust to exist it must have what are known as the “three certainties”. They are:
- Certainty of Intention – It must be clear that the settlor intended to create a trust;
- Certainty of Subject Matter – It must be clear what property is to form part of the trust; and
- Certainty of Objects – It must be clear who the potential beneficiaries of the trust are.
A trust that does not have the “three certainties” is an oxymoron, insofar as there can be no trust that offends the three certainties as the trust failed to be established. In the circumstance contemplated above, the lack of “gift-over” upon the primary beneficiary’s death would arguably equate to there being a lack of “certainty of objects”, insofar as it is not clear who all of the potential beneficiaries of the trust are. If it is found that the trust does offend the “certainty of objects” it would fail. Should the trust fail, the primary beneficiary for whom the Henson Trust was established would no longer have the funds which would have formed the Henson Trust available to top up the funds which they receive from their government benefits, with such funds likely now forming part of the residue or being distributed on a partial intestacy.
Although the historical application of the “three certainties” would result in the Henson Trust contemplated above having been declared void from the beginning, insofar as no trust that offends the three certainties can be found to exist, it should be noted that the court in Stoor v. Stoor Estate, 2014 ONSC 5684, went to great lengths to avoid such an outcome. In Stoor Estate, notwithstanding that the court found that the trust in question failed as a result of it offending the three certainties for a lack of “certainty of objects”, the court delayed the failure of the trust until after the primary beneficiary’s death believing that it was in keeping with the testator’s intentions.
There has been significant debate about whether the Stoor Estate decision was correctly decided, and what impact, if any, it should have upon the historical application of the “three certainties”. What is not in debate however is that it is important that when drafting a Henson Trust, or any trust for that matter, to ensure that you provide for a gift-over of the residue upon the primary beneficiary’s death. If you fail to provide for such a gift-over you run the risk that the trust will be declared void for offending the three certainties, thereby depriving the individual for whom you were establishing the Henson Trust the opportunity to receive such funds in addition to their government benefits.
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No words strike fear into the hearts of most estates lawyers like the “rule against perpetuities”. Horrible memories of first year property law class, and dire warnings about how nobody truly understands how to apply the ancient and archaic principles which have developed over centuries, leave most lawyers wanting to avoid the subject at all costs. Although the cases can sometimes be hard to understand, the foundational principles and modern application of the rule against perpetuities is actually relatively simple.
The rule against perpetuities is an ancient common law doctrine which restricts the ability of an individual to control property over a prolonged period of time. At its most simple, the rule against perpetuities can be understood as not allowing an individual to control the distribution or ownership of property for longer than the “perpetuity period”, with the perpetuity period equating to a “life in being” who is alive upon the death of the testator plus twenty one years. A “life in being” is the lifetime of an individual who may receive, or is somehow associated to, the gift of the property. To this respect, an individual cannot control the ownership or distribution of property in their Will for longer than the lifetime of an individual who is alive upon the death of the testator and somehow associated with the gift, plus twenty one years after such an individual’s death. If a gift offends the rule against perpetuities, it is declared void.
In Ontario, the application of the rule against perpetuities is governed by the Perpetuities Act. Section 4(1) of the Perpetuities Act establishes a “wait and see” approach to determining if a gift offends the rule against perpetuities. What this in effect means is that simply because a bequest could offend the rule against perpetuities does not result in the gift immediately being declared void, as you must wait to see if the gift actually does offend the rule against perpetuities. Only in the event that the gift does ultimately vest outside of the perpetuity period is it declared void.
Take for example the hypothetical bequest of a property to a local charity so long as they use the property for the benefit of the charity. Should the charity cease to use the property for the purpose of the charity, the property would instead be distributed to the deceased’s issue (i.e. descendants) in equal shares per stirpes. The “perpetuity period” in this instance would be the lifetime of one of the deceased’s descendants alive on the deceased’s death who ultimately lives the longest after the deceased’s death (likely the youngest descendant alive upon the deceased’s death, although not necessarily) plus twenty one years after such a descendant’s death. Although it is conceivable that the charity could continue to use the property for longer than the lifetime of such a descendant plus twenty one years, such that the gift-over to the deceased’s issue could offend the rule against perpetuities and be declared void, you do not immediately declare such a gift void at the time of the deceased’s death. Rather, you must “wait and see” if the triggering event (i.e. the charity ceasing to use the property) occurs during the perpetuity period (i.e. the lifetime plus twenty one years of the descendant in question). Only upon the triggering event not occurring during the perpetuity period would the gift be declared void for offending the rule against perpetuities.
See, not so scary after all.
In today’s podcast, Stuart Clark and Sayuri Kagami discuss the issue of whether damages can be claimed on a passing of an attorney for property’s accounts in light of the fact that section 49(3) of the Estates Act, RSO 1990, c E21 only refers to the ability of a Judge to award damages against an executor, administrator, or trustee, not an attorney for property, in such proceedings. To read about this issue, see Stuart Clark’s recent blog on this topic.
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Being a Power of Attorney for Property can often be a difficult and thankless job. It is not unforeseeable that, after originally accepting the job, circumstances may arise which leads the Attorney for Property to want to resign. But how do you go about actually resigning as Attorney for Property? Is it enough to simply stop acting as Attorney for Property, or to loudly scream “I quit!” to those that have caused you the frustration, or are additional steps required for the resignation to become effective?
The resignation process for an Attorney for Property is governed by section 11(1) of the Substitute Decisions Act, which provides:
“An attorney under a continuing power of attorney may resign but, if the attorney has acted under the power of attorney, the resignation is not effective until the attorney delivers a copy of the resignation to,
(a) the grantor;
(b) any other attorneys under the power of attorney;
(c) the person named by the power of attorney as a substitute for the attorney who is resigning, if the power of attorney provides for the substitution of another person; and
(d) unless the power of attorney provides otherwise, the grantor’s spouse or partner and the relatives of the grantor who are known to the attorney and reside in Ontario, if,
(i) the attorney is of the opinion that the grantor is incapable of managing property, and
(ii) the power of attorney does not provide for the substitution of another person or the substitute is not able and willing to act.”
As a result of section 11(1) of the Substitute Decisions Act, if an Attorney for Property wishes to resign from their position they must put such resignation in writing, which must then be delivered to the certain individuals, including the grantor, any other Attorneys for Property named in the document, as well as the grantor’s spouse and next-of-kin if the grantor is incapable and the Power of Attorney does not provide for a substitute Attorney for Property or the substitute is not willing or able to act. Once the resignation has been received by all of such individuals, the resignation is effective, and the individual is no longer the grantor’s Attorney for Property.
It should of course be noted that resigning as Attorney for Property would not release the individual of any liability for their historic administration of the grantor’s property. To do so, the resigning Attorney for Property would likely have to commence an Application to Pass Accounts regarding their management of the grantor’s property, or seek a release from the grantor if the grantor was still capable. This, however, is a topic for a further blog on a different day.
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The notes and records of the lawyer who assisted the deceased with their estate planning can play an important role in any estate litigation. As a result, it is not uncommon for a drafting lawyer to receive a request from individuals involved in estate litigation to provide them with a copy of their notes and files relating to the deceased’s estate planning. But can the lawyer comply with such a request?
The central concern involved for the lawyer is the duty of confidentiality which they owe to the deceased. This duty of confidentiality is codified by rule 3.3-1 of the Law Society of Ontario’s Rules of Professional Conduct, which provides:
“A lawyer at all times shall hold in strict confidence all information concerning the business and affairs of the client acquired in the course of the professional relationship and shall not divulge any such information unless expressly or impliedly authorized by the client or required by law to do so.”
The duty of confidentiality and privilege which is owed to the deceased by the lawyer survives the deceased’s death. This was confirmed by the court in Hicks Estate v. Hicks,  O.J. No. 1426, where, in citing the English authority of Bullivant v. A.G. Victoria,  A.C. 196, it was confirmed that privilege and the duty of confidentiality survive death, and continues to be owed from the lawyer to the deceased. With respect to the question of who may waive privilege on behalf of the deceased following their death, Hicks Estate v. Hicks confirmed that such a power falls to the Estate Trustee under normal circumstances, stating:
“It is clear, therefore, that privilege reposes in the personal representative of the deceased client who in this case is the plaintiff, the administrator of the estate of Mildred Hicks. The plaintiff can waive the privilege and call for disclosure of any material that the client, if living, would have been entitled to from the two solicitors.”
Simply put, the Estate Trustee may step into the shoes of the deceased individual and compel the release of the lawyer’s file to the same extent that the deceased individual could have during their lifetime.
In circumstances in which the validity of the Will has been challenged, the authority of the Estate Trustee is also being challenged by implication, as their authority to act as Estate Trustee is derived from the Will itself. In such circumstances, the named Estate Trustee may arguably no longer waive privilege and/or the duty of confidentiality on behalf of the deceased individual. Should the notes and/or records of the drafting lawyer still be required, a court order is often required waiving privilege and/or the duty of confidentiality before they may be produced.
Whether or not a lawyer can release their file following the death of a client will depend on the nature of the dispute in which such a request is being made, and who is making the request. If there is a challenge to the validity of the Will or the Estate Trustee’s authority, it is likely that a court Order will be required before the lawyer may produce their file regardless of who is requesting the file. If the dispute does not question the Estate Trustee’s authority, such as an Application for support under Part V of the Succession Law Reform Act, the lawyer should comply with the request to release their file so long as the requesting party is the Estate Trustee. If the requesting party is not the Estate Trustee, and the Estate Trustee should refuse to provide the lawyer with their authorization to release the file, matters become more complicated, and may require a court Order before the lawyer may release their file.
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Today on Hull and Estates, Stuart Clark and Umair Abdul Qadir discuss the recent decision in Cohen v Cohen, 2018 ONSC 1613, in which the Honourable Justice Maranger discussed the Ontario Superior Court of Justice’s jurisdiction to consolidate applications for equalization commenced pursuant to the Family Law Act with applications for dependant’s relief under Part V of the Succession Law Reform Act. You can read more about the Cohen decision on our blog.
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It is not uncommon for dependant’s support claims to be commenced contemporaneously with family law claims after death, with the dependant’s support claim often forming a sort of safety net should the family law claim not be successful. This is likely in part on account of section 63(4) of the Succession Law Reform Act providing that an Order providing for the support of the deceased’s dependants can be made “despite any agreement or waiver to the contrary“, such that the court in certain circumstances can make an Order for dependant’s support notwithstanding that agreements such as marriage contracts may have been entered into prior to death which may otherwise have severely restricted the surviving spouse’s entitlements.
While it is not uncommon for family law and estates claims to be brought contemporaneously, this can sometimes result in an in issue in the form of a multiplicity of proceedings, with multiple proceedings being before the court at the same time, often on different court lists. In Toronto, the family law claims would likely proceed before the Family Court, which is governed by its own “Family Law Rules“, while the estate law claims would proceed before the Estates List of the Ontario Superior Court of Justice, with such a process being governed by the more standard Rules of Civil Procedure. Different courts, different rules, different timelines.
It appears that such a multiplicity of proceedings became an issue in the recent Cohen v. Cohen decision, with the Applicant’s counsel eventually moving to have the family law and estate law proceedings consolidated and heard together before the Family Court. Opposing counsel objected, taking the position that a dependant’s support Application under Part V of the Succession Law Reform Act could not be heard before the Family Court, and that such a proceeding must proceed before the standard Ontario Superior Court of Justice.
In ultimately rejecting the position of opposing counsel, and ordering the family law claims and the estate law claims to be heard together before the Family Court, Justice Maranger provides the following commentary:
“Counsel representing the estate argued that a strict reading of section 57 (1) of the Succession Law Reform Act (“court” means the Superior Court of Justice) statutorily precludes consolidating a dependant’s relief application with a family law act application, because the SLRA does not specify Superior Court Family Branch. I reject that argument, clearly a reference to the Superior Court of Justice can in certain circumstances allow for the reading in of the Superior Court Family Branch. A family branch judge is a Superior Court judge for all purposes including hearing cases under the Succession Law Reform Act.”
Cohen v. Cohen suggests that estates law cases and family law cases can be consolidated and heard together by the same court notwithstanding that such courts may be specialized for a different purpose. What impact, if any, the use of the Family Law Rules would have upon adjudication of an Application for support under Part V of the Succession Law Reform Act remains to be seen.
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There is a famous scene in Monty Python and the Holy Grail where an individual tries to include his very much still alive relative on a cart carrying out plague victims to the still alive individual’s protests. Upon being presented to be taken away, the individual loudly protests “I’m not dead yet” to the annoyance of the individual trying to have them taken away, resulting in a back-and-forth about whether they will be dead soon and should still be included on the cart. Hilarity ensues.
This scene from Monty Python always plays through my mind whenever I hear stories of individuals who are incorrectly declared dead by the court. The Toronto Star recently reported on a case about a man from Romania who returned from working abroad to find that his wife had had him declared dead by the court while he was away. Despite showing up to his own hearing to reverse the Order declaring that he was dead, the court refused to reverse the Order, saying that it was too late for him to do so. Stories such as these are surprisingly common, with an Ohio man having found himself in similar circumstances in 2013.
In Ontario, the process by which an individual is declared dead in absentia when there is no body is governed by the Declarations of Death Act, 2002. Although the Declarations of Death Act does not set out a process by which an individual who is still alive could reverse an Order finding that they were deceased, it notably does not contain any provision barring the reversal of such an Order, and does contain language providing what is to occur with the “deceased” individual’s property should they later found to be alive such that it appears that such an Order is possible.
Section 6(1) of the Declarations of Death Act provides that when an Order has been made declaring an individual dead, and their estate has been distributed, such a distribution is final even should the “deceased” individual subsequently be found to be alive. While section 6(3) grants the court special powers to order specific property be returned to the deceased individual, absent a specific court order to the contrary, the “deceased” individual’s property is now the property of those to whom it was distributed.
While it appears the Ontario court can reverse an Order incorrectly finding you to be deceased, you may not be so lucky in getting your stuff back. Maybe now we know why the man was so loudly protesting “I’m not dead yet” in the Monty Python sketch.
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When I was a kid I loved the song “I’m my own grandpa” from the Muppets. For those of you unlucky enough not to have grown up with such a lyrical masterpiece, the song tells the tale of someone who, as a result of his father marrying his wife’s daughter from a previous relationship, becomes his own grandfather. It is a masterpiece up there with the likes of any of Beethoven’s symphonies.
The song recently came flooding back into my memory when a question was posed to me regarding the inheritance rights of first cousins on an intestacy who, as a result of a quirk in the marriage patterns of their relatives, were first cousins to the deceased both on their maternal and paternal sides. The question which followed is, if you are a first cousin of an individual on both sides of the family, does that mean that you are entitled to double the inheritance in circumstances in which the estate is to be distributed to the first cousins on an intestacy?
The “double cousining”, if it can be called that, occurred as a result of one of the deceased’s father’s brothers marrying one of the deceased’s mother’s sisters. The children born to such a couple are first cousins of the deceased both on their maternal and paternal sides.
The issue of whether a “double cousin” receives twice the inheritance on an intestacy to those cousins unlucky enough to have only been related to the deceased once was dealt with by the court in Re Adams, (1903) 6 O.L.R. 697 (Ont. H.C.). In ultimately concluding that the “double cousins” do not receive double the inheritance, and that all cousins receive the same amount, Justice Meredith states the following:
“Under the Devolution of Estates Act all the property in question is to be distributed as personal property is now distributable. And among collateral relatives in the same degree of kinship it is so distributable equally. They take in their own right, not by way of representation. And there is no question of quantity or quality of blood; those of the half-blood take equally with those of whole blood; and those of the double blood — if I may so name a relationship, in the same degree, on the part of both father and mother — take no more, for all are akin to the intestate, and all in the same degree of kinship.” [emphasis added]
Re Adams suggests that being a “double cousin” does not result in double the inheritance, and that a cousin related to the deceased both on the maternal and paternal sides receives the same as if they had only been related to the deceased once. Those of you looking to explore unorthodox family trees in a goal to maximize potential distributions to you on an intestacy will have to look elsewhere.
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