Tag: Stuart Clark

06 Feb

Hull on Estates #539 – The basics of the rule in Saunders v. Vautier

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This week on Hull on Estates, Stuart Clark and Nick Esterbauer discuss the basics of the rule in Saunders v. Vautier and its expansive role in estate and trust proceedings.

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04 Jan

Saunders v. Vautier – What does it mean?

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Over the holidays I had a great nostalgia trip watching the recent Netflix series “The toys that made us” about the history of toys. One of the episodes focused on “He-Man and the Masters of the Universe“. For those of you who did not grow up in the 1980s, the titular character had a habit of loudly proclaiming “I have the power” right before getting down to business and saving the day. I feel like loudly proclaiming “I have the power” is as good a segue as any to discuss the general principles surrounding the rule in Saunders v. Vautier.

The term “Saunders v. Vautier” is often thrown around by estates lawyers as if it is a foregone conclusion that everyone in the room, including clients, should instinctively know what is meant by the phrase. This, of course, is not always the case. For those needing a general refresher look no further.

When lawyers mention the rule in “Saunders v. Vautier” it is often done in reference to a scenario wherein a beneficiary is not to receive certain property until a specific age, however as the provision providing for the gift does not contain a “gift-over” to another beneficiary should the originally named beneficiary not reach the specified age, the beneficiary immediately demands receipt of the gift upon attaining 18 years of age thereby collapsing the trust. While the rule in Saunders v. Vautier can be utilized in such a scenario, it would be a mistake to assume that this is the only scenario in which the rule in Saunders v. Vautier may be utilized, as the potential applications of the rule are much more expansive than this.

At its most expansive the rule in Saunders v. Vautier can be thought of as the rule which allows a beneficiary(s) to ignore the testator’s/settlor’s intentions and vary the terms of a trust. It stands for the proposition that if all potential beneficiaries of a trust, collectively representing 100% of the potential “ownership” of the assets of the trust, unanimously direct that the trust is to be wound up and/or varied, the trustee(s) must act in accordance with the beneficiaries’ direction regardless of whether such direction goes against the testator’s/settlor’s “intention” in establishing the trust. As summarized by the Supreme Court of Canada in Buschau v. Rogers Communications Inc.:

The common law rule in Saunders v. Vautier can be concisely stated as allowing beneficiaries of a trust to depart from the settlor’s original intentions provided that they are of full legal capacity and are together entitled to all the rights of beneficial ownership in the trust property. More formally, the rule is stated as follows in Underhill and Hayton: Law of Trusts and Trustees (14th ed. 1987), at p. 628:

If there is only one beneficiary, or if there are several (whether entitled concurrently or successively) and they are all of one mind, and he or they are not under any disability, the specific performance of the trust may be arrested, and the trust modified or extinguished by him or them without reference to the wishes of the settlor or trustees.

If even one beneficiary of the trust, however remote their interest may be, should refuse to consent to the proposed variation, the rule in Saunders v. Vautier may not be utilized and the trust must continue to be administered as settled. If one of the potential beneficiaries of the trust is under a legal disability, whether as a result of being a minor or otherwise, the principles from Saunders v. Vautier may still be utilized, however the consent of the beneficiary under a legal disability must be obtained under the Variation of Trusts Act which allows the court to consent to the proposed variation on behalf of the beneficiary under a legal disability. Should the court ultimately provide such a consent, and assuming all remaining “sui juris” beneficiaries have already consented to the proposed variation, all potential beneficiaries would have consented to the proposed variation and the rule in Saunders v. Vautier would be invoked.

Thank you for reading. Wield that power wisely.

Stuart Clark

31 Oct

Hull on Estates #532 – Do common law spouses need to live together?

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This week on Hull on Estates, Ian M. Hull and Stuart Clark discuss the recent case of Stajduhar v. Wolfe, 2017 ONSC 4954, and whether two individuals need to live together to be considered spouses within the confines of Part V of the Succession Law Reform Act.

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04 Apr

Hull on Estates #513 – Drafting Protection of Trustees

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This week on Hull on Estates, Natalia Angelini and Stuart Clark discuss options that may be available to help protect a trustee when drafting a Will or Trust.

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09 Mar

Hull on Estates #509 – Role of Powers of Attorney for Property

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This week on Hull on Estates, Jonathon Kappy and Stuart Clark discuss the powers entrusted to a Power of Attorney for Property, including whether they may give gifts on behalf of an incapable person.

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13 Dec

Hull on Esates #497 – Limitations and Passing Accounts

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Today on Hull on Estates, David M. Smith and Stuart Clark discuss limitation periods and Applications to Pass Accounts, and whether there could be a scenario whereby certain objections raised within an Application to Pass Accounts could be statute barred as a result of the expiry of any limitation period.

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25 Oct

Hull on Estates #490 – Costs on a Will Challenge

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This week on Hull on Estates, Natalia Angelini and Stuart Clark discuss the recent decision of Lavoie v. Trudel, 2016 ONSC 4141 (http://bit.ly/2dAwIpI), costs reported at 2016 ONSC 4769, and the circumstance in which the court ordered all parties to bear their own costs in a will challenge notwithstanding that the challenge was not successful.

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09 Aug

Hull on Estates #479 – Court Interference with a Trustee’s Discretion

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This week on Hull on Estates, Ian M. Hull and Stuart Clark discuss mala fides and bad faith, and when the court will interfere with a Trustee’s discretion.

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28 Jun

Hull on Estates #473 – When a witness does not recall witnessing a Will

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This week on Hull on Estates, Jonathon Kappy and Stuart Clark discuss Besaw Estate v. Besaw, 2015 CanLII 62411 (http://bit.ly/28Qumyo), and whether the court can admit a Will to probate when one of the attesting witnesses gives evidence that they don’t recall witnessing the Will.

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31 May

Hull on Estates #469 – Signing an Insurance Designation for a Physically Incapable Person

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This week on Hull on Estates, Jonathon Kappy and Stuart Clark discuss the recent decision of Re: Hanson Estate, 2016 ONSC 2382 (http://bit.ly/1WqJx77), and whether an individual who is mentally competent but physically incapable can direct another individual to sign a life insurance beneficiary designation on their behalf.

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