Tag: toronto estate law blog
Earlier this week, we discussed the effect a well drafted separation agreement has on an individual’s estate plan. But what effect does a divorce have?
In most instances, going through a divorce can be stressful and contentious. As a result, necessary changes to an individual’s estate plan may be overlooked. Fortunately, section 17(2) of the Succession Law Reform Act provides divorced couples with some piece of mind:
“Except when a contrary intention appears by the will, where, after the testator makes a will, his or her marriage is terminated by a judgment absolute of divorce or is declared a nullity,
(a) a devise or bequest of a beneficial interest in property to his or her former spouse;
(b) an appointment of his or her former spouse as executor or trustee; and
(c) the conferring of a general or special power of appointment on his or her former spouse,
are revoked and the will shall be construed as if the former spouse had predeceased the testator.”
While the SLRA provides a divorced spouse’s estate with some protection against honouring unintended gifts after divorce, the termination of a marriage is nonetheless a good time for divorced persons to review their estate plans, especially as joint bank accounts and beneficiary designations do not have the benefit of the remedial provisions of the aforementioned statute.
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According to a 2007 Yahoo survey, the upcoming holiday season is a time when some people are twice as likely to consider breaking up with their significant other. This is partly because the individual may want to begin the new year with a fresh start.
An effective way of ensuring a fresh start after the end of a long-term relationship is to sign a separation agreement. A separation agreement allows parting spouses to contractually set out each party’s rights and obligations regarding issues with respect to property, debts and child and/or spousal support.
By the same token, a well drafted separation agreement can include provisions that allow former spouses to essentially contract out of any benefit conferred to them under each other’s Will. From an estates perspective, it may be useful for a separation agreement to include clear and unambiguous terms with respect to whether the surviving spouse:
- is entitled to take as a beneficiary upon death, whether by way of will, intestacy or beneficiary designation;
- has any rights to make a claim against the estate of the deceased spouse; and
- may act as the estate trustee or personal representative of the deceased spouse.
The decision in Makarchuk v. Makarchuk, 2011 ONSC 4633 is a great example of the importance of a well drafted separation agreement.
In Makarchuk v. Makarchuk, the spouses had been married for over 40 years. After separation, the couple entered into a separation agreement but they did not divorce. Five years later the husband died without changing his will, which named his former wife as the sole executor and beneficiary of his estate.
The separation agreement included the following provision:
“Except as provided in this agreement, and subject to any additional gifts from one of the parties to the other in any will validly made after the date of this agreement, the husband and wife each release all rights which he or she has or may acquire under the laws of any jurisdiction in the estate of the other and in particular:….”
Following the husband’s death, the wife sought directions from the Court as to whether, by virtue of the separation agreement, she had released her right to be the sole estate trustee and beneficiary of the estate.
The Court found that the wording contained in the separation agreement did not clearly address the terms of the deceased’s Will. In particular, the husband and wife only released all rights that they may acquire under the law. It was the Court’s view that such language was too broad to oust the wife from receiving her entitlement under the deceased’s Will.
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The superrich likely have the market cornered when it comes to epic estate battles – Howard Hughes, J. Howard Marshall (i.e. Anna Nicole Smith), and E. Howard Hunt (of silver fame) – quickly come to mind.
However, even the mildly famous or sainted can have their moment in the estate spotlight. Recently, Luciano Pavarotti’s family was in the news when a dispute arose among his offspring in respect of his considerable fortune. They have apparently reached a settlement.
I also read with interest a recent US newspaper article indicating that two of Martin Luther King’s children had filed a lawsuit against a third regarding a dispute over the civil rights leader’s estate (J. Edger Hoover would have loved it). Bernice King and Martin Luther King III filed a lawsuit in Atlanta in order to force their brother, Dexter King, to open the books of their famous father’s estate.
From what I understand, the lawsuit claims that Dexter King, who is the executor of his father’s estate, has refused to provide his brother and sister with documents concerning the estate’s administration. The lawsuit claims that Dexter King and the estate "converted substantial funds from the estate’s financial accounts…for their own use". The siblings were never told beforehand and are now seeking financial records and other documents in order to investigate the administration of the estate.
Martin Luther King’s "dream" seems to have stalled when it comes to sibling rivalry and the fortunes of his estate. However, on a more serious note, the dispute once again reminds us of the importance of transparency in the administration of an estate and open communication between executor and beneficiary.
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Listen to Personal Liability
This week on Hull on Estate and Succession Planning, Ian Hull talks about the extensive personal liability of an estate trustee.
Also, in the March 2008 issue of Canadian Lawyer, the Toronto Estate Law Blog was ranked as one of Canada’s Top Ten Law-Related Blogs by Gerry Blackwell. The list also included Michael Geist’s blog, Law is Cool and the Rule of Law blog from Kelowna, BC. In the same issue of Canadian Lawyer, Suzana Popovic-Montag was featured as a leader in the world of law and social media. Kudos!
Most lawyers have come across the vexatious litigant, the complainant who has an endless array of grievances and regards the courts as a convenient forum to pursue frivolous claims. The Oxford Dictionary defines vexatious as "… not having sufficient grounds for action and seeking only to annoy the defendant". Endless proceedings and countless motions are brought over a number of years. Regrettably, the vexatious litigant knows enough about the rules of court, often through trial and error, to be a menace and not easily put off. As no one judge initially hears all proceedings and accompanying motions, a great deal of sympathy is often extended to the vexatious plaintiff together with ample leeway to pursue his or her claims.
However, there is hope. Section 140 of the Courts of Justice Act states that where a judge of the Ontario Superior Court of Justice is satisfied that a person has persistently and without reasonable grounds instituted vexatious proceedings or conducted proceedings in a vexatious manner, the judge may order that no further proceedings be instituted or current proceedings continued without leave of a judge.
In Dale Streiman & Kurz LLP v. De Teresi, Mr. De Teresi had commenced 73 proceedings over 10 years. According to the court, Mr. De Teresi had a history of serially litigating against the same party over essentially the same set of facts. He brought sequential lawsuits, often suing lawyers who had acted for or against him in past proceedings and continued to litigate even when a settlement had been reached. The court held that Mr. De Teresi had deliberately misled the court and instituted proceedings that could not succeed but were simply designed to harass other parties. Mr. De Teresi was declared a vexatious litigant and could no longer institute proceedings without leave.
Finally, if a section 40 order is not yet open to the defendant, the defendant can ask that a judge be appointed to case manage all proceedings commenced by the vexatious plaintiff. Once assigned, a judge will quickly take the measure of the plaintiff and begin to shut down frivolous proceedings and useless motions.
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In Paul Trudelle’s blog of May 31, 2007, Paul commented on the tribute to Brian Schnurr at the Ontario Bar Association Trusts & Estates Section Year End Dinner held on May 30, 2007. At the Dinner, Brian received the OBA’s Award of Excellence for Trusts & Estates.
Aside from speeches regaling and praising Brian’s accomplishments there was also a surprise tribute written by Rodney Hull Q.C. LSM (with apologies to Gilbert and Sullivan) which was sung by Duncan Miller:
He is the very model of a Chancery practitioner
And knows the subtle difference ‘twixt respondent and petitioner
As well he knows that naught with wills is elementary
Except it’s clear that intention must be testamentary
He draws his wills in language incomprehensible
And fobs them off on clients as meaningful and sensible
Although his fees are oft described in terms such as rapacious
They are always paid on time with thanks from clients most gracious
He knows as well to draft his wills with very great acuity
He also knows to stay away from gifts in perpetuity
Unless of course the wish is to benefit some charity
In which case he must specify intent with greater clarity
With words he often tends to convolute
To change a gift from contingent to absolute
At home of little else they talk but the rule in Browne and Moody
To do otherwise it would be a breach of his clear duty
Interpretation of his wills he leaves for the courts to unravel
Which provides an ample and extensive fund for his extensive travel
Duncan did a very charming job of bringing the verse to life and capping a wonderful evening.
Access to justice in Ontario is a hot topic and a priority for Attorney General Michael Bryant. In fact, he is the force behind various changes we are seeing in the legal arena that according to Jim Middlemiss (in his article Smile, you’re on CA Camera published in the March 2007 edition of Canadian Lawyer) include the introduction of the Access to Justice Act, 2006 that reforms the justice of the peace system and regulates paralegals.
Another change being made affects the Ontario Court of Appeal where cameras are being allowed in the courtroom for some hearings as part of a pilot project. Now, more than ever, counsel will have to enter this court with robes ironed, hair styled and legal arguments ready. The pressure is on. Not only do counsel have to persuade appellate judges of the merit of their client’s case, counsel has to do it on national television!
While the objective is a worthy one – providing an unobstructed view of our justice system at work – I must admit I am more interested in the impact televised hearings will have on the form and presentation of legal argument. I expect that some lawyers may be unnerved by the watchful eye of the public, some may be eager to make a name for themselves and some may not be fazed at all.
My hope is that it will further add to the caliber of advocacy and professionalism and inspire the public to take an interest.